INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
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 Carberry
Worker Member: Mr. Somers
1. Redundancies; Salary Review.
2. Allegro Limited is a distribution company and employs 85 workers. In September, 2002 Management informed the Union that, due to the fact that two major customers decided to centralise their distribution processes, the Company required to implement 12 redundancies within the sales group . The Company proposed that the redundancies would be effected on a 'last in first out' basis and offered a redundancy package of 2.9 weeks pay per year of service plus statutory entitlements. The Union, while accepting the need for redundancies, sought that they be implemented on a voluntary basis and that the redundancy offer be increased to six weeks plus statutory entitlements. This was not acceptable to the Company. The Union also sought a review of the salaries of the sales group but this was rejected by the Company. The dispute was referred to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission in December, 2002. A Court hearing was held on the 7th March, 2003.
1.The claimants should be treated no less favourably than workers similarly affected in other companies. In these instances a package of voluntary early retirement/ voluntary redundancies was negotiated and implemented in all circumstances and settlements in excess of six weeks average gross pay per year of service were the norm.
2. The 'last in first out' criteria should be removed and a voluntary option provided.
3. The claimants have given full cooperation to the Company over the past number of years during times of serious trading difficulties. They also agreed to a twelve month pay freeze in order to maintain the viability of the operation.
4. The Company is now in a better trading position and, therefore, should address in a serious way the claim for a review of the claimants' salaries.
1 The selection criteria proposed is a recognised fair and objective process which was used by the Company in a previous redundancy situation in 1995. This selection process allows the Company to retain the skills and expertise of longer serving sales representatives.
2. The Company has a finite budget to finance the redundancy package and no agreement can be reached on any ex-gratia amount until the issue of selection criteria is resolved.
3. The Company cannot afford the cost of implementing a voluntary redundancy package.
4. The Company is not in a position to increase salaries while implementing a redundancy programme.
5. The claimants are paid an appropriate salary which compares favourably to those in other distribution companies.
6. The claim is cost increasing and precluded under the Programme for Prosperity and Fairness (PPF).
The Court has given careful consideration to the submissions of the parties to this dispute and recommends as follows:
The Court recommends that redundancy should be on a voluntary basis subject to the right of the Company to accept or reject volunteers. The Court further recommends that the terms offered should be five weeks pay per year of service inclusive of statutory entitlements, subject to a cap of €50,000.
The Court is satisfied that the claim for a salary increase is a cost increasing claim and is precluded by the PPF. The Court does not recommend its concession.
Signed on behalf of the Labour Court
19th March, 2003______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.