Labour Court Database __________________________________________________________________________________ File Number: CD93648 Case Number: LCR13894 Section / Act: S26(1) Parties: DONNELLY MIRRORS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Redundancies.
Recommendation:
The Court, recognises the serious difficulties which are created
for individuals by the loss of jobs. The Court also recognises
the current parlous state of the motor industry world-wide which
is impacting on component suppliers in Ireland.
The Court would ask the Company to examine minutely its proposals,
to see if any alternative positions at any level can be made
available which would result in a reduction in the number of job
losses proposed.
Should redundancies be necessary, the Court would recommend that
these be carried out as far as possible on a voluntary basis.
The Court recommends that the terms should be four weeks per year
of service, inclusive of statutory entitlement with a ceiling of
two years earnings.
The Court so recommends.
Division: MrMcGrath Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD93648 RECOMMENDATION NO. LCR13894
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: DONNELLY MIRRORS
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Redundancies.
BACKGROUND:
2. The Company supplies interior mirrors to the automotive
industry in Europe and Japan. It employs 330 people. The Company
is divided into 2 areas, the P.C.M. business (prisms and complete
mirrors) and the E.C. business. The E.C. business is a new high
technology advanced mirror business and is in the early
development stage. The dispute relates to the P.C.M. area.
The dispute concerns the redundancies (16) the Company wishes to
make. The Company states that the automotive industry has been in
recession for 2 years, particularly 1993, and that these
redundancies are necessary if the Company is to continue to be
successful. The Union opposes compulsory redundancies.
At at meeting on 14th October, 1993 both parties put forward
proposals regarding the redundancies.
The Company's offer was:
1. 3 weeks p.y.s. inclusive of statutory entitlements
2. Maximum of 1.25 years' pay.
The Union's offer was:
1. 7.50 weeks p.y.s. plus statutory for service up to 10
years
2. 8.50 weeks p.y.s. plus statutory for service over 10 years
3. No upper limit
4. "A week's pay" to be calculated so as to include value
of fringe benefits
5. Maintenance of V.H.I., pension, medicare and life
assurance cover for 5 years
6. Pay in lieu of notice
7. Minimum payment to be calculated by reference to a
recognised service of 5 years.
There was no agreement and the dispute was referred to the Labour
Relations Commission. A conciliation conference took place on
29th October, 1993 but no further agreement was reached. On 12th
November, 1993 the dispute was referred to the Labour Court under
Section 26(1) of the Industrial Relations Act, 1990. A Labour
Court hearing took place on 30th November, 1993.
UNION'S ARGUMENTS:
3. 1. The Company admits that the poor sales figures for 1993
are "sudden" and "unexpected". Figures that drop so suddenly
cannot be relied upon. The Company had initially announced
59 redundancies (16 staff and 43 on floor) but then decided
on just 16 staff. The Company's decision to immediately seek
redundancies is too hasty.
2. The Company states that the redundancies (all in the
P.C.M. area) are part of an overall design to reduce
overheads, not because of poor sales. It is unfair that no
one from the E.C. area or management should be included in
the redundancies. The P.C.M. area made a profit of #1
million to June 1993 while the E.C. area made a loss of #1.5
million.
3. The Company has been inconsistent in its approach to the
problem. Eight temporary employees have been employed since
the redundancies were announced and 18 staff workers employed
since January 1991.
4. The Union will only accept voluntary redundancies and
only when the Company makes a reasonable offer. Similar
companies with redundancies have offered far better deals
(details supplied).
COMPANY'S ARGUMENTS:
4. 1. The automotive industry has been in recession for over 2
years, with particular problems in 1993. There will be 2
million fewer vehicles built in Europe and 600,000 fewer
built in Japan in 1993 than in 1992. As many as 400,000 jobs
may be lost in the component industry in Europe if the
situation continues. The actual sale of prisms and complete
mirrors is considerably down on the Company's projected sales
for the year. The Company is also facing competition from
low cost producers.
2. The Company has to take a number of cost cutting
measures if it is to survive. This is particularly important
in the area of manpower costs, with over 50% of costs in
payroll. After discussions with the Union on 10th September,
1993 (details supplied) it was decided on a permanent
reduction of 15 salaried positions and 43 hourly paid
workers. Further negotiations, and the protential for new
production jobs in the summer of 1994, means that the 43
hourly paid jobs may be saved. However, further
redundancies, to reduce overheads in this area, are not ruled
out.
3. It is because of the possibility of further redundancies
that the Company cannot afford a high redundancy settlement.
It is important for the Company's future that the correct
mixture of skilled workers is maintained. If necessary,
compulsory redundancies will have to be made to maintain this
mixture.
RECOMMENDATION:
The Court, recognises the serious difficulties which are created
for individuals by the loss of jobs. The Court also recognises
the current parlous state of the motor industry world-wide which
is impacting on component suppliers in Ireland.
The Court would ask the Company to examine minutely its proposals,
to see if any alternative positions at any level can be made
available which would result in a reduction in the number of job
losses proposed.
Should redundancies be necessary, the Court would recommend that
these be carried out as far as possible on a voluntary basis.
The Court recommends that the terms should be four weeks per year
of service, inclusive of statutory entitlement with a ceiling of
two years earnings.
The Court so recommends.
~
Signed on behalf of the Labour Court
17th January, 1994. Tom McGrath
C.O'N./A.L. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.