Labour Court Database __________________________________________________________________________________ File Number: CD93689 Case Number: LCR14311 Section / Act: S26(1) Parties: DE BEERS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;TECHNICAL ENGINEERING AND ELECTRICAL UNION;AMALGAMATED ENGINEERING AND ELECTRICAL UNION |
Dispute concerning a cost-reduction programme.
Recommendation:
5. Having considered the submissions of the parties and the oral
evidence presented at the hearing, the Court is satisfied that the
serious situation of the business is fully recognised by both
sides. This is reflected in the acceptance of redundancies and
acceptance that further measures are required for the protection
and continuation of the business.
The Court accepts that the level of losses recently incurred by
the Company is unsustainable into the future and, when viewed in
the context of the alternative production options open to the
Company, demands that all possible cost-saving measures and
marketing strategies which may help improve the situation be
implemented as quickly as possible.
Wage costs are a significant element of the overall costs and,
having regard to the acknowledged high levels of wages, it is
reasonable for the Company, in present circumstances, to seek an
overall reduction. Though such a proposal would in normal
industrial relations circumstances be regarded as harsh, the Court
considers that the existing situation and the danger to the
employment of upwards of 600 workers justifies the proposal.
In the circumstances and on the basis of the evidence presented to
it the Court recommends that the Union accept the Company's
proposals for a restructuring of pay-scales and for a pay-freeze
in 1994. However, having regard to the arguments put forward by
the Union, the Court further recommends that the restructuring
should not take place before 1st February, 1994 and that in the
meantime the Company and Union enter discussions in an attempt to
achieve agreement on alternative measures which would justify
amelioration of the Company's proposal. Should such agreement not
materialise by the 1st February, 1994 the Court recommends that
the Union accept the implementation of the Company's proposals
from that date.
Division: Mr Heffernan Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD93689 RECOMMENDATION NO. LCR14311
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1),
INDUSTRIAL RELATIONS ACT, 1990
PARTIES: DE BEERS
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL ENGINEERING AND ELECTRICAL UNION
AMALGAMATED ENGINEERING AND ELECTRICAL UNION
SUBJECT:
1. Dispute concerning a cost-reduction programme.
BACKGROUND:
2. De Beers Industrial Diamond Division was established at
Shannon in 1960 and is involved primarily in the manufacture of
industrial diamonds. On 15th September, 1993, the Company sought
a reduction of 106 in its workforce by way of voluntary
redundancy/early retirement. The Company secured a reduction of
150 by its deadline date.
3. On 9th November, 1993, the Company, owing to their serious
trading position, sought an additional reduction of 90 in the
workforce, a 10% cut in pay with effect from 1st January, 1994,
and a pay freeze for 1994. The 10% cut in pay would be achieved
by removal of the top two points of the scales, reducing all
employees down two points on the incremental scale and by
introducing two 'new-comer' incremental points. The Union while
accepting further redundancies objected to the proposed 10%
reduction in pay and the pay freeze for 1994.
4. The issue was referred to the Labour relations Commission and
a conciliation conference was held on the 9th December, 1993.
Agreement could not be reached and the issue was referred by the
Labour Relations Commission to the Labour Court on the 14th
December, 1993. The Court investigated the matter on the 16th
December, 1993.
UNION'S ARGUMENTS:
3. 1. If the Company reaches its objective of 250
redundancies/early retirements it will have cut its
annual payroll substantially.
2. The Union are prepared to negotiate change on a managed
basis.
COMPANY'S ARGUMENTS:
4. 1. The implementation of the Company's proposals will help
the preservation of jobs.
2. The rates of pay in the Company are very good and even
after the reductions employees will continue to be paid
good rates.
3. Failure to implement the proposed changes could lead to
the re-allocation of production to the plants in Sweden
and South Africa.
4. The Company is in a serious position and must secure
major cost savings.
RECOMMENDATION:
5. Having considered the submissions of the parties and the oral
evidence presented at the hearing, the Court is satisfied that the
serious situation of the business is fully recognised by both
sides. This is reflected in the acceptance of redundancies and
acceptance that further measures are required for the protection
and continuation of the business.
The Court accepts that the level of losses recently incurred by
the Company is unsustainable into the future and, when viewed in
the context of the alternative production options open to the
Company, demands that all possible cost-saving measures and
marketing strategies which may help improve the situation be
implemented as quickly as possible.
Wage costs are a significant element of the overall costs and,
having regard to the acknowledged high levels of wages, it is
reasonable for the Company, in present circumstances, to seek an
overall reduction. Though such a proposal would in normal
industrial relations circumstances be regarded as harsh, the Court
considers that the existing situation and the danger to the
employment of upwards of 600 workers justifies the proposal.
In the circumstances and on the basis of the evidence presented to
it the Court recommends that the Union accept the Company's
proposals for a restructuring of pay-scales and for a pay-freeze
in 1994. However, having regard to the arguments put forward by
the Union, the Court further recommends that the restructuring
should not take place before 1st February, 1994 and that in the
meantime the Company and Union enter discussions in an attempt to
achieve agreement on alternative measures which would justify
amelioration of the Company's proposal. Should such agreement not
materialise by the 1st February, 1994 the Court recommends that
the Union accept the implementation of the Company's proposals
from that date.
~
Signed on behalf of the Labour Court
Kevin Heffernan
21st December, 1993 ----------------
P O'C/U.S. Chairman
NOTE:
Enquiries concerning this Recommendation should be addressed to
Mr Paul O'Connor, Court Secretary.