Changes times for Dunnes Stores

IT WAS Independence Day 1995 when the deputy chairman of the Labour Court, Mr Finbarr Flood, issued his peace formula to resolve…

IT WAS Independence Day 1995 when the deputy chairman of the Labour Court, Mr Finbarr Flood, issued his peace formula to resolve a bitter three week strike at Dunnes Stores and proposed a basis for ending decades of bitterness between management and unions. But unlike the movies, the world of industrial relations is very complex and provides no last "nuke the aliens" solutions.

Prophetically Mr Flood urged both parties "to consider carefully the recommendation, not in the context of what has been gained or lost, but rather, in the context of what can be achieved, given proper working relations".

The general secretary of Mandate, Mr Owen Nulty, welcomed the court's findings and said that both sides should implement them "in their true spirit". From Dunnes Stores there was a deafening silence.

By October both sides were back at the Labour Court looking for clarifications of the July 4th peace formula and by Christmas they were in dispute once more. The company's outlets remained closed to pre Christmas Sunday shoppers because, alone among the Republic's major retailers, Dunnes Stores could not agree overtime rates of pay for staff.

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As a result the company lost an estimated £6 million in profits, to add to the £50 million lost to competitors during the previous summer's strike.

In January efforts to establish an independent tribunal to deal with the mounting list of problems in the store collapsed after the chairman, the former ESB chief executive Mr P.J. Moriarty resigned. He blamed the company's attitude for his decision.

After eight months of stalled talks, deferred strike ballots and abortive peace initiatives, a strike from September 2nd now seems inevitable. But there are indications that a deal can be cut next Tuesday.

All power in Dunnes Stores rests with the board. Traditionally this has been made up almost exclusively of members of the Dunne family. Since 1993 the board has been dominated by Mrs Margaret Heffernan, who ousted her brother, Mr Ben Dunne jnr as chief executive in a boardroom coup.

She has proved every bit as tough as Ben jnr in her business decisions, and even more inflexible when it comes to industrial relations. But the market share has fallen since her brother's departure and the intractable industrial dispute was damaging the firm's image.

For instance, when the company decided to sponsor the Dublin Women's Mini Marathon last June to improve its public image Mandate used the occasion to hand out 40,000 "Fair Play to the Dunnes Stores Workers" badges, and union members ran in the marathon with T shirts bearing the same slogan.

In May the board recruited the former Quinnsworth managing director, Mr Dick Reeves, as the new director of food, with effective control over the firm's grocery division. Mrs Heffernan was to concentrate on the clothing side of the business, always her first interest.

The changes are thought to have been initiated by Mr Frank Dunne, the oldest of the Dunne brothers, who had left the main management decisions in the past to Ben and Margaret while he pursued his property and racing interests.

In July, Mr Andrew Street was head hunted from Boots, the major British multiple, as director of information systems and logistics.

For the first time in its 52 year history the firm's board had only two family members, who were now balanced by two outside professionals. While Mr Reeves cut his teeth working as a buyer for Dunnes Stores he was recruited because of his achievements as managing director of Quinnsworth, where he helped the Powers supermarket group (including Quinnsworth and Crazy Prices) to overtake Dunnes Stores.

What Mr Reeves and Mr Street will have been telling their new boardroom colleagues is that analysing and interpreting information, anticipating trends, delegating authority and motivating staff will have to replace the old strategy of rigid centralisation and relying on bulk buying and price cuts to maintain market position.

Mr Street's role in contacting the company's unions through the Irish Congress of Trade Unions on Thursday, before the strike ballot count was even finished, has to be seen in this context. Only the day before, Superquinn became the first supermarket chain in the country to introduce do it yourself scanning for customers.

When the practice spreads to other multiples, price scanning by customers will make queues at check outs a bad memory, except for people who shop at Dunnes Stores. Dunnes is now the only major retailer which has yet to reach agreement with its unions on the introduction of scanning equipment at its check outs.

Yet do it yourself scanning by customers was introduced by Superquinn with the co operation of Mandate. Ironically, Mandate offered to co operate with the introduction of scanning equipment at Dunnes Stores as a quid pro quo for the 3 per cent productivity deal that is at the centre of the current dispute.

The company rejected the offer. The old board appeared unconvinced that it needed scanning.

The success of the Superquinn initiative was a graphic example of how central good industrial relations have become to business development.

The company, in its response to the news that employees voted nine to one for strike action, was uncharacteristically conciliatory. It would "seek to move past the current impasse in relations between the company and the unions which, regrettably, has caused the union to ballot for strike action", it said in a statement.

It may be that Mr Flood's Independence Day message is at last getting through.