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 McGrath
Employer Member: Mr McHenry
Worker Member: Mr O'Neill
1. Dispute concerning redundancy terms.
2. The dispute relates to the redundancy of six workers employed at the Company's unit at the Asahi plant in Ballina. The Company provided the catering facilities at the Asahi plant. Sutcliffe Catering inherited the catering contract with Asahi and took over the operations of a Company called National Catering in May, 1993. National Catering had been in operation since 1977. The redundancies will result from the imminent closure of Asahi. The Union's claim on behalf of four workers, is for redundancy payments of six weeks' pay per year of service plus statutory entitlements. The Company offered to pay statutory redundancy to the workers but stated that any ex-gratia payments would have to be met by Asahi. This was unacceptable to the Union.
The disptue was referred to the Labour Relations Commission and a conciliation conference was held on the 16th of September, 1997. Agreement was not possible and the dispute was referred to the Labour Court by the Labour Relations Commission on the 14th of October, 1997. A Court hearing was held on the 28th of October, 1997.
3. 1. The Company is a major employer in the catering industry. There are only a small number of workers involved in the claim. They are on low rates of pay. The likelihood of these workers ever obtaining alternative employment is remote.
2. Management has accepted that an equitable settlement should be made to the workers concerned which should be similar to that paid to the workers employed at Asahi.
3. A number of comparable companies in the industry paid ex-gratia payments to workers being made redundant (details supplied to the Court).
4. The Company's dispute with Asahi on the issue of contract seems to be taking precedence over the Union's claim on behalf of workers who have given excellent service. The Company has not engaged in meaningful negotiations on the claim. This is most unfair to the workers.
4. 1. The agreement between Asahi and National Catering drawn up in 1977, provided that Asahi would pay all the costs associated with the catering unit. On this basis Sutcliffe Catering manages the catering unit. Asahi refunds the cost of food equipment, wages, and all costs associated with the running of the catering operation and also pays Sutcliffe a weekly management fee of £50.
2. The Company contends that the responsibility for funding redundancy payments to the workers concerned rests with Asahi as that Comapny is committed to an agreement to pay all costs associated with the contract, including labour costs.
3. The Company's expansion over the past few years has resulted from the acquisition of contract catering companies and through organic growth. As redundancy situations occur through downturns or closures of client companies, provisions are put in place in agreements between the parties to provide for redundancy payments which may arise. Details were supplied to the Court on the redundancy provisions in eight Sutcliffe contracts finalised since 1994. In all these circumstances, the client company reimbursed Sutcliffe Catering in respect of both statutory and enhanced redundancy payments.
4. The Comapny accepts that it is the legal employer of the six workers and is committed to the payment of statutory redundancy which will take account of workers' past service with National Catering and service with Sutcliffe Catering since 1993.
5. The matter of both statutory and enhanced redundancy payments is being pursued legally with Asahi and, until such time as that Comapny accepts its obligations in relation to the costs associated with the closure of the plant and the redundancy implications for Sutcliffe staff, no further payments will be made.
The Court, having fully considered all of the issues raised by the parties in their oral and written submissions considers, in all the circumstances, the employees being made redundant should receive a severance package of three weeks per year of service plus statutory entitlements.
The Court so recommends.
Signed on behalf of the Labour Court
7th November, 1997______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.