Labour Court Database
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File Number: CD9448
Case Number: LCR14386
Section / Act: S26(1)
Parties: SEMPERIT (IRELAND) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
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Subject:
Claim for a 3% wage increase under Clause 3 of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
The Court, having considered all the arguments made by the parties
in their oral and written submissions, finds that, given the
current situation in the Company and the industry generally,
concession of the Union's claim at this time would be
inappropriate.
The Court recommends that further consideration of this issue be
deferred until 1995.
Division: MrMcGrath Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD9448 RECOMMENDATION NO. LCR14386
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
SEMPERIT (IRELAND) LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim for a 3% wage increase under Clause 3 of the Programme
for Economic and Social Progress (P.E.S.P.).
BACKGROUND:
2. The Company manufactures car tyres at its plant in Dublin,
employing 720 workers. It exports most of its product to Europe,
principally to Germany and the United Kingdom. It is part of the
Continental A.G. Group, which is the fourth largest tyre producer
in the world.
The dispute concerning Clause 3 of P.E.S.P. has been ongoing since
1991. The Union states that its members have given ongoing
co-operation to the Company, including co-operation with the
implementation of new technology. It claims that its members are
entitled to the 3% wage increase under Clause 3 of the P.E.S.P..
The Company, while acknowledging the co-operation of the workers
concerned, states that it cannot pay the 3% claim because of
ongoing financial difficulties.
A number of meetings at local level failed to resolve the dispute.
The dispute was referred to the Labour Relations Commission and a
conciliation conference was held on 18th October, 1993. No
agreement was reached and the dispute was referred to the Labour
Court on 20th January, 1994 under Section 26(1) of the Industrial
Relations Act, 1990. A Labour Court hearing took place on 14th
February, 1994.
UNION'S ARGUMENTS:
3. 1. The Company has introduced a number of changes in work
practices over the years, including a 4 cycle shift system
over seven days and new technology. The workers concerned
have co-operated at every stage and this is acknowledged by
the Company.
2. In August, 1991 the Company rejected the claim for a 3%
wage increase because the outlook for the 1992 was poor.
In fact the Company made a profit of #4.34m in 1992, the
first time it has made a profit since 1969.
3. In August, 1992 the Company agreed to grant the 3% wage
claim if the Company proved to be operating at "An acceptable
level of profitability". A loss of #5.1m in 1991 was
followed by a profit of #4.34m in 1992. The profit resulted
from the co-operation of the workers concerned and
concessions made by them. Despite the fact that the Company
made a profit in 1992 it again rejected the claim for a 3%
wage increase in May 1993.
4. In 1992, a Union delegation met with Management to
discuss work problems. The problems were causing low
production and excessive overtime. Corrective action was
taken which resulted in increased output.
5. In 1993, the workers concerned were laid-off for
approximately 10 weeks. Despite a decline in output of 17%,
the Company made a profit of #1m. This is attributed to the
continuing contribution and co-operation of the workers.
COMPANY'S ARGUMENTS:
4. 1. The automotive industry is experiencing the worst
recession for many years. In 1993, car sales volumes were
reduced by 20% in Germany, which is the Company's largest
market. Since 1985, the Company has invested approximately
#40m in its Dublin plant, to improve quality and efficiency.
2. In 1993, the Company's production output was reduced by
17% as a result of the Dublin plant being closed for 10
weeks. This reduced the Company's profit potential by
approximately #5m.
3. The Company is in competition in Europe with 12 other
car tyre plants. Four of these plants are in low production
cost countries. In 1992, the Dublin plant was among the
highest production cost plants in the Group. The situation
has improved but the Company must continue to cut costs if it
is to remain competitive.
4. The Company cannot afford to pay the 3% wage claim under
Clause 3 of the P.E.S.P. due to the deterioration in markets
and prices and increasing competition in Europe.
RECOMMENDATION:
The Court, having considered all the arguments made by the parties
in their oral and written submissions, finds that, given the
current situation in the Company and the industry generally,
concession of the Union's claim at this time would be
inappropriate.
The Court recommends that further consideration of this issue be
deferred until 1995.
~
Signed on behalf of the Labour Court
Tom McGrath
25th March, 1994. ______________________
C.O'N./A.L. Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.