INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
KLOPMAN INTERNATIONAL LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Implementation of Programme for Competitiveness and Work (PCW).
2. The dispute concerns the Company's claimed inability to pay the 3rd and final Phase of the PCW, which is due from 1st April, 1996.
The Company is a textile manufacturer engaged in the spinning and weaving of polyester and cotton blended yarns and fabrics for the European markets. All the output is exported to its sister operation in Italy for dyeing and finishing.
Following rationalisation programmes in 1991 and 1994, the number of workers was reduced to the present 200 approximately. A reduction in operating from a 7- day week to 5 days was implemented in 1991. In March, 1996, the Company announced further rationalisation with the removal of all "Sulzer" weaving equipment from the Tralee plant. This will reduce the plants capacity from producing 9.5 million to 5.8 million linear meters annually and involves 90 redundancies on an on-going basis. 25 redundancies have taken place to date. The Union believes that the Tralee plant is gradually being wound-down.
The dispute was referred to the Labour Relations Commission (LRC) and a conciliation conference took place on 17th April, 1996. As the parties did not reach agreement the dispute was referred to the Labour Court on 2nd May, 1996, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 3rd July, 1996, in Tralee.
3. 1. The Company's rationalisation programme in 1994 involved a £6 million investment, mainly in new technology. This allows the Company to compete with imports from low-cost countries. The effect on the workforce was that 115 workers were made redundant and the remaining workers had wage reductions of between £30 to £40 per week.
2. In August, 1995, the Company announced the strategic management plan which involved major changes, flexibility and organisation of work. Following negotiations, the Union agreed to this. The workers have co-operated at all times and surpassed targets set by the Company. The Company claims that a 17% drop in sales was the reason for restructuring yet the workforce in Tralee was reduced by nearly 40%
3. The plant in Tralee is producing cloth as cheaply at its sister plant in Italy. There is no justification in management refusing to pay the increase provided under the PCW.
4. 1. The Company has continually faced major competition within its markets from products sourced from low-cost countries. The total operating loss forecast for the financial year ended 29th June, 1996 is £1.8 million. The financial cost of restructuring to date is £2.24 million. The projected accumulated loss from 1991 to 1997 is £8.6 million.
2. Unless the current rationalisation programme is implemented in full the plant will have no future. The programme includes all budgeted costs. The Company cannot afford to pay the increase due under the PCW if it is to have any chance of remaining competitive.
The Court, having considered all of the issues raised by the parties, recommends that the payment of the 3rd Phase of PCW be deferred at the present time, the situation to be reviewed 3 months from the date of issue of this recommendation.
If in the meantime the Company is forced to close, the Court recommends that all monies due under this Phase should be paid.
Signed on behalf of the Labour Court
28th August, 1996______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.