INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. Implementation of 4% rise due under the Programme for Prosperity and Fairness(PPF)
2. The Company was formally a subsidiary of Aer Lingus. It has been involved in the supply of computer equipment since 1969 and employs approximately 168 people. The Company is located at 17 Willsborough Industrial Estate, Clonshaugh, Dublin 17.
The Union is seeking payment and retrospection of the 4% pay increase under the PPF which was due from the 1st July, 2002. It claims that management has failed to honour the terms of this agreement.
Management states that computer sales have dropped significantly over the past two years. The Company has incurred losses of €4.5 million for the two years ended 31st December, 2002. The Company is pleading inability to pay any salary increase until such time as it returns to profitability. It also states it required a five year credit facility from A.I.B. on condition that the Company returns to profitability.
As the parties failed to reach agreement the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 22nd August, 2002 but agreement was not reached. The dispute was referred to the Labour Court on the 23rd January, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 19th March, 2003, the earliest date suitable to the parties.
3. 1. The workers are entitled to payment of the final phase of the PPF from the due date of 1st July, 2002.
2. The payment of 4% is now nine months behind the due date. Also the expected commencement of a new pay round is due from April 2003.
3. The workers have cooperated fully with management and the re-organisation of the Company with no disruptions or industrial relations difficulties.
4. The co-operation of the staff in the re-organisation of the Company was on the understanding that if the workforce delivered then management would honour their obligations.
5. The workers believe that the employer has had more than sufficient leeway and should honour their obligations under the PPF forthwith with full retrospection.
4. 1. The Company had high expectations that sales would increase in 2002. However, it turned out to be the worst year for the I.T. industry in the last decade.
2. Expenditure in Ireland on products and services declined in 2002 by 15% to 20%. Falling hardware sales accounted for most of the decrease and unfortunately the Company was not immune to the global downturn.
3. The Company engaged in two rationalisation programmes involving voluntary redundancies. The programmes resulted in reducing staff numbers by sixty and reducing the annual cost base by €2.5million.
4. The Company's largest customer, A.I.B. is currently running a tender process for the maintenance of its computer and communications hardware. If the Company loses the A.I.B. contract, or is forced to reduce its contract price, the consequences for the Company will be extremely serious and could include further job loses.
5. The Company is not in a financial position to the pay the 4% increase due under the PPF. It is asking the Court to consider its current financial circumstances and to support its decision regarding the current staff pay freeze until the Company returns to a reasonable position of profitability.
The Court has considered the positions of both sides. The Company has indicated that, due to their financial position at present, they are unable to pay 4% due under the terms of the final phase of the Programme for Prosperity and Fairness (PPF) and, therefore, are pleading inability to pay.
The Court has taken account of the terms of Clause 7 of the PPF which provide for consideration of the economic, commercial and employment circumstances of a particular firm, and accepts the Company's contention that payment of the increase due since 1st July, 2002, at this time would severely impact on their competitiveness and employment.
Therefore, the Court recommends that the parties should meet again at the end of June, 2003, to discuss the situation prevailing at that time. If no resolution can be found, the issue may be referred back to the Court.
Signed on behalf of the Labour Court
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.