Labour Court Database __________________________________________________________________________________ File Number: CD88211 Case Number: LCR11852 Section / Act: S67 Parties: COLENTA IRELAND LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS UNION |
Redundancy Compensation.
Recommendation:
7. The Court has considered the submissions made by the parties.
It notes the terms of the Agreement on redundancy made in 1983,
but having regard to the present financial and trading
difficulties being experienced by the Company it recommends that
the employers offer be amended to provide a sum of £100 per year
of service, and that the offer so amended be accepted by the
workers concerned.
Division: Mr O'Connell Mr Shiel Mr Devine
Text of Document__________________________________________________________________
CD88211 RECOMMENDATION NO LCR11852
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: COLENTA IRELAND LIMITED
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS UNION
SUBJECT:
1. Redundancy Compensation.
BACKGROUND:
2. In July, 1987, the Company introduced short-time working for
the majority of its workforce due to a serious decline in
business. In January, 1988, the Company informed the Union that
they were proposing a re-organisation which would involve nine
redundancies. This was unacceptable to the Union and rejected
on the basis that the redundancies were to be implemented on a
selective basis, i.e. on a section by section basis. On 3rd
February, 1988, the matter was referred to the conciliation
service of the Labour Court and a conciliation conference was
held on 16th February, 1988. The Union sought the following
redundancy terms:
- all redundancies should take place on a voluntary basis
or on a last in first out basis,
- redundancy pay to be 6 weeks pay per year of service
plus statutory entitlements,
- an ex gratia payment of £700 to be paid to 4 workers
with less than two years service.
3. At conciliation it was agreed that pending resolution of the
issues:
- four workers with less than 2 years service would be
made redundant on 19th February, 1988 and paid £70 (tax
paid).
- five workers would be laid off on the same date until
further notice and would also receive £70 payment.
- the Company would put forward proposals for a voluntary
redundancy package while reserving the right to refuse
any application on the basis of retaining required
skills. In the event of insufficient volunteers the
matter to be referred back to conciliation.
4. The Company subsequently made an offer of statutory redundancy
entitlements plus £50 for each year of service and minimum notice
entitlements. One of the nine workers selected for redundancy/lay
off accepted. These proposals were rejected by the Union on the
basis that an agreement had been reached between the Company and
Union in 1980 which provided for redundancy pay of 3 weeks pay for
each year of service plus statutory. A further conciliation
conference took place on 3rd March, 1988 at which agreement could
not be reached and on 9th March, 198 the matter was referred to
the Labour Court for investigation and recommendation. The Court
investigated the dispute on 13th April, 1988. At the hearing a
number of points were agreed between the parties in relation to
the application of the redundancies.
UNION'S ARGUMENTS:
5. 1. In 1980 a redundancy agreement was made between the
Company and the Union which provided for three weeks pay for
every year of service and statutory entitlements (details
supplied to the Court). In 1983 an agreement on redundancy
was also made in respect of workers with less than 2 years
service. This provided for 2 weeks pay plus £50 per year of
service (details supplied to the Court). The present offer
by the Company for workers with more than 2 years service is
well below the terms of the 1980 agreement, while no offer
has been made to those with less than 2 years service
although there is a 1983 agreement for short-term workers.
The Union is now seeking terms in excess of the 1980
agreement, due to the fact that this was made 8 years ago and
redundancy terms have improved substantially since that time.
An examination of redundancy agreements in other companies
including local ones supports this point (details supplied to
the Court).
2. The Company has been successful over the years and
intends to remain in operation. The Company has acknowledged
the co-operation given by the workforce over the years and
considering the flexibility given by the workers the Company
should not breach agreements. On this issue redundancy
should be either on a last in first out plantwide basis or a
decent voluntary package should be put forward.
COMPANY'S ARGUMENTS:
6. 1. The Company has suffered a serious decline in its level
of business. This has been due to the recent slide in the
value of the dollar at a time when the Company was trading
about 60% of its production with the United States and facing
increased competition on the US market. The Company is
facing a critical survival situation (details supplied to the
Court). Unless there is an upswing in currency and market
conditions in the near future short-time will have to
continue and the Company can only hope to avoid further staff
reductions. The Company does not have the resources to meet
the Union's claim.
2. Regarding the 1980 'agreement' referred to by the Union,
this was offered by a Company member whose contract had been
terminated at the time and who was therefore in no position
to make such an offer and which was not adhered to.
Regarding the 1983 agreement this did not just apply to
workers with less than 2 years service and these redundancy
terms were applied to four workers with more than 2 years
service (details supplied to the Court). The Company does
not have the resources to meet the Union's claim, and the
offer made by the Company is the only one it can afford in
the present circumstances.
RECOMMENDATION:
7. The Court has considered the submissions made by the parties.
It notes the terms of the Agreement on redundancy made in 1983,
but having regard to the present financial and trading
difficulties being experienced by the Company it recommends that
the employers offer be amended to provide a sum of £100 per year
of service, and that the offer so amended be accepted by the
workers concerned.
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Signed on behalf of the Labour Court
29th June, 1988 John O'Connell
U.M./P.G. Deputy Chairman