De Beers plans to restructure

In late April 1997, the De Beers industrial diamond plant located in Shannon, Ireland, announced plans to introduce a broad-based restructuring programme, covering its reward and grading systems, recruitment, redeployment and a limited number of voluntary redundancies.

The multinational industrial diamond manufacturer, De Beers, is planning a major restructuring programme at its Shannon plant, which will involve an overhaul of its reward and grading systems, as well as some recruitment and a number of redeployments and voluntary redundancies. The key changes, announced to employees at the end of April 1997, involve the proposed introduction of a performance-based pay system and the establishment of a new lower entry rate of pay. There would be an element of "red circling" for existing employees at the top of their scales, which would remain unchanged apart from the application of nationally agreed pay rises.

This is the third phase of a strategy which the company first introduced in 1993 in order to bring De Beers "into the new millennium", according to its regional director, Chris Owers. Mr Owers recently told the 500 employees at Shannon that the company faces increasingly sophisticated worldwide competition, explaining that countries such as Japan, Korea and China are currently making inroads into the industrial diamond market.

The company said it also wanted to maintain the "continuous development of a participative approach in the area of communications and in relation to employees and trade unions, and a development of employee awareness to market conditions relating to customer service". If continuous change is not adopted "we will be in danger of a stepping from crisis to crisis every few years, and certainly this is not the way to run a business," the company warned.

Reacting to the company's plan, Brendan Cunningham an official from SIPTU, the majority trade union in the company, was critical of management for "using the language of partnership". Partnership, he said, needed to be demonstrated in a "practical way".

The company has no formal written agreement with the trade unions at the Shannon plant and, until recently, operated outside of national pay agreements. In recent years, however, De Beers has applied centrally agreed pay increases. For example, it recently implemented the first phase of the new national pact, Partnership 2000 (IE9702103F), from 1 January 1997.

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