Labour Court Database __________________________________________________________________________________ File Number: CD94173 Case Number: LCR14392 Section / Act: S26(1) Parties: THERMAL HEAT EXCHANGERS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning a survival plan.
Recommendation:
Having fully considered all of the views expressed by the parties
and given the circumstances and the need to ensure the viability
of the Company and the protection of the maximum number of jobs,
the Court recommends as follows:
1. Pay
No increase in 1994.
2% with effect from 1st January, 1995.
2.5% with effect from 1st January, 1996.
2. Redundancy
That the redundancy package be increased to 4 weeks' pay per
year of service, inclusive of statutory entitlement.
3. Shift Work
That the Company's offer of 25% in respect of the evening
shift be accepted.
Division: MrMcGrath Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD94173 RECOMMENDATION NO. LCR14392
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
THERMAL HEAT EXCHANGERS
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning a survival plan.
BACKGROUND:
2. 1. The Company is German owned and has been located in
Drogheda since 1978. It employs 198 workers and
manufactures coils for refrigeration and
air-conditioning units. It has been incurring
substantial losses for some years and earlier this year
it submitted a survival plan to the Union. The plan
included 30 redundancies in the production area, a 2
year pay-freeze, changes in shift premia and various
other changes in work practices.
2. Following local negotiations and the intervention of the
Labour Relations Commission, 3 areas of difficulty
remain; the level of redundancy compensation, the pay
freeze and the shift changes.
i) Redundancy Compensation
The Company has offered a voluntary redundancy
package of 3 weeks' pay per year of service. The
Union's claim is for 5 weeks' pay per year of
service.
ii) Two year pay-freeze
The Company proposed that it would not pay the
first 2 phases of the Programme for
Competitiveness and Work (P.C.W.). The first
phase was due to commence on 1st January, 1994.
The Company later modified its position to
bringing 1% of the third phase forward by 1 year
to 1st January, 1995. The Union has rejected all
proposals on a pay-freeze.
iii) Shift changes
The present shift situation is that 75 workers
operate a rotating shift of 6 a.m. to 2 p.m. and
2 p.m. to 10 p.m. for which they receive a premium
of 20%. The Company is seeking to change to a
semi-fixed evening shift where a reduced number of
workers would work for a week on evenings followed
by a week on days and the workers would receive a
premium of 25% for the week on evenings. There
would be no premium paid for the day work. The
Union was opposed to changes in shift because of
the effect on workers' earnings and the change in
their working pattern.
3. The dispute was referred to the Labour Relations
Commission and conciliation conferences were held on 7th
and 14th March, 1994. It was not possible to resolve
all the issues and the above matters were referred to
the Labour Court under Section 26(1) of the Industrial
Relations Act, 1990 on 21st March, 1994. A Labour Court
investigation took place on 28th March, 1994.
UNION'S ARGUMENTS:
3. 1. The workers have given continuous co-operation to the
Company over the past number of years. The Union's
reaction to the "survival plan" has been measured and
positive. The Company must deal with the outstanding
issues in a realistic fashion.
2. Redundancy
The Company's offer of 3 weeks' pay per year of service
is unacceptable to the Union. It is out of line with
the norms for both the industry and the area. The terms
of the package must be improved for those workers who
were forced to leave the Company.
3. Two year pay-freeze
The totality of the survival plan forces the workers to
accept great change and losses. It is unacceptable that
the Company is seeking to manage on the implementation
of the negotiated terms of the P.C.W..
4. Shift Changes
It is unreasonable of the Company to expect the Union to
give up the system of rotating shifts and the conditions
which apply to same. The Company's shift proposals
involve unsustainable losses to a large number of
workers and the Union is not in a position to consider
their implementation.
COMPANY'S ARGUMENTS:
4. 1. The Company has sustained substantial losses over the
past 3 years due to a significant change in the market
place and increased competition. The cost of the raw
material is determined by the market, therefore, the
only area where the Company can reduce its costs is in
the costs of its labour. The Company's survival plan
is essential to its continued operation. The plan must
be accepted in total.
2. Redundancy Compensation
The 30 redundancies are essential to reduce the
Company's cost of labour to a competitive level. The
Company's final offer of compensation of 3 weeks' pay
per year of service is measured against what it can
afford in the circumstances.
3. Two year pay-freeze
During the currency of the P.E.S.P. the Company's cost
of labour increased by 13.25%. This cost must be
absorbed as it cannot be passed on to customers.
(Details supplied to the Court). The Company's final
offer on pay is the very maximum increase which can be
afforded.
4. Shift Changes
The Company's present double rotating shift system is
unsatisfactory on grounds of cost and the disruption
which the change-over causes to production. The
Company's final position, of a weekly rotation between
day-work and an evening shift with a 25% premium for
evening shift only, takes account of difficulties which
the Union outlined during negotiations.
RECOMMENDATION:
Having fully considered all of the views expressed by the parties
and given the circumstances and the need to ensure the viability
of the Company and the protection of the maximum number of jobs,
the Court recommends as follows:
1. Pay
No increase in 1994.
2% with effect from 1st January, 1995.
2.5% with effect from 1st January, 1996.
2. Redundancy
That the redundancy package be increased to 4 weeks' pay per
year of service, inclusive of statutory entitlement.
3. Shift Work
That the Company's offer of 25% in respect of the evening
shift be accepted.
~
Signed on behalf of the Labour Court
9th May, 1994. Tom McGrath
J.F./A.L. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.