INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
TRUE TEMPER LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Dispute concerning rationalisation and cost-cutting.
2. The Company is a wholly owned subsidiary of True Temper Hardware, USA, which in turn is part of the Huffy Corporation. The Company manufactures/assembles garden tools, agricultural tools and contractor shovels and it employs 56 hourly paid workers. The dispute concerns production workers. In recent years the Company has experienced ongoing losses due to severe competition in the marketplace. Management maintains that production costs are uncompetitive and must be reduced. In 1995, the Company introduced a cost cutting plan but the Union, while agreeing to negotiate various issues, rejected the elements of the Company proposals which attempted to reduce wage or bonus rates. The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 13th June, 1996. Agreement was not possible and the dispute was referred to the Labour Court on the 17th June, 1996. A Court hearing was held on the 8th July, 1996.
3. 1. In 1985, following a similar cost cutting exercise, the Union accepted Company proposals which resulted in significant wage cuts and a reduction in staff levels.
2. Management assured workers in 1995 that despite ongoing difficulties the Company would not 'claw back' weekly earnings or worsen conditions of employment.
3. The Company looked for greater co-operation and flexibility from the production workers and this was given, together with increased efficiencies.
4. When management restructured the Maintenance and Staff departments, finance was made available for a voluntary severance package and, in relation to the Maintenance Section, workers remaining were given a new upgraded structure. Similar arrangements should apply in the case of the workers concerned.
5. The Union is prepared to offer maximum co-operation in various areas. However the production workers cannot accept proposals which will seriously worsen existing conditions. They are the only workers in the plant to be presented with wage cut proposals.
1. The Company has reduced its demands for direct labour costs savings from £150,000 to £110,000 and has agreed to explore every possibility to achieve the necessary cost savings through enhanced productivity. This will improve unit labour costs and enable present pay levels to remain intact.
2. The Company has achieved substantial cost savings in the staff/managerial department including an effective pay cut of 4% through salary sacrifices. The Maintenance Section also afforded a major rationalisation.
3. It is essential that cost savings are implemented. If direct pay can be left unaffected then measures which provide enhanced productivity must be accepted, such as the utilisation of at least 30 minutes per day in extra production time available on "unofficial breaks" plus the addition of one hour on Friday.
From the discussions at the Court Hearing it would appear that there is a credibility issue between the parties. This arises because there is a perception with people in this Group that they are the only ones being asked to make a productivity contribution. They also feel that in similar circumstances voluntary parting packages were provided by the Company for other groups.
Whilst these claims were refuted by the Company the issue is further complicated by the fact that the employees will, if they agree to the company proposals, create a situation where more of their group may be put on short-time or lay-off.
Nevertheless, the Court is satisfied that productivity savings require to be made to ensure the survival of the Company.
Bearing this in mind and conscious of the employees' fears in relation to the proposed changes the Court makes the following recommendation:
1. The employees to accept one of the Company proposals in Appendix 1, (of their proposals) or alternatively to negotiate an alternative agreement resulting in the same savings.
2. Because of the situation that could arise from 1 above, resulting in more people being laid off, any agreement reached should not be implemented until after full working has been resumed.
3. The Court will, at the request of either party, assess the impact of the operational changes arising from an agreement after 12 months.
Signed on behalf of the Labour Court
24th July, 1996______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.