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
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr Rorke
1. Severance payments including pensions.
2. In December, 1998, the Company announced its intention to sell its fuels business in Ireland to DCC, an Irish investment company whose energy division owns Emo Oil and Flogas. The sale was completed on the 1st of February, 1999 and six members of staff moved to DCC with the fuels business. The remaining sixty seven employees transferred to a new trading company, Castrol (Ireland) Limited. Nineteen employees were issued with letters of continuing employment, while forty eight employees received letters of redundancy. When newly created posts are filled it is estimated that 44 employees will be made redundant.
Following local negotiations the parties attended a conciliation conference at the Labour Relations Commission on the 8th of February, 1999. The Company offered severance terms in line with those agreed in 1996 as detailed in Labour Court Recommendation LCR15281 and LCR15282. The Union claimed enhanced severance and pension terms citing the Company's financial profile, relevant deals elsewhere within the industry and the compulsory nature of the redundancies. The Union's claim is as follows:-
- 8 weeks' pay per year of service,
- "ceiling" 156 weeks,
- minimum payment 52 weeks,
- Plan B, VHI payment for 4 years to be paid for by the Company.
- Removal of State offset,
- 5 added years (i.e. credit),
- Formal indexation i.e. 3%,
- Deferred pension from age 50 for members of the scheme without penalty,
- Actuarial reduction for voluntary early retirees to be reduced to 3%,
- Interim payment for those between 48 and 50 years pro rata to their pension.
The Union also submitted a claim for a £3,000 co-operation payment on behalf of all employees. The Company offered a gross payment of £1,600 to each employee, which was rejected by the Union. As agreement between the parties was not possible, the dispute was referred to the Labour Court on the 2nd of March, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 16th of March, 1999.
3. 1. These are compulsory, enforced redundancies in which the individual workers have no choice. The average age profile is late 40's/early 50's which presents difficulties in securing suitable alternative employment elsewhere.
2. All of the staff concerned opted to stay with the Company following the rationalisation in 1996. They improved productivity and overall sales, yet some of the work proper to staff in Ireland is now being transferred to Swindon.
3. The Company is an extremely profitable and successful multinational company, which intends to pay approximately £250 million to its shareholders after April, 1999. The Union's claims are fair and reasonable and are similar to packages available in comparative employments within the industry.
4. 1. Despite the comprehensive rationalisation and restructuring programme in 1996 at a cost of £3 million the present redundancies are unavoidable. The severance terms offered by the Company are those which were agreed in 1996 following acceptance of Labour Court recommendations.
2. The cost of the terms offered by the Company amounts to £5.9 million - severance terms of £3.5 million and early retirement pension costs of £2.4 million. The Union's claim is for severance terms of £6.0 million, early retirement pension costs of £8.2 million and VHI payments of £0.1 million. The total cost would amount to £14.3 million, which is both untenable and unrealistic.
3. The Company has indicated that it could consider minor adjustments to make the package more acceptable, such as concessions within the early retirement element of the package. However, as a corollary, the terms of Labour Court recommendations LCR15281 and LCR15282 should apply.
The Court considered the written and oral submissions made by the parties.
The Court is satisfied that the circumstances in this case are different to those prevailing in LCR15281.
In LCR15281 the Court took into account the fact that employment was available for a number of employees effected by the then Company proposals.
Taking into account all aspects of this case the Court recommends that the previous package as outlined in LCR15281 apply with the following modifications:-
1. Ceiling to be changed to 130 weeks for those under 50 and 104 weeks for those over 50, inclusive of all statutory entitlements.
2. A minimum payment of 9 months' pay.
3. 5 employees of 47 years of age to be retained in the Company until their 48th birthday (1 in April, 1 in May, 1 in September, 2 in December).
4. Plan B VHI to be paid until end of 1999.
5. Indexation to be agreed on basis of CPI or 3% whichever is lower.
6. 2 added years pension credits to be allocated to those leaving as a result of this Plan.
On the other outstanding issue, co-operation payment, the Court recommends that the Company's offer of £1,600 be increased to £2,000.
Signed on behalf of the Labour Court
13th April, 1999______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.