INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
G. E. SUPERABRASIVES
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL, ENGINEERING AND ELECTRICAL UNION
AMALGAMATED ENGINEERING AND ELECTRICAL UNION
Chairman: Mr Flood
Employer Member: Mr Doherty
Worker Member: Mr O'Neill
1. (1) Guarantee of redundancy package of 2002 being honoured by new management in any new redundancies. (2) Compensation for loss of G.E. Share Scheme. (3) Goodwill payment.
2. The Company is a subsidiary of General Electric (G.E.) in the U.S. It is based in Clonshaugh Industrial Estate and processes abrasive and industrial diamonds for industry. The Company employs approximately 160 workers, 130 of whom are represented by the Unions. The dispute has arisen because of the decision of General Electric U.S. to sell the Company to Littlejohn LLC.
The 3 issues of concern to the Unions are as follows:
(a) Retention of the severance package terms currently on offer.
Over the past 10 years, restructuring plans (1994, 1996, 1998, and 2002) have taken place, reducing the number of staff from 420 to 160. The Unions' view is that the 2002 severance terms would be on offer in the event of another restructuring plan within G.E. The Company has stated that, with the exception of the Share Plan, all other terms and conditions will continue.
(b) Compensation for the loss of G.E. Share Scheme.
With regard to the Share Scheme, workers have enjoyed a tax efficient share scheme based on the purchase of G.E.shares. The Unions believe that the loss of the Scheme is in the region of €4,000 per worker per annum. The Unions are claiming 4 times the annual loss i.e. €16,000 per person. The Company's last offer was €4,000 gross as compensation.
(c) Application of a goodwill payment.
The Unions' are claiming a goodwill payment because their members are prepared to accept, in good faith, the transition as employees to Littlejohn LLC. The claim is for €1,000 per year of service for all members. The Company does not believe that there are circumstances to justify such a payment.
The issue was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 19th of November, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 24th of November, 2003.
3. 1.(a)The severance terms of the 2002 restructuring plan are a central part of the workers' conditions of employment. The precedent that provides for the continuation of existing severance terms is not uncommon at the time of transfer of ownership. (The Unions provided a number of examples).
2.(b)The G.E. Share Scheme has existed for many years and is an integral part of the workers' remuneration package. The removal of the Scheme is severe, and the loss of such elements of the pay package is normally dealt with by way of an agreed compensatory package.
3.(c)Most of the workers have 16-18 years' loyal service. The restructuring plans have reduced the workforce by two thirds and have brought about major improvements in efficiencies for the Company. The workers' contribution should be rewarded by a goodwill payment.
4. 1.(a)The Company has confirmed that, with the exception of the Share Plan, all other terms and conditions will continue. There are no plans for any redundancies. However, in the event of such occurring, the terms of the 2002 redundancy package will apply up to the 31st of December, 2004.
2.(b)The Company is not under an obligation to pay compensation for the withdrawal of the Share Plan. The Trust Deeds and Rules state that the continuity or discontinuance of the Plan is at the discretion of the Directors of the Company (details supplied to the Court). The Company's offer of €4,000 compensation is generous as it believes that the average value of the tax exemption on the bonus is €1,600 net, not €4,000 as the Unions claim.
3.(c)Conditions and rates of pay in the Company are very good. Given that all terms and conditions (with the exception of the Share Plan) will continue, there is no basis for a goodwill/loyalty bonus.
The Court, having considered the written and oral submissions made by the parties, makes the following recommendations to resolve this dispute:
1. Retention of existing severance terms package:
The Company commitment that, in the event that redundancies occur in 2004, the Company will apply the terms of the 2002 redundancy package should be extended to cover any redundancies up to 31st December, 2005.
2. Compensation for loss of GE Share Scheme and goodwill payment :
The Court recommends that the Company pay the claimants €8,000 gross as a lump sum in settlement of these claims.
Signed on behalf of the Labour Court
15th December, 2003______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.