INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
HERDMANS (IRELAND) LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr. Somers
1. Redundancy compensation.
2. The Company, which was established in 1965, was located in Ballybofey, Co. Donegal. It employed 85 people in the manufacture of linen yarn. Its sister company, Herdmans Limited, was founded in 1835 and employs 550 people at Sion Mills, Co. Tyrone.
On the 4th of July, 2001, the Company informed its employees that the Ballybofey mill was to close, with the loss of 85 jobs. There were also to be 85 redundancies at Sion Mills. The parties commenced negotiations on redundancy terms and agreement was reached at Sion Mills. Volunteers were sought but employees who had less than two years' service were made compulsorily redundant.
However, no agreement could be reached with the employees at Ballybofey. An independent mediator was appointed but could not resolve the issue. The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 16th of August, 2001. The Union initially sought severance terms of 6 weeks' pay per year of service (p.y.o.s.) plus statutory entitlement, but was prepared to reduce its claim to 4 weeks' pay per year of service plus statutory.
The Company offered statutory redundancy plus 25% plus £100 (126.97 Euro) for employees with over 15 years' service or £50 (63.49 Euro) for employees with less than 15 years' service. The parties were unable to reach agreement and the issue was referred to the Labour Court on the 5th of September, 2001, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute in Donegal on the 10th of October, 2001. The Ballybofey mill closed on the 28th of September, 2001.
3. 1. The Union submitted a claim for 6 weeks' pay per year of service for several reasons. The workers are facing permanent closure and many of them will have difficulty securing alternative employment given their age profile and the economic situation in the area.
2. Redundancy compensation of 4 to 6 weeks is not uncommon in the Republic of Ireland and has been recommended previously by the Labour Court. However, the Company's offer is well below the average for Donegal and the Republic of Ireland. In order to resolve the issue, the Union is prepared to reduce its claim to 3 weeks' pay p.y.o.s. plus statutory.
3. Although the Company currently has trading difficulties, previous experience suggests that this will not be permanent. The Company still has substantial assets and employs 500 people in Northern Ireland. The Company should improve its offer significantly to compensate its employees who have given long and dedicated service to the Company.
4. 1. Since 1996, the Company has had to close three of its spinning plants. Despite its financial losses, the Ballybofey mill was kept open and large sums of money were invested. The attempts to make Ballybofey viable have affected the parent company and may have put the future of Sion Mills at risk.
2. The Company's principle of profit related pay and the service pay reward system show the Company's commitment to its staff. The labour turnover at Sion Mills of 8% per annum will enable the Company to offer employment to a number of Ballybofey employees, particularly those with long service.
3. The Company's redundancy compensation offer is based on its previous one in 1998. The present crisis is more serious than in 1998 and there is no guarantee that the immediate cash flow difficulties that will result from complying with the existing offer and the closure costs of the mill can be overcome.
4. The Company cannot increase its redundancy payment offer. The Company has no alternative sources of finance and the proceeds of any assets realised will be retained by the Company's bankers.
The Court considered carefully the written and oral submissions made by the parties.
Taking into account all of the issues involved in this case, the Court recommends that the Company offer on redundancy be increased to 3 weeks' pay per year of service, inclusive of statutory payments.
Signed on behalf of the Labour Court
19th October, 2001______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.