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 Flood
Employer Member: Mr McHenry
Worker Member: Ms Ni Mhurchu
1. Redundancy terms.
2. Due to competitive market forces, the Company sought twelve redundancies (seven in Killeshandra co-op and five in Lough Egish co-op), with a view to achieving and maintaining improvement in cost-efficiencies.
Following 3 conciliation conferences on the matter, under the auspices of the Labour Relations Commission, the Company offered a redundancy package amounting to 3½ weeks' average pay plus 1 week's basic pay per year of service (pyos), or 5½ weeks' basic pay pyos, whichever is the greater, up to the age of 60, plus pension entitlements. For employees aged between 60 and 65, 2½ weeks' average pay or 4.33 weeks' basic pay pyos (60-61), 2 weeks' average pay or 3.66 weeks' basic pay pyos (61-62), 1 week's average or 2.33 weeks' basic pay pyos (62-63), and 1 weeks' basic pay pyos (63-65), were offered. The offer was rejected by the Union which sought an enhanced package equivalent to 6 weeks' pay pyos plus £6,000, i.e., the same package as applied previously in the Avonmore-Waterford Group (AWG).
The Union's claim was rejected by the Company. In the meantime, the Company's offer was over-subscribed and the Company had to refuse access to a number of employees to the package. The matter was referred to the Labour Court, on the 10th of July, 1998, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation, in Cavan, on the 19th of January, 1999, the earliest offered date suitable to both parties.
3. 1. Over the past ten years, the Company has shed in the region of 100 jobs. It has not negotiated any worthwhile improvements in pay and conditions other than those provided for under national pay agreements. Meanwhile, the workforce has co-operated with ongoing change, the introduction of new technology and the development of new products generally. If the Company has not been performing well it is due to shortcomings on the part of management, their only suggestions to improve performance being to continue to reduce the workforce, particularly in the Operative and Clerical areas.
2. The Company is situated in a severely handicapped region, as designated by the EU, and this, in turn, means that alternative job opportunities are limited. The Company stands to save in the region of £500,000 when the redundancies are taken into account. There has been no substantial argument put forward by the Company as to why it cannot meet the standard of compensation established elsewhere in the co-operative movement.
3. The level of compensation offered has been exceeded by other major employers rationalising their staff, elsewhere in the country. Settlements, bearing out the Union's arguments, have been well-established by now, particularly in the food industry (details supplied to the Court).
4. Where business failure and company closure cause redundancy, it is accepted that compensation would be at a lower level. However, in this instance, the Company is endeavouring to maximise profitability at the expense of the staff. Accordingly, parity of compensation with that conceded in the AWG settlement should be extended to all the workers who have taken redundancy.
4. 1. The commercial position facing the Company required that it achieves greater cost-efficiencies and a part of this agenda defined the need for a small number of voluntary redundancies. In processing the redundancies, the Company avoided the closure of any operations and was as flexible as possible in facilitating applications for the package by allowing the package to run plant-wide.
2. The package, as put forward by the Company, was a good package which represented a significant cost to the Company and which was an improvement on the redundancy terms offered by the Company in 1990.
3. The fact is that, despite there not being a formal agreement between the Company and SIPTU on the terms, the package was over-subscribed and the Company had to refuse some applicants.
4. The package has to be seen in the light of, and in proportion to, the Company's trading position and comparisons by the Union to the Avonmore-Waterford Group are wholly inappropriate.
5. The package represented the very best that the Company could offer, in the circumstances. The Company remains under pressure to improve its business and so ensure on-going viable employment. Any increase in the terms already accepted by those employees who have left the Company will adversely impact on this objective.
The Court, having considered the written and oral submissions made by the parties does not recommend concession of the Union's claim for parity with redundancy terms applied in the Avonmore-Waterford Group.
Signed on behalf of the Labour Court
12th February, 1999______________________
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.