Labour Court Database __________________________________________________________________________________ File Number: CD87101 Case Number: LCR11196 Section / Act: S67 Parties: MAGCOBAR - and - ITGWU |
Claim on behalf of eight former employees of the Company for the recalculation of their redundancy payments.
Recommendation:
6. The Court, having regard to the submissions of the parties and
the report of the technical assessor, finds that the calculations
of the non-statutory redundancy payments made by the Company are
strictly in accordance with the agreed formula.
The Court, however, sees merit in the Union's claim and, in so far
as it will not involve the Company in any additional cost above
that originally envisaged, the Court recommends that the Company
give favourable consideration to amending the agreement in
accordance with the Union's wishes.
Division: CHAIRMAN Mr Shiel Mr Devine
Text of Document__________________________________________________________________
CD87101 THE LABOUR COURT LCR11196
CC861631 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11196
Parties: MAGCOBAR (IRELAND) LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Claim on behalf of eight former employees of the Company for
the recalculation of their redundancy payments.
Background:
2. In May 1982 the Labour Court investigated a dispute between
the parties concerning enhanced redundancy payments. The Court's
Recommendation (No. 7216) formed the basis of the redundancy
agreement finally accepted and signed by both parties in 1983. An
extra statutory redundancy compensation formula was agreed, part
of which comprised a tonnage calculation. In the event of total
closure the tonnage would be guaranteed to be at least 1,125,000
tonnes.
3. In August, 1986 the Company sought eight voluntary
redundancies. The workers involved were paid in accordance with
the agreed formula. However, the amount received was less than
expected and the question of the interpretation of the redundancy
formula was raised by the Union. Agreement could not be reached
on this interpretation and the matter was referred to the
conciliation service of the Labour Court on 7th October, 1986. No
basis for a settlement of the dispute could be reached at a
conciliation conference held on 10th December, 1986 (which was the
earliest date suitable to the parties). On 12th February, 1987
the parties requested that the matter be referred to the Labour
Court for investigation and recommendation. A Court investigation
into the dispute was held in Limerick on 8th April, 1987. The
Court appointed an assessor to assist in its consideration of the
dispute. The Assessor's report was received on 8th May, 1987.
Union's arguments:
4. (i) At the time of negotiating the redundancy formula there
was no suggestion of redundancy before November, 1987,
which was the expected date of closure.
(ii) The Company supplied each worker with details of his
entitlement as of 8th August, 1986 stating that this
was the "lump sum as per Agreement". Yet when they
actually received the redundancy money the amount was
substantially less.
(iii) There is no extra cost to the Company of concession of
this claim as any monies paid out now will simply
reduce the amount available to the remaining workers
when the Company closes. Those workers are supporting
this claim.
(iv) The formula used would be fair and equitable in a total
termination situation as was expected when it was being
negotiated. However when interim redundancies occurred
it was seen as been seriously flawed. In equity the
workers should receive the amounts expected. The
spirit of the agreement was to give an equitable
distribution of the redundancy fund upon termination
and it was never foreseen that a major compulsory
redundancy would take place before final termination.
(v) When negotiating the redundancy formula the senior men
were prepared to share with their younger colleagues so
now the younger men still in employment are seeking
that equity should prevail as a result of early
unexpected redundancy.
Company's arguments:
5. (a) The Company made the redundancy payments on the basis
of the agreed formula for calculating the service
component of the extra statutory payment (details
supplied to the Court). The Company considers its
interpretation of the Agreement to be the correct one.
(b) The Company did not know exactly how much each worker
would get until the day before the redundancies when
confirmation of the correct interpretation was received
from the Company's parent in Houston.
(c) The tonnage formula was included in the Agreement in
order to take account of any interim redundancies.
(d) The Agreement was designed to deal with interim
redundancies as Clause IV refers to "Prior Redundant
Employees"
(e) The calculations provided by the Union are incorrect.
(f) Concession of this claim would have cost implications
for the Company.
RECOMMENDATION:
6. The Court, having regard to the submissions of the parties and
the report of the technical assessor, finds that the calculations
of the non-statutory redundancy payments made by the Company are
strictly in accordance with the agreed formula.
The Court, however, sees merit in the Union's claim and, in so far
as it will not involve the Company in any additional cost above
that originally envisaged, the Court recommends that the Company
give favourable consideration to amending the agreement in
accordance with the Union's wishes.
~
Signed on behalf of the Labour Court
John M Horgan
21st May, 1987 ---------------
R.B./U.S. Chairman