Social partnership was placed under increasing strain last night with the rejection by Irish Ferries of a Labour Court call for it to shelve its controversial outsourcing plan, writes Chris Dooley, Industry and Employment Correspondent
In a recommendation issued yesterday, the court said the company should not proceed with its plan to lay off up to 543 seafarers and replace them with cheaper labour from abroad.
It told the company to honour a three-year agreement on seafarers' pay and conditions, reached with unions in June last year.
The recommendation was rejected within hours by the company, which described it as being "incapable of acceptance and implementation".
It repeated its assertion that it had no choice but to implement the redundancy and outsourcing programme in order to ensure it remained competitive.
The company's stance increases the difficulties faced by the Government in its attempts to secure a new partnership deal.
Unions have decided not to enter talks on a successor to Sustaining Progress in the absence of specific commitments from the Government on measures to prevent exploitation of workers.
The talks had been due to begin tomorrow but have now been postponed indefinitely.
The unions' stance arose directly as a result of the Irish Ferries controversy.
Unless the Government moves to prevent the company from proceeding with its plan, which involves hiring agency seafarers on hourly pay of €3.60, it is unlikely that unions will enter talks.
The outsourcing plan has been condemned by Taoiseach Bertie Ahern, who has said it remains to be seen whether the company "gets away with" it.
However, both Mr Ahern and Minister of State for Labour Tony Killeen have expressed doubts in the Dáil about the potential for Government action to stop the company.
In its recommendation yesterday on the dispute between the company and Siptu, the Labour Court said the conduct of "orderly industrial relations" required that parties honour agreements.
The company, it said, had not made out a "sufficiently compelling case" to justify unilateral termination of the agreement reached with unions in June last year on seafarers' pay and conditions.
Accordingly, it was recommending that the company honour the agreement of 2004 and that the parties resume negotiations on such modifications as were considered necessary.
In a second recommendation, the court found in favour of a Seamen's Union of Ireland claim that members who wished to remain at the company ought to retain their existing terms and conditions of employment.
The company also rejected this recommendation. It has offered its 543 seafarers on Irish Sea routes the option of redundancy or continued employment, but on reduced pay and conditions.
The Taoiseach said last night the Labour Court was "the proper arbiter" of good industrial relations practice. "I would hope that both parties would respect the decision of the court."
But in its statement rejecting the recommendations, Irish Ferries said its cost reduction programme was needed to address "unprecedented adverse trading conditions".
It said fuel costs were on course to double between 2004 and 2006, the car tourism market was in decline and its labour costs were substantially higher than those of its competitors.
"Indeed, given the fiduciary responsibilities which must be discharged by the board of the company under law, it is impossible to see how management can accept any course other than the cost reduction programme proposed by the company."
Shares in its parent company, Irish Continental Group, fell by 18 cent, or 1.7 per cent, to close at €10.47, after the Labour Court recommendations were delivered.
An application by the company to re-register its Irish Sea vessels to Cyprus, meanwhile, has been turned down by the Department of the Marine.