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: Ms Jenkinson
Employer Member: Mr Pierce
Worker Member: Ms Ni Mhurchu
2. Lund International is the European division of a U.S. corporation. It manufactures small cutting equipment and blades for the European Forager Business. It was established in Ireland in 1981 and employs 71 people. The corporate parent, Lund International USA, is in "Chapter II" proceedings under US Court protection. The Irish operation is trading successfully and is excluded from the "Chapter II" process. In this environment management reviewed its operations and re-structured the Company.
The dispute concerns the re-deployment of six lead hands (as part of the re-organisation) to machine operator/ machine setter with the loss of approximately £91 per week. The Union's claim is on behalf of five lead hands. There are two elements to the plus payments:
1. Basic Added Payment.
2. Other additional payments.
The workers concerned have varying levels of service as lead hands. The Union is seeking compensation of two years' loss of earnings. It argues that the reduction in income is having a devastating effect on the workers' lifestyle and that the losses in pension benefits are enormous. The Company's offer is 6 months' loss for the Basic Added Payment and 12 months' loss for the other additional payments to the longest serving lead hand and pro rata to the other claimants.
The matter was the subject of two conciliation conferences held under the auspices of the Labour Relations Commission. As agreement could not be reached the dispute was referred to the Labour Court on the 10th of April, 2000 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place in Athlone on the 31st of May, 2000
3. 1. The reduction in income is having a devastating effect on the lifestyle of the workers concerned and is creating difficulty for them in meeting their financial commitments.
2. The loss of pension benefit is enormous and the workers have been advised that it would be necessary to make additional voluntary contributions of £1,400 per annum in order to maintain the same level of benefit envisaged prior to the reduction in wages.
3. The decision of the Company to demote the workers without regard to the effect on their financial circumstances is difficult to understand. It is the Union's view that no effort was made by management to take cognisance of the hardship the reduction in wages would have. In the circumstances the Union is seeking that the Court recommends compensation commensurate with the loss suffered.
4. 1. Given the position of the Company it has to restructure in order to reduce costs. The position of the parent Company remains critical.
2. The Company appreciates that there are significant losses incurred by the six lead hands and in recognition of this has made a generous offer, particularly in regard to the Basic Added Payment which was only in existence for two years and does not justify substantial compensation. Its offer in respect of the other additional payments is one year's loss for service going back to 1991 and pro rata back to 1996 and 1998.
3. The Union's claim for two years' loss would approximate to £10,000 per person and would be far too costly, defeating the purpose of restructuring. The Company considers that its offer is more than generous and is seeking that the Court supports the Company's position.
This is a claim for compensation for the loss of earnings due to re-structuring within the company in order to make it more competitive. The Court considers that the loss of earnings is most substantial and will have a major impact on the lives of those losing out. The Court is also concerned at the future loss of pension benefit on those earnings, particularly as contributions on those earnings have been made, which will now be lost by the workers concerned.
Therefore, for each of the five claimants involved in this claim, the Court recommends
the payment of two years' loss of the Basic Added Payment (BAP). As compensation for the loss of the additional payments the Court recommends that the longest serving lead hand should be paid two years' loss, while the shortest serving lead hand should be paid one year's loss, and pro rata for the lead hands with service in between.
The Court recommends that half of the above payments should be made on acceptance of this recommendation, the balance four months later.
Signed on behalf of the Labour Court
21st June, 2000______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.