Independent Newspapers' outsourcing

Under a redundancies and outsourcing programme in 2004, Independent News and Media (INM) got rid of 205 staff from its operations in Dublin and outsourced a significant number of those jobs to companies based in Northern Ireland and in Clonakilty, county Cork.

The company had made a profit of ?214 million in the previous year. It said it needed to reduce its high cost base in the face of competition from low lost UK publishers.

The scheme went ahead without strike action and the redundancies were technically "voluntary". But the unions were threatened that the terms of the voluntary redundancy package would be withdrawn, and statutory redundancy would be imposed, if there was any strike action. And employees were told that if they did not apply for voluntary redundancy, they would subsequently be made redundant.

It has emerged that INM management expected strike action, and had put in place a strategy to enable them to continue printing their titles in the event of a strike in Dublin.

According to a senior source in the INM group, the company successfully produced dummy copies of each of its titles on a daily basis from a brownfield site in county Armagh for six weeks in anticipation of strike action.

This was kept secret from staff of the group in Ireland. The newspaper editors were aware of it, and journalists from titles in the UK were used to staff the dummy operation. The INM titles would have been printed at the company's Belfast Telegraph plant.

The operation was intended to thwart any strike action taken against the company's titles in Dublin.

But the threat of strike action faded after a majority of staff took the voluntary redundancy package, and the National Union of Journalists voted not to support any strike action by their colleagues in the other unions who faced redundancies.

According to a number of sources in the unions and INM, the NUJ vote was narrowly defeated due in part to the canvassing of staff by members of the union in senior editorial and management positions within the INM titles. A "huge number" of freelance staff who had never voted before voted in the ballot, according to a source.

Two hundred and five staff were made redundant by May 2004, the majority members of SIPTU's administrative branch, in clerical positions within the company, as well as some members of the Irish Print Union and of the Graphical Paper and Media Union (GPMU).

The administrative functions were outsourced to companies in South Armagh and Clonakilty.

In September 2004, the SWS Group announced that 60 new jobs had been created at their purpose-built Business Process Outsourcing Centre in Clonakilty due to "successfully tendering for a number of substantial outsourcing contracts with Independent Newspapers (Ireland) Ltd (part of the multinational Independent News and Media Group headed by Sir Anthony O'Reilly) and a number of other businesses".

"The contracts will involve SWS carrying out extensive financial back office processing activities for Independent Newspapers. These will include a range of financial and customer support type activities including Accounts payable, Accounts receivable, Payroll, Banking and Services Accounting. The type of jobs created will include Finance and Accountancy positions in addition to IT, Administration and Customer Service type roles", SWS said.

The Business Process Outsourcing division previously had 150 staff.

The chief executive of SWS, Kieran Calnan, said he was "delighted to have been awarded this prestigious contract by Independent Newspapers (Ireland) Ltd" and that the company was "committed to providing a first class service to the Group and look forward to a long and fruitful relationship together".

The classified advertising function was outsourced to a company called AnswerCall Direct in Armagh. AnswerCall Direct has since been bought by an Indian multinational, HCL, which retained the INM contract. HCL has a "sizable team" working on the INM contract, a source in the group said. Both AnswerCall Direct and HCL received grants from Invest Northern Ireland, the Northern equivalent of the Industrial Development Authority (IDA), to help them attract contracts such as that from INM. AnswerCall received £2.8 million of UK state funds in 2002/03. HCL has recently received £4.68 million from Invest Northern Ireland in assistance towards creating 600 new jobs at its Armagh and Belfast operations. Invest Northern Ireland grants money on the basis of attracting inward investment from multinationals and promoting exports.

Under the Protection of Employment Act 1977, a company seeking collective redundancies is compelled to inform the minister, and the minister has the power to compell the company to enter into consultations with the minister prior to affecting the redundancies.

The chairman of the group of unions at INM, John White, wrote to then Minister for Enterprise, Trade and Employment, Mary Harney, in the run up to the May deadline for the redundancy package, requesting her to intervene under the Act.

The redundancies, he said, were "being unilaterally imposed in clear breach of agreements between the company and constituent unions which provide for the redundancies to take place in a controlled manner on a voluntary basis".

"To allow these redundancies to take place as proposed would have serious consequences for the entire dispute resolution process under Sustaining Progress.

"I therefore urge you to use your powers under the Protection of Employment Act 1977 to intervene and seek a peaceful resolution to the issue of the proposed redundancies."

An official in the Department replied on behalf of the Minister, advising the unions to take any grievances to a rights commissioner, and ignoring the request for the Minister to intervene under the 1977 Act.

The official stated that INM had justified the redundancies on three bases: the "underlying high cost base" in the Irish newspaper business; competition from "low cost UK publishers with considerable comparative advantage"; and the "long-term viability of the business".

A union source described this as a "grossly insulting response". "Everybody knew there was a right of reference to a rights commissioner, but that would take such a long time to process that by that state the deadline would have passed", the source said.

Union sources said INM had "torn up" previous agreements between the company and unions in imposing the redundancy package.

The issue was referred by the unions to the Labour Relations Commission, then to the Labour Court for a full hearing and then to the National Implementation Body under the terms of Sustaining Progress. At each stage, INM refused to cooperate, according to union sources. p