Labour Court Database __________________________________________________________________________________ File Number: CD87939 Case Number: LCR11639 Section / Act: S67 Parties: CORBETT & SONS LIMITED - and - IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION |
Claim by the Union on behalf of 8 workers concerning the level of redundancy compensation.
Recommendation:
5. The Court, having examined the accounts of the Company,
recommends that the terms of L.C.R. 9493, of 5th February, 1985,
be applied to these workers and that the payment be in two equal
moieties, the first now and the second at the end of July, 1988.
Division: CHAIRMAN Mr Heffernan Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD87939 RECOMMENDATION NO. LCR11639
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CORBETT & SONS LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION
SUBJECT:
1. Claim by the Union on behalf of 8 workers concerning the level
of redundancy compensation.
BACKGROUND:
2. The Company is involved in the builders providers and general
merchant business. In order to stem losses experienced in recent
years, the Company divided its main store into small shopping
units. The Company leased these, but with limited results. The
Company decided to close a number of departments, resulting in 8
redundancies. On 9th November, 1987, the Company offered
statutory compensation for the 8 staff being made redundant. This
offer was rejected by the Union, who claimed 4 weeks' pay per year
of service. The Union argued that there was a precedent in the
Company for higher than statutory compensation. The Union
referred to Labour Court Recommendation No. 9493 of February,
1985, which recommended three times statutory compensation plus
the amount of the Employer's rebate. The Company said that due to
financial constraints it could not afford to pay anything more
than statutory compensation and that if it was forced to do so it
could jeopardise the remainder of the business. As agreement
could not be achieved at local level, the matter was referred on
1st December, 1987, to the conciliation service of the Labour
Court. At a conciliation conference held on 4th December, 1987,
the Union indicated that its position was negotiable to some
extent. However, the Company maintained that it could not amend
its offer. The parties then agreed to refer the matter to the
Labour Court for investigation and recommendation. A Court
hearing took place on 15th December, 1987, in Galway.
UNION'S ARGUMENTS:
3. 1. The Labour Court in L.C.R. No. 9493 recommended three
times the statutory redundancy plus the amount of the
Employer's rebate. Since the issuing of that Recommendation,
11 more redundancies have taken place under the same terms.
3. 2. The Union has been told that the present redundancies are
a result of the recession. The Union accepts that retail
sales generally have been somewhat depressed, but believes
that the real problem is that the retail shop was starved of
funds in favour of the Company's shop unit development. The
department managers were instructed not to buy any more
stock, with the result that stock in all departments declined
on an on-going basis with the natural result of a continuing
serious drop in turnover, which in turn has led to a serious
cash flow problem.
3. As far back as October, 1986, the Union advised the
Company that in the event of redundancies arising as a result
of the shop unit development, it would be seeking redundancy
terms of 4 weeks wages per year of service, plus statutory
redundancy.
4. The Union believes that it is possible for the Company to
meet this claim on the grounds that the Company has huge
valuable assets, such as its city centre shop, which houses
three floors of shopping malls with a large adjoining car
park. It also has further shop units, a D.I.Y. store and
office complex. In addition to these valuable properties it
has two large banks of land, plus the city's largest builders
providers yard. Taking this into account the Union submits
that its claim is reasonable and should be met.
COMPANY'S ARGUMENTS:
4. 1. The Company's hope for the shopping units development has
not been realised. Income received from rental goes directly
towards payment of borrowings necessary for the conversion.
The units retained by the Company have suffered a serious
deterioration in business. This has left the Company in a
position where it is incurring on-going and substantial
losses rather than profits to seek to defray the debts which
it owes. The Company's present financial position is so
serious that any additional costs of the type envisaged in
this claim would be sufficient to tip the balance against the
Company's survival.
2. The Company accepts that it has a diligent and loyal
workforce who have done everything in their power to help the
Company overcome its difficulties. Whilst the Company is not
in a position to recognise this loyalty by making enhanced
redundancy payments, it has, until now, refrained from taking
action to reduce staff numbers, when in reality the amount of
work available to them has not been substantial. This is a
reflection of the Company's attitude towards the employees
and the Company's attitude towards the present situation,
which is that it has taken this step reluctantly and only as
a last resort.
3. The Union informed the Company in October, 1986, that if
redundancies were to be initiated the staff wanted 4 weeks'
pay per year of service plus statutory redundancy. Given the
length of service of most employees the cost of this claim
would be enormous. The Union referred to Labour Court
Recommendation No. 9493 in support of its claim. The Company
considers that while such payments were made in the past, to
pay them in its present circumstances would be suicidal.
Therefore it considers that this precedent is of no value.
4. The Company has already been before the Labour Court
twice in relation to a claim for an increase under the 26th
wage round. The Court in Recommendation No. 11562
recommended 'that in the present circumstances it is not
possible for the Company to concede any increase at this
time.'
RECOMMENDATION:
5. The Court, having examined the accounts of the Company,
recommends that the terms of L.C.R. 9493, of 5th February, 1985,
be applied to these workers and that the payment be in two equal
moieties, the first now and the second at the end of July, 1988.
~
Signed on behalf of the Labour Court
John M. Horgan
_______________________
12th January, 1988 Chairman
B.O'N/J.C.