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Dáil Éireann díospóireacht -
Wednesday, 16 Feb 1994

Vol. 438 No. 8

Adjournment Debate. - Shannon (Clare) Plant.

I thank you, a Cheann Comhairle, for allowing me to raise this matter on the Adjournment this evening. I spoke in the House some time ago about the problems of De Beers at Shannon Airport. As I said then, De Beers is the most important industrial employer in the Shannon Industrial Estate. There are approximately 600 people now employed there, and wages and fringe benefits to the local economy amount to approximately £46 million per annum.

In recent times the company has been subjected to severe competition when the Shannon plant found itself competing within its own structure, within the De Beers family, in addition to competition from the United States, Japan, Korea, other eastern countries, including Romania and France. This has meant that the management at Shannon found it necessary to restructure their entire operation. Some painful decisions have been taken, with goodwill being expressed by both sides. I have always had great admiration for the way in which the De Beers staff and management have solved their difficulties. The company are a model in industrial relations.

There is a slight hiccup there at present. My purpose in raising this matter is to urge the Government to become a facilitator, or persuader, in this case. I understand that the Irish Congress of Trade Unions have already taken an interest in the resolution of this difficulty. I shall be interested to hear what the Minister has to say about the moves already undertaken in this respect. The House will recall that when I raised this matter here before I was told about the jobs protection unit within the Department. It had been my hope that some scheme would be devised so that talks between management and union would resolve the difficulties. I do not want to exacerbate the situation — I know it is a very delicate one — but I should appreciate the Government taking an obvious, active interest in the case.

I share Deputy Carey's concern about the difficulties being experienced at De Beers, particularly as I, too, come from the region. De Beers has been in Shannon since 1961. It is one of the most successful and prestigious companies in the region. It has made an enormous contribution to the local economy both by way of direct wages and salaries and in terms of its demand for goods and services locally.

The industrial dispute and threatened strike at the company arises from its proposals to reduce the workforce by 90 and to restructure pay by means of a 10 per cent pay cut and a pay freeze in 1994. There were 150 voluntary redundancies in 1993. According to management, developments in the industrial diamond market, including the emergence of high quality, low cost producers, have left the Shannon company in a vulnerable position. I understand that manufacturing costs in the Shannon plant are more expensive than in the company's other plants in Sweden and South Africa and that failure to implement the necessary cost reductions could lead to relocation of production to one of the other plants.

While the unions did not accept the management proposals, they did not reject pay cuts out of hand. They indicated that they were prepared to negotiate a managed change in the structures of pay.

The matter was referred to the Labour Court which issued a recommendation in December 1993. In its recommendation the court accepted the need for a restructuring of pay scales and for a pay freeze in 1994. However, the court went on to recommend that the restructuring should not take place before 1 February 1994 and that, in the meantime, the company and unions should enter discussions in an attempt to achieve agreement on alternative measures that would justify amelioration of the company's proposal. However, in the event that agreement could not be reached by 1 February 1994, the court recommended that the unions accept implementation of the company's proposals.

Further discussions took place between the parties in accordance with the Labour Court recommendation. The unions offered a 5 per cent pay cut along with a pay freeze and no incremental adjustments for 1994. This was not acceptable to the company, however, and it has proceeded to implement the 10 per cent pay cut already proposed. Consequently, the unions have served strike notice to expire on Monday, 21 February.

My understanding is that the unions are at present considering taking legal action against the company for interfering with contracts of employment without agreement. The unions have indicated that strike action will be deferred if such legal action is pursued.

The Labour Relations Commission is in touch with the parties and is available to assist in negotiations on the issues in dispute if its services are required. The services of both the Labour Relations Commission and the Labour Court are designed to ensure that parties have impartial, expert and independent assistance in incremental stages to reach settlements to avoid industrial action.

I regret that the parties so far have been unable to reach agreement. In view of the serious consequences a strike could have for employment in the Shannon region, I would urge all concerned to seek to resolve their difficulties through negotiation, with the assistance of the Labour Relations Commission, if necessary.

May I ask if the Minister of State at the Department of Enterprise and Employment, Deputy O'Rourke, who has been delayed unavoidably in the Seanad, may be afforded two minutes to add to my reply?

I am sure that is satisfactory.

I thank my colleague, the Minister of State, Deputy O'Dea, for having nobly stepped into the breach. I might explain to the House that I was in the Seanad and it was impossible, even with my powers, to be in both places simultaneously as the Vote there exceeded the time.

I had a conversation with Deputy Carey about the matter earlier in the evening. The brief just read by my colleague was the one I would have delivered. I have noted that Deputy Carey asked the Government to take an active interest and continue an interventionist role in the matter, which is in line with what he said to me earlier.

I am glad to place on the record that tomorrow I will contact the Labour Relations Commission to ensure that the level of intensity and commitment of dialogue between the parties is maintained. This is most important as matters are now at an acute stage. I shall be in contact with Deputy Carey and his office as the matter progresses.

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