Labour Court Database __________________________________________________________________________________ File Number: CD87330 Case Number: LCR11482 Section / Act: S20(1) Parties: HOSPITALS TRUST (1940) LTD - and - IR.HOSP. EMPLOYEES HOUSE ASSOC |
Claim, on behalf of approximately 100 employees for extra statutory redundancy compensation.
Recommendation:
6. The Court has considered the submissions made by the parties.
It was not possible to determine what the eventual financial
out-turn of the liquidation would be in this case because of
pending Court actions, etc. It was noted that the monies held in
the unclaimed prizes account are held by the trustees on trust for
the prize winners pending tracing the parties entitled to them and
also that there is no statutory authority enabling the trustees to
apply these monies other than to the prize winners.
In all the circumstances of this case and having regard to the
long service of the claimants, the Court considers that a case
exists for paying redundancy of two weeks pay per year of service
in addition to the statutory payments already made. The Court so
recommends.
Division: Mr Fitzgerald Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87330 THE LABOUR COURT LCR11482
Section 20(1) INDUSTRIAL RELATIONS ACT 1969
RECOMMENDATION NO. LCR11482
PARTIES: HOSPITALS TRUST (1940) LIMITED
and
IRISH HOSPITAL SWEEPSTAKES EMPLOYEES' ASSOCIATION
Subject:
1. Claim, on behalf of approximately 100 employees for extra
statutory redundancy compensation.
Background:
2. In recent years the Company encountered financial difficulties
in the running of the Irish Hospital Sweepstakes as a result of
the recession and increased administration costs. Various
proposals were discussed by the Company and the Government in an
effort to make the enterprise viable. In 1985 a decision was
taken that a National Lottery should be administered by An Post.
The future of the Hospital Trust was, in the light of this
decision, uncertain. Continuing losses resulted in almost all
employees being placed on indefinite lay-off from January, 1986.
Discussions continued on the possibility of a viable alternative
Sweepstake operation but none of the proposals came to fruition.
In July, 1986, the Company's Ballsbridge premises was damaged by a
hurricane. In January, 1987, the entire workforce was issued with
redundancy notice expiring in February/March, 1987. A liquidator
was appointed on 16th March, 1987. All employees were paid
statutory redundancy compensation. The Company is currently being
wound up by the Liquidator in accordance with the Companies Act,
1963. The Association sought extra statutory redundancy
compensation, a minimum of three weeks pay per year of service.
No extra statutory payments were made, however. The Association
referred its claim to the Labour Court under Section 20(1) of the
Industrial Relations Act, 1969. A Court hearing took place on
25th May, 1987. Prior to the hearing the Association agreed to be
bound by the Court's recommendation.
Association's arguments:
3. (i) The Association's claim is for minimum redundancy
compensation of three weeks' pay per year of service.
The average length of service of these employees is in
excess of 25 years and a considerable number of them
have up to 40 years service with the Irish Hospitals'
Sweepstakes. The Association considers that, in the
circumstances, statutory redundancy compensation is
inadequate.
(ii) The wage structure which was in operation in the
Company was well below the national average for
comparable work. The workers accepted a wage freeze
for up to four years to try to enable the Company to
overcome the financial difficulties which it was
experiencing and to maintain employment. Low wages
were accepted without dispute or conflict.
(iii) The introduction of the State Lottery and the
concession of its running to An Post is the direct and
only reason for the closure of the Irish Hospitals
Sweepstakes. The Association believes that Company
proposals which were put to the Government to operate
a viable Sweepstake were primarily rejected because of
a fear of competition with the National Lottery. The
revenue from the National Lottery has greatly exceeded
expectations and it will continue to hold a monopoly
position. A small percentage of this revenue would
cover the cost of the present claim.
(iv) Prior to the hurricane damage the Government purchased
the lease of the Ballsbridge building from the Trust,
which had 14 years to run, for #1.4 million, but
retained 50% of that figure for Capital Gains Tax.
Further to a compensation claim the Insurers paid
#500,000 compensation to the Government. The
Association estimates the potential sale price of the
Ballsbridge site at #12,000,000.
(v) In addition to the above mentioned financial benefits
to the Government, the Association estimates that
approximately #300,000 will accrue to the Hospital
Trust from the liquidation sale and #180,000 as a
government rebate on statutory redundancy settlements.
The Association considers that the redundant workforce
should receive some benefit from these financial gains
to the Company and to the Government.
(vi) The aspirations of the workforce are moderate by any
standards, particularly as there could have been a
viable ongoing business, with Government support.
Liquidator's case:
4. Management side was represented at the Court hearing
by the liquidator who indicated that he was appointed
Liquidator of Hospitals' Trust (1940) Limited on 16th
March, 1987. It was clear that the Company had ceased
to trade prior to his appointment. As statutory
redundancy entitlements constitute preferential claims
in a winding up, it was necessary to ascertain whether
the Company discharged its statutory obligations in
this regard. Investigations have indicated that
statutory redundancy entitlements were paid to all
employees by the Company. The Company had not entered
into any agreement to make any redundancy payments in
excess of statutory amounts. (In a number of cases
the quantum of statutory compensation has been
questioned by employees, and a number of cases will be
heard by the Employment Appeals Tribunal in this
regard on 26th May). As the Company is now in
liquidation, the liquidator must carry out the winding
up in accordance with the Companies Act, 1963, as
amended. A liquidator is obliged to discharge a
Company's liabilities in accordance with the
priorities laid down by statute - he has no
discretion.
As of now known liabilities do not exceed known assets
and while it was not possible to accurately forecast
the eventual out-turn, the liqidator's view was that
there should be a small surplus when all claims were
met.
5. It is not possible to indicate the amount of the
monies held in the unclaimed Prizes Account by the
Trustees. However, the Trustees would have no
authority in law to apply any of these monies other
than to the prize winners.
RECOMMENDATION:
6. The Court has considered the submissions made by the parties.
It was not possible to determine what the eventual financial
out-turn of the liquidation would be in this case because of
pending Court actions, etc. It was noted that the monies held in
the unclaimed prizes account are held by the trustees on trust for
the prize winners pending tracing the parties entitled to them and
also that there is no statutory authority enabling the trustees to
apply these monies other than to the prize winners.
In all the circumstances of this case and having regard to the
long service of the claimants, the Court considers that a case
exists for paying redundancy of two weeks pay per year of service
in addition to the statutory payments already made. The Court so
recommends.
~
Signed on behalf of the Labour Court
Nicholas Fitzgerald
23rd October, 1987 --------------------
A.K./U.S. Deputy Chairman