INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
ROCHE IRELAND LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr Rorke
1. (1) Compulsory redundancies, (2) Method of selection for redundancy, (3) Compensation package.
2. The Company, which opened its plant in Clarecastle in 1976, was part of the Syntex Corporation of America. It is a chemical manufacturer and its main product was the drug 'Naproxen'. The Company also produces dl-acid, which is a more complex operation than producing Naproxen. The patent for Naproxen expired in 1993 and the Company (then Syntex Ireland) was taken over by the Roche Group in 1994, and changed its name to Roche Ireland Limited. Despite the takeover, it was decided to consolidate the manufacture of Naproxen in a low-cost Mexican plant in December, 1997 which, in turn, led to the closure of the Naproxen facility in Ireland. This impacted directly on 47 Naproxen workers (CPOs) in the Clarecastle plant.
At a meeting on the 30th of September, 1997, management informed the Union of the closure of the Naproxen plant and indicated that it would require at least 50-60 redundancies from all sections, preferably voluntary redundancy/early retirement. The Company's proposal was as follows:
(i) Enhanced once-off package of 7 weeks' regular pay per year of service for voluntary severance only, subject to a maximum payment of 130 weeks of regular pay.
(ii) Employees over age 50 could avail of the Company's early retirement package plus pension entitlements.
(iii) Statutory entitlements were additional.
The offer was open to the 28th of November, 1997.
By the middle of January, 1998, having extended the offer from the 28th of November, 1997, the Company had a total of 46 volunteers. Various workers from the Naproxen plant had been redeployed, but 11 remained who could not be redeployed and had not volunteered for redundancy (the figure at the time of the Court hearing had reduced to 9). At a meeting on the 14th of January, 1998, the Company made a compulsory redundancy offer, similiar to one made in 1993, to the 9 workers as follows:
5 weeks' pay per year of service for the first 10 years, 6 weeks' pay per year of service for subsequent years up to a maximum of 104 weeks, and an early retirement provision.
The Company also stated that it would be introducing a new 5-cycle shift on the 1st of March, 1998. The Union stated that it believed that compulsory redundancy was not necessary but, if it became inevitable, a package should take account of the fact that workers were being compelled to take redundancy.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place on the 28th of January, 1998. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 2nd of February, 1998, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 10th of February, 1998.
3. 1. After the expiry of the Naproxen patent in 1993, there were major changes agreed to which resulted in a loss of earnings potential for the workers (details supplied to the Court). There were also a number of voluntary redundancies. The workers were committed to keeping the Clarecastle plant open and believed management was equally committed. However, in 1994 management's attitude to the Union began to change, with less and less consultation taking place.
2. The Union's position, as per an Agreement in April, 1993, is that, should compulsory redundancy arise, it would be on the basis of last-in first-out. The 9 workers concerned have longer service than a number of workers redeployed. It is still not certain that there is a need for the redundancies. The Company has not agreed manning levels under the proposed 5-cycle shift. Agreement, when reached, might eliminate the need for redundancies.
3. The Company's offer of voluntary redundancy, while attractive to many workers, did not suit everyone. The 9 workers concerned hoped to remain in the job that they had been in for many years (17 - 23 years). The Company's offer to the 9 workers is considerably less than the offer of voluntary redundancy and is unfair. The Company should improve its offer to the workers who are being forced to take redundancy.
4. 1. The manufacture of Naproxen accounted for over 30% of the volume produced in the Clarecastle operation and over 50% of production operation activity. With the loss of the Naproxen production, the Company had no choice but to look for the redundancies it did. The voluntary redundancy package on offer was very generous, a fact acknowledged by the Union. The Company does not have work for the 9 workers concerned. It has redeployed as many of the Naproxen operatives as it can but the 9 compulsory redundancies are unavoidable.
2. The Company has the right to retain employees based on skills, aptitude, qualifications and experience. The production of Naproxen was not a particularly skilled operation. The Company could not countenance a situation where 9 of its more skilled employees from other plants should be selected for compulsory redundancy ahead of the 9 workers concerned.
3. The compensation package offered to the 9 workers is very generous and compares favourably with any redundancy offer in the industry. The Company has also offered to assist the workers in sourcing alternative employment.
The dispute centres on the consequences of the closure of the Naproxen manufacturing operation at Roche, which was the main employer of production operators in this chemical plant. Having offered exceptional terms for voluntary redundancy for a period, the Company accepted all volunteers up to January.
At this stage, the Company states that it has redeployed to the maximum extent that it can in facilitating volunteers outside the Naproxen operation, and has nine remaining Naproxen operators whom it requires to make compulsorily redundant. Terms proposed are those applying in 1993 under the previous owners, Syntex.
The Union makes the point that these nine are not the least time-served employees, and that the Company should either absorb them or place them in the jobs of those with the least service.
The Court, having considered the detailed written and oral submissions made at the hearing, finds that there is a redundancy situation which the Company has tried to mitigate as far as possible by voluntary redundancy and redeployment. However, the remaining nine employees are not the last to be employed in the Naproxen plant, although the employees in total did participate in the test process as a means of maximising selection for replacement of volunteers elsewhere in the plant.
The Court recommends that the nine remaining employees accept that they are redundant in these special circumstances. The Company, however, should extend to them the same special terms offered to the other voluntarily redundant staff. Additionally, on a once-off basis and without precedent, given that this group is not the last into the closed Naproxen operation and have not volunteered for redundancy, an additional sum of £4,000 each should be paid to them. Furthermore, if suitable vacancies arise in the plant in the future, they should be given first consideration for such posts, if still available.
Signed on behalf of the Labour Court
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.