Labour Court Database __________________________________________________________________________________ File Number: CD88471 Case Number: LCR11971 Section / Act: S67 Parties: BUTTLES BARLEY FED BACON COMPANY LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim for improved redundancy compensation on behalf of thirty production workers.
Recommendation:
5. The Court having considered the submissions from both parties
recommends that the Company increase its offer of redundancy
payments to 3 times the amount of statutory entitlement.
Division: Ms Owens Mr Heffernan Mr Devine
Text of Document__________________________________________________________________
CD88471 RECOMMENDATION NO. LCR11971
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BUTTLES BARLEY FED BACON COMPANY LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
AND
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim for improved redundancy compensation on behalf of thirty
production workers.
BACKGROUND:
2. The Company is involved in the slaughtering and processing of
pigs for sale as bacon and pork. The pigmeat industry is
undergoing radical change as a result of Government policy, and
the new structure will involve a small number of central
slaughtering plants with processing taking place at satellite
plants. As a result of this rationalisation the Company has a
requirement for thirty redundancies at the Enniscorthy plant and
has offered redundancy compensation on the basis of twice the
statutory entitlement on a "last in first out" basis. This offer
was rejected by the Union which is seeking compensation based on a
formula of five weeks pay per year of service under forty one
years of age and six weeks pay for each year of service plus
statutory entitlement over the age of forty one years. The
dispute could not be resolved in discussions at local level and
was referred to the Conciliation Service of the Labour Court on
the 11th May, 1988. A Conciliation Conference took place on the
2nd June, 1988 but no agreement was reached. The matter was
referred to the Labour Court for investigation and recommendation
on the 28th June, 1988. A Court hearing took place on the 19th
July, 1988.
UNION'S ARGUMENTS:
3. 1. The Union's claim of five and six weeks pay for each year
of service is consistent with standards in the area, and in
rationalisation programmes which have then negotiated
in this region (details supplied to the Court). In 1987 the
Company paid three times the statutory entitlement to five
workers who opted for redundancy on a voluntary basis. In a
compulsory redundancy situation these terms should be improved
upon.
2. It is most unlikely that the workers who are made
redundant will find alternative employment in the area. It is
an employment black spot with twenty two per cent of the
workforce unemployed. The rationalisation programme will
certainly put the Company on a more profitable footing. The
killing operation will transfer from the Enniscorthy plant
under a centralised slaughtering scheme for the area. The
kill bonus will not be payable which will reduce the earning
capacity of those workers remaining at the plant.
3. A central factor in the Company's future prosperity is the
goodwill, co-operation and flexibility of the workforce. The
workforce particularly in recent times, has accepted lengthy
pay pauses in order to assist the Company toward
profitability. It is unfair that in return for their
responsible concern and enlightened sensitivity for the future
requirements of the plant, that they should be rewarded with a
derisory redundancy offer.
COMPANY'S ARGUMENTS:
4. 1. The Company has been in a serious loss-making situation
for a considerable period of time. In the eighteen months
prior to June, 1988, losses have amounted to two hundred and
eighty three thousand pounds. The cost of meeting the
redundancy offer will be sixty four thousand pounds.
Notwithstanding that its fixed assets are over-valued the
Company has negative assets and has been supported by outside
funds for a long period. Funds which had been set aside for
development have had to be used to propup the existing
operation.
2. The Company's offer on redundancy compensation is twice
the statutory entitlement and will be a substantial cost to
the Company. The funds to cover the redundancy payments are
not available within the Company and will have to be sought
elsewhere. There are two options open to the Company either
to minimise losses and see through the changes in employment
at minimum cost to protect the Company from even more damaging
loss, or to go into liquidation. From financial and other
points of view liquidation is the preferable option. The
Company has advised the Union that should the cost of the
redundancies exceed the Company's budget, then the option of
liquidation will then be taken.
4. 3. The details of the Company's precarious financial position
have been given to the Court. Since there are no monies
generated internally to fund redundancies, it is essential
that the cost of the settlement be minimised. To do otherwise
would have the effect of limiting the chances of the Company
continuing in business. It would also act as a further drain
on funds which could be made available for development.
RECOMMENDATION:
5. The Court having considered the submissions from both parties
recommends that the Company increase its offer of redundancy
payments to 3 times the amount of statutory entitlement.
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Signed on behalf of the Labour Court.
Evelyn Owens
___28th___July,____1988. ___________________
A. K. / M. F. Deputy Chairman