INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
A O SMITH ELECTRIC MOTORS IRL LTD
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Pierce
Worker Member: Ms Ni Mhurchu
1. Closure of Company premises in Bray, Co Wicklow.
2. The case before the Court concerns a dispute between SIPTU and management at A.O. Smith Electric Motors Ireland Ltd in relation to redundancy terms following a decision to close the manafacturing facility in Bray, Co Wicklow.
The Union are claiming enhanced redundancy terms on the basis that the relocation of the plant to lower cost economies will result in significant savings and an increase in profits.
The company reject the claim for enhanced redundancy terms on the basis that the closure of the plant is necessary to ensure survival in a very competitive market.
Redundancy terms have been offered which the Company consider to be fair and reasonable in the circumstances.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on 25th April 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 28th April 2005.
3 1. The company will save $7 million per year from the closure of the plant in Bray, as well as an increase in profits from re-locating to low cost econmies. The claim for 2 weeks pay per year of service in addition to statutory entitlements is fair in the circumstances.
2. The package offered by the company is inadequate and out of line with other similar situations across industry in general.
4. 1. The company has offered 1 week's pay per year of service plus statutory entitlements, a continuation of VHI payments until the end of the current scheme year, an outplacing service and access to benefits under the Redundancy Payments Act, irrespective of service. As a result of the losses incurred and re-location expenses, the company are not in a position to enhance their offer.
Having regard to a broad range of redundancy settlements reached in similar situations elsewhere, the Court is satisfied that the Union's claim has merit.
Having taken full account of all relevant considerations including the savings which will be achieved by the closure, the length of service of the staff involved and the need to achieve an orderly closedown, the Court recommends that the employer's offer be increased by a further one week's pay per year of service.
This offer should be conditional on and in consideration of full co-operation in achieving an orderly closure of the plant and the transfer or realisation of all fixed assets and equipment.
Signed on behalf of the Labour Court
5th May 2005______________________
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.