Labour Court Database __________________________________________________________________________________ File Number: CD88702 Case Number: LCR12094 Section / Act: S67 Parties: CONCRETE PRODUCTS OF IRELAND - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION;ELECTRICAL TRADES UNION;AMALGAMATED ENGINEERING UNION |
Redundancy terms for nineteen employees.
Recommendation:
5. The Court, having considered the submissions made by the
parties and noting that the Company/Union Agreement does not
define the date for calculation of weekly pay for redundancy
purposes, recommends that those employees leaving the Company's
employment after 1st June, 1988 should have their redundancy
payments calculated by reference to their rate of pay on the date
of termination of their employment.
Division: Mr Fitzgerald Mr Shiel Mr Devine
Text of Document__________________________________________________________________
CD88702 RECOMMENDATION NO. LCR12094
INDUSTRIAL RELATIONS ACTS, 1946 AND 1976
SECTION 67
PARTIES: CONCRETE PRODUCTS OF IRELAND
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
ELECTRICAL TRADES UNION
AMALGAMATED ENGINEERING UNION
SUBJECT:
1. Redundancy terms for nineteen employees.
BACKGROUND:
2. In February, 1988, the Company announced a major redundancy
programme. For the previous seven years approximately, a written
agreement concerning redundancy pay had existed. This
agreement provided for three weeks' pay per year service plus
statutory entitlements. In this instance, however, the Company
stated that due to the extent of the redundancies, it could not
adhere to the agreement. Following a number of meetings, an
agreement was drawn up dated 12th February, 1988, whereby the
severance package was to be three weeks' pay per year of service
for the first thirteen years of service and two weeks pay for each
year thereafter, subject to a maximum of seventy weeks' pay.
Clause 6 of the agreement states that "a week's pay is defined as
40 hours gross pay, i.e. exclusive of overtime payments, but
including all other elements such as productivity, attendance,
etc.." Between February and 31st May the majority of the
redundancies, approximately 85, were effected. Nineteen of those
to be made redundant still remained. The 26th wage round expired
on 31st May and, on 20th June, agreement was reached on the
implementation of the Programme for National Recovery with effect
from 1st June, 1988. On 29th June, the Union wrote to the Company
stating its expectation that the pay increases thus awarded would
be included in the calculation of redundancy payments subsequent
to 1st June. In July, 1988, seven more redundancies were
effected. The redundancy payments made to these workers were
based on their pay prior to 1st June i.e the application of the
Programme for National Recovery was not taken into account. The
Union objected to this and a meeting was held on 17th August,
1988. No agreement was reached and the matter was referred, on
the same date, to the conciliation service of the Labour Court. A
conciliation conference was held on 2nd September, 1988. Again,
no agreement was reached and the matter was referred to a full
hearing of the Labour Court. The hearing took place on 7th
October, 1988.
UNION'S ARGUMENTS:
3. 1. Since 1982 there have been four redundancy programmes in
the Company. In each case the redundancy formula of three
weeks' pay per year of service was applied on the basis of a
week's pay being calculated at the current rate. The
different levels of redundancy pay under the different
programmes was due solely to the application of wage
agreements. In the two sister companies, Marley Extrusions
and Marley Flooring and Plumbing there have been at least two
sets of redundancies. In each case the "three weeks" formula
was applied using the current rate of pay at the time.
2. The Company has also made lump sum payments to those who
volunteer for redundancy. Such lump sums are increased in
accordance with wage increases. So too are payments made in
respect of lay-off.
3. The Union estimates the cost of inclusion of the pay
increase in the calculation of their redundancy pay to be a
maximum of #6,800. The Company cannot credibly claim that it
cannot afford to pay this amount. The Group's Chief Executive
recently stated that the costs associated with the February
closures are expected to be almost entirely recouped through
the sale of related assets. He also stated that the concrete
products division is expected to return to profits about now.
COMPANY'S ARGUMENTS:
4. 1. The intention of the redundancy negotiations and agreement
was to treat all those being made redundant in a similar and
equitable fashion. There was never any intention or agreement
to have two levels of redundancy settlement, depending on the
timing of the redundancies. To concede the present claim
would be to treat the claimants more favourably than those
made redundant as part of the same agreement but prior to 1st
June, 1988. The claimants have already benefited by prolonged
employment. They are now seeking a further benefit over and
above that offered to their colleagues previously made
redundant. There are four employees still employed who, in
February, had no expectation of this.
2. In the course of discussions on implementation of the
terms of the National Agreement, no reference was made to
inclusion of the pay terms in the already negotiated
redundancy agreement.
3. The redundancy agreement was entered into in good faith by
all parties on the specific agreement that it was in full and
final settlement of all claims arising from the termination of
the workers' employment with CPI Limited, both at common law
and under statute.
4. In the case of 18 of the 19 claimants, concession of the
claim would mean no increase in the claimants' statutory
redundancy entitlements in view of the statutory limit of
#11,000 or #211.54 weekly to be taken into account in
statutory calculations. In all 19 cases the claimants have
received well in excess of their statutory entitlements.
5. The redundancy legislation giving rise to redundancy
entitlement and payment is very clear. Paragraph 13 of
schedule 3 of the Redundancy Payments Act, 1969 states that
the wage to be taken into account is the wage applying "as at
the date on which he was declared redundant." Further,
paragraph 21 of schedule 3 defines the date an employee is
declared redundant "as the date on which the notice of a
proposed dismissal was given to the employee." In all 19
cases notice of redundancy was given prior to 1st June, 1988.
There is therefore no entitlement to inclusion of the terms of
the National Agreement negotiated and implemented after notice
of redundancy was issued in all cases. This interpretation of
the Redundancy Acts was upheld in the High Court in an appeal
by the Minister for Labour in the case of Nokia Limited in
1983.
RECOMMENDATION:
5. The Court, having considered the submissions made by the
parties and noting that the Company/Union Agreement does not
define the date for calculation of weekly pay for redundancy
purposes, recommends that those employees leaving the Company's
employment after 1st June, 1988 should have their redundancy
payments calculated by reference to their rate of pay on the date
of termination of their employment.
~
Signed on behalf of the Labour Court
Nicholas Fitzgerald
___________________________
27th October, 1988. Deputy Chairman
A.K./J.C.