Labour Court Database __________________________________________________________________________________ File Number: CD93398 Case Number: LCR14166 Section / Act: S26(1) Parties: CAVAN MINERAL WATER COMPANY LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
(i) Clause 3 and 3rd Phase of the Programme for Economic and Social Progress (P.E.S.P.), (ii) Redundancy compensation.
Recommendation:
6. Having considered the views of the parties as expressed in
their oral and written submissions, having examined the accounts
of recent years and the correspondence from financial
institutions, the Court considers that the redundancy terms as
offered by the Company should be accepted.
With regard to the claims under the provisions of P.E.S.P., the
Court recommends that the union defer consideration of these until
July, 1994, when the situation should be reviewed.
The Court so recommends.
Division: MrMcGrath Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD93398 RECOMMENDATION NO. LCR14166
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: CAVAN MINERAL WATER COMPANY LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. (i) Clause 3 and 3rd Phase of the Programme for Economic and
Social Progress (P.E.S.P.), (ii) Redundancy compensation.
BACKGROUND:
2. The Company is a family owned concern engaged in the bottling
and distribution of various alcoholic and soft drinks. The
Company was first established in 1927 and currently employs
approximately 26 people.
In April, 1992, the Union sought a meeting with the Company to
discuss Clause 3 of P.E.S.P. A meeting took place on 12th March,
1993, at which the Company stated that it was not prepared to
discuss Clause 3 and that it was pleading inability to pay the
third Phase of P.E.S.P. due with effect from 12th March, 1993.
The matter was referred to the Labour Relations Commission.
On 14th June, 1993, the Company announced that it was closing down
the bottling line which would result in the loss of 8 jobs. The
Union submitted a claim for compensation payments of 6 weeks' pay
per year of service plus statutory entitlements. A meeting took
place between the parties on 30th June, 1993, at which the Company
stated that it was not in a position to pay more than the
statutory entitlements. The Union rejected the Company's position
and it was agreed to refer the matter with the other issues in
relation to P.E.S.P. to the Labour Relations Commission. A
conciliation conference was held on 7th July, 1993, but no
agreement could be reached and the matter was referred to the
Labour Court on 8th July, 1993. The Labour Court hearing took
place on 22nd July, 1993. On 3rd August, 1993, the Court issued
its recommendation by letter.
(i) Clause 3 and Phase 3 of P.E.S.P.
UNION'S ARGUMENTS:
3. 1. The rates of pay of the workers concerned are
substantially lower than workers in similar employments.
2. Most local workers in similar employments have received
the 3rd phase and the terms of Clause 3 of the P.E.S.P.
3. Concession of the Union's claim would still leave the
rates of pay paid by the Company below the rates paid by its
competitors and considerably less than workers in local
industry generally.
4. The implementation of Clause 3 is the only means open to
the workers to fulfil their aspirations of achieving a
reasonable level of remuneration.
COMPANY'S ARGUMENTS:
4. 1. The Company is experiencing severe trading difficulties.
The financial accounts and position of the Company show a
fundamental inability to pay.
2. The bank has stated that it will not release funds for
such increases.
3. Concession of the Union's claim could lead to the
Company's closure. It is in the best interest of the
workers concerned in the long-term and short-term, that
further pressure is not put on its finances.
4. The Company's financial position is maintained by way of
the personal guarantees of the directors to its bankers.
5. The Company has always honoured its commitments in the
past and will do so in the future. The Company would be
prepared to pay the basic terms of the P.E.S.P. if a
break-even position is achieved in the future.
6. Clause 2 of P.E.S.P. states that increases due under
Clause 1 should be applied, "due regard being had to the
economic and commercial circumstances of the particular firm,
employment or industry". The Company is invoking this Clause
as it clearly applies in this situation.
(ii) Redundancy Compensation
UNION'S ARGUMENTS:
4. 1. The rationalisation plan proposed will benefit the Company
only. The workers concerned are faced with long-term
unemployment.
2. The Company has traded profitably for many years. It is
20 years since any new investment was made in the bottling
line.
3. The Company claims that this rationalisation plan is the
only way to return to profitability. The plan must take
account of compensation due to the workers. The workers have
given the Company many years of loyal service and compensation
payments of six weeks' pay per year of service is not
unreasonable in the circumstances.
COMPANY'S ARGUMENTS:
5. 1. The Company is experiencing severe trading difficulties.
2. Concession of any claim would worsen the already delicate
financial position of the Company.
3. The deteriorating position of the Company has resulted in
the banks issuing an ultimatum to rationalise. This ultimatum
requires that the Company finance the rationalisation without
the assistance of the banks.
4. The personal financial positions of the shareholders are
extremely vulnerable.
5. The Company has maintained from day one that it wishes to
be as open as possible about all the facts. In this regard
the Company has offered to make its books available to an
agreed Union accountant or other such person, to verify the
facts.
6. If the bank is forced into any sort of an uncompromising
position it will simply fore close. The Company is already
behind deadlines laid down by the bank.
7. The Company hopes that the new slimmed down operation will
enable it to survive, trade its way out of difficulties,
prosper in the future and in doing so, save 19 jobs.
RECOMMENDATION:
6. Having considered the views of the parties as expressed in
their oral and written submissions, having examined the accounts
of recent years and the correspondence from financial
institutions, the Court considers that the redundancy terms as
offered by the Company should be accepted.
With regard to the claims under the provisions of P.E.S.P., the
Court recommends that the union defer consideration of these until
July, 1994, when the situation should be reviewed.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
_____________________
6th September, 1993. Deputy Chairman.
F.B./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.