INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr McHenry
Worker Member: Ms Ni Mhurchu
1. Inclusion of overtime in redundancy calculation.
2. In November, 1999, the Company announced the closure of the manufacturing operation of its plant at Costello, Co. Galway. Following discussions between the parties, a redundancy package was agreed which provided for six weeks' pay per year of service plus statutory entitlements. Redundancies commenced in January, 2000. In February, 2000, the Union wrote to the Company seeking confirmation of the redundancy package agreed. In addition it sought confirmation that average overtime should be taken into account when calculating weekly pay. This in particular affected 11 workers in Maintenance (4 fitters and 7 shift workers) who worked an average of ten / fifteen hours overtime per week and two hours overtime every third Monday morning respectively. The Company maintained that, from the outset of the redundancies, average overtime has been used for the calculation of a week's pay for statutory purposes only. Subsequently the Company agreed that in respect of contractual overtime for 3 maintenance workers this would be used in the calculation of ex gratia payments. It would not extend this concession to other employees. The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 3rd October, 2000 but agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 6th December, 2000. The dispute was received in the Court on the 6th December, 2000. A Court hearing was held on the 29th March, 2001.
3. 1. The Company refused to factor in overtime carried out amongst the 7 shift workers every third Monday. The Company required two or three workers to commence work at 6.00 a m. on a Monday morning to start up machines and have them ready for production at 8.00 a m. This overtime was rotated between a number of workers on each shift every third week. The overtime work, which was carried out at the start of shift, attracted a rate of double time and was ongoing for many years. It is wrong to discriminate against these 7 workers who, like the 3 fitters, came into work at 6.00 a.m. to accommodate the needs of the operation.
2. In addition to the 2 hours on a Monday morning, the fitters worked an average of between 10 and 15 hours overtime each week. Overtime had been a normal part of each week for the fitters over the past ten years but even more so since three of their colleagues left the Company in 1998 and 1999. These fitters were not replaced which left extra work for those remaining. Overtime rates for the first four hours after normal finishing time attracts a payment of T 1/2 and thereafter 2T. It is totally unfair that the workers' true earnings were not reflected in their severance package.
3. It is normal to include all elements of weekly pay in the calculation of a severance package, this is provided for in the Redundancy Payments Acts which have been used as a guideline in the calculation of the severance package thereby including earnings from overtime.
4. 1. From the outset the Company set out to achieve a fair and equitable settlement for the workers made redundant. This is borne out by its opening offer of four weeks' pay per year of service. The final settlement of six weeks' per year of service plus statutory is very lucrative, fair and reasonable. It is the Company's understanding that the package was accepted by the majority of the workforce.
2. The method of calculation was not contested by the Union until the 28th of February, 2000 by which time 24 workers had been made redundant.
3. The Company was always clear and specific in what it regarded as a week's pay and Management specifically outlined to workers that a week's pay is current contractual weekly wage including contractual allowances but excluding overtime.
4. During negotiations the Company addressed the issue raised by the Union where certain workers were obliged to work two hours overtime per week contractually. It agreed to have these two hours included in the calculation of a week's pay, statutory and non statutory.
5. The claim is disingenuous as it seeks to achieve special status for certain workers. The Company would not have agreed the terms had it not felt that the package was intended for and accepted by all workers.
Having considered the submissions of the parties the Court has concluded that the inclusion of overtime in reckonable pay (except in respect of specific individual cases) was not part of the agreement reached on severance pay.
In these circumstances the Court does not recommend concession of the Union's claim.
Signed on behalf of the Labour Court
12th April ,2001______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.