FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : OTIS LIMITED - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr O'Neill |
1. Terms/Selection for redundancy/lay off
BACKGROUND:
2. The Company is involved in the installation/maintenance of lifts and escalators and is a wholly-owned subsidiary of United Technologies Corporation (UTC). The Company is seeking 14 redundancies from the engineering section due, it claims, to a downturn in business particularly in recent weeks. Whilst the Union was opposed to the redundancies its policy was that, in the first instance, a voluntary package should be offered and, if the required numbers are not met, compulsory redundancies should be on a last-in first-out (LIFO) basis. The Company stated that it did not operate a policy of LIFO and, if it could not get the voluntary redundancies it needed whilst retaining essential skills, it would choose who was to be made compulsorily redundant.
The dispute was referred to the Labour Relations Commissions and a conciliation conference took place. At the conference the Company offered statutory redundancy plus one week's basic pay per year of service subject to a cap of 52 weeks. The offer was rejected by the Union and the dispute was referred to the Labour Court on the 9th May, 2008, in accordance with Section 26(1) of the Industrial Relations Act, 1990. Labour Court hearings took place on the 23rd May and 26th May, 2008. At the hearings the Company increased its offer to statutory redundancy plus 4 weeks' average pay per year of service subject to a cap of 52 weeks.
UNION'S ARGUMENTS:
3. 1. UTC is a hugely successful company and Otis Limited contributed approximately 33% of total group profits. Part of the Company's success in Ireland has been the Union's willingness to engage in a new best practice agreement over the last three years.
2. The Company's decision not to operate LIFO does not make sense. It means that engineers with long service and greater experience will be let go whilst those less service and experience will be retained.
3. The cap of 52 weeks is grossly unfair to those with long service. It means, effectively, that 7.5 years' service is the cut-off point, i.e. no worker, even one with 24 years' service, can receive a greater redundancy package than someone with 7.5 years' service.
COMPANY'S ARGUMENTS:
4. 1. The Company had no choice but to seek redundancies as a number of orders that the Company had was being ignored and there has been a reduction in the number of new orders in recent months. As a result sub-contracting work was suspended and engineers transferred from the UK were removed on a temporary basis.
2. The Company has developed standard products and methods (GeN2) to improve installation efficiency. Current performance in construction efficiencies in Ireland is 32% behind the European average. The proposal for selecting people for redundancy is for future competitiveness in the marketplace and to ensure the skills structure in the construction workforce is appropriate.
3. The Company is committed to only making lay-offs where absolutely necessary. It has a global policy of paying a maximum of 52 weeks pay including notice.
RECOMMENDATION:
Having considered the views of the parties expressed in their oral and written submissions, the Court recommends that the Company redundancy package should be as follows:
- statutory redundancy pay, plus
- 4 weeks' average pay per year of service and
- in all the circumstances applicable to the impending redundancies in this case the Court recommends that there should be no maximum amount imposed on the severance payment.
The Court recommends that the selection criteria for the redundancies should be decided upon in the following order:
1. voluntary redundancy with selection available from across all business areas, including construction, service and modernisation with the Company having the right to retain key skills;
2. if compulsory redundancies are deemed necessary to meet the numbers required then selection will be decided proportionately from the four engineering grades in the construction side of the business, with LIFO being the deciding factor.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
28th May, 2008______________________
CONDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.