FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SMURFIT KAPPA NEWS PRESS LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Redundancy selection and terms.
BACKGROUND:
2. The Company prints a number of newspaper titles under contract at a plant in Kells, Co. Meath and employs ninety staff. The downturn in the economy coupled with a recent huge investment in a state-of-the-art modern printing press has led to over-capacity at the plant. The Company has proposed that a number of staff be made compulsorily redundant in order to reduce costs and allow the plant remain a viable going concern. The selection criteria and the redundancy terms proposed by the Company were not acceptable to the Union and, despite several attempts, agreement could not be reached.
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 25th February, 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 23rd April, 2010.
UNION'S ARGUMENTS:
3. 1. If "last-in / first-out"(LIFO) is not adhered to for selection purposes, the Employees losing their jobs are entitled to take cases for unfair dismissal on the grounds of unfair selection for redundancy.
2. The enhanced redundancy terms which are required must include in the calculation the restoration of the 8% cut to basic pay
COMPANY'S ARGUMENTS:
4. 1. In order to maintain the highest standards of health and safety, the Company must retain the most competent employees along with those with the key skills to meet the needs of the business into the future.
2. The redundancy terms offered are in line with industry norms and conform to other corporate agreements.
RECOMMENDATION:
The issues before the Court concern the Union’s claim regarding the Company’s proposed selection criteria for redundancy and the terms of the redundancy package on offer.
The requirement for redundancies arose as a result of the Company’s investment in new technology and a downturn in business due to the current economic climate. As a result of the replacement of the old printing presses with a new modern technically-advanced press and the downturn in business it became necessary to make 16 employees redundant.
A dispute arose over the selection criteria when the Company intended to depart from applying selection on a strictly seniority basis in order to retain key skills necessary in the case of three employees. The Union disputed the need to depart from the selection criteria based on seniority stating that not all employees were given an equal opportunity to obtain the new skills required.
The Union also sought an improvement in the Company’s redundancy ex-gratia terms and sought the restoration of an 8% reduction in basic pay in the calculation of the redundancy terms. The 8% reduction occurred on 1st March 2010 when the night-rate no longer applied to the day employees.
Having considered the oral and written submissions of both parties, the Court upholds the Company’s proposal to select employees for redundancy based on “last in/first out” subject to the retention of key skills as identified in order to meet its business needs.
In all the circumstances of this case, the Court recommends that the redundancy terms offered should be improved to yield 4½ weeks’ pay per year of service inclusive of statutory redundancy entitlements plus a co-operation payment of €7,500. Furthermore, the Court recommends that the redundancy payments should be calculated on the pay rates applying in February, 2010, i.e. prior to the 8% reduction.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
6th May, 2010______________________
JFDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.