INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PEERLESS RUGS LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Keogh
Worker Member: Mr O'Neill
1. Enhanced redundancy terms & 2% under the Programme for Prosperity and Fairness.
2. On the 25th of May, 2001, the Company announced that its operation in Athy would close on the 20th of July, 2001, with the loss of approximately 65 jobs. The Company is owned by the Reffond Group. At a meeting on the 11th of June, the Company offered to pay statutory entitlements. This was rejected by the workers who sought 8.5 weeks pay per year of service, plus statutory entitlements and the 2% payable under the PPF which was due from the 1st of April, 2001. The Union informed the Company that the claim was negotiable but received no response.
The Company stated that it was insolvent and appointed a receiver (KPMG). The Union claims that the Company promised to make its financial accounts available but this has not happened. The dispute was referred to the Labour Relations Commission and a conciliation took place on the 21st of June, 2001. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 22nd of June, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing was due to take place on the 2nd of June but the Company indicated that it would not be attending. A hearing subsequently took place on the 9th of July, 2001. The Company's management did not attend, but the Receiver did and confirmed that only statutory entitlements would be paid.
3. 1. The Company was profitable when it was taken over by the Reffond Group in 1997. From financial information available, the Company showed healthy profits for the year ended June, 1999. It is unacceptable that the Company can now declare itself insolvent and unable to pay more than statutory payments. Redundancy settlements in the textile industry average 3.5 - 4 weeks' pay per year of service.
2. The average service of the workers is 22 years and they have contributed greatly to the success of the Company. The age profile of the workers and the poor employment situation in Athy means that most of the members will have great difficulty in finding alternative work.
3. Reffond Group's subsidiary in Cork has recently begun to produce goods which were produced by the Company in Athy. The Union believes that this will expand after the closure, which will allow the Reffond group to continue to benefit whilst the workforce is left jobless.
4. The failure of the Company to provide, as promised, the financial figures for the Company raises serious doubts about its motives.
The Court has not been provided with any evidence to substantiate the Company's financial position. Indeed, the Union has claimed that figures for 1999 and 2000 indicate a Company trading successfully.
The Company management did not attend the hearing. The Receiver attended, but was not in a position to outline the Company's financial situation.
Given the failure of the Company to provide, as agreed, the financial figures to the Union, and a claim that production was being transferred to Cork, the question of a restructuring rather than insolvency situation arises.
Given the uncertainty as to the real reason for the Company's situation, the Court recommends that the Company pay the employees 3 weeks' pay per year of service, plus statutory payments as due.
Signed on behalf of the Labour Court
10th July, 2001______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.