INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
MUSGRAVE SUPERVALU CENTRA LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Murphy
Worker Member: Mr O'Neill
1. Clawback of Compensation Payments.
2. Musgrave SuperValu-Centra Limited (MSVC) is the retail franchise division of Musgrave Group in Ireland. MSVC operates from six distribution facilities which include a new depot in Kilcock, Co. Kildare. In 2005, eleven drivers were re-located to the Kilcock site. In Recommendation (LCR 18138) the Court recommended a re-location payment of €8,000 for each driver. They also received €2,500 each as a down-payment on future loss of earnings and €1,500 each for loss of future overnights. The agreement allowed for two redundancies up to the end of 2005, and up to four further redundancies in 2006. The dispute now before the Court concerns the proposed claw-back by the Company from the redundancy compensation of the three payments referred to.
- The Union claims that its members who are leaving through Voluntary Redundancy be paid the full amount provided for in the relocation agreed payment as contained in LCR 18138 to be paid to those who may wish to leave the Company by way of redundancy by the end of December, 2006. The Union contends that deduction of the re-location payment from the redundancy payments was not covered in the agreement.
- The Company rejects the claim on the basis that the payments were made in the context of a permanent transfer to Kilcock. The alternative to a permanent transfer was redundancy.
- 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 the 12th June, 2006, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 27th October, 2006.
3.1 There was no reference in the agreement to any lump sum payments being withheld in the event of a driver opting for redundancy. The re-location took place in February, 2005. Should an individual decide to take up the redundancy option, that option will only be available up to December, 2006. In the meantime the individual will have had the cost of the extra travel caused by the re-location. That individual will also have facilitated the Company in building up the business from the new location in the same period of time.
2. An agreement was entered into freely by the Company in 2005. The agreement as it is written should apply. There is no reference in this agreement to any claw-backs in respect of re-location expenses for those who may apply to take the voluntary redundancy package. In that regard it is now wrong for the Company to use a revised formula in respect of redundancy that incorporated claw-back of re-location compensation where none is specified in the written agreement.
3. The Court is asked to find in favour of the Unions claim and should an individual between now and the end of December, 2006 opt to take the redundancy package the Company will not have that package reduced by the re-location compensation that was allowed for in LCR 18138.
.1 It was at the request of the Union that the Company agreed to leave those positions open for a period of time to allow drivers to decide whether they wished to transfer permanently or accept redundancy. Accordingly, a driver who opts for redundancy has no entitlement to retain both payments.
2. In circumstances such as in this case, it is normal practice in industrial relations to deduct payments for future loss or re-location compensation from any redundancy payments made. At negotiations, Management stated to the drivers that in the event of a driver opting for redundancy than any payment made in the context of a transfer would be deducted from the redundancy payment. This is acknowledged by the Union.
3. With the exception of the re-location compensation, identical payments have been made to drivers in Cork and Galway. These payments have been clawed back from redundancy payments in these locations. The claw-back of these payments was included in the agreements made in respect of those locations in writing. Although it was not stated specifically in the agreement in relation to Kilcock, by inadvertent omission, it was made clear by MSCV verbally that such a claw-back would apply.
It seems clear to the Court that the import of the agreement reached in 2005 was that a number of workers could opt for redundancy as an alternative to relocation. It follows that those who take that option could not have a valid claim for the full package made available to those who remain in the employment.
In the Court's view while the agreement literally interpreted does not expressly provide for a claw-back, taken in context such a term is clearly implied.
The Court is, however, of the view that the element of the overall package which is attributable to future loss is in a different category to the other elements which relate purely to the inconvenience associated with relocation. Having regard to all the circumstances the Court is of the view that those who take redundancy in the future (up to 31st December, 2006) should retain €2,500 of the amount paid but that the remainder of the overall package should be subject to a claw-back.
Signed on behalf of the Labour Court
16th November, 2006______________________
Enquiries concerning this Recommendation should be addressed to Joanne O'Connor, Court Secretary.