Labour Court Database __________________________________________________________________________________ File Number: CD93245 Case Number: LCR14092 Section / Act: S26(1) Parties: C.B. PACKAGING LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Severance terms.
Recommendation:
(2) Invest in machinery to meet the market requirements
in addition to improved level of productivity and
reduction in unit costs.
8. Against this background, the Company have put forward an
offer of #650 including Statutory entitlement per year of
service. The Union have sought a figure of #750 plus. This
argument is based on the #750 which was on offer in 1987 as
part of a redundancy package then.
9. The Union is completely ignoring the fact that since 1987,
the sack market has deteriorated at an alarming rate. This
has accelerated since 1990 and at present all European
producers are suffering from a reduction in volumes and
prices.
10. Even as the Company negotiated the rationalisation plan,
the order position had slumped to the extent that it was
necessary to issue short-time notice to our employees.
11. Under the circumstances the Company is unable to improve
its offer of #650 per year as set out above.
RECOMMENDATION:
5. The Court having considered the views of the parties in their
oral and written submissions recommends that the severance package
be increased to #750 per year of service inclusive of statutory
entitlements plus #2,500.
Division: MrMcGrath Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD93245 RECOMMENDATION NO. LCR14092
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: C.B. PACKAGING LIMITED
(REPRESENTED BY THE IRISH BUSINESS EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Severance terms.
BACKGROUND:
2. The Company which is part of the Clondalkin Group plc., is
involved in the manufacture of paper sacks. In January, 1993, the
Company informed the Union of its plans for the restructuring of
the Company's operations which would result in the loss of 20 jobs
(2 clerical/18 production). In the period February/March, 1993, a
series of meetings took place between the parties on the proposed
rationalisation scheme. Agreement was reached on manning levels
but no agreement was reached on severance terms for the proposed
20 redundancies.
The matter was referred to the Labour Relations Commission. A
conciliation conference was held on 5th April, 1993, but no
agreement was reached and the matter was referred to the Labour
Court on 7th April, 1993. The Labour Court hearing took place on
28th April, 1993.
UNION'S ARGUMENTS:
3. 1. The Company are seeking the redundancies of 30% of the
Union's membership. The effect of the Company's proposals in
many cases amount to compulsory redundancy.
2. The jobs of the workers concerned have been invested by
the Company in new plant and machinery.
3. Most of the workers concerned chose to remain with the
company when previous voluntary redundancy was on offer. The
length of service of the workers ranges from 11 to 36 years.
4. This is a time of unprecedented levels of unemployment.
Unemployment levels in the Clondalkin and surrounding areas,
where many of the employees reside, are particularly high in
comparison to national averages.
5. The Union is seeking #750 per year of service plus #5,000
as paid to printing workers in 1987. These are the minimum
terms which would be required to help the workers concerned
deal with the difficulties of unemployment.
6. The resources of the Clondalkin Group are considerable.
These resources have been substantially built and developed by
the efforts of the workers concerned.
7. In the circumstances where the Company are investing in
new plant and machinery it is reasonable to expect that
adequate funding be provided to deal with the consequences for
the workers concerned of such change.
COMPANY'S ARGUMENTS:
4. 1. From a high employment of 329 persons in 1979, the Company
contracted substantially so that by 1992, it had 83 employees.
This position came about from a number of factors as follows:
(1) Coming on stream of other Irish sack manufacturers.
(2) Competition from abroad through Irish agents.
(3) Change from paper sack packaging to bulk delivery or
plastic sacks such as polyethylene or polypropylene.
(4) Contraction and/or rationalisation of the customer
base.
2. The reduction in demand for paper sacks has also been
taking place in the U.K. and European markets leading to a
serious imbalance between supply and demand.
3. The general recession in business, free movement of goods
in Europe, and the Sterling devaluation, have exacerbated the
problem.
4. In general there is chaos in the sack business which has
led to surplus capacity which has resulted in a price war. A
great deal of uncertainty exists in the industry.
5. This has affected the Company seriously and management's
view of present and future prospects dictates that immediate
change must be brought about to lower the cost structure if
the company is to have a chance of survival in the coming
years.
6. In addition, demand from customers for glued instead of
sewn closures has forced the Company to invest #700K in new
machinery.
7. With the installation of this machine in mid 1993, a
reconstruction of the Company's operation will be done.
Against the prevailing market conditions, to make this capital
investment was a difficult decision. The company was left
with two choices :
(1) Maintain the status quo and face eventual closure of
the operation.
OR
(2) Invest in machinery to meet the market requirements
in addition to improved level of productivity and
reduction in unit costs.
8. Against this background, the Company have put forward an
offer of #650 including Statutory entitlement per year of
service. The Union have sought a figure of #750 plus. This
argument is based on the #750 which was on offer in 1987 as
part of a redundancy package then.
9. The Union is completely ignoring the fact that since 1987,
the sack market has deteriorated at an alarming rate. This
has accelerated since 1990 and at present all European
producers are suffering from a reduction in volumes and
prices.
10. Even as the Company negotiated the rationalisation plan,
the order position had slumped to the extent that it was
necessary to issue short-time notice to our employees.
11. Under the circumstances the Company is unable to improve
its offer of #650 per year as set out above.
RECOMMENDATION:
5. The Court having considered the views of the parties in their
oral and written submissions recommends that the severance package
be increased to #750 per year of service inclusive of statutory
entitlements plus #2,500.
~
Signed on behalf of the Labour Court
___________________
Tom McGrath
26th May, 1993. Deputy Chairman
F.B./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.