Committee Reports > List of Committees > Joint > 1980 > Committee on Commercial State-Sponsored Bodies > Report No. 13 - Comhlucht SiÚicre Éireann, Teoranta

APPENDIX 6

SUBMISSION FROM ASSOCIATION OF SCIENTIFIC, TECHNICAL AND MANAGERIAL STAFFS TRADE UNION

1. FOREWORD

A.S.T.M.S. are very pleased to have been invited to make a submission to the Joint Committee on State-Sponsored Bodies. We believe it is very opportune that the Committee is examining the Company at this time of serious difficulty. We believe that a realistic and objective examination by an outside group of the eminence and influence of your committee can have a cathartic effect on the Company and help set it on course to deal sensibly and courageously with our problems.

To enable the Committee deal effectively with the situation we believe it is essential that both the Management and the Unions make submissions with frankness, honesty and without hysteria. The problems of the Company are real and serious but we believe they are solveable given open and honest co-operation between all parties.

It is the wish of the Union to help towards this end by stating clearly how we see the present position and the future aims of the Company. It must be remembered however that we are a Trade Union and our first and overriding responsibility is to the protection and welfare of our members. That obligation we will meet. However, we genuinely believe that the interests of the Company and of its employees are totally compatible and in that context the prosperity and future solidity of the Company is our common interest.

We have read the Company submission to the committee and therefore we do not wish to cover the same ground. We will confine ourselves to speaking in general terms hoping, by so doing, to convey to the committee our interest towards protecting our members and furthering the general viability of the Group.

It is our hope that resulting from the investigation by the committee the Oireachtas will be made aware in a positive way of the problems we face and that in turn they will accept the real input they can now make to protecting and advancing the interests of this very important State Enterprise.

2. IRISH SUGAR COMPANY BRANCH/A.S.T.M.S.

In 1972 Erin Foods faced severe difficulties. The Company Management, at that time, were considering large scale rationalisation of the Food enterprise which would have resulted in serious redundancies in the workforce including a big reduction in management and staff levels.

The staff faced with this threat, formed a Staff Association, so that they could have a unified voice in protecting their position. This Staff Association subsequently in 1974 became a branch of the Association of Scientific, Technical and Managerial Staffs. (A.S.T.M.S.).

A.S.T.M.S. now represent senior and middle management, agricultural, accountants, technical and clerical staffs throughout the Company and for practical reasons it represents all grades of employees in Head Office. The Union currently represents approximately five hundred employees.

While A.S.T.M.S. represents its members in the traditional trade union manner it has also been concerned with the direction of Company policy. On many occasions it has voiced its opinion on particular policies where it felt that these were not in the long term interest of either the Company or its employees. This somewhat unorthodox attitude has at times caused serious friction between the Management and the Union as we have been accused of interfering in matters of policy beyond our prerogative. In a way the Union has tended to become the conscience of the Company as our methods have in a potent way made us concerned with moral issues of justice, dignity of work and dignity of the individual. The Union has also been concerned with the overall interest of all the workforce in preserving employment levels and maintaining all the Companies existing operations. The Union believes that only by adopting a very hard line regarding the maintenance of employment and plants can it balance a periodic attitude of management towards the often easy solution of pruning. This does not imply a negative or closed mind attitude by the Union but is merely pragmatic in the sense that out of hard debate and consultation between both parties will come a reasoned and proper compromise or even hard decisions. In short the Union is not against closures or redundancies if it is convinced that such action is properly taken and for the ultimate benefit of the Group and its employees.

3. FUTURE OF IRISH SUGAR COMPANY GROUP

For many years the Company has been able to fulfill its role while maintaining a degree of profitability in a protected situation. For historical reasons there was little investment in the sugar enterprise in the sixties. The consequences of E.E.C. entry required massive investment in factory modernisation. Large borrowing was and is required to finance this necessary programme. Unfortunately high interest rates, inflation and escalating oil costs have hit the Company at a most vulnerable time. These factors combined with the inherent commercial weaknesses of the Company mean that we are now facing losses which will continue in the immediate future.

To many, rationalisation offers a solution to reducing these losses. A.S.T.M.S. strongly hold the view that no such rationalisation can be considered until there is a fundamental re-definition of the Company role in the National context.

It is perhaps appropriate that the Joint Committee is examining the Company at this time because it is ultimately the responsibility of the Oireachtas to articulate the role and the future direction of the Company in the National interest. A.S.T.M.S. see the judgement and findings of the Joint Committee having a significant influence on the Oireachtas in forming their attitude to the Company, towards formulating its future direction and in giving the Company the means, financial and otherwise, to enable it effectively progress the Company towards achieving the aims it is set.

4. PROBLEMS OF COMPANY

The Company is presently faced with a number of problems. These can be divided into two distinct categories.

1. Historic Structural Deficiencies:—

—Sugar Factories located more for political considerations rather than for ready accessability to raw materials.

—Many small food production units which do not allow the benefit of economies of scale.

—Lack of phased investment over many years, means that the Company now requires a massive modernisation programme within a short space of time.

2. Current Commercial Problems:—

—Inflation.

—Escalating energy costs.

—High Interest rates.

The Sugar Company is not unique in facing these latter problems, but these allied to our historic deficiencies have exacerbated the current problems of the Company.

In developing a philosophy to deal with the current problems it is most important to separate the historic problems from the immediate difficulties. In the past profitability in certain sections of the Company have enabled the Company to bear the cost of social responsibilities in other areas. The affect of rising costs in the traditionally profitable sectors means now that support cannot be given to the loss-making activities. This fact presently highlights the problems of the weaker sectors. On the face of it the simple solution would appear to be the closure of the loss-making operations. A.S.T.M.S. believe this is not a practical solution. The affect of closures of individual units would have catastrophic consequences for the local economies which they serve, particularly in this time of high unemployment. The Union believes that a more enlightened and expansionist approach is necessary. Diversification into new areas of activity should be geared to absorb the workforce into areas which would provide greater wealth creation. Endemic in any such alteration of functions is the belief that the Company must control these new activities and continue to be the employer of the workers involved in them.

5. STATE COMPANY STATUS

A State Company by its nature is not totally master of its own destiny. It is subject to political influence in its decision making. It is acknowledged that the State must define the role of the semi-state Companies. In the absence of a clearly defined role, the political influence tends to effect the progress of the Company on an ad hoc basis, more often than not after particular Company decisions have been taken. An example of this is that C.S.E.T. acquired a fertilizer blending facility in Waterford and was subsequently prevented from using it by Government direction following pressure applied by the private sector. The Union does not wish to argue the merits or demerits of this case but merely uses it to illustrate the confusion that can arise in the absence of clear policy definition.

The Company is expected to make profit and at the same time to execute its social responsibilities. This is a seeming contradiction and encourages Management to use social obligations as an excuse for poor commercial performance and at other times to use lack of profitability to justify unpalatable policy decisions. If, however, the social responsibilities are defined and their cost quantified, this would allow a more realistic assessment of commercial performance. It would also allow both Management and workforce to operate in a real world situation. The solution to this dilemma can only come from Government.

The Company at present is at a very low ebb. All its operations are under trading pressure. The capital investment has added further severe problems and the future looks bleak. The morale of all sections of the employment is very low resulting in a depression which must affect, adversely, individual and group performance. The Management is obviously affected by this atmosphere and seem unable to adapt their thinking and effort productively towards raising the morale and towards finding realistic and acceptable solutions to the problems. The Company therefore needs an outside body to re-define our role, balancing our commercial and social obligations. They need, then, to quantify the social responsibilities so that our commercial performance can then be assessed and judged in a practical way. This will give meaning and objectives to Management at all levels and will revitalise their attitude and performance.

The Union contends that if this were done the workforce would be quickly aware of a new spirit and a new era in our history and would be prepared to accept whatever changes in structure and activities are necessary to further the commercial interests of the Group. Vital in all this is the necessity of honest and total consultation with all the partners in the industry.

The Union fully appreciates the difficulties involved in achieving this aim but cannot over emphasise the urgent need to work towards it. C.S.E.T. is one of the oldest of State Companies, one of the most important, in its widespread involvement in the agricultural sector and in deprived areas. It is also one of the largest direct employers in the State. It has a proud and successful history and now when it is going through a crisis period it deserves and has earned the right to expect the help required to enable it deal with its problems.

6. WORKER PARTICIPATION

Worker participation is now a reality in the Company and four workers now comprise one third of the Board. Three of these are members of I.T.G.W.U. and one is a member of A.S.T.M.S.

It is early yet to make a real judgement on the success or otherwise of this experiment. The Union is totally in favour of this development and expects that it will, in a semi-State company, prove to be a powerful instrument for change. The Board of a State Company has a more important and direct affect on the style and policy of the Company than would be the case with a private Company. Profitability in C.S.E.T. is not the ultimate criterion. Again it must be repeated that the Company has commercial, social and national responsibilities. A Board consisting only of outside appointed members does not have an intimate knowledge of the Company and its management. Such a Board is very dependent on what Management asks it to consider. Even with long experience on the Board, they are not fully equipped to make objective judgements and must be very influenced by the weighting of Management propositions put to them. The advent of Worker Directors to the Board will considerably alter this. Workers coming to the Board bring a deep knowledge of the Company operations and the Company traditions and responsibilities. They also know the Management people, their strengths and their weaknesses. They are, as a result, qualified to make judgements on management performance and on management objectives and plans. With this knowledge and experience, they can advise the full Board, so enabling it to make more balanced and considered decisions than was possible for the traditional Board, which had not available to it this background knowledge.

The Union understands that in fact this is already happening. The Union is aware that rather than resenting the arrival of workers, the traditional Board has quickly recognised the positive contribution being made and the potential of insiders advice and contribution to their own professional and business skills.

The other important element of Worker Participation is of course the reporting back to the electorate. This is a difficult matter as it is hard to evolve a realistic structure where this can be done. The Company is attempting to set up new structures based on a Works Council idea but is making slow progress in the matter. There is no doubt that without proper reporting back mechanisms the full value to the Company of Worker Directors will not be realised. It is vital that the elected Directors, through frequent and deep contact with the workforce, be able to bring to the Boardroom the real and legitimate aspirations and feeling from the shop floor. It is equally vital that the elected Directors can convey to the shop floor the intentions and attitude of the Management.

The Worker Directors must maintain close contact with the trade unions but must be careful not to assume or inhibit any of the traditional Union functions. They have an important role but one clearly different from that of the Unions from which they came.

Worker Directors have to achieve a delicate balance between guarding the direct interests of the workforce and the equally important consideration of the viability of the Company operations. An enlightened Management should be able to use constructively the influence and experience of the elected members without, in any way, compromising their integrity or acceptability by those who elected them.

May 1980