FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MICHELL (IRELAND) LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. Non payment of Phase 2 of Programme for Competitiveness and Work (PCW).
BACKGROUND:
2. The Company is a wholly owned subsidiary of Michell Leather of South Australia. It is involved in the processing of wet blue bovine hide for supply to the quality end of the upholstery market. It employs 80 workers at its plant in Portlaw, County Waterford.
The dispute before the Court concerns the non-payment of Phase 2 (1.5%) of the PCW with effect from 13th October, 1995. The Company is pleading inability to pay on the grounds of poor trading conditions which have resulted in the Company incurring substantial monthly losses.
The matter was referred to the Labour Relations Commission . A conciliation conference took place on 13th February, 1996. As agreement could not be reached the dispute was referred to the Labour Court on 12th March, 1996 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place in Clonmel on 4th June, 1996.
UNION'S ARGUMENTS:
3. 1. The workers' rates of pay are already substantially out of line with the industry norm.
2. In July, 1995 the Company put forward a set of proposals involving pay and restructuring which were accepted by the workforce. The Company in acknowledging the workers acceptance of the proposals indicated that "all elements of the PCW are unchanged due to this restructuring."
3. When discussions took place between the parties in October, 1995 there was no indication that the Company would refuse to honour its agreement of July, 1995.
4. In May, 1996 the Company advised the Union that it would pay Phase 2 of the PCW from a current date, but that it would not be honouring the period October, 1995 to May, 1996. This is unacceptable to the Union. The workers have an expectation that payment of the PCW be made in full.
COMPANY'S ARGUMENTS:
4. 1. Since it commenced trading in 1992 to the end of June, 1995 the Company has recorded accumulated losses. Those losses have continued to May, 1996.
2. A variety of factors affecting the entire tanning industry has contributed to the Company's difficulties. Excess supplies of hide from the US together with the entry of new suppliers to the European market, has made it extremely difficult for Michell to retain its markets in Europe.
3. The Company's markets have continued to contract. This has been due partly to a movement away from leather upholstery by European car manufacturers towards cheaper alternatives. Moreover, the warm weather in the northern hemisphere throughout 1995 severely impacted upon sales of show leather and contributed to the overall decline.
4. The unfavourable exchange rate of the punt vis-a-vis sterling and the US dollar has affected the Company's ability to compete internationally. Its difficulties have been exacerbated by the current BSE crises.
5. The difficult trading circumstances greatly speeded the closure of Swanpool Limited trading as Irish Tanners, Dungarvan, County Waterford on 20th May, 1996 with a loss of 40 jobs. Swanpool was a direct competitor of Michell, producing an identical product and selling to the same markets.
6. All temporary contracts were terminated during October, 1995 due to trading difficulties and all remaining employees were placed on protective notice from October, 1995 to March, 1996. Throughout this period, the Company retained more employees than operational requirements justified. This was done in the best interests of the workforce
7. Some of Michell's customers have recently placed new orders and a break even situation is projected for May of this year. As soon as these orders were placed, the Company indicated to the Union that it was prepared to pay the 2nd Phase of the PCW commencing 11th May, 1996. When the issue of back payment was raised, it was made clear that any such back payment was out of the question in the context of the Company's substantial accumulated losses.
RECOMMENDATION:
Having examined the circumstances outlined in the submissions presented, the Court recommends that the Company agree to pay the arrears of PCW due to the claimants not later than 31st December, 1996 and that the Union accept this position.
Signed on behalf of the Labour Court
Evelyn Owens
1st July, 1996______________________
F.B./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.