INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969
BALLINAMORE TEXTILES LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Pierce
Worker Member: Mr Rorke
1. Dispute regarding additional redundancy compensation payment.
2. Ballinamore Textiles Limited operated as a CMT supplier (cut, made and trim) of childrens garments for distribution to retail chains in the UK and Ireland.
On the 13th of February, 1998, the Company announced its decision to close. The redundancies and those of 22 it had declared on the 20th of January, 1998, to be implemented on a phased basis from the 20th of February to the 10th of April, 1998. Local level discussions took place following which agreement was reached on redundancy terms (details supplied to the Court).
The agreement provided for:-
- 1.5 times statutory redundancy entitlement (inclusive), to employees due to receive payment in lieu of notice.
- Twice statutory redundancy entitlement (inclusive), to employees working their notice and due to be made redundant on the 10th of April, 1998.
- Employees due to be made redundant on the 10th of April, 1998 with less than 2 years service would receive an ex-gratia payment of £350.
Clause 6 of the agreement states:-
"These terms are conditional on claim(s) being made on the Company
by IDA Ireland as a result, directly or indirectly, from the decision to cease
trading being waived by the IDA. In the event they are not so waived then
any amount payable under these proposals would be reduced
accordingly, subject to compliance with statutory requirements. Should
this matter involving the IDA, not be conclusively resolved by the 8th
of April, 1998, then the Company will proceed to discharge all
statutory payments to employees on the redundancy date with any balance
of monies due under these severance terms being held over pending
resolution. Each individual will be advised of the amounts involved."
Subsequently the Company was obliged to pay £110,000 to IDA Ireland.
The dispute concerns the Union's claim on behalf of approximately 100 people for enhanced redundancy payments. It argues that it was always the Union's position that in the event of the IDA not waiving the payment of £110,000 it reserved the right to process a claim in excess of statutory entitlement.
The matter was referred by the Union to the Labour Court on the 2nd of February, 1999 under Section 20(1) of the Industrial Relations Act, 1969 and the Union agreed to be bound by the Court's recommendation. A Labour Court hearing took place in Donegal on the 17th of November, 1999, the first date suitable to the parties.
3. 1. The Company's offer recognised the low morale caused by the announcement to close and was an incentive for staff to work their notice and assist in an orderly wind-down of the operation. The refusal of the Company to honour the understanding of the 3rd of April, 1998 is a clear breach of good faith.
2. The Company has a considerable asset in Ballinamore and has leased the factory to an individual who is effectively running the old operation under a different name with a reduced workforce.
3. The Company has a good industrial relations record with the workforce over 25 years. Its decision to close was not influenced by the workers' level of performance. It was the largest employer in Ballinamore and the workers concerned have no prospects of obtaining alternative employment to use their skills.
4. The Court is requested to recommend that the Company honour its moral obligation to a workforce which has served it well over 25 years and recommend a severance package of twice the statutory redundancy.
4. 1. The terms of the agreement freely entered into by both parties is clear and unambiguous with regard to the treatment of the ex-gratia element of the package and the implications arising in the event that the claim made on the Company by IDA Ireland as a result, directly or indirectly, of the decision to cease trading not being waived by the IDA. The agreement clearly provided that any amount payable under the proposals "would be reduced accordingly, subject to compliance with statutoryrequirements". There is no alternative meaning or affect to the agreement entered into and balloted upon by Union members and the acceptance of which was confirmed by SIPTU.
2. The Company acknowledges that the nature of such a clause in the agreement may be regarded as unusual but the purpose was nonetheless understood and signalled by the Company during the course of negotiations in view of the outstanding claim by IDA Ireland and the financial implications involved.
3. On implementation of the redundancies,employees were required in accordance with the terms of the agreement to complete a discharge form. This document carefully set out the monies due to employees arising under the various elements of the agreed package. The explanatory clause in the discharge form reinforced the formal agreement between the Company and SIPTU and provided that "the balance of monies under (2) or (3) as appropriate are being held over pending a resolution, as soon as may be practical, of a disputed claim made by IDA Ireland on Ballinamore Textiles Limited as a result, directly or indirectly, of the Company's decision to cease trading. The amount of monies under (2) or (3) may be abated accordingly but in the event that the claim by IDA Ireland is not waived then only those monies as may be due under (1), (4), (5) or (6) will be afforded." The discharge form further confirmed the individuals acceptance and agreement that the package and settlement was legally binding and effective and confirmed their understanding and acceptance of what that meant and entailed. It further confirmed that they had read the document, had the opportunity to take independent advice from SIPTU and understood and accepted the contents of the document before signing it. The discharge form was completed in all cases.
4. Having regard to all of these matters and in particular the express nature of the agreement on severance terms and the specifics of the disclaimer, the current claim is being pursued in direct contravention and breach of the agreement with SIPTU. The 'disclaimer' executed by individuals was clear with regard to the discharge of the elements of that agreement as they related to the status of the claim by IDA Ireland. The Court is urged to reject the current claim on these primary grounds given the nature of the agreement and the serious implications arising from any decision to set aside the agreements freely entered into.
The Court has considered carefully the written and oral submissions made by the parties to this dispute.
The Court is of the view that while the agreement on settlement terms for redundancy is unusual, it is also very clear and unambiguous regarding the offset of monies due to the IDA. On this basis the Court does not consider that it can recommend additional redundancy payments to the claimants.
Signed on behalf of the Labour Court
9th December, 1999______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.