INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION (ACTSS)
Chairman: Mr Duffy
Employer Member: Mr Doherty
Worker Member: Mr O'Neill
1. 1. Failure to implement redundancy terms agreed on 10th of June, 2003, (2) Failure to honour "last in, first out (LIFO)".
2. The Company is based in Collinstown, Co. Westmeath and employs 450 workers in the manufacture of car parts. The Company has recently effected 85 redundancies on a voluntary and compulsory basis due to poor trading conditions. Part of the redundancies involved the elimination of the Line Manager grade. In May, 2003, the Company met with the Union in regard to its financial position. On the 10th of June, 2003, the Company set out details of the proposed voluntary redundancy package which was statutory entitlements plus one half weeks' pay for the first 15 complete years of service. All service above 15 years would be at statutory rate only. All ex-gratia payments were to be subject to a ceiling of €507.90 for complete years of service. In the event that a sufficient number did not volunteer, the balance would be selected on a last in, first out basis. Those made redundant on a compulsory basis would receive statutory entitlements plus an ex-gratia payment of 2 weeks' pay per year of service. While the deal on the 10th of June, 2003, related to weekly-paid staff, salary-paid staff were entitled to apply for the voluntary package.
In July, 2003, the Company wrote to the Union indicating that the package for the compulsory redundancy for salaried staff would be the same as weekly paid staff. However, in doing a cost calculation, the Company decided that the cost implications of the compulsory package for salaried staff was not financially viable. The Company sought a cap of €40,000 on the overall redundancy payment for salaried staff.
On the issue of selection for redundancy, the Company has indicated that selection will be on the basis of retaining skills. The Union's case is that the Company has reneged on both parts of the agreement of 10th of June, 2003.
The issue was referred to the Labour Relations Commission and a conciliation conference took place. The Company improved its offer of the maximum redundancy payment to €45,000 but this was not acceptable to the Union which wanted no cap. The Company began to lay off workers in late August, 2003, and on the 1st of October, 2003, at a reconvened conciliation conference, it was agreed that the remaining staff on lay-off would accept the redundancy package subject to cap of €40,000, and refer the outstanding issues to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 20th of October, 2003.
4. 1. The Company has attempted by a variety of means to renege on the agreement of 10th of June, 2003. This is totally unacceptable to the Union.
2. The Union is prepared to discuss any means to find a solution to the dispute.
3. There are only three people who will benefit from redundancy with no cap. The cost will not be as great as the Company claims.
4. The concept of last in, first out is the norm in most industries.
3. 1. The redundancy package originally offered on the 10th of June, 2003, was not financially viable when considered in light of the necessary compulsory redundancies of salaried staff. The additional cost of providing redundancy with the cap would be approximately €150,000.
2. The situation at the Company has disimproved since the original agreement with the loss of the Volvo contract. Other contracts were also adversely affected.
3. The Company has always reserved the right to manage redundancies, whether voluntary or compulsory, on the basis of skill in the first instance.
The Company contends that in July, 2003, it realised that the redundancy agreement which they had concluded one month earlier was no longer viable in the context of redundancy affecting salaried staff.
In the Court's view, the agreement entered into between the parties in June, 2003, is a valid subsisting industrial relations agreement and its terms must be honoured by both parties. Accordingly, the terms of the June agreement should apply to the current redundancies.
It is noted that the Union is prepared to acknowledge the current financial difficulties with which the Company is now faced, and is prepared to enter into an arrangement which could involve deferring part of the payments due under the June agreement. In that regard, the Court recommends that the payment of any amount in excess of €45,000 should be deferred. The parties should meet in April, 2004, to consider if and when the outstanding amounts due and owing should be paid. Should the parties fail to reach agreement, the matter may be referred back to the Court.
Selection for Redundancy.
The Court accepts that LIFO is an acceptable method of selection for redundancy and is recognised as such, with qualifications, in the Union /Company agreement. However, in the present case the entire grade is being eliminated and all employees within the grade are being made redundant. In these circumstances, selection, in the normal sense in which that term is understood, does not arise. Accordingly, the Court does not recommend concession of this claim.
Signed on behalf of the Labour Court
4th November, 2003______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.