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: Ms Jenkinson
Employer Member: Mr Carberry
Worker Member: Ms Ni Mhurchu
1. Selection for Redundancy
2. The Company is a Multinational and based in Castlebar, Co. Mayo, assemblying cable harnesses for the Telecoms industry. Like other companies in this sector it has suffered, due to falling orders, greater competition on prices and fall off of demand. In the last two to three years employee numbers have fallen from 1000 to 250.
In January 2002 the Company announced redundancies of 230 permanent staff, 194 of whom are Union members. The Union has an unusual displacement scheme in place whereby staff whose posts become redundant could opt to revert to another junior post if they had previously held one. The redundancy then applied to the most junior in the lesser grade. There were more applicants for redundancy than places available. The Company sought volunteers and applied last in first out, anti alphabetical (Z-A) system to decide on those to whom the redundancy applied. This system was implemented unilaterally by the company without consultation or agreement with the Union.
The issue on future selection proceedures was the subject of a Conciliation Conference under the auspices of the Labour Relations Commission. As agreement was not reached the matter was referred to the Labour Court on the 7th January 2003 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 12th March 2003.
3.1. In January 2002 the Company announced that 194 members of staff were to be made redundant, grades ranging from one to five were affected. Negotiations took place on a redundancy package and the formula to be used for selection. Agreement was reached on the selection process, balloted upon by members, and accepted.
2. The Company in their final analysis chose to select from both the voluntary applications and from those who would have been at risk if the compulsory system was used. i.e. those on shortest service. This resulted in a large number of applications being rejected. Some of those workers who were overlooked are of the view that they will never be selected from any future applications for redundancy as they will always be the most senior. The Company's eventual selection process was flawed and was contrary to what was agreed and to normally accepted practices.
3. The Union request the selection criteria for future redundancies should be:-
a) Redundancies would be on a voluntary basis
b) Staff with the longest service would be given priority.
4.1. The Company understands the Union's claim is for the selection criteria as regards future redundancies. The Company would not be prepared to commit to anything beyond what is in the existing company/Union agreement (Section 16) in respect of any future redundancies if they should arise. The Company claim that if there were future redundancies then at that time they will make decisions as regards selection procedures.
2. If there were to be future redundancies, these would be due to a continuing deterioration of the Company's performance in a tightly constrained financial environment and could only be on a compulsory basis.
3. As in previous redundancies schemes the company and the employer retain the right to accept or reject any application as stated in the application for voluntary redundancy "I accept that the company reserves the right to accept or rejected this voluntary application"The method of selection used by the Company was to ensure that a proportion of all employees at all Service Grades levels were accepted for redundancy. This was in full agreement with Section 16 of the Company/Union agreement.
The Court has considered the position of both sides. The issue referred to the Court is future selection for redundancy. The Union are seeking that all redundancies in the future should be voluntary and that selection should be on the basis of the longest serving employees having priority. The Company indicated that it is not prepared to commit to anything beyond Section 16 of the Company/Union agreement in respect of any future redundancies if they should arise.
The Court is of the view that Section 16 is not clear in terms of selection criteria for redundancy and that it would be premature to recommend selection on a voluntary or compulsory basis at this stage.
Therefore, the Court recommends that the parties should agree criteria, which are fair and reasonable and based on objective factors, in the event of redundancies arising in the future. Care must be taken to ensure that the criteria agreed are not discriminatory in effect.
Signed on behalf of the Labour Court
25th March 2003_______________________
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.