FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : JOHN RONAN & SONS LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Employer Member: Worker Member: |
1. (1) Non-Payment of Phase 3 of the Programme for Competitiveness and Work (PCW).
BACKGROUND:
2. John Ronan & Sons Limited was established in 1950. It is involved in the processing of cattle hide and sheepskin for export to the UK, Europe and the Far East markets. It is located in Clonmel and employs approximately 110 permanent/60 casual workers.
The dispute before the Court concerns the non-payment of Phase 3 (2.5%) of the PCW. The Company argues that due to deteriorating circumstances it requires savings in order to pay Phase 3. The Union's position is that an agreement was reached in June, 1994 regarding the payment of the PCW and that the Company should honour the agreement.
Following local level discussions the matter was referred to the Labour Relations Commission. A conciliation conference took place on 17th January, 1996 but agreement could not be reached and the dispute was referred to the Labour Court on 30th January, 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. Since 1988 there has been an agreement on co-operation, covering re-organisation and re-deployment which has resulted in the following:-
(1) The re-organisation of the hide yard, doubling productivity.
(2) The reduction of labour costs at fleshing/painting by 50%.
(3) The re-organsiation of the wool-packing.
(4) The introduction of the machine pulling in the wool grading area with a reduction in manning levels from 6 to 2, the reduction of unit costs and saving of approximately £100,000 per annum.
2. Payment of the PCW was agreed following substantial concessions by the workers. The workers have a long history of constructive negotiation with the Company and the Union is prepared to address the Company's concerns but only on the basis that Phase 3 of the PCW is paid first.
COMPANY'S ARGUMENTS:
4. 1. John Ronan & Sons Limited is currently operating at a loss and has been in a loss making position for some time now. 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 and Far East markets, have made it extremely difficult for the Company to retain its markets in Europe.
2. The Company's markets have continued to contract. This has been due partly to a movement away from leather upholstery by European car manufacturers. Moreover, the warm weather in the northern hemisphere throughout 1993, 1994, 1995 severely impacted upon sales of shoe and clothing leather and has contributed to the overall decline.
3. The unfavourable exchange rate of the punt vis-a-vis sterling and the US dollar has affected the Company's ability to compete internationally. In 1994 there were six companies processing hides and skins in Ireland. Only two are currently trading.
4. The current BSE crisis has affected supplies of hides with the beef kill at one point diminished to approximately 15% of its former levels.
5. The opening of a new wet blue bovine hide process at Portlaw, Co. Waterford in 1992 has placed a further demand on domestic supplies of hide and has posed serious competition for the Company's sales into the European Union.
6. Throughput at the Company's fellmongery is currently running at 40% of its capacity and is continuing to decline. Hide tanning facilities are currently at 60% of capacity. Both of these figures represent huge reductions in throughput levels from some years ago. Consequently, unit costs have increased substantially and have further eroded the competitiveness of the Company's produce.
7. Management has fully apprised the Union of its difficulties and has explained that it is unable to pay the 3rd Phase of the PCW. Notwithstanding, the Company is anxious to meet its obligations if at all possible. In the light of this the Company has proposed some cost saving measures which would help to offset the cost of the 2.5% increase. In the absence of cost savings the 3rd Phase cannot be paid. The Company has made it clear that it is willing to examine any alternative proposal forwarded by the Union which would result in similar savings.
RECOMMENDATION:
Having considered the submissions made by the parties and having examined the accounts submitted by the Company, the Court is satisfied that the Company must achieve some savings if it is to secure employment in the firm.
In all the circumstances the Court recommends that the Company agree to pay Clause 3 of the PCW from the due date and that both parties enter into negotiations immediately with a view to exploring areas where savings can be achieved. The final stage of the PCW should be withheld pending the outcome of the discussions and/or when the Company's position has been stabilised.
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.