INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY MANAGEMENT SUPPORT SERVICES)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Ms Doyle
Worker Member: Mr Shanahan
1. Redundancy Terms & Selection
2. This case concerns a dispute between the Company and Union in relation to proposed redundancy selection criteria and redundancy terms. Management has offered four weeks pay per year of service inclusive of statutory entitlement capped at 18 months earnings. The Union is seeking six weeks pay inclusive of statutory entitlement with no cap. The dispute was not 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 matter was referred to the Labour Court on 23rd July, 2012 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 30th October, 2012
3 1The Company's offer is inadequate. Given the length of service of the workers, the imposition of the cap will significantly affect those accepting the redundancy terms on offer. In addition four weeks pay per year of service is totally insufficient given the future employment prospects of those being made redundant.
2 The redundancies should be on a voluntary basis in the first instance and if under subscribed, the principle of Last In First Out (LIFO) should apply. Management's position in relation to the selection criteria is totally unacceptable to the Union.
4 1 Management must restructure in order to remain viable and secure employment into the future. Its redundancy offer of four weeks pay per year of service capped at 18 months pay is generous in the current climate and should be accepted by the Union.
2 Management must ensure that those remaining in employment are best suited to meeting the business needs going forward. A matrix system will used matching the skills and attributes required going forward and in those circumstances the LIFO principle will not be the only selection criteria that will be used.
The matter before the Court concerns the redundancy terms and selection methods proposed by the Company for its forthcoming redundancies. The Union sought an improvement to the redundancy terms on offer and sought voluntary redundancy and/or in the alternative, selection by the “last in first out” method. The Company plan to reduce its workforce from a total of 220 employees to 70 employees.
The Company offered two week’s pay per year of service plus statutory redundancy terms with a cap of 18 months and the Union sought six week’s per year of service inclusive of the statutory redundancy terms, with no cap.
The Company sought to select employees based on their abilities to adequately cope with and handle the organisation changes and increased productivity that will arise following the redundancies. In that regard it proposed to use a matrix system, based on the skills and attributes of employees. Both sides accepted the need for restructuring. The Company complied with its obligation to notify the Minister for Enterprise, Trade and Innovation of the proposed collective redundancies and it entered into consultation with the Union and the Staff Forum on selection and related matters.
The Court notes that the Company accepted that in the first instance redundancies will be on a voluntary basis and both sides accepted that in a restructuring situation there will be a requirement to retain key employees. In such circumstances, the Court recommends that both sides should enter into immediate discussions on the proposed selection matrix, with length of service being one of the criteria to be considered within the matrix system.
The Court recommends that where the provision of training would assist an employee within the proposed new restructured working system, then such training should be provided.
Based on the above recommended selection process the Court recommends that the Company should increase its offer and pay three weeks’ pay per year of service plus statutory redundancy terms with a two year cap.
The Court so recommends.
Signed on behalf of the Labour Court
19th November 2012______________________
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.