Joe Sherlock (Cork East, Labour)
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Management at the Dairygold plant in Mitchelstown is seeking to implement a draconian regime in an attempt to cap direct labour costs at €3.8 million per annum. Such a regime would undermine Irish jobs and result in an influx of cheaper eastern European labour. Management is threatening to close down Dairygold's meats division if workers do not agree to a rate of pay of €9 per hour, or gross pay of €351 per week, for all sections of the plant. Such a rate of pay would mean a loss of up to €150 per week for some of the plant's workforce of approximately 150 people.

I raise this matter because I feel that Dairygold is trying to introduce sweatshop tactics. It is embarking on a systematic campaign to force Irish workers who earn the average industrial wage out of jobs, thereby making way for migrant workers who will be paid at a rate marginally above the minimum wage. We are witnessing the systematic dissolution of the social partners' hard-fought gains, to be replaced by "yellow pack" jobs. The Government must intervene to protect Irish jobs against an influx of cheaper labour from eastern Europe. It is an insult to the people of this country and the workforce of Dairygold in Mitchelstown, who have always been loyal to the company, to expect Irish workers to survive on €351 per week.

I have mentioned that management at the Mitchelstown plant is trying to cap its labour costs at €3.8 million per annum. Such a draconian regime would undermine Irish jobs and lead to an influx of cheaper labour from eastern Europe. The company is threatening to shut its meats division if workers do not agree to a rate of pay of €9 per hour, but that rate has been rejected by 95% of the workforce. If agreement is not reached with SIPTU, the company may try to sell Galtee Meats. It has been suggested that the managing director of the company, who used to work for Kerrygold, is preparing for a possible take-over of Dairygold by Kerrygold.

The Minister for Enterprise, Trade and Employment should intervene under the Companies Acts to investigate the Dairygold operation at Mitchelstown before it is too late. I remind him that 1,200 jobs at Dairygold have already been lost in the Mitchelstown area.

Tony Killeen (Clare, Fianna Fail)
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I thank Deputy Sherlock for raising this matter on Adjournment. I understand his concerns about the proposed cost-saving proposals at Galtee Meats, which is the pig division of Dairygold Co-operative Society Limited.

The operations of Galtee Meats in Mitchelstown, Roscrea and Tallaght employed approximately 500 people until the end of September 2004. On 10 August 2004, the Dairygold Group announced that it intended to terminate its slaughtering operation at Mitchelstown and to close its facility at Roscrea, and that has since happened. The activities at Roscrea were transferred to the vacated space at Mitchelstown, where the company operates a substantial added value and small goods operation. The company continues to operate the facility in Tallaght. Such actions were taken by the company on foot of a comprehensive review of its pigmeat divisional cost competitiveness and its performance as a profit centre, based on an independent Danish meat research benchmarking study. Galtee Meats intends to focus on growing the added value branded category, which has been profitable.

I understand that Galtee Meats is seeking to adjust its wage costs. It has introduced improved practices as part of its attempt to achieve improved profitability in its operation. Such measures are being introduced so that the company can plan its growth prospects on a competitive basis. Galtee Meats recently informed workers at its pigmeat processing plant in Mitchelstown of its planned cost-saving proposals, which are aimed at achieving international competitiveness. I understand that the proposals involve an increase in the hourly rate of pay from €8.25 to €9 and changes to the existing bonus and overtime systems. The trade union has calculated that such changes would result in significant reductions in the workers' net incomes. The proposals also involve changes to the working week, increased productivity and the buy-out of certain work practices. The members of the union voted last Thursday not to accept the proposals.

This country's system of industrial relations is essentially voluntary in nature. If the parties have failed to find a solution to the issues in dispute, the State can make available the Labour Relations Commission and the Labour Court to act to settle disputes. The experience and expertise of the commission and the court are available free of charge. Management and unions at Dairygold availed of the services of the State's dispute settling machinery during the rationalisation of other divisions within Dairygold last year. However, neither the trade union nor the company has referred this matter to the Labour Relations Commission to date. Therefore, the matter is still at the local discussion stage. Ultimate responsibility for the resolution of the issues in dispute rests with the parties in question. The Deputy is aware that I have no function in individual disputes.

Collective agreements are the primary method of determining conditions of employment, in keeping with this country's voluntarist industrial relations tradition. The role of statute law has traditionally been limited to setting minimum levels of protection or entitlement. Ireland has been to the fore in ensuring that reasonable conditions of employment exist. The approach of consensus, which involves employers, employees and the Government, has been supported by a well-balanced suite of employment rights legislation and a range of measures designed to stimulate employment. That approach constitutes an appropriate framework for the purpose of achieving an efficient and competitive business environment. The primary objective of employment rights legislation is to protect the safety and health of workers and to foster labour market harmony by promoting policies which minimise conflict and maximise fairness.

Food processing is an internationalised industry. One of its features is its easy mobility, which depends on factors such as its cost base, labour supply and proximity to cheap raw materials or the intended marketplace. The maintenance of competitiveness in our economy, specifically in the pig production industry in which margins are tight, will continue to be a serious challenge for the Irish food processing sector. The meat processing industry, which is an important part of our agrifood economy, is engaged in the processing of meat, most of which is Irish. The resultant products make a valuable contribution to export earnings and are sold on the home market. The maintenance of employment levels and wealth creation is particularly vital for the local economies in which processing operations are located. I would be concerned if the level of food processing activity were to decrease.

I thank the Deputy for raising this matter on the Adjournment. The State's industrial relations machinery remains available to the parties, as I have said, and I urge the parties to avail of such facilities if they require third-party assistance.