Labour Court Database __________________________________________________________________________________ File Number: CD92670 Case Number: LCR13901 Section / Act: S26(1) Parties: JOHNSON MANUFACTURING - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Payment of Phase 1 (4%) of P.E.S.P.
Recommendation:
5. The Court has considered the submissions made by the parties
at the hearing and also the additional financial information
provided by the Company. On the basis of this the Court
recommends that the Union suspend the claim for the terms of the
1st Phase of the P.E.S.P. and re-submit it in June, 1993 for
consideration in the light of the circumstances than prevailing in
the Company.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD92670 RECOMMENDATION NO. LCR13901
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: JOHNSON MANUFACTURING
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Payment of Phase 1 (4%) of P.E.S.P.
BACKGROUND:
2. The Company which is involved in the manufacture of fuel
tanks, suspension tanks, and airbrake tanks, is a subsidiary of
Claren House Holdings and employ approximately 21 people.
On 10th June, 1992, discussions took place between the parties on
the implementation of the first phase of P.E.S.P. which falls due
for the workers concerned on 1st May, 1992. The Company, by
letter dated 12th June, 1992, indicated that it was not in a
position to pay the increase and outlined its position as follows:
"(A) Lack of orders thus leading to the introduction of short
time.
(B) Production inefficiencies thus leading to late
deliveries and additional costs.
(B) Quality problems relative to seam welding and projection
welding.
(D) Because of the downturn in the market at present and the
highly competitive nature of the business we are waiting
to see if this trend will continue".
The Union responded by letter dated 17th July, 1992, and a further
meeting between the parties took place on 22nd July, 1992,
following which the Union by letter dated 24th July, 1992,
outlined its position as follows:
"(A) Production inefficiencies would need to be identified to
clarify if these problems are operator related and in
the event of standards being in dispute, we would seek
the assistance of our Union's industrial engineer in
this regard.
(B) Our members are not opposed to entering into discussion
on any proposals the Company may have with a view to
improving production output or altering manufacturing
procedures which would realise benefits to both parties.
(C) On the subject of the implementation of Phase one of
P.E.S.P., our members have decided to puruse this matter
through the Labour Relations Commission.
We will be available for discussion, at reasonable
notice, on any of the above".
No further discussions took place and the Union referred the
matter to the Labour Relations Commission. A conciliation
conference took place on 17th September, 1992 and as no agreement
could be reached the matter was referred to the Labour Court on
29th October, 1992. The Court hearing took place on 5th November,
1992.
UNION'S ARGUMENTS:
3. 1. The Company's claim that it is not in a position to pay
the increase, is not accepted by the Union.
2. There was short time working for one week in early 1992.
There is now production on six days per week, with unlimited
overtime and regular Sunday work. This has been the position
since the summer holidays.
3. The Union, on more than one occasion indicated a
willingness to address any difficulties management has in
relation to production efficiencies and quality control but
the Company did not respond.
4. The Company has an obligation to the workers under the
terms of P.E.S.P. and this should be recognised, phase one
should be implemented with effect from 1st May, 1992.
COMPANY'S ARGUMENTS:
4. 1. The Company is formally pleading inability to pay the
terms of the P.E.S.P. The Company will show a substantial
trading loss in 1992.
2. In 1990, despite significant losses, the P.N.R. was
honoured.
3. The Company needs further investment, a reduction of
costs, particularly in materials and overheads which is
already underway, and a delay in the implementation of the pay
agreement for one year, to survive.
4. If an increase and retrospective payment of that increase
is recommended at this stage, the Company would face an
unbearable financial burden and its viability would be put at
risk. It would result in the loss of new business and
probably the existing airbrake tank business. This would
result in the loss of seven new jobs and approximately
eight/nine of the existing jobs.
5. The continued goodwill of the workforce is necessary to
support the cost reduction programme and to ensure the
survival of the Company.
RECOMMENDATION:
5. The Court has considered the submissions made by the parties
at the hearing and also the additional financial information
provided by the Company. On the basis of this the Court
recommends that the Union suspend the claim for the terms of the
1st Phase of the P.E.S.P. and re-submit it in June, 1993 for
consideration in the light of the circumstances than prevailing in
the Company.
~
Signed on behalf of the Labour Court
John O'Connell
_________________
15th December, 1992. Deputy Chairman.
F.B./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.