Labour Court Database __________________________________________________________________________________ File Number: CD93624 Case Number: LCR14315 Section / Act: S26(1) Parties: MUNSTER ELECTRONICS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the application of the 3% increase in basic pay under Clause 1, phase 2 of the Programme for Economic and Social Progress.
Recommendation:
The Court finds that the employees are entitled to expect payment
of the P.E.S.P. from the due dates. It is clear to the Court,
however, from the oral and written submissions of the parties and
from the financial information supplied, that the future of the
Company is delicately balanced at this time.
Accordingly, the Court recommends :
That the Company pay to the employees, 3% with effect from the
1st of October, 1993 and a further 1% with effect from the 1st of
January, 1994 ;
That on the 1st of April, 1994, the parties review the situation,
including the finances of the Company and the outstanding payments
due to the employees under the terms of the P.E.S.P. ; this
review to take account of the arrears due under Phase 2, the
non-payment of the full terms of Phase 3 of the P.E.S.P. and the
implementation of any new agreement, together with the financial
situation of the Company, with a view to both parties agreeing
appropriate arrangements which will ensure the viability and
competitiveness of the Company and will protect the living
standards of the employees.
Division: MrMcGrath Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD93624 RECOMMENDATION NO. LCR14315
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: MUNSTER ELECTRONICS
(FORMERLY MELCHERT ELECTRONICS)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the application of the 3% increase in
basic pay under Clause 1, phase 2 of the Programme for Economic
and Social Progress.
BACKGROUND:
2. The Company manufactures printed circuit-boards (PCBs) and
has been located in Listowel since 1977. Over the past 7 years,
the Company has not traded profitably and has changed ownership on
3 occasions. In April 1993, a management buy-out took place as
the German parent-company wished to withdraw from the manufacture
of PCBs in Ireland. There are presently 92 workers employed by
the Company. The Union claim is for the increase in basic pay
from the 1st of January, 1993. Due to its trading difficulties
and non-profitability, the Company has pleaded inability to pay.
The dispute was referred to the Labour Relations Commission and
conciliation conferences were held on the 16th of September and
the 22nd of October, 1993, at which agreement was not reached.
The Company made an offer which included the conditions that there
would be no retrospection and that any pay-increase would be
related to the Company's output. This was unacceptable to the
Union. The feeling of the workers was that, as they had stood by
the Company during its difficult times, their claim should be
conceded. Further intervention by the Labour Relations Commission
failed to resolve the matter. The dispute was referred to the
Labour Court on the 9th of November, 1993, in accordance with
section 26(1) of the Industrial Relations Act, 1990. The Court
investigated the dispute, on the 3rd of December, 1993.
UNION'S ARGUMENTS:
3. 1. The fact that the Company has endured difficulties in
recent times is not in dispute. However, when the management
buy-out took place, commitments were given by the Company
that the liabilities of the previous Company would be
accepted by the new management, including the honouring of
all conditions of employment of existing employees. There is
an obligation on the Company, therefore, to pay the 2nd Phase
of the P.E.S.P. from the 1st of January, 1993.
2. There is clear evidence that the Company's position has
considerably improved recently and additional workers are
being recruited. Productivity has been increased since late
1992 and workers have agreed to wide-ranging inter-
changeability and flexibility. Improvement in the Company's
standing has been achieved with the strong support of the
workers. Already the workers are one year out of step
regarding the application of the P.E.S.P. It is reasonable
that the 2nd phase be paid retrospective to the 1st of
January, 1993.
COMPANY'S ARGUMENTS:
4. 1. The management buy-out took place in April, 1993, with
the intention of transforming the Company into a viable
business. Although targets for June, 1993 were reached, the
Company encountered difficulties in mid-year and incurred
losses (details supplied to the Court). While the situation
has shown some improvement recently, extra impetus is
required to enable the Company to attain profitability. To
pay out the 3% without achieving the required output/profit
would only further exacerbate the Company's trading position.
2. The Company is currently facing considerable competition
from manufacturing companies in the Far East. In order to
improve competitiveness, new plant is required. Financiers
are reluctant to back a loss-making Company. The Company's
loan facilities have been reduced considerably (details
supplied) and will be further reduced unless a profit is
achieved for November, 1993. Additional cost-increases will,
therefore, critically affect the Company's ability to
survive.
3. Management, recognising the critical situation the
Company was in, took salary cuts in June, 1993 (Details
supplied).
RECOMMENDATION:
The Court finds that the employees are entitled to expect payment
of the P.E.S.P. from the due dates. It is clear to the Court,
however, from the oral and written submissions of the parties and
from the financial information supplied, that the future of the
Company is delicately balanced at this time.
Accordingly, the Court recommends :
That the Company pay to the employees, 3% with effect from the
1st of October, 1993 and a further 1% with effect from the 1st of
January, 1994 ;
That on the 1st of April, 1994, the parties review the situation,
including the finances of the Company and the outstanding payments
due to the employees under the terms of the P.E.S.P. ; this
review to take account of the arrears due under Phase 2, the
non-payment of the full terms of Phase 3 of the P.E.S.P. and the
implementation of any new agreement, together with the financial
situation of the Company, with a view to both parties agreeing
appropriate arrangements which will ensure the viability and
competitiveness of the Company and will protect the living
standards of the employees.
~
Signed on behalf of the Labour Court
23rd December, 1993. Tom McGrath
M.K./A.L. ---------------
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.