INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL, ENGINEERING AND ELECTRICAL UNION
Chairman: Mr McGee
Employer Member: Mr Grier
Worker Member: Ms Ni Mhurchu
1. Wind down payment as enhancement of redundancy package.
2. The case has resulted from the Company's decision to close the sugar factory in Carlow with effect from the 11th of March, 2005. The Company will now concentrate production on its plant in Mallow. There are approximately 140 permanent staff and 110 seasonal workers involved. Although the Unions strenuously opposed the closure when the announcement was made on the 12th of January, 2005, they have now accepted that the closure will go ahead. The Unions received a mandate from the employees to reach an acceptable financial settlement for the orderly closedown of the factory. The Company has offered €250,000 as a closure fund in addition to the existing redundancy terms. The Unions believe that a figure of €10 million is more appropriate.
The dispute was referred to the Labour Relations Commission and a number of conciliation conferences took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 23rd of February, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 2nd of March, 2005.
3. 1. The Carlow plant made a massive contribution to the €10 million profit generated for Greencore from sugar production in 2004.
2. Up to the 12th of January, 2005, workers at Carlow held the expectation that they would continue in employment up to retirement age. They were given no opportunity to make any contribution to the decision taken by the Company.
3. The Company's offer of €250,000 is totally unacceptable and far below the level of payment necessary for settlement. The workers have moved from total opposition to full co-operation in regard to the closure.
4. Production concentrated at one plant (Mallow) will lead to greater profits, further improved by the sale of the Carlow site. In addition there are immediate savings on salary costs. The total salary cost at Carlow for 2004 was in excess of €8 million.
4. 1. Over the past three years management has informed the employees of the difficulties facing the Company and the need for radical restructuring. The three key issues involved are (1) the impending Sugar Regime Reform (2) change in customer behaviour and (3) increased competition from the larger scale EU sugar producers (details supplied to the Court).
2. The workers concerned will receive very generous redundancy terms - in effect 6 weeks' pay per year of service, plus statutory redundancy. The Company has also offered a bonus payment of €250,000 for an orderly shutdown of the factory.
3. The Company has already committed to making a major financial investment in the Mallow factory. The Company must reduce its cost base if it is to maintain its market share. Concession of the Unions' claim would have serious implications for the future of the Company.
The Court has considered the submissions of the parties in relation to one outstanding issue unresolved in direct negotiations or at Conciliation in relation to the total close down of the Company in Carlow.
The Court is conscious that significant progress has been made and a substantial redundancy payment agreed.
The claim before the Court is for a closure fund in respect of both permanent and seasonal workers in addition to redundancy terms. The Company offered €250,000 to be distributed as follows:-
Workers with up to 20 years' service - €1000 each
Workers with between 20 & 30 years' service - €1500 each
Workers with over 30 years' service - €2000 each
To permanent workers only
This was rejected as unacceptable. Given that the workers' position changed from total opposition to the closure to mandating their Unions to negotiate terms, this matter must be considered by the Court in light of the fact that a redundancy package has been agreed between the parties which is comparable with most of the better severance settlements achieved in recent years.
The concept of a bonus payment in respect of an orderly wind down must be seen, not as part of a redundancy settlement, but as a "top-up" payment for co-operation in the closedown.
With this in mind, and bearing in mind the lengthy service of the workers and the unique nature of the industry concerned, the Court recommends that the ex-gratia terms offered by the Company be increased as follows:-
Workers with up to 20 years' service - €3500 each
Workers with between 20 & 30 years' service - €5250 each
Workers with over 30 years' service - €7000 each
With pro-rata for seasonal workers.
Signed on behalf of the Labour Court
8th March, 2005______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.