FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PREMIER PERICLASE (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Carberry Worker Member: Mr O'Neill |
1. 4% Third Phase of the Programme for Prosperity and Fairness (PPF)
BACKGROUND:
2. The Company Premier Periclase Limited is based in Drogheda and is part of the C.R.H. Plc Group and manufactures chemicals. Each Company within the group is a stand alone entity and must generate its own profit, cash and pay its own pay. There is no cross company subsidisation.
In 1997, the Company embarked on a cost cutting exercise which included a reduction in employee numbers from 222 to 139. There are 116 people presently in permanent employment in the Company.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not be reached, the dispute was referred to the Labour Court on 25th October 2002 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 11th February 2003, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3.1.This dispute concerns the failure of the Company to pay the terms of the Third Phase of the PPF which was due from 1st April 2002.
2. Due to a cost cutting exercise from 1997, which included a reduction in employee numbers from 222 to 139, savings equivalent to €5million on salary/wages has been achieved. There was a further savings in 2002 of €1million. Also C.R.H. Plc had a profit before tax of €196 million for the first 6 months of 2002.
3. Rationalisation plans made to employees to further reduce costs were adhered to and every target set by the Company which was within the employees control was achieved without any fall in output.
4. Having regard to the above, the Company's refusal to pay the Third Phase of the PPF, which for 116 people would cost in the region of £204,000 a year, is not acceptable to the employees.
COMPANY'S ARGUMENTS:
4.1. The Company's current financial position and projection figures justifies the non payment of the Third Phase of the PPF.
2. The Company accumulated losses of €700,000 between 1997 and 2001. In 2002 the loss was €4.6million. Production prices remain low and a further drop is forecast for 2003,With full implementation of the rationalisation plan, including the pay freeze, a loss of between €1.5 and €2million is forecast for 2003.
3. Pay rates at the Company are well above average for Ireland in general and the North East in particular.It is essential for the continuation of employment in the Company that agreement is reached on a pay freeze for 2002 and 2003.
4. The Unions were invited to nominate an independent auditor to examine the Company's books but declined the invitation.
RECOMMENDATION:
In this case the Company has pleaded inability to pay the final phase of PPF. In support of its claim the Court has been furnished copies of the Company's accounts and balance sheet showing its actual financial circumstances in the financial years 2001 and 2002 and its projected position for the year 2003. The Unions have been offered an opportunity to appoint independent financial experts to examine the accounts but have declined the offer. The Unions have not disputed the accuracy of the figures as presented but contend that the financial circumstances of the parent company should be taken into account.
In the absence of any suggestion to the contrary, the Court accepts that the accounts with which it was presented represent a true and fair view of the financial circumstances of the Company. Based on this information the Court fully accepts that the Company would have difficulty in paying the increase at issue. However, the Court is not satisfied that those difficulties are such as to amount to an inability to pay the amount involved in the present claim.
In recognition of the Company's difficulties the Court recommends that the increase be paid from 1st January 2003. The parties should then have further discussions in relation to the payment of the arrears in light of the developing financial circumstances of the Company. If the circumstances are such as to allow for payment of the arrears, the parties might also consider a schedule of payments into the future.
Should the parties fail to reach agreement on this matter it may be referred back to the Court.
Signed on behalf of the Labour Court
Kevin Duffy
3rd March 2003______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.