Labour Court Database __________________________________________________________________________________ File Number: CD87806 Case Number: LCR11607 Section / Act: S67 Parties: STAR PLASTICS LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim by the Union concerning the proposed redundancy of two drivers and two helpers.
Recommendation:
6. The Court, having considered the submissions made by the
parties, accepts that in the event of the Company deciding to rely
totally on contract haulage and disposing of its two trucks, a
redundancy situation will result for four employees. In that
event the Court recommends that the parties should resume direct
negotiations with a view to agreeing a basis for selection and
compensation for redundancy.
Division: Mr Fitzgerald Mr Shiel Mr O'Murchu
Text of Document__________________________________________________________________
CD87806 RECOMMENDATION NO. LCR11607
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: STAR PLASTICS LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim by the Union concerning the proposed redundancy of two
drivers and two helpers.
BACKGROUND:
2. The Company uses contractors for 80% of its transport
requirements. The remainder is carried out by its own fleet,
consisting of two trucks, staffed by two drivers and two helpers.
In June, 1987, the Company proposed using contractors for all
transport requirements. The Company also proposed a package which
set up two of the workers as owner drivers and absorbed the other
two into production work, with a formula, as follows, to cover
compensation for loss of earnings -
- #10,000 or truck
- Additional payment ranging from #3,000 to #7,000 based
on years of service.
3. The proposal was rejected by the Union and on 27th August,
1987, the matter was referred to the conciliation service of the
Labour Court. At a conciliation conference held on 20th October,
1987, the Union indicated that it considered compensation
amounting to six weeks pay per year of service, (about #2,000 per
year) was appropriate. The workers years of service are sixteen
years for one worker and twenty-four for the three others. The
Company rejected this and suggested three weeks pay per year of
service as appropriate. As agreement could not be reached at
local level, the matter was referred on 28th October, 1987, to the
Labour Court for investigation and recommendation. A Court
hearing took place on 2nd December, 1987, in Cavan.
UNION'S ARGUMENTS:
4. 1. The Union believes that it does not cost as much money as
the Company maintains, to run a fleet of trucks. The Union
believes that the method used by the Company to calculate
costs is misleading, and that the Company's fleet does in
fact compare favourably with the haulage contractors.
2. Small haulage companies do not always observe the same
standards in respect of wages and conditions of employment as
apply in the case of the workers concerned. A fair
comparison can only be made if the contractor is observing
the statutory deductions for tax, P.R.S.I. etc.
3. The Union contends that no redundancy situation exists,
as there is no shortage of work. Outside haulage was
permitted some years ago on the basis that it would
supplement the Company's own haulage but would have no
adverse effects on those employed on the Company's own
transport.
4. There are advantages for the Company in using its own
haulage with the Company's employees, eg. the workers
concerned act as ambassadors for the Company. This does not
happen with outside contractors.
COMPANY'S ARGUMENTS:
5. 1. There is no agreement between the Company and Union
whereby outside contractors were allowed on the basis that
this would have no effect on Company employees.
2. As a result of changing transport requirements (eg.
palletised single drop trips), contract haulage is cheaper
than the Company's own transport. It is approximately 50%
cheaper when the maintenance cost of Company transport is
taken into account.
3. The Company is involved in an extremely competitive
business, with substantial transport requirements. The
Company must remain cost effective, especially in the area of
transportation, if it is to remain in business. The Company
already has excess staff in the production area and will
require a number of redundancies in this area. As a result
the offer to absorb two of the workers concerned into the
production area has had to be withdrawn.
4. Given the weekly earnings of the workers concerned, the
Company believes that its offer of three weeks pay per year
of service is reasonable and should be accepted.
RECOMMENDATION:
6. The Court, having considered the submissions made by the
parties, accepts that in the event of the Company deciding to rely
totally on contract haulage and disposing of its two trucks, a
redundancy situation will result for four employees. In that
event the Court recommends that the parties should resume direct
negotiations with a view to agreeing a basis for selection and
compensation for redundancy.
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Signed on behalf of the Labour Court
21st December, 1987 Nicholas Fitzgerald
B.O'N./P.W. Deputy Chairman