LCR22221

FULL RECOMMENDATION

CD/20/40
CCc-164780-19

RECOMMENDATIONNO.LCR22221

SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990

PARTIES :

BCD ENGINEERING

- AND -

240 VARIOUS WORKERS
(REPRESENTED BY CONNECT)

DIVISION :

Chairman:	Mr Geraghty
Employer Member:	Ms Doyle
Worker Member:	Mr Hall

SUBJECT:

1.Retirement Lump Sum

BACKGROUND:

2.This dispute was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement could not be reached, the dispute was referred to the Labour Court on 10 February 2020 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 5 June 2020.

UNIONS ARGUMENTS:

3. 1.There is a total of 240 employees in this employment who are covered by the arrangements in dispute. The Union is bringing this claim on behalf of its 60 Members.

2. It is the Union's view that the announcement in 2016 by the former CEO of the scheme to recognise and reward employees for their service to the Employer by way of a payment on retirement of €600 per years of service, capped at a maximun of €20,000, formed part of their Terms and Conditions of Employment and cannot be changed unilaterally by the Employer.

3. The Union state that some of their Members have been employed, some up to 50 years, with the Employer and to receive a lump sum of €4,500 or €7,000 "seems like an insult" to their Members.

4. The Union ask the Court to find in favour of their claim.

EMPLOYER'S ARGUMENTS:

1. The Employer states the scheme introduced by the former CEO stated was "at the discretion of management and maybe be altered at any time without prior notification or consultation". This scheme was not under negotiation with Unions.

2. The Employer states that it was not financially viable to sustain a payment of €20,000 to retiring employees and offered an alternative of €4,500 or €7,000.The Employer is prepared to improve the scheme by being willing to pay the amounts provided for when employees reach the State retirement age, without the requirement that they retire at that time.

3. The Employer requests the Court to accept that the original scheme that was put in place by a former CEO was unprecedented and not financially sustainable by the Employer. It was a discretionary policy.

RECOMMENDATION:

This case arises from an announcement on behalf of the Employer in 2016 of a scheme of lump sum payments to Workers upon retirement, in respect of which the Employer reserved the right to make unilateral changes. However, the Court accepts that the announcement gave rise to expectations on the part of the Workers concerned that somewhat compromise the absolute nature of this right and notes that the decision of the Employer to reduce significantly the amounts that it was prepared to pay has generated huge disappointment and has given rise to the dispute between the parties.

Accordingly, the Court recommends, as follows;

1The scheme should not apply to any new employees who enter the Employer’s workforce after the date of this Recommendation.
2During a period of three years from the date of this Recommendation, the terms of the scheme should remain in place but the maximum amount payable should be changed to €13, 500 per person.
3The parties should enter discussions immediately with a view to agreeing new arrangements to apply at the end of the three-year period that will achieve the Employer’s objective of reducing significantly the extent of the contingent liability on the Employer’s balance sheet. In this regard, the Court notes that the State’s dispute resolution machinery is available to assist the parties, should that be required.

This Recommendation is an attempt to achieve a balance between the interests of the parties and it is intended for acceptance and implementation by both parties in its entirety.

	Signed on behalf of the Labour Court

	Tom Geraghty
TH	______________________
8 June 2020	Deputy Chairman

NOTE

Enquiries concerning this Recommendation should be addressed to Therese Hickey, Court Secretary.