INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
MUNSTER ELECTRONICS LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Alleged breach of agreement/redundancy selection.
2. The Company manufactures bare printed circuit boards and has been located in Listowel, Co. Kerry since 1977. The Company changed its name from Melchert Electronics in 1993, following a change of ownership. In January, 1996 it employed 85 workers.
The dispute concerns 7 redundancies from the hourly paid staff, and the manner in which the redundancies are to be effected. The redundancy offered was statutory plus 2 weeks' pay per year of service. The Union claimed that the redundancies should be voluntary and on a seniority basis. The Company maintained that certain skilled workers would have to be retained to ensure the ongoing viability of the Company.
A meeting was held in April, 1996. As the parties anticipated some difficulty in getting the necessary redundancies, it was agreed that they would meet again on 3rd May. At the meeting it was agreed that the redundancies would be on a phased basis - 2 in May, 1996, 2 in June, 1996 and 3 in July, 1996. The Company agreed to a once-off pay of £400 to the 7 volunteers - £200 on acceptance of the redundancy and a further £200 one month after the actual redundancy.
A total of 17 applications were received for the 7 redundancies. The Union claims that instead of the redundancies being voluntary, the Company selected 7 workers and issued them with redundancy notices. The Union sought a meeting with the Company on 22nd May, 1996 to discuss the dispute. To date, 3 workers have taken redundancy.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place on 20th June, 1996. As the parties did not reach agreement the dispute was referred to the Labour Court on 28th June, 1996. A Labour Court hearing took place on 3rd July, 1996, in Tralee.
3. 1. There was clear understanding and agreement between the parties that a meeting would take place to discuss the method of choosing the 7 redundancies. The Union wrote to the Managing Director on 9th May, 1996 referring to the Company's proposals and accepting them "on the understanding that all redundancies would be achieved on a voluntary basis". The Company's selection of 7 workers is a clear breach of this agreement.
2. On 17th and 20th May respectively, 2 shop stewards approached the Managing Director to discuss the issue of the redundancies. He told them that he would do so but then proceeded to issue the redundancy notices.
3. The Union accepts that the redundancies must take place if the Company is to remain viable. In 1993, there were 27 redundancies, all voluntary and agreed to by both parties. The workers have always co-operated with the Company and are now multi-skilled and interchangeable.
4. 1. The Company reviewed the 17 applicants and, taking account of the need to retain key skills, selected 7 volunteers. The 7 volunteers were informed on 20th May, 1996 that they were successful and were paid £200 in respect of formal acceptance of their redundancies. Two of the volunteers were on the Union Committee which had negotiated with the Company. Some of the volunteers asked that the redundancies take place later in the year and the Company agreed to this.
2. The Company has experienced major cashflow problems in the last few years. The redundancies are necessary from an economic point of view and this has been accepted by the Union. If the Company had agreed to the Union's proposal of accepting the 7 most senior applicants it would have meant losing highly skilled workers. The Company cannot afford to do this. It must be allowed to decide which applicants to select or reject in accordance with the best interests of the Company. It does not accept that it acted in bad faith.
The Court finds that there was a commitment to a meeting taking place to discuss a procedure for final selection for redundancy. The Court finds that this was not honoured by the Company.
The Court notes that certain of the employees selected have left the Company.
In all the circumstances, the Court recommends that the Company, in respect of the remaining redundancies, meets with the representative of the employees and agrees a procedure for final selection. Such procedure to take account of the need to retain skills and expertise and seniority.
The Court so recommends.
Signed on behalf of the Labour Court
25th July, 1996______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.