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Nov 07

Statement on the Intended Closure of Lutron Liamuiga by Honourable Vance W Amory, Senior Minister & Minister of Labour et al  

On Wednesday 07th November, 2018

 

Fellow citizens I speak to you on a matter which is of concern and of importance to all the people of St. Kitts and Nevis.

 

Lutron Liamuiga Ltd has formally advised the Ministry of Labour of its decision to close its plant in St Kitts effective 01 March 2019.  Lutron has been operating in the Federation for some 31 plus years.

 

In a correspondence sent to the Department of Labour dated 31st October, 2018, Lutron outlined that its decision was due to U.S. Government Regulatory changes made in 2007 leading to a decrease in the demand for its products.

 

In the same correspondence of 31st October 2018, the representatives of Lutron explained that the US Government regulations enshrined in the Energy Independence and Security Act of 2007, in 2012 prohibited the manufacture and use of 100 Watt incandescent bulbs; also in 2013 there was a similar prohibition on the manufacture and use of 75 Watt incandescent bulbs followed in 2014, by another prohibition on 60 Watt and 40 Watt incandescent bulbs.  This has had the effect of reducing Lutron’s Market for its incandescent lighting products to 5% overtime and placed significant operational challenges on the company in St. Kitts.

 

Lutron executives also advised that they gave much consideration on the future of their manufacturing business in St. Kitts and even in the face of the new regulations which affected the demand for their product, they were willing to engage their workers in the introduction of a new system of production and considered changing the technology in an effort to improve the efficiency of their operation and to maintain their competitiveness.

 

The representatives of Lutron advised, and this was confirm by officers of the Department of Labour, that they sought to introduce a more efficient production system called the Self Balancing System, which required the employees to adapt to a new method of work.  It was reported by Lutron that this new Self Balancing System was rejected by the workers thus forcing the management of Lutron to consider taking the steps to discuss the closure of their facility in St .Kitts.

 

The 31st October 2018 correspondence also revealed that Lutron engaged its workers in full disclosure of the challenges and its proposed investment to revamp and reorganize the production but workers opted to have the investment used on them instead of the company investing in continued manufacturing improvements.  The Lutron letter further advised that and I quote “After a careful and thorough review of this request up through the highest levels of our company, we are in agreement with them that it is time to retire the facility”.  They also advised “that we (Lutron) are proud to have spent 31 years working with you and the people of St Kitts.  It has been a great journey”.

 

Upon learning of this situation, this was on the 30th of October the Department of Labour responded promptly and convened a meeting on Thursday 01st November with the plant management and executives who were visiting for this purpose and the workers of Lutron.  The meeting sought to ensure full compliance with the appropriate labour legislation and also addressed employees’ concerns associated with closing the facility and provided answers to their questions in relation to the closure.  The issues raised at the meeting were adequately addressed by the Labour Commissioner, who was ably supported by a team of senior management officials of the Department of Labour. During the meeting, the workers of Lutron expressed satisfaction with their proposed payout package from Lutron and spoke mainly of their intended severance claims to be paid from the Government.

 

Based on the letter from Lutron and discussions with the workers and management with reference to the payment to be made on the closure of the facility, the Ministry and Department of Labour are satisfied that the remuneration package complies with the applicable legislation, which deals with the protection of employment.   Lutron has agreed to make an ex-gratia payment of 17 weeks to all qualifying workers at the point of closure and in addition, has agreed to make a financial allowance for the transition and training of all workers who desire to be part of the plans to transition into other fields.  The Lutron payment is in addition to the government payment of severance in accordance with the claims made under the Protection of Employment Act.

 

The compensation package from Lutron will see more than half of the workers, some 50 employees, receiving the equivalent of 104 weeks pay, that is inclusive of severance as well, 4 persons will receive compensation equivalent of 94 weeks pay,  one person will receive the equivalent of 91 weeks pay, another 4 workers will receive 87 weeks, 4 will receive 79 weeks pay, 4 will receive 75 weeks pay, 2 will receive 71 weeks pay and three will receive the equivalent 56 weeks pay.  The difference in payment or the amount which shall be received is as a result of years of service which each category of workers has given.

 

It is also worthy to note that salaried employees will also receive their pay package. Six (6) persons will receive 109 weeks compensation, 1 person will receive the equivalent 84 weeks pay and one other worker will receive 80 weeks pay and the equivalent thereof.

 

Lutron has also committed to fund a training programme in collaboration with Government through the Department of Labour to assist workers who would be affected. While the Government is NOT happy that a number of our citizens will be without ongoing employment, the remuneration package which will be made available and which, based on reports from the Department of Labour and representatives of Lutron Liamuga, were requested and agreed by the employees would provide a reasonable buffer for the displaced employees.

 

However, during the next few months as already stated the Government will put in place meaningful adjustment and transition strategies to ameliorate and soften the impact of this impending closure.

 

An inter-sectoral collaborative approach, spearheaded by the Department of Labour, will be taken to oversee the transition of the workers after the closure.  This partnership will bring together Government ministries, Lutron Liamuiga representative, the private sector and the National Tripartite Committee for the engagement and future work of the employees at Lutron who would be displaced.

 

The transition process, which will commence shortly, will include:

    Sourcing employment within the industrial enclave with other manufacturing companies in expansion mode.

    Training workers through STEP internship and the National Skills Training Programme (NSTP)

    The retraining and retooling of workers in other areas such as the

    hospitality, early childhod care, beauty services, etc.

    we also look to building capacity through entrepreneurial training and investment counselling which would be done by persons recuited through the department of labour.

 

The Ministry of Labour will monitor the process of closure to provide guidance and assistance to workers and management of Lutron in its closure.

 

Lutron has committed to ensure that workers are fairly remunerated and has offered to fund training programmes in collaboration with existing government programmes to assist the workers during their transition.

 

Ladies and gentlemen we expect that with the continued expansion of the economy, workers will be able to find employment.  One of the areas that will be pursued by the Ministry is the discussion with existing plants so that workers can be used in other plants on the industrial site given their experience and expertise in the culture of manufacturing industry.  The Ministry and Department of Labour will continue to work with employees of Lutron through continued meetings during this transition period to help them to identify areas of employment and areas of possible investment to ensure a good quality of life for themselves and their families after this period.

 

In all of this, the Government wishes to recognize that Lutron Liamuiga has been a reliable and compassionate employer, having provided over the years some useful benefits for the workers and boasted of a very low worker turn over during the 31 years of exitance.

 

The Government and certainly the Ministry is NOT happy to see the closure of one of the longest operating manufacturing companies in the Federation but recognizes that the international market place has had its impact on the company.

 

The Government and the Ministry of Labour can only advise that Lutron has been a good corporate citizen and now that circumstances have dictated this course of action that the employees who will receive their payout package will manage their ex-gratia payment and severance entitlement well and take advantage of this training and opportunity to engage in new employment through the assistance of the Department of Labour.

 

MAY GOD CONTINUE TO BE WITH US ALL. THANK YOU

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