INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
BURMAH CASTROL (IRELAND) LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Dispute concerning redundancy terms.
2. In March, 1996 the Company announced a major rationalisation and restructuring plan in its fuels/lubricants division. The proposals included the subcontracting of all fuel/oil deliveries, some lubricant deliveries and the closure of provincial depots in Cork, Galway and New Ross. The plan involves 40 redundancies (30 Drivers, Operatives etc., and 10 Administration). This claim concerns the 10 workers in administration. The Company offered the following severance package to the workers concerned:-
Category: Employees Under 50Category: Employees over 50Category: Employees aged
between 60 & 63
7 weeks per year of service 3.5 weeks per year of service 3.5 weeks per year of service
with the following maximums
To a maximum of 104 weeks pay To a maximum of 52 weeks pay At age 60 ......... 39 weeks pay*
(inclusive of statutory redundancy) (inclusive of statutory redundancy) At age 61 ......... 26 weeks pay*
PlusPlusAt age 62 ......... 13 weeks pay*
A payment of 13 weeks A payment of 13 weeks At age 63 ......... zero weeks pay*
(to cover all other statutory to cover all other statutory * (inclusive of statutory
entitlement) entitlement) redundancy)
PlusPlus* (pro rata for months within year)
A deferred pension based onAn immediate pension based onPlus
actual serviceactual serviceA payment of 13 weeks (to cover
(with no discount factor applying)all other statutory entitlement)
An immediate pension based on
actual service (with no discount
The Union claimed an improvement in the Company's offer, summarised as follows:
1. 8 weeks pay per year of service plus statutory.
2. 2.5 years plus statutory.
3. 6 months in lieu of notice.
4. Pension - 5 years credit and no discounts.
5. Scaling Down
Age 50-57 - 30 months
Age 58-59 - 29 months
Age 60 - 24 months
Age 61 - 18 months
Age 62 - 12 months
Age 63 - 8 months
Plus up to 5 years credit in pension and no discounting.
Management rejected the Union's claim. The dispute was referred to the Labour Relations Commission and two conciliation conferences were held on the 25th May and 14th June 1996. Agreement was not possible and the dispute was referred to the Labour Court on the 2nd July 1996. A Court hearing was held on the 23rd July 1996.
3. 1. The Union has not disputed the principle of sub-contracting as most other companies in the industry have done so. It cannot however accept the severance package offered by the Company. The rest of the oil industry has observed a consistent approach in terms of severance and early retirement provisions. The Union's claim is that the settlement terms which are the norms of the industry be applied to the workers concerned.
2. The Company is profitable. The whole purpose of sub-contracting is to increase profitability and it behoves Management to put in place a package that will ensure staff will not suffer unnecessary hardship.
3. Even if the Union's claim is conceded in full most of the workers concerned who have given long and loyal service to the Company, will be seriously disadvantaged vis-a-vis loss of potential earnings and service in the pension scheme. Their age profile will militate against their chances in the future to obtain employment of a meaningful nature.
1. Acceptance of the Company's rationalisation plan is essential for its survival. It must reduce costs and improve its trading position.
2. The cost of the plan will be in the region of £3m of which almost £2m will be paid in personal separation terms. In addition, 23 of the 40 workers involved will receive immediate pensions without any discounting factors applying. Management has arranged job opportunities for 22 of the 40 workers being declared redundant.
3. The Company is a very small operator representing approximately 1% of the European operation. Its plan is in essence a survival package. The terms are the best the Company can justify. The cost of concession of the Union's claim would be an additional £1.4m. The Company cannot afford this cost. However if minor adjustments were required to make the Company offer more acceptable, these could be considered.
The Court considered all the information presented including the subsequent information supplied on age structures and years of service. Taking this information into account and the fact that employment will be available for a number of employees, the Court recommends that the Company separation terms be modified as follows:-
(1) pension to apply from 48 years (details on method of application to be as indicated by the Company during the Court hearing).
(2) First option on alternative employment to be given to those not qualifying for a pension i.e. those below 48.
(3)Where the option of employment with contractors requires relocation, and an individual is not eligible for pension a further £10,000 to be added to the Company lump sum, if the individual takes the retirement option.
(4)For over 50 years the maximum of 52 weeks to be increased to 78 weeks.
(5)Lump sums to be exclusive of statutory entitlements, for all taking the separation terms.
Signed on behalf of the Labour Court
9th August, 1996______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.