Labour Court Database __________________________________________________________________________________ File Number: CD9529 Case Number: LCR14670 Section / Act: S26(1) Parties: KRUPS ENGINERING LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
New Wage Structure.
Recommendation:
5. The Court in this case has been asked by the Company to
recommend that all new entrants would be paid at a considerably
reduced rate from those currently in employment. It is accepted
by the parties that these new entrants will be carrying out
exactly the same work and have the same conditions. In support of
their position, the Company gave detailed information (some on a
confidential basis) as to their present trading difficulties and
in particular the competitiveness of the Limerick plant vis a vis
other plants in the group. The Court notes that there is a degree
of acceptance from the Union side that the Company has
difficulties and has, therefore, co-operated with the Company in
the introduction of many changes in the plant which will have an
adverse effect on the workers.
Having examined the evidence submitted, the Court has concluded
that, in the exceptional circumstances of the Group and in
particular noting the Limerick plant's position in the Group, a
proposal along the lines suggested by the Company is necessary at
the present time.
The Court recommends as follows:-
(a) All permanent employees retain all their existing pay
and conditions and that these be "red circled".
In particular, their right to a fair share of available
overtime should be protected.
(b) Staff recruited from January, 1995 will start on a
weekly rate of #160.
(c) The 2nd phase of P.C.W. will be applied to rates at (a)
& (b) above, on the date already agreed.
(d) The rates for new entrants be increased by #5 per week
twelve months from the date of introduction.
(e) Simultaneous with the increase at (d) the parties
jointly carry out a review of the overall position in
the plant, with particular regard to the operation of
the Company's strategic plan and its effect on the
employees' earnings, and to narrowing the gap between
the employees rates of pay.
(f) The Court was made aware by the Union of a request made
some time ago to the Labour Relations Commission to
carry out an industrial relations audit. The Court
understands this was placed "on hold" pending the
outcome of the present negotiations. The Court
considers it important for the welfare of all that such
an audit should commence immediately.
The Court accepts that the employees are being asked to accept
considerable changes and would urge the Company in return to do
everything possible to assure the employees of the security of
their employment.
Division: Ms Owens Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD9529 RECOMMENDATION NO. LCR14670
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: KRUPS ENGINERING LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. New Wage Structure.
BACKGROUND:
2. 1. The dispute concerns a decision by the Company to
introduce a new rate of pay for new employees in its plant at
Limerick.
2. The Company has been manufacturing a range of domestic
appliances in Limerick since 1964. The plant was owned by the
Krups Group until January, 1991, when it was taken over by the
French owned Moulinex Group. The Moulinex Group has 20
factories, producing a broad range of domestic appliances,
located in France, Spain, Germany, Egypt, Mexico and Ireland.
3. The Union represents approximately 530 workers,
including 470 general workers and 50 temporary workers
recruited since August, 1994.
4. In the summer of 1994, a number of French investment
companies invested in the Group in an effort to make it more
competitive. In effect, the Group is now controlled by the
French investment companies. In July, 1994, the Group
launched a recovery plan which involved restructuring, the
closure of some plants, redundancies and renegotiation of pay.
5. In September, 1994, Management in Limerick presented a
survival plan to the Union involving a number of issues. One
of the issues involved the introduction of a new wage of #153
per week for new recruits. The present wage for general
workers is #191 per week. The dispute was referred to the
Labour Relations Commission and a conciliation conference took
place on 14th December, 1994. Most of the issues were
resolved but agreement could not be reached on the new wage
structure.
6. The dispute was referred to the Labour Court on 15th
January, 1995, under Section 26(1) of the Industrial Relations
Act, 1990. A Labour Court hearing took place on 24th January,
1995.
UNION'S ARGUMENTS:
3. 1. The rate of #153 per week is unfair to new workers.
These workers will do the same work as those on #191 per week.
Also, the rate of #153 will remain static except for general
increases such as the Programme for Competitiveness and Work
(PCW).
2. An Agreement in May 1991 allows the Company to pay new
entrants only 80% of the rate for the first 14 weeks work.
The maximum training period is 3-4 weeks. The Company is
getting at least 10 weeks where workers are doing a full job
but not getting paid for it.
3. The plant in Limerick is more cost-effective than many
others in the group. "Direct" workers in Limerick are 22%
cheaper than "direct" workers in France. Records show a
profit of #2.5m in the 1993-94 financial year in the Limerick
plant.
COMPANY'S ARGUMENTS:
4. 1. The Moulinex Group has suffered considerable job losses
in recent years with further losses predicted for the current
year. A number of plants in the Group have also closed down.
Despite investment by the French investors, the Group has a
debt of approximately #225m.
2. Because of the competitiveness of the market, the Group
has had to accept large orders with very low margins. This
further increases the financial pressure on the Group. The
plant in Limerick only produces 6% of the Group's turnover.
If it proved to be economical, the Limerick plant's production
could be transferred to other plants in the Group.
3. The new pay rate for new entrants is most important in
the long term future of the Limerick plant. The rate of #153
per week is similar to that of other companies in such a
competitive market. The Group will only continue to invest in
the Limerick plant for as long as it remains competitive.
Acceptance of the new pay rate will help ensure this.
RECOMMENDATION:
5. The Court in this case has been asked by the Company to
recommend that all new entrants would be paid at a considerably
reduced rate from those currently in employment. It is accepted
by the parties that these new entrants will be carrying out
exactly the same work and have the same conditions. In support of
their position, the Company gave detailed information (some on a
confidential basis) as to their present trading difficulties and
in particular the competitiveness of the Limerick plant vis a vis
other plants in the group. The Court notes that there is a degree
of acceptance from the Union side that the Company has
difficulties and has, therefore, co-operated with the Company in
the introduction of many changes in the plant which will have an
adverse effect on the workers.
Having examined the evidence submitted, the Court has concluded
that, in the exceptional circumstances of the Group and in
particular noting the Limerick plant's position in the Group, a
proposal along the lines suggested by the Company is necessary at
the present time.
The Court recommends as follows:-
(a) All permanent employees retain all their existing pay
and conditions and that these be "red circled".
In particular, their right to a fair share of available
overtime should be protected.
(b) Staff recruited from January, 1995 will start on a
weekly rate of #160.
(c) The 2nd phase of P.C.W. will be applied to rates at (a)
& (b) above, on the date already agreed.
(d) The rates for new entrants be increased by #5 per week
twelve months from the date of introduction.
(e) Simultaneous with the increase at (d) the parties
jointly carry out a review of the overall position in
the plant, with particular regard to the operation of
the Company's strategic plan and its effect on the
employees' earnings, and to narrowing the gap between
the employees rates of pay.
(f) The Court was made aware by the Union of a request made
some time ago to the Labour Relations Commission to
carry out an industrial relations audit. The Court
understands this was placed "on hold" pending the
outcome of the present negotiations. The Court
considers it important for the welfare of all that such
an audit should commence immediately.
The Court accepts that the employees are being asked to accept
considerable changes and would urge the Company in return to do
everything possible to assure the employees of the security of
their employment.
~
Signed on behalf of the Labour Court
Evelyn Owens
30th January, 1995 -------------
C O'N/U.S. Chairman
NOTE:
ENQUIRIES CONCERNING THIS RECOMMENDATION SHOULD BE ADDRESSED
MR CIARAN O'NEILL, COURT SECRETARY.