Irish costs are too high, says Unilever

The Irish arm of consumer goods giant Unilever has warned that its cost base here is too high and if does not address this issue, it will not have the funds to invest to survive in Ireland.

The firm sounded the warning at the Labour Court where it has argued with Siptu over redundancy terms for employees.

In May, the firm announced it was seeking 40 redundancies from a workforce of 190. At the time it said it was seeking the redundancies in an attempt to create a “more competitive organisation... in response to an unrelentingly challenging retail environment”.

The firm’s brands include HB ice cream, Ben & Jerry’s, Carte D’Or, Hellman’s, Bovril, Flora, Lyons Tea, Slim Fast, Knorr, Lynx, Sure, and Dove.

In the discussed redundancy, the company was initially offering workers a revised redundancy package of four weeks’ pay of service inclusive of statutory payments.

The Labour Court reports that “proposals which emerged from a conciliation conference at the Labour Relations Commission and a subsequently enhanced offer made at local level were rejected by the members”.

Siptu contends that “the union members have supported the numerous reorganisations throughout the years and they contend that this should be reflected in the severance package on offer by the company”.

In its argument to the Labour Court, Unilever states that its cost base here is too high and if does not address this issue, it will not have the funds to invest to survive in the current challenging economic and competitive environment.

The firm have also argued that “in the past when providing severance packages the company would have been able to offset some of the costs with the 60% rebate on statutory which is no longer available”.

In its recommendation, the Labour Court stated that it is of the view that the final modified proposals to the terms put forward at conciliation are generally reasonable.

It goes on: “However, the court recommends that they should be modified so as to provided that the proposed additional payment of €600 per year of service be increased to €1,000 per year of service.”

The most recent accounts for Unilever Ireland (Holdings) Ltd show that it recorded after tax profits of €7.3m after revenues increased by 20% to €297.8m.

Unilever stated yesterday that 36 people are now confirmed redundant as some people affected by the announcement have since found alternative roles within the company.

A company spokeswoman said: “We have received the Labour Court recommendation and are currently considering it.”