Labour Court Database __________________________________________________________________________________ File Number: CD94223 Case Number: LCR14488 Section / Act: S26(1) Parties: KRUPS ENGINEERING LTD - and - SIPTU |
Dispute arising from a Company proposal to reduce the shift premiumin the injection moulding department.
Recommendation:
5. The Court has considered the submissions of the parties and
the additional oral evidence presented at the hearing. The Court
is seriously concerned that, in presenting the historical
background to the present 3-cycle shift-premium, the Union has
dismissed the financial difficulties which led to the takeover of
Krups by Moulinex, and the financial problems which currently
beset Moulinex at international level and which have led to
large-scale redundancies. It is obvious that the Limerick plant
cannot be isolated from the overall Group situation, and the fact
that it may be performing well relative to some other plants does
not diminish its need to improve its competitiveness.
In considering the 3-cycle shift-premium, the Court is conscious
that it includes some elements which were negotiated in return for
specific undertakings and commitments by the staff. While these
undertakings might not justify special payments in today's
circumstances, the payments related to them were freely negotiated
at the time and an undertaking was given by the Company in 1992
that they would continue. in the circumstances, the Court does
not recommend that they be changed at this time, but that they
should be 'red-circled' in respect of present holders.
However, the Court considers that there is a pressing obligation
on the workers involved to meet their ongoing commitments given in
return for the various payments which were negotiated, and
particularly those given under the 1980 agreement which guaranteed
their "full co-operation with technical and organisational changes
in the shift-working departments". The Court regards the 1980
agreement as a two-way trade and in the event of workers failing
to meet their obligations in a constructive way, the Company would
be entitled to withdraw the payments which constituted its side of
the bargain.
Division: Mr Heffernan Mr Brennan Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94223 RECOMMENDATION NO. LCR14488
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT, 1990
PARTIES: KRUPS ENGINEERING LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute arising from a Company proposal to reduce the shift
premium in the injection moulding department.
BACKGROUND:
2. The Company, which has been based in Limerick since 1964,
manufactures a range of small domestic appliances, and employs a
workforce of 603 of which 32 are directly concerned in the
dispute. Up to 1991, the Company was part of the Krups Group. In
January, 1991, the Krups Group was taken over by the French-based
company Moulinex. The takeover saved the Krups Group from
financial difficulties and the Limerick plant from closure. The
Moulinex Group has 23 factories world-wide. In the past two
years, the Group has suffered significant losses and total
employment fell by 2,400 up to April,1994, with further loss
expected. Redundancies and temporary lay-offs have taken place in
the Limerick plant and more are anticipated. The Group is seeking
to eliminate all potential cost-increases and to make savings
wherever possible. Against this background, the Company seeks to
buy out the 3-cycle rotating shift-premium of 36%, which was
included in an agreement reached by the parties in 1980, and
replace it with a more standard 3-cycle premium of 25%. The
Company has made a buy-out offer of 78 weeks' loss of earnings.
This was rejected by the Union which is seeking a red-circling
arrangement for the workers concerned. The dispute was referred
to the Labour Relations Commission and a conciliation conference
was held on he 15th of March, 1994, at which agreement was not
reached. The dispute was referred to the Labour Court, on the
19th of April, 1994, in accordance with Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute on the 25th of May, 1994.
COMPANY'S ARGUMENTS:
3. 1. The Moulinex Group, of which Krups Engineering is but
one of over twenty production facilities, is currently making
significant losses. There is a clear excess of capacity in
the Group and jobs have been, and continue to be, lost
throughout the Group, with complete plants being closed as
part of this process.
2. Any anomalies that exist in the Limerick plant or indeed
any issues which serve to put the future of the plant at risk,
have to be faced up to in a realistic manner, in the interest
of all the employees at the plant.
3. The employees on the rotating 3-cycle shift have a
reasonable basic rate of pay which is above the basic rate in
the factory. The current shift premium of 36% is totally
unrealistic for this type of shift-pattern and should be
reduced; the premium proposed by management, 25%, is at or
above the norm for this kind of shift.
4. The Company has offered a generous compensation package
of 78 weeks' loss of earnings. This amount is well above the
norm in Irish industry.
5. The 36% premium is a conspicuous problem both in the
eyes of other employees not currently on shift, and in the
sense that it is above Irish norms, which are above most
international norms. It was one of the reasons the Group
declined to sign a recent draft-agreement with the Industrial
Development Authority. The Group intends to increase the
volume of shift-work in the factory and the risk of such a
high premium spreading to other parts of the factory cannot be
ignored.
6. When the Company was taken over by the French Group, the
Group as a whole was trading profitably. Commitments given
then by the general manager would not be given now. Those
commitments were given with a view to securing the full
co-operation of the employees with changes required by the new
owners.
UNION'S ARGUMENTS:
4. 1. The 32 workers involved have received the premium for 15
years or more and have set their living standards accordingly.
2. There is a fairly large number of people in Krups
Limerick who are "Red Circled" or on a personal rate in other
departments. It has been agreed that when a 3-cycle shift
worker leaves or becomes redundant, he will be replaced by a
'fixed-shift' worker. Consequently the requirement for a
3-cycle shift work will end in time, and with it the 36%
premium.
3. The General Manager made two commitments to the 32
shiftworkers during the last 18 months:-
(i) That there would be no loss of earnings to the
current workforce ;
(ii) that workers will not be removed from the shift in
the moulding department.
These commitments must be honoured by the Company.
4. It is unreasonable of the Company to seek to reduce the
shift-workers' earnings by 11% and to expect duties to be
performed for which the 11% was paid in the first instance.
(Details supplied to the Court).
5. Krups (Limerick) is a very modern, viable and profitable
Company and for Management to propose a wage reduction is
totally unacceptable. The total cost of this issue to the
Company is #80,000 a year which is less than 0.5% of the
total pay-roll.
RECOMMENDATION:
5. The Court has considered the submissions of the parties and
the additional oral evidence presented at the hearing. The Court
is seriously concerned that, in presenting the historical
background to the present 3-cycle shift-premium, the Union has
dismissed the financial difficulties which led to the takeover of
Krups by Moulinex, and the financial problems which currently
beset Moulinex at international level and which have led to
large-scale redundancies. It is obvious that the Limerick plant
cannot be isolated from the overall Group situation, and the fact
that it may be performing well relative to some other plants does
not diminish its need to improve its competitiveness.
In considering the 3-cycle shift-premium, the Court is conscious
that it includes some elements which were negotiated in return for
specific undertakings and commitments by the staff. While these
undertakings might not justify special payments in today's
circumstances, the payments related to them were freely negotiated
at the time and an undertaking was given by the Company in 1992
that they would continue. in the circumstances, the Court does
not recommend that they be changed at this time, but that they
should be 'red-circled' in respect of present holders.
However, the Court considers that there is a pressing obligation
on the workers involved to meet their ongoing commitments given in
return for the various payments which were negotiated, and
particularly those given under the 1980 agreement which guaranteed
their "full co-operation with technical and organisational changes
in the shift-working departments". The Court regards the 1980
agreement as a two-way trade and in the event of workers failing
to meet their obligations in a constructive way, the Company would
be entitled to withdraw the payments which constituted its side of
the bargain.
~
Signed on behalf of the Labour Court
27th of June, 1994 Kevin Heffernan
M.K./U.S. ----------------
Chairman
NOTE:
Enquiries concerning this Recommendation should be addressed to
Mr Michael Keegan, Court Secretary.