INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
KRUPS ENGINEERING LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Brennan
Worker Member: Ms Ni Mhurchu
1. Productivity improvements across the board.
2. The Company has been manufacturing a range of domestic appliances in Limerick since 1964. The plant was owned by Krups Group until January, 1991, when it was taken over by the French- owned Moulinex Group. The Moulinex Group has 20 factories, producing a broad range of domestic appliances, located in France, Spain, Germany, Egypt, Mexico and Ireland. The Union represents approximately 580 general operatives at the Limerick plant.
The Company informed the Union on the 13th February, 1997 that, because of financial difficulties (details given to the Court), it proposed to reorganise the work force into "cellular" (4 to 6 people) type production and that the new system would replace the current "assembly line" method. It claims that it needs to change its production methods in order to become more competitive. The Limerick plant must become competitive in order to attract further corporate finance for investment. The Company proposed that those working within each "cell" and who were employed prior to January, 1995 would be paid a basic rate of £208.34 with those employed after that date receiving £179.34. In addition, all employees would rotate within the "cell" providing flexibility as and when required. The Company has proposed a buy -out of the weekly differentials on the basis of 78 weeks for those affected by the productivity programme. In addition, it wants to match working hours to the seasonal variations of market demand.
The Union claims that it has no problem with the "cell" concept provided that; (a) there is no loss of earnings, (b) that the Company pay the outstanding 2% from 1994 under the Programme for Competitiveness and Work (PCW) within the lifespan of Partnership 2000 (39 months) and (c) that the Company pay the 2% Local Bargaining element of Partnership 2000 at the appropriate time (October, 1998). The Union is also seeking to "red circle" those currently on the higher rates of pay.
As no agreement was possible between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 26th March, 1997 but no agreement was reached. The dispute was referred to the Labour Court under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 30th May, 1997.
3. 1. The Union has no objection in principle to the concept of cellular working. However, it will not accept any reduction in workers' earnings.
2. The Union wants the implementation of the 2% productivity clause under Partnership 2000 together with payment of the final phase of the Programme for Competitiveness and Work (PCW).
3. The Union will not accept, nor is it justified, that "lower paid" workers be allowed to perform "higher paid" work within the "cell".
4. The Union has always co-operated with the Company in relation to (a) redundancies; (b) lay-offs, (c) pay-freeze; (d) new entrants' rates of pay.
5. The Union has also accepted aspects of "World Class Manufacturing" (WCM) over the past number of years such as: (a) J.I.T. systems; (b) S.M.E.D. system; (c) ISO system; (d) Kan-Ban system where no financial reward was sought.
4. 1. The Limerick plant must become more competitive and get its cost base in line with that of its competitors in order to enable it secure its future and attract additional products to the factory.
2. There are 18 factories within the Moulinex Group. However, 2 plants in France will close this year because they are uncompetitive.
3. The Company must introduce new production methods at the Limerick plant or it will not survive.
4. The Company cannot accede to the Union's demands as the costs involved are unsustainable.
5. The Union is making it difficult for the Company to "market" Limerick as a sound commercial proposition for future investment .
The Court considered all the written and oral submissions made by the parties.
While the Company and the Employees have made and accepted changes in the past to meet the ongoing commercial challenges, the Group has major financial problems. It is clear that the Limerick Plant has to compete in a very competitive world market to survive and must also compete within the group for investment.
Taking into account the above the Court makes the following Recommendation:-
(1) The Employees to accept the Company proposals on cellular manufacturing.
(2) Loss of earnings resulting from acceptance of (1) above to be compensated at 2 years (104 weeks) buy out.
(3) If a redundancy situation arises within the next three years for any employee affected by loss as a result of (1) above, company redundancy payments to be calculated at the rate prior to acceptance of the compensation, if more beneficial to the employee.
(4) Proposals on patterns of work for seasonality to form the basis of Partnership 2000 discussions between the parties.
In return for acceptance of the above Recommendation the Court believes that the Company should pay the outstanding 2% PCW increase, staggered over an agreed period.
Signed on behalf of the Labour Court
19th June, 1997______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.