The Labour Court has recommended that Eason’s 800 staff accept pay cuts as part of a plan to sustain the viability of the books-to-stationery retailer.

However, as part of its recommendation published on its website, the Labour Court has stated that the pay-cuts remain in place until April 30th, 2016 when workers’ current rates of pay will be restored unconditionally.

The retailer’s cost cutting plan has come before the Labour Court after workers in April rejected Labour Relations Commission (LRC) proposals for pay-cuts of between 4 per cent and 10 per cent.

Staff voted against pay cuts by a ratio of three-to-one.

Cost cutting plan

As part of its cost cutting plan, Eason management is hoping to reduce its overall costs by €2.5 million by various measures including pay reductions.

In its argument to the Labour Court, Eason’s “contends that failure to implement the agreed proposals will have a detrimental effect on the survival of the business that is currently operating in extremely difficult market conditions”.

The book-seller points out that “the urgent requirement for the proposed reductions has been endorsed by two independent financial assessors and furthermore has been agreed to by the unions”.

Eason’s said it was seeking agreement on its proposals so that they may be implemented without further delay.

‘Disproportionate’

In response, Siptu and Mandate unions contend that the contribution sought from its members is “disproportionate” and point out that its members have outrightly rejected the company’s cost reduction proposals and strongly oppose any reduction in pay.

The unions also contend “that there is no guarantee that the company’s proposed plan will allow the company to emerge from its current financial position”.

The court report that unions were also of the view that increased contribution is required from top level management. In its recommendation, the court noted that “an independent assessment of the company’s financial position carried out on behalf of the unions confirms the need for payroll cost reductions”.

It stated that it believes “that the type and range of adjustments provided for in the LRC proposals remain necessary so as to sustain the viability of the business and the employment that it supports”.

Eason made a profit of €2.6 million in the year to the end of January 2013 compared with a loss of €5.3 million in the previous 12 months after reducing its annual cost base by €6.1 million between 2011 and 2012.