INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
OLDCASTLE CO-OPERATIVE CREAMERY LIMITED
(REPRESENTED BY IRISH CO-OPERATIVE ORGANISATION SOCIETY)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. Redundancy severance pay terms.
2. The dispute concerns one worker who commenced employment with the Company in February, 1986 and who was employed in the capacity of sales representative until the termination of his employment on the 29th of January, 1999.
The Company offered him a redundancy payment of 2 weeks' basic pay per year of service plus statutory entitlements. The Union is seeking 6 weeks' pay per year of service plus statutory entitlements, on foot of an agreement reached between the then general manager of the Company (who left the Company shortly afterwards) and the Union. The Company claims that the general manager had no authority to enter into such an agreement with the Union. The matter of what exactly comprised basic pay for the calculation of redundancy payment was also in dispute. The Union claims that basic pay should include a "deferred holiday payment" bonus amounting to about £5,000 received by the worker each year since 1996/97. This was rejected by the Company. The dispute was the subject of a conciliation conference, under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court, on the 12th of March, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 26th of April, 1999.
1. The agreement between the Company and the Union was negotiated, in good faith, with the general manager who had held that position for 43 years. The terms of that agreement are not unusual.
2. During his working notice period, the worker secured agreement with the Company's debtors on payment terms which were approved by the Company's chairman and an advisor.
3. The Company is attempting to disregard a portion of the worker's pay which was paid on a deferred basis at annual leave time. Such payments were not unique to the worker.
4. Redundancy terms arising from the closure of the Company's grocery section in 1991 provided for payment of 4 weeks' pay per year of service. Such a level of severance pay might have resolved this dispute, if based on actual pay earned by the worker.
5. Severance terms of 6 weeks' pay per year of service are a feature within agricultural co-operatives.
6. The committee is concluding the sale of piggery for between £650,000 and £700,000 and other areas of non-core business have been advertised for sale. Additionally, a new deal has be negotiated with Virginia Milk Products for the Company's 3 million annual gallonage.
1. The society was not aware of the "agreement" between the then general manager and the Union. The general manager did not have authority to enter into negotiations nor to conclude such an agreement.
2. The Company which is a relatively small society, employing 9 workers, has endured serious trading difficulties since 1997. Its reserves have become depleted and it has considerable bank liabilities (details supplied to the Court).
3. The Company believes that the worker has been fairly treated. Despite the fact that his earnings were related to sales, which were in decline, his income increased significantly over the years. The Company's offer amounts to £1,000 per year of service which, considering the size and nature of the Company, is a reasonable payment.
The Court has given consideration to both the oral and written submissions of the parties and recommends that in the special circumstances of this case, the Company should offer to pay the claimant three weeks' pay per year of service, based on his basic pay plus commission (the "holiday deferred pay" should not form any part of the calculations). This compensation is being recommended exclusive of the statutory redundancy payment.
This compensation package should be regarded by the parties as an exception based on the individual circumstances of this case and should not form a precedent for future redundancies.
Signed on behalf of the Labour Court
14th May, 1999.______________________
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.