INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969
- AND -
(REPRESENTED BY IRISH PERMANENT MANAGEMENT ASSOCIATION)
Chairman: Mr Duffy
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. Appeal of Rights Commissioners Recommendation Ir9532/02/TB.
2. The appeal concerns a worker who commenced employment as manager in Nenagh in October, 1986. He was made redundant on 31st December, 2000. The redundancy arose as part of the Company's reorganisation plan, which involved the closure of seventeen branches, ten in Dublin and seven rural branches. The rural branches were to convert to agencies. The worker claimed that he was unfairly treated and referred the issue to a Rights Commissioner for investigation. On the 16th October, 2002 the Rights Commissioner issued his recommendation as follows;
"In settlement of this dispute I recommend that the claimant be paid €7,000 which equates to one extra years redundancy payment."
On the 25th November, 2002 the worker appealed the recommendation to the Labour Court. The Court heard the appeal on the 29th January, 2003.
3. 1. As a result of the Company's decision the worker took a salary drop of €10,163(from €53,333 to €43,170) in 2001.
2. Of the seven country branch managers involved in the closures, under the reorganisation plan, the claimant was the only one that the Company did not make an effort to accommodate.
3. The worker's proposed notice of redundancy(RP1) was dated 12th October, 2000 but was actually served on 22nd November, 2000.
4. The Company kept the Nenagh Branch open until February, 2002,(when it merged with the local TSB branch in the new company).There was no reason why the claimant could not have been retained longer in the employment. He would have had a further fourteen months of employment at a higher salary of approximately €56,0000 - a loss of approximately €18,000.
5. As a result of the Company's decision the claimant took a substantial drop in salary. He was denied the opportunity to compete for the manager's position in Nenagh or take up a similar position in another locality facility which other managers enjoyed. Consequently he has lost out on employment, earnings, and pension benefits.
6. The claimant was particularly punished in terms of his pension entitlement. If he had remained in employment until the branches merged he would have been entitled to his pension benefits from age 60 whereas he now has to wait until age 65.(This benefit clicks in at age 40. The claimant was age 40 on the 7th February, 2002; the branch closed on the 23 February, 2002).
7. The claimant should have been compensated for the period at least up to the closure of the branch by way of the salary gap, and the higher redundancy payment (approximately €25,000).
4. 1. Under the terms of the claimant's contract of employment he was specifically recruited to be manager of the Nenagh branch and was not transferable to any other location.When the decision was made to close the Nenagh branch, his job was redundant and he, as the jobholder, was redundant. The branch , in common with a number of other branches where the manager had been made redundant, remained in operation pending the appointment of an agent.
2. The claimant was not discriminated against, and was treated in the same manner as other managers.
3. The Management Association, representing managers at the claimant's grade, negotiated the severance and early retirement terms and agreed with the Company the process of selection for redundancy. Following individual representations by the Management Association, regarding the claimant's terms, he received €15,237 in excess of the terms agreed.
4. At no stage during these discussions was any claim made by the worker that he was unfairly treated.
5. The Company does not dispute the date the RP1 notice was issued. However the claimant was aware in advance of his pending redundancy through briefings by Management, communications of the closure decisions and discussions with representatives on his behalf.
6. The claimant received a very generous severance payment. He was treated fairly and equitably and in accordance with the terms and process for branch closures agreed with his representatives.
The Court is satisfied that an agreement was entered into between the claimant and the company, the terms of which are set out in the company's letter of 12th October, 2000. The agreement was freely entered into by the claimant who had the benefit of professional advice at the time.
It is often the case that circumstances alter after an agreement is concluded which make its terms more or less attractive than was originally anticipated. However, in the absence of material misrepresentation, the parties are expected to honour their agreement and abide by its terms.
In the present case circumstances emerged after the agreement was concluded which, if known at the time, may have caused the claimant to seek different severance terms than those which he agreed. The Court does not accept that this is a valid basis on which to reopen the agreement at this time.
However, in the circumstances the Court does not consider it appropriate to interfere with the recommendation of the Rights Commissioner. Accordingly the recommendation of the Rights Commissioner is affirmed and the appeal is disallowed.
Signed on behalf of the Labour Court
07th February, 2003______________________
Enquiries concerning this Decision should be addressed to Tom O'Dea, Court Secretary.