Labour Court Database __________________________________________________________________________________ File Number: CD87266 Case Number: LCR11183 Section / Act: S67 Parties: WAXED CARTONS LTD - and - ITGWU |
Claim for redundancy payment on behalf of approximately thirteen workers.
Recommendation:
5. Having regard to the very serious financial position facing
the Company, the Court recommends that the Company's offer be
amended to provide for statutory payment plus 20% to those being
made redundant and that this offer be accepted by the workers
concerned.
The Court further recommends that the parties agree that the
Court review the situation again in June, 1988, to ascertain if
further payments to the workers concerned can be made, taking
account of the financial situation in the Company as it then
obtains.
Division: Mr O'Connell Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87266 THE LABOUR COURT LCR11183
CC87193 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11183
Parties: WAXED CARTONS LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim for redundancy payment on behalf of approximately
thirteen workers.
Background:
2. The Company manufactures packaging materials for the ice
cream industry and has been operating in Inchicore, Dublin. Its
main product areas are cartons and flexible packaging.
Following recent serious losses, Management, at a meeting on the
10th December, 1986, sought to negotiate cost cutting procedures,
such as closing the canteen, introducing new working hours and
payment by cheque rather than in cash. At a further meeting on
the 26th January, 1987, Management proposed making 17 redundancies
(twelve permanent and five temporary staff). Initially the
Company proposed to pay only statutory redundancy to the permanent
staff (the five temporary workers did not qualify under the
Redundancy Payments Acts, 1967-1979) but later amended its offer
to statutory plus 15% of statutory. The Union sought five weeks'
pay per year of service but this was rejected. In addition, the
Company also sought to seek agreement on a move to a new premises
at the Dublin Industrial Estate as well as changes in work
practices and flexibility.
At a general meeting of the workers on the 2nd February, 1987, the
Company's proposals, with the exception of the redundancy payment
issue, were accepted. As no local level agreement could be
reached on this outstanding issue, the matter was referred to the
conciliation service of the Labour Court on the 3rd March, 1987.
At a conciliation conference, held on the 23rd March, the Company
amended its offer to 17.50% of statutory and the Union amended its
claim to three weeks' pay per year of service. However, the
Company's proposal was rejected by the workers and the matter was
referred to the Labour Court for investigation and recommendation.
A Court hearing took place on the 16th April, 1987.
Union's arguments:
3. (a) The service of the workers concerned ranges from 34
years through down to three years. It will be obvious
to the Court that in the present economic climate there
is very little likelihood of these people finding
alternative employment.
(b) The Court should be aware that the owner of the Company
also bought over another company which went into
liquidation in late 1986 and there is an ironic
situation arising from this insofar as the Union was
told that the Company could not continue in its
Inchicore premises and had to move to a new site. It
now transpires that it is retaining the Inchicore
premises and transferring the second company's
operations there, whilst at the same time moving the
claimants to the Dublin Industrial Estate.
(c) Furthermore, the Company has made some capital
investment in plant and equipment which in normal
circumstances the Union would encourage. However, the
workers fail to understand how the Company can obtain
monies for investment in plant and equipment while at
the same time pleading inability to put forward a
meaningful proposal on redundancy compensation.
Company's arguments:
4. (i) The Company is faced with an extremely serious
financial position which is under continuous review
(details of Company's finances supplied to the
Court). Future projections have been made on the
foot of limited financial resources and delicately
balanced budgets. For instance, the purchase of the
new factory has been financed through 100% borrowings
secured on the strength of future projections and on
foot of personal guarantees by the managing director.
(ii) The Company recognises the co-operation of its
employees during the course of the relocation. The
re-organisation package is designed to restore
confidence in the Company and to safeguard remaining
jobs. Against this background the Company has tried
to pay the maximum settlement possible under the
circumstances and its final offer is statutory plus
17.5%.
(iii) The implementation of redundancies whilst at all
times an unenviable task, is one which must be faced
head on in a realistic fashion by all parties
concerned. There is a moral duty on all those
concerned to gauge expectations in the light of the
Company's particular circumstances.
RECOMMENDATION:
5. Having regard to the very serious financial position facing
the Company, the Court recommends that the Company's offer be
amended to provide for statutory payment plus 20% to those being
made redundant and that this offer be accepted by the workers
concerned.
The Court further recommends that the parties agree that the
Court review the situation again in June, 1988, to ascertain if
further payments to the workers concerned can be made, taking
account of the financial situation in the Company as it then
obtains.
~
Signed on behalf of the Labour Court.
John O'Connell
____25th____May,____1987. ___________________
D. H. / M. F. Deputy Chairman