INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Brennan
Worker Member: Ms Ni Mhurchu
1. Redundancy terms.
2. Farah (Exports) Ireland is a multi-national clothing company based in Galway and Kiltimagh. It was stated by the Company that the Irish Company and its global operations have all been losing substantial amounts of money. As a result of the Irish losses the Company closed its factory in Ballyhaunis in 1996 and transferred production to Kiltimagh. Workers were given the option of transferring to Kiltimagh or of accepting voluntary redundancy. The redundancy terms were the subject of a Labour Court hearing on the 27th August, 1996 at which the Court recommended payment of twice the statutory entitlement.
On Sunday the 5th January, 1997 a fire broke out at the Galway plant causing considerable damage. On the 28th January, 1997 the Company announced that, due to losses and the excessive costs involved in re-opening the factory, the factory would close with the loss of 70 jobs. The parties then began negotiations on redundancy terms. As agreement could not be reached the matter was referred to the Labour Relations Commission and a conciliation conference took place on the 7th February, 1997. Again, agreement was not reached and the issue was referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 18th February, 1997.
3. 1. Many of the workers have been employed by the Company for over 15 years and are entitled to a redundancy package which reflects their service. Outstanding payments due under the PESP and the PCW should now be paid. A redundancy package based on the higher basic rate of pay should be calculated as follows:-
0 - 2 years' service - 4.5 weeks' per year of service or part thereof
2 years' and over - 4.5 weeks' per year of service plus statutory entitlement
2. The loss of the workers' jobs is out of their control and they do not have the options open to them as previously applied in Ballyhaunis. There were no compulsory redundancies in Ballyhaunis.
3. The Company is not a small, local, Irish-based company but is part of a multi-national company with interests in a number of countries.
4. The Company has already received payment for the sale of its grounds and factory premises in 1996 and is now about to be compensated for the loss of machinery and fittings.
4. 1. The Company has had, and still has, serious financial difficulties and the Union's proposed redundancy package is far in excess of anything that the Company could afford. The Company has offered:-
0 - 2 years' service - No entitlement
2 - 7 years' service - 2 times statutory plus £100 per year of service
Over 7 years' service - 2 times statutory plus £150 per year of service
This offer is fair and reasonable in an industry where settlements are often much lower.
2. The Union's expectation of 4 1/2 weeks, plus statutory plus the other issues of retrospection and corrected rates of pay are far in excess of the Company's finance capabilities.
3. The Company has endeavoured to treat the Galway situation sympathetically bearing in mind the circumstances surrounding the closure. Although some of the Galway jobs will now be carried out in Kiltimagh, training of new employees will be an additional cost to the Company and the balance of work will have to be contracted out. The Company's proposed redundancy package will also cost approximately £200,000.
It is accepted by the Company that this factory would have continued in operation, despite the trading climate, had the fire not taken place. It was as a result of the fire that the Company reviewed its operations, and moved to Kiltimagh. It is equally clear that opportunity for employees to transfer to Kiltimagh is not an option that is generally available.
Taking into account all the issues surrounding this case including the circumstances of the closure the Court recommends that the employees be paid 3 1/2 weeks of pay per year of service inclusive of statutory entitlement as compensation, and in full settlement of all claims. Weeks of pay to be calculated at current pay rates.
Signed on behalf of the Labour Court
13th March, 1997______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.