INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
TRETORN SPORT LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr. Somers
1. Payment of phase 2 (5.5%) of the Programme for Prosperity and Fairness (P.P.F.).
2. Tretorn Sport Ltd is based in Portlaoise and manufactures tennis balls for the export market. It employs approximately 60 workers. The Company states that from 1999 its profitability began to decline significantly. The end of year financial statement for December, 2002, shows a loss of €700,000. The Company state that it is not in a financial position to pay the 5.5% of the P.P.F. unless productivity measures are agreed to offset the cost.
The Union claims that its members have not received any increase in pay since March, 2001. Following a conciliation conference on the 21st June, 2002 the Industrial Relations Officer (IRO) put forward a "Recovery Plan" which was accepted by both sides. The Company later indicated, however, that it could not honour the agreement unless a number of cost offsetting measures were agreed to. The settlement proposals also included the recommendation that the Advisory Development & Research Service (ADRS) of the Labour Relations Commission be invited by both sides to carry out an industrial relations audit at the plant and issue a report. The ADRS report outlined the changes which were necessary to be carried at the plant.
The Union states that the workers have honoured their side of the agreement and that the Company must now do the same. The Union balloted its members for strike action which was due to take effect from 15th April, 2003.
As agreement could not be reached between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 14th April, 2003 at which the Union agreed to defer strike action. No agreement was reached at conciliation and the dispute was referred to the Labour Court on the 14th April, 2003 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 27th May, 2003.
3. 1. The Company breached the Company/Union agreement in relation to pay.
2. The pay agreement negotiated under the auspices of the Labour Relations Commission (LRC) should be honoured by the Company.
3. The workers concerned have not received any pay increase during a period when inflation was high and should be compensated for this accordingly.
4. The Company's only competitor has paid all elements of the P.P.F.
5. The workers are incensed and angry at the Company reneging on the LRC agreement which they believed was a guaranteed pay increase.
4. 1. The Company is experiencing serious trading and financial difficulties and is not in a position to pay the 5.5% of the P.P.F. unless productivity measures are agreed to offset the cost.
2. The Company's loss of €700,000 is a result of increased pressure from competitors operating in countries with cheaper labour costs.
3. The Company's largest competitor, Dunlop, has transferred production from the UK and Germany to Far Eastern countries, ensuring production at significantly lower costs.
4. The reason for the cost-offsetting measures is an unanticipated and rapid deterioration in its trading and financial situation brought about by a series of factors outside of the Company's control.
The Court has given careful consideration to the submissions of both parties. The Court notes the serious financial situation of the company. The Court also notes that the workers received no increases in pay since March, 2001. Recovery plan proposals dated 21st June, 2002 were put forward by the industrial relations officer at conciliation and were accepted by both sides. Subsequently, due to a further deterioration in the company's position, it indicated that it could not honour the terms without agreement on a number of cost offsetting measures.
Acknowledging the company's financial difficulties, the Union accept the recovery plan including the necessity for reducing costs and indicate their commitment to negotiate changes as outlined in the ADRS report. The Union sought implementation of pay increases as outlined in the LRC recovery plan proposals.
The Court recommends that the LRC recovery plan proposals should be accepted and immediately implemented by the company.
The Court is of the view that it is incumbent on the Union now to enter into discussions on real progress being made on the cost offsetting measures, as outlined to the Court. In view of the company's position the Court recommends that these discussions should be progressed with a real sense of urgency.
The Court so recommends.
Signed on behalf of the Labour Court
18th June, 2003______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.