INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 20(2), INDUSTRIAL RELATIONS ACT, 1969
FIELD BOXMORE DUBLIN LTD
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr O'Neill
1. Non-payment of Phase 2 of Sustaining Progress.
The Company is a label manufacturer and employs 53 people at its manufacturing plant in Dublin 22. It is part of the Chesapeake Corporation USA but operates as an independent business with a separate budget and full responsibility for top and bottom lines.
The Company has operated at a loss in both 2004 and 2005. At a meeting with Union representatives in November 2004 the Company informed the Union that it would not be in a position to pay Part 2 of Sustaining Progress and that it would be requiring cost-offsetting measures including redundancies and more flexible working practices in return. Following the meeting some correspondence ensued between the parties but no agreement could be reached.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 24th August, 2005, having regard to Paragraph 1.10 (ii) of Sustaining Progress and in accordance with Section 20(2) of the Industrial Relations Act, 1969, with the parties accepting the outcome. A Labour Court hearing took place on the 6th December, 2005.
3. 1.The Company have twice agreed to pay our members and twice they broke these agreements.
2. The Company have radically shifted from agreeing to pay the terms of Sustaining Progress, Phase 2, to claiming complete inability to pay.
3. With regard to flexibility we wish to make the point that the current flexibility agreements in the respective areas are still now not being fully utilised.
4. In recent history nine people have left from the affected areas. This in itself should have the necessary cost savings to fund the increases.
4. 1.In August, 2005 the Company sought work practice changes in line with other operations in Ireland and Europe however, these were not acceptable to the Union.
2. Output in the printing and packaging sector has fallen by some 39% in the last few years.
3. Growth in manufacturing on which much of this industry depends has virtually stagnated in recent years and margins within the sector have dramatically reduced.
4. Other costs such as rent, rates, pensions, electricity and waste management, many of which are outside the Company's control, are having a negative impact on its cost base.
5. In his report on the Company accounts the Assessor concluded that the Company is entitled to seek the protection of clause 1.10(ii) of Sustaining Progress.
This dispute concerns a plea by the Company of inability to pay all the terms of the pay agreement under Sustaining Progress II.
Clause 1.8 of the agreement provides that an employer may plead inability to pay the terms of the agreement where this would lead to serious loss of competitiveness and employment. Clause 1.10 sets out the procedure to be followed where such a plea is made and Clause 1.10(ii) deals with situations where an employer claims inability to meet the terms of the agreement in full.
The agreement provides that the onus is on the employer to substantiate the plea. The procedures prescribed by the agreement involve an examination of the economic, commercial and employment circumstances of the employer by an Independent Assessor appointed by the LRC.
Having examined the financial information supplied by the Company, the Assessor concluded that the Company could seek the protection of Clause 1.10(ii).
As the dispute remained unresolved following the Assessors report, it was referred to the Court pursuant to Section 20(20 of the Industrial Relations Act, 1969. The Court is confined to determining whether the Employer can or cannot pay the terms at all.
The Court has considered the submissions made by both sides and has considered all of the financial and related information with which it was provided. The Report of the Assessor has also been fully considered and given serious weight. The Court is satisfied that the Company is experiencing significant financial and competitive pressures, and based on its current operating processes and its deteriorating losses is therefore, satisfied that the Employer has demonstrated that it cannot pay the terms of Sustaining Progress II.
The Court so decides.
Signed on behalf of the Labour Court
15th December, 2005______________________
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.