Labour Court Database __________________________________________________________________________________ File Number: CD94421 Case Number: LCR14569 Section / Act: S26(1) Parties: LISSADELL TOWELS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
(i) Claim for increase under the first phase of the Programme for Competitiveness and Work (PCW), (ii) Reduction in basic pay.
Recommendation:
The Court has considered the submissions from the parties and has
studied the financial information supplied to it subsequent to the
hearing.
The Court has come to the conclusion that urgent action is needed
if the Company is to return to viability. The Court accordingly,
recommends that payments of Phase 1 of P.C.W. be postponed and
that the Company and Union, as a matter of urgency, agree to enter
into negotiations as to how the savings required by the Company
can be achieved. The Court accepts that both parties may require
the assistance of their own experts in these negotiations and
would expect that these negotiations should conclude by 9th
December, 1994.
It remains open to the Union to re-submit the claim for Phase 1 of
the P.C.W. direct to the Court if necessary if the matter is not
resolved in the context of the above proposed negotiations.
Division: Ms Owens Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94421 RECOMMENDATION NO. LCR14569
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
LISSADELL TOWELS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. (i) Claim for increase under the first phase of the
Programme for Competitiveness and Work (PCW),
(ii) Reduction in basic pay.
BACKGROUND:
2. The Company is involved in the manufacture of towels, mainly
for the hotel trade. It is based in Carrickmacross and
employs approximately 150 workers.
The dispute before the Court concerns the Union's claim for
payment of the first phase of the P.C.W. with effect from 9th
April, 1994. Local level discussions took place, following
which the Company indicated inability to pay the increase
due. The Company's position is that it is seeking a pay
reduction of 10% to be applied to all employees to enable it
to survive in the future.
The dispute, along with a number of other issues was referred
to the Labour Relations Commission. Conciliation conferences
took place on 14th June, 1994 and 12th July, 1994. At the
second conciliation conference the Company put forward the
following proposals in relation to the proposed
pay-reduction:-
- elimination of service-pay
- overtime rates to be reduced
- workers to work a number of days in the year for no
pay
- a limited number of redundancies
- pay-freeze for 3 years
- revert to 40 hour week
The Union rejected the Company's proposals.
As no agreement could be reached the dispute was referred to
the Labour Court by the Labour Relations Commission on 9th
August, 1994 in accordance with Section 26(1) of the
Industrial Relations Act, 1990. A Labour Court hearing took
place in Dublin on the 30th August, 1994.
UNION'S ARGUMENTS:
3. 1. The Company has made it difficult to create a good
industrial relations environment because of its
continuing policy of refusing to pay the basic terms of
National Wage Agreements.
2. The Labour Court in LCR no. 13468 issued in November,
1991 considered that in the event of the Company
reaching a break-even situation there is an obligation
on it to discharge its liability under the Programme for
Economic and Social Progress (PESP). The Company is
expecting a break-even or small profit situation in the
financial year 1993/1994.
3. The Company has acknowledged the workers contribution to
its survival plan in 1993, which resulted in substantial
savings to the Company.
4. The workers are prepared to co-operate with management
on an on-going basis to enable the Company reduce costs
through new work concepts i.e. 'world class'
manufacturing etc., provided that the basic terms and
conditions of employees are not affected.
COMPANY'S ARGUMENTS:
4. 1. While conceding that there is a need to dramatically
reduce the Company's costs the workers have refused to
negotiate on any cost saving measures.
2. A comparison of Lissadell's costs in relation to its
major European competitors show that:-
(a) The Company's payroll costs as a percentage of
sales value are higher.
(b) Its capital investment is lower.
(c) Its turnover per employee is lower.
Because of these cost factors the Company needs a
reduction of 10% in payroll costs. This would
contribute approximately #250,000 in a full year and
allow the Company return to profitability.
3. Since April, 1993, the Company has been trying to
maintain its competitiveness against persistent
competition from low cost countries such as Turkey,
India and China. Despite this competition the Company
believes that certain strategies properly executed would
preserve jobs and the future of the majority of
employees.
4. The Company's books have been analysed in detail by the
Union's accountants twice in the past 3 years. It is
the Company's understanding that the workers have been
informed that the situation is critical.
5. In recent years the Company has experienced serious
financial difficulties. In the circumstances the
rejection of the Company's proposals and the Union's
refusal to negotiate on the matter is unacceptable and
unrealistic, especially as the need for savings has been
accepted by the workers concerned.
RECOMMENDATION:
The Court has considered the submissions from the parties and has
studied the financial information supplied to it subsequent to the
hearing.
The Court has come to the conclusion that urgent action is needed
if the Company is to return to viability. The Court accordingly,
recommends that payments of Phase 1 of P.C.W. be postponed and
that the Company and Union, as a matter of urgency, agree to enter
into negotiations as to how the savings required by the Company
can be achieved. The Court accepts that both parties may require
the assistance of their own experts in these negotiations and
would expect that these negotiations should conclude by 9th
December, 1994.
It remains open to the Union to re-submit the claim for Phase 1 of
the P.C.W. direct to the Court if necessary if the matter is not
resolved in the context of the above proposed negotiations.
~
Signed on behalf of the Labour Court
7th October, 1994 Evelyn Owens
F.B./D.T. ____________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.