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Strong warning to staff from Element Six CEO
ELEMENT six chief executive Cyrus Jilla has again warned staff the company will plan for a future without its flagship manufacturing operation in Shannon if a proposed rescue package is not agreed.
Cost competitiveness was blamed for the shock announcement last month that 370 jobs in manufacturing and distribution were to go to lower cost locations overseas.
But a package was subsequently agreed by local management and the executive to save 163 posts in "high skills manufacturing and innovation", leaving a total workforce in Shannon of almost 250 when R&D and customer service are included.
SIPTU and the TEEU have been fighting for an improved redundancy offer for over 200 people who will still lose their jobs but Mr Jilla, in a letter delivered to each member of staff yesterday, indicates the current package on offer will not be improved.
SIPTU has said Element Six posted over €500 million in operating profits last year but the company says it "cannot afford" to improve the €8 million redundancy pot currently on offer. After both the TEEU and SIPTU secured overwhelming mandates for industrial action last week, Mr Jilla warned "a vocal minority" of workers were jeopardising the entire manufacturing operation at Shannon.
His letter notes that while the new plan proposes increased productivity and changes in "outdated" work practices which are a legacy of the company's long 50-year presence in the Free Zone, no reductions in pay are proposed.
As equipment and machinery would no longer have to be moved overseas under the plan, the company was able to improve its redundancy package from €6.5 million to €8 million.
"The total package for affected employees is now around four-and-a-half weeks per year of service, which is very good by EU standards and more than double the level of redundancy payments received this year at any of our sites.The world has changed dramatically, even in the last six months, and none of us can expect previously perceived entitlements will apply," Mr Jilla said in relation to a redundancy deal of eight weeks per year of service agreed at Shannon only last December.
An increased company contribution of €10.7 million to the defined benefit pension scheme also made it impossible to "afford a higher package".
Mr Jilla says that while most employee are working as normal, " a vocal minority" was showing no desire for consultation over industrial action and some staff "failed to work normally" last week.
"Currently the message is being sent to us by some of you is that these long-term jobs and plan are not wanted.This seems extraordinary in these current times."
Mr Jilla warns that if there is no third party conciliation process entered into, or if there is industrial action, within the next two weeks, this could result in the loss of 370 jobs; the elimination of ex-gratia redundancy payments for all these jobs and reduced pension contributions.
In response SIPTU branch organiser Mary O'Donnell said: "Element Six should stick to agreements reached and put local management in a position to negotiate, rather than threatening loyal employees". However, she also welcomed the agreement of the company to enter third party talks to resolve their differences.
"The threat made in the letter in relation to the pension scheme is particularly unfortunate and contradict promises made by the local manager Ken Sullivan at the Labour Relations Commission. To use pensioners' past service and threaten an agreement made in good faith is a new low."
"The company claim that only a vocal minority is involved in rejecting the company's approach to date is belied by the fact that the 40 strong management group have supported demands that the company deal with the redundancy issue as a priority, and non-union employees have taken a similar stance.
"Finally, the 99 per cent of SIPTU members and 100 per cent of TEEU members who voted for industrial action if necessary could not be called a vocal minority. Hopefully the company will give local management a mandate to negotiate, otherwise they will be engaging in an empty exercise that would be an abuse of the conciliation services of the LRC," said Ms O'Donnell.
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