Pharma plant workers to consider pay cut proposals

Workers at a Co Tipperary pharmaceutical plant face almost two years of pain if they accept Labour Court proposals concerning pay cuts and other cost-saving measures.

The Labour Court recommended the measures at Clonmel-based Suir Pharma after finding both Siptu and Unite agree the viability of the enterprise, which employs around 175 people, is in question.

At the court, the firm stated it expects a loss of over €1.8m for this year, “and the company’s survival plan requires temporary savings in the region of €1.1m in 2014 and 2015 in order to remain trading”.

The most recent accounts show the firm recorded a modest profit on revenues of €24.3m in 2012. Suir Pharma supplies products across a broad spectrum of therapeutic areas including pain management, anti-depressants, antihypertensives, benzodiazepines and gastrointestinal treatments.

According to the Labour Court, the unions said the workers have not received a pay increase since 2008 and “they were prepared to make a sacrifice including co-operation with change and flexibility, but that there was a fair and reasonable expectation that the company would not seek to further to diminish their current terms and conditions of employment.”

The unions argued the management proposals reduce basic pay, reduced overtime and overtime rates, eliminates two bonuses, reduces annual leave, increases the work week, and reduces break and shift hand-over times.

In response, the firm stated it employed an independent assessor to carry out a financial review that outlined the serious challenges the company faces.

The company also gave assurance to re-instate any changes to terms and conditions subject to an independent financial review in the third quarter of 2015.

In its determination, the Labour Court stated that the necessity for some adjustment in terms and conditions cannot be in doubt “although the scale of the adjustment required is in dispute”.

It was satisfied the final position put forward by Suir Pharma in a letter dated April 2 is reasonable.

However, the court stated that the company’s proposals be modified.

In its recommendation, the court stated no company bonus be paid in 2014 or 2015 and these include service and attendance bonuses; Christmas bonuses and site, department and individual bonuses.

It also recommended reduction in annual leave by one day with the freezing of ongoing incremental service entitlement; an increase in the working week by one unpaid hour to 40 hours per week and standardise break entitlement to give 30 minutes for lunch and the elimination of a 15 minute afternoon break for some employees.

The court stressed that the proposals, when implemented, should be regarded as a temporary derogation from existing agreements with the derogation to remain in place until December 31, 2015.

The court stated that all agreements and conditions of employment should be restored automatically and unconditionally with effect from January 1, 2016.

A spokeswoman for Unite said yesterday that it is entering a consultation phase with its members, with members from Unite and Siptu expected to ballot on the recommendation.

A result could be available by Friday week.