Labour Court Database __________________________________________________________________________________ File Number: CD95464 Case Number: LCR14877 Section / Act: S26(1) Parties: MCCARRON & COMPANY LIMITED (THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning (i) Redundancy Package (ii) Cost-saving measures.
Recommendation:
The Court, having considered the written and oral submissions made
by the parties, makes the following recommendations:
1. Redundant staff to be paid 2 1/2 weeks' pay per year of
service plus the statutory entitlements;
2. A Consultant to be engaged to produce a report on the
Company, with recommendations on the ongoing business
strategy. This report to be completed within 4 weeks of the
issue of this Recommendation;
3. If the Consultant confirms the Company proposals as the way
forward, the Union should accept the proposed changes.
Division: Mr Flood Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD95464 RECOMMENDATION NO. LCR14877
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
McCARRON & COMPANY LIMITED
(represented by the Irish Business and Employers' Confederation)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
Dispute concerning (i) Redundancy Package (ii) Cost-saving
measures.
BACKGROUND:
The Company is a family-owned pig-processing plant, located
in Cavan town, employing 119 workers. The Company has been
loss-making since 1994 and is proposing the restructuring
/rationalisation of its operations. This will include the
cessation of production of 'small goods', i.e., sausages,
puddings, rashers, etc. (already implemented), and various
other cost-saving measures.
Fifty-nine workers will be made redundant and the remainder
will be asked to accept changes in work practices, including
reduction to bonus, a pay-freeze to the end of the P.C.W.,
the elimination of permanent health insurance and lower rates
of pay for future entrants, etc. Savings in the region of
#250,000 p.a. are envisaged.
The Company's six van salesmen have been given the option of
redundancy or becoming independent salesmen, delivering the
Company's product (ham, bacon, pork, etc.) and small goods
sourced outside, but sold under the Company's name. The
Company indicated its willingness to negotiate the terms of
the redundancies, if the Union was prepared to discuss the
Company's cost-saving package.
The dispute was the subject of three conciliation conferences
under the auspices of the Labour Relations Commission, at
which agreement was not reached. The Union sought a
redundancy package of six weeks' pay per year of service and
stated that, if a reasonable package was offered, workers
would probably volunteer for it. The Union argued, however,
that it was unreasonable for the remaining workers to be
asked to accept reductions in their benefits. The Union
stated that the Company's problems arose mainly due to
inadequacies in the management structure, and called for a
major reappraisal of all aspects of the Company's operations,
by a suitable external consultant. The Company indicated
that it would be prepared to bring in a consultant, but only
if the Union undertook to accept the conclusions as binding,
a condition that was unacceptable to the Union.
The dispute was referred to the Labour Court, on the 11th of
August, 1995, in accordance with Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute on the 21st of August, 1995.
COMPANY'S ARGUMENTS:
1. If the Company does not restructure its operations and
achieve cost savings, it will not continue to operate in the
medium term. The 59 redundancies, the contracting out of
small goods and savings of #250,000 are essential to maintain
60 jobs.
2. The Company cannot afford the redundancy package sought by
the Union. The cost would put a severe financial burden on
the Company as it attempts to rebuild and restructure its
operations.
3. The Company needs to save #250,000 to become competitive
in a very difficult market (details supplied to the Court).
There would be no point, therefore, in making half the
workforce redundant, and contracting out the manufacture of
some products unless the Company had the correct costs
structure. Whilst the Union appears to have accepted that
there is a need to restructure and achieve savings, it has
refused to enter into real negotiations to date.
UNION'S ARGUMENTS:
1. The Union is not convinced that the Company's proposals will
turn around the financial position currently being
experienced. The workers have already yielded to the Company
on a range of issues, with nothing to show for their
co-operation (details supplied to the Court). Now the
workers are faced with a new set of demands along with a
threat of layoffs of all staff on the 1st of September, 1995.
2. A major appraisal of all aspects of the Company's operations
is now required. As the majority of staff refuse to consider
the cost-reductions planned, the Company has no option but to
withdraw its proposals and bring in the necessary expertise,
to evaluate the best way forward for the Company.
3. It seems that the Company is bartering its cost-reduction
proposals against the claim for redundancy compensation.
Salesmen and Lorry Drivers, together with all other staff
faced with lay off and redundancy must receive compensation
for loss of their jobs and, if there are alternatives, these
can be explored by those workers.
RECOMMENDATION:
The Court, having considered the written and oral submissions made
by the parties, makes the following recommendations:
1. Redundant staff to be paid 2 1/2 weeks' pay per year of
service plus the statutory entitlements;
2. A Consultant to be engaged to produce a report on the
Company, with recommendations on the ongoing business
strategy. This report to be completed within 4 weeks of the
issue of this Recommendation;
3. If the Consultant confirms the Company proposals as the way
forward, the Union should accept the proposed changes.
~
Signed on behalf of the Labour Court
30TH AUGUST, 1995
M.K./A.K. Finbarr Flood
--------------------
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.