INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
NESTLE (IRELAND) LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL, ENGINEERING AND ELECTRICAL UNION
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
1. (1) Terms for redundancy.
(2) Terms for buyout of earnings (overtime).
2. In 1988 Rowntree Mackintosh Limited, which was based in Dublin and Mallow, was taken over by Nestle Societe of Switzerland. In recent years a review was carried out of all aspects of the Irish operation including organisation, operations, future commercial strategy and employee skills. As a result of the review the Company announced that 49 redundancies were required and that overtime in certain areas would no longer be required. The dispute between the parties concerns agreement on the terms for the redundancies and the buyout of overtime. The Unions' claim is for a severance package of 8 weeks' pay per year of service inclusive of statutory entitlement and that up to 5 years' credit in the pension scheme be given to staff aged 55 years and over with no discounting. The Unions are also claiming that staff who wish to avail of the buyout of overtime earnings should be paid 130 weeks' compensation (2.5 times the annual loss). The Company's offer is for 4 weeks' average pay per year of service inclusive of statutory entitlement and a buyout of 1.5 times the annual loss of overtime earnings.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission on 30th August, 1996. As agreement could not be reached the dispute was referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Labour Court investigated the dispute on 4th October, 1996.
3. 1. The committed and hardworking staff, many with over 40 years service, have contributed greatly to the success of the Company. The current proposals will enhance profitability still further, which imposes a moral obligation on the Company to match the best standards achieved with regard to a settlement package.
2. Many companies have paid up to 6 weeks' pay per year of service excluding statutory entitlement, while even within the Company a package of 5 weeks including statutory entitlement was previously paid. Special provision should also be made for staff aged 55 years and over who should receive up to 5 years' credit with no discounting as applies in most severance deals.
3. The loss of rostered overtime, averaging £50 per week and up to £120 per week in some cases, could result in a loss of £40,000 for a 50 year old worker over the remainder of his/her working life. Although staff have not agreed to a buyout of overtime earnings, the minimum acceptable would be 130 weeks, which was paid in the early 1990s. A minority of staff who were required to give a commitment to work rostered overtime should be treated on an exceptional basis and should be allowed to retain their current working arrangements and earnings.
4. 1. The recent review identified a number of issues which must be dealt with to ensure the future viability and profitability of the Company. These included a decline in sales and profits due to severe competition from inexpensive imported brands and own label products. It also highlighted avoidable costs in operations and administration. Significant investment has been made since 1990 and further investment is required in areas such as the IT area, in addition to implementing 49 redundancies and abolishing certain overtime.
2. A lack of applications for voluntary redundancy is not envisaged. The offer of 4 weeks' pay per year of service inclusive of statutory entitlement, which was agreed through the Labour Court in 1991, will be an expensive package due to the age and service of many of the employees. Currently there is no maximum ceiling on the redundancy amount. Prior to today's Labour Court hearing the ATGWU has agreed on 5 weeks' pay per year of service as part of an agreed total package.
3. The loss of overtime earnings will amount to between £7.55 and £33.00 per person per week. The currently agreed protection level of 78 weeks' compensation for loss of earnings is being applied at the moment with this group of employees. The ATGWU has accepted 78 weeks as per the current agreement with 2 X 9 monthly payments instead of 3 X 6 monthly payments. The current agreement also provides for an additional 12 months protection for losses above £3,000. Staff who are required to work their current hours will be red-circled to avoid a loss of premium.
Having considered the submissions, both verbal and written made to the Court in this case, the following recommendation is made:-
The Company should offer, and the Union accept, 5 weeks per year
of service for those made redundant, these terms to be inclusive of
Where there is a loss of earnings arising from the change to "flat" hours,
the current protection level of 78 weeks should be paid, with the added
protection mentioned in the Court of an additional 12 months where the
loss runs at a level above £3,000. Further, the Company's commitment to
"red-circle" certain employees who will be required to work the same
starting, or finishing times as heretofore so as to avoid their being paid a
lesser amount than previously, should be honoured.
Signed on behalf of the Labour Court
21st October, 1996______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.