INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
SMITH MC LAURIN LIMITED
- AND -
Chairman: Mr Duffy
Employer Member: Mr Keogh
Worker Member: Mr Rorke
1. Dispute concerning redundancy terms.
2. The Company, which manufactured adhesive backing labels, has decided to cease operations in Portlaoise and in future will service its Irish customer from the parent plant in Scotland. Prior to the closure announcement there were a small number of employees in the office area including the three workers concerned who are employed in the clerical/administrative section. Twenty two other workers had accepted a voluntary severance package in 1997, which provided for 4 weeks' pay and a sum of £50 per year of service inclusive of statutory payment as well as other benefits. The Company has offered the three worker 1 weeks' pay per year of service up to age 40, and 1½ weeks' pay per year of service over age 40. The workers' claim is as follows:-
- 6 weeks' pay and a sum of £50 per year of service inclusive of
- No cap on the payment amount.
Group outplacement to be organised by the Company.
Normal week's pay to be the higher figure of
- the redundancy payment average formula.
- A loyalty ex-gratia payment to be made to employees with less than
3. 1. The three workers concerned have a total of 45 years service. They have been extremely loyal to the Company, worked through a very difficult redundancy situation in 1977. The gave total co-operation to the Company during the Management buy-out in 1998, and afforded full flexibility in relation to changes in work practices that were necessary.
2. Given the position that the workers are in, through no fault of their own, they feel that their claim for six weeks pay per year of service is fully justified. The workers all have serious financial commitments including mortgages, family dependants, car loans etc..
3. The Company can well afford to concede the workers' claim. They do not accept that the Company is in a dire financial position. It has substantial group assets, annual group sales of approximately £25 million, has land, factory machinery equipment for sale which is expected to realise substantial sums of money. The cost of conceding the workers' claim is approximately £90,000. The Company will continue to sell into the Irish market and make profits in this market in the future.
4. The workers' future employment prospects are bleak due to the closure of various local companies. However, in one of those employments workers received a redundancy package of 6½ weeks' pay per year of service. That Company appreciated their workers' commitment and loyalty.
5. The Company is in a very strong financial position and are well able to afford to fairly reward the workers concerned by conceding their claim.
4. 1. Because of the significant losses sustained the Company was left with no option but to close its Portlaoise plant. Management is not in a position to increase the offer made to the workers concerned. Since the 1997 redundancies there have been dramatic changes within the Company and also in the market place in which it operates. The Company acknowledges the frustration of the workers and regrets that, due to its financial position, it is not able to give them a more generous package. However, the redundancy settlement offered is all that the Company can afford.
2. The workers have highlighted the prospective sale of the Portlaoise factory as generating income to finance a more generous settlement, However, the Company does not know how much this will generate and there are loans secured on those assets which will have first call on any income raised.
The Court has carefully evaluated the submissions of the parties in this case. The Court notes that the decision to close the business was taken voluntarily and that all staff are to be made compulsorily redundant.
The Court does not accept that the circumstances of the Company have changed to such a degree as to justify a departure from the restructuring redundancy terms previously applied. Accordingly, the Court recommends that the terms applied in 1997 be applied in the present case.
Signed on behalf of the Labour Court
17th August, 1999______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.