Labour Court Database __________________________________________________________________________________ File Number: CD93492 Case Number: LCR14221 Section / Act: S26(1) Parties: CARTON BROS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
(i) 3rd Phase/Clause 3 of The Programme for Economic and Social Progress (P.E.S.P.). (ii) Conditions of Employment.
Recommendation:
7. The Court has considered the submissions of the parties and
the additional evidence presented at the hearing. Its
examination shows clearly that cost-containment is essential to
the business, given the Company's existing financial position and
its need for additional investment to meet changing market trends.
Failure would have implications for both the business and
employment. Having regard to this situation and also to the
objectives of the P.E.S.P the Court recommends that:-
- the Company pay the 3rd phase of P.E.S.P. with effect
from 1/10/93.
- that arrears, i.e. for period from 1/4/93, be paid
not later that 31/3/94.
- that no payment be made under Clause 3 of P.E.S.P. as
the Company circumstances do not meet the
requirements of that part of the agreement.
- that the Company does not totally suspend the
sick-pay scheme but that it suspend payment of the
first three days of any sick absence.
- that this restriction continue for a period of six
months during which time the parties seek agreement
on methods to eliminate abuse of the scheme.
- that the existing tea-breaks continue for the present
but that the Union accept the necessity for strict
adherence to the time limits.
Division: Mr Heffernan Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD93492 RECOMMENDATION NO. LCR14221
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT, 1990
PARTIES: CARTON BROS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. (i) 3rd Phase/Clause 3 of The Programme for Economic and
Social Progress (P.E.S.P.).
(ii) Conditions of Employment.
BACKGROUND:
2. The Company which employs approximately 320 people is involved
in poultry processing for the Irish and U.K. markets. The
workers concerned are employed by the Company as feed mill
operaters, hatchery workers, processing and maintenance staff
at three different locations in Cavan and Monaghan.
In late 1992, early 1993, due to its serious
financial/economic position, the Company sought to reduce unit
costs to bring items into line with its major competitors.
The changes proposed involved a review of pay rates,
non-payment of 3rd phase and clause 3 of P.E.S.P., withdrawal
of sick-pay scheme and the elimination of a 15-minute
afternoon tea break. The Union rejected the proposals.
The matter was referred to the Labour Relations Commission.
Conciliation conferences took place on 26th March, 1993, 27th
April, 1993 and 31st May, 1993, but no agreement was reached
and the matter was referred to the Labour Court on 4th August,
1993. The Labour Court hearing took place on 8th September,
1993.
UNION'S ARGUMENTS:
3RD PHASE AND CLAUSE 3 P.E.S.P.
3. 1. The Company cannot sustain a claim for inability to pay
given its performance in recent years. The audited accounts
show substantial pre-tax profits for the years ending
December, 1991 and December, 1992.
2. The current trading position of the Company does not
justify the attempts being made to seriously worsen the
conditions of employment of the workers concerned. Increases
under the terms of the P.E.S.P cater for cost-of-living
increases.
3. The performance and on-going co-operation of workers
concerned merit the full application of the 13 3/4% increases
under the terms of the P.E.S.P.
4. Many of the Company's problems are related to a failed
commercial investment which had nothing to do with the
operations in Cavan and Monaghan.
5. The basic rates of pay of the workers concerned are low
when compared to production workers generally.
6. The Company has benefited considerably since October,
1992, as a result of low interest rates.
CONDITIONS OF EMPLOYMENT
4. 1. The Union cannot accept the total withdrawal of the
sick-pay scheme
2. To withdraw the sick-pay scheme would be at variance
with the spirit of Clause 4 of P.E.S.P. and unfair to the
majority of workers who act responsibly in relation to the
scheme
3. The Union are willing to help tighten up on absenteeism
by agreeing to the introduction of a Company doctor for the
purpose of sick certificates.
4. The afternoon tea-break in necessary given the nature of
the climatic conditions of work involved.
5. The withdrawal of the afternoon tea-break could affect
the morale of the workers.
COMPANY ARGUMENTS:
3RD PHASE AND CLAUSE 3 P.E.S.P.
5. 1. Given the depressed state of the poultry industry
generally, in relation to prices and in particular the
Company's severe debt problem and high cost structure, it is
imperative that action be taken now in relation to reducing
its costs and making it more competitive vis-a-vis other Irish
producers and imports.
2. If the Company is to maintain its position and grow it
must be in a position to compete but to do this it must tackle
its high cost structure. For example, portioning as a
percentage of demand has quadrupled in the last 4 years.
However, the Department of Agriculture has written to the
Company on a number of occasions indicating that they are very
unhappy with the Company's facilities in this area and are
demanding capital investment in upgrading these facilities;
yet the Company is simply not in a position to fund such
investment. So here is a potential growth area which the
Company cannot afford to respond to because of its high cost
structure.
3. The responsibility to solve these difficulties must be
shared between the employer and employees. The Company is not
looking for a quick-fix solution but rather is attempting to
tackle the core of the problem which lies in its cost
structure. Achievement of the Company's proposals would still
leave employees in Carton Bros with the highest wage rates in
the industry. If the cost structure can be brought in line
then the Company will be in a much stronger position to
stabilise its position and grow its market share. This in
turn will enable the Company to invest in capital and take
advantage of new product development opportunities as outlined
earlier. Such development would provide greater job security
and should expand the numbers employed in the Company.
CONDITIONS OF EMPLOYMENT:
6. 1. There is clear evidence to show that the Sick Pay Scheme
is contributing to very high absenteeism; when it was
previously withdrawn, absenteeism levels fell to 2%.
2. The Company believe that the elimination of one of the
15 minute tea breaks would not cause undue hardship,
particularly since this is in line with a lot of similar
companies both within and outside the industry.
RECOMMENDATION:
7. The Court has considered the submissions of the parties and
the additional evidence presented at the hearing. Its
examination shows clearly that cost-containment is essential to
the business, given the Company's existing financial position and
its need for additional investment to meet changing market trends.
Failure would have implications for both the business and
employment. Having regard to this situation and also to the
objectives of the P.E.S.P the Court recommends that:-
- the Company pay the 3rd phase of P.E.S.P. with effect
from 1/10/93.
- that arrears, i.e. for period from 1/4/93, be paid
not later that 31/3/94.
- that no payment be made under Clause 3 of P.E.S.P. as
the Company circumstances do not meet the
requirements of that part of the agreement.
- that the Company does not totally suspend the
sick-pay scheme but that it suspend payment of the
first three days of any sick absence.
- that this restriction continue for a period of six
months during which time the parties seek agreement
on methods to eliminate abuse of the scheme.
- that the existing tea-breaks continue for the present
but that the Union accept the necessity for strict
adherence to the time limits.
~
Signed on behalf of the Labour Court
Kevin Heffernan
18th October, 1993 ----------------
F.B/U.S. Chairman
NOTE:
Enquiries concerning this Recommendation should be addressed to
Mr Fran Brennan, Court Secretary.