Labour Court Database __________________________________________________________________________________ File Number: CD88970 Case Number: LCR12280 Section / Act: S67 Parties: CADBURY (IRELAND) LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Redundancy terms.
Recommendation:
5. The Court finds that the terms offered by the Company for
redundancy compare favourably with what has been agreed throughout
industry in recent years. Having regard to the structure of the
Company's proposal, the Court recommends that the lump sum
incentive element of #10,000 be increased to #12,000 and that the
total proposals so amended should be accepted in final settlement
of the dispute.
Division: CHAIRMAN Mr Shiel Mr O'Murchu
Text of Document__________________________________________________________________
CD88970 RECOMMENDATION NO. LCR12280
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CADBURY (IRELAND) LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Redundancy terms.
BACKGROUND:
2. The Company's Rathmore factory opened in 1948, manufacturing
chocolate crumb on a batch process. By 1984 this plant had become
uncompetitive due to the arrival of new technology and increased
manufactury costs, and the Company decided to embark on a major
investment programme to retain the maximum number of viable jobs.
In April 1988, the Union was informed of the requirement for 63
redundancies, 56 of whom would come from the Factory Seniority
Group. When the Company announced the closure of the old batch
plant in August, 1988 a notice seeking applications for voluntary
redundancy/early retirement was posted. There were thirteen
applicants. Following a number of meetings with the Union, the
Company improved the voluntary package to the following:-
2 - 15 years reckonable service - Act x 3 + #10,000
15 - 22 " " " - Act x 3.50 + #10,000
22 years + - Act x 4 + #10,000
together with pay in lieu of statutory notice.
Those eligible were all permanent employees under 61 years of age
at 23rd September, 1988. Employees 61 years of age and more were
offered a reduced severance package and normal pension
entitlements. The Company also made an offer on forced redundancy
of five weeks' pay per year of service inclusive of statutory
entitlements, to be applied on a last-in-first-out basis should
the voluntary package fail to achieve the desired results. The
number of volunteers rose to 17 leaving a shortfall of 39. The
Union indicated that compulsory redundancy was not acceptable and
that a suitable voluntary severance package should be negotiated.
The Company was not prepared to improve on its offer and as no
agreement could be reached at local level the matter was referred
to the conciliation service of the Labour Court. No basis for a
settlement was reached at a conciliation conference held on 9th
December, 1988 and the matter was referred to the Labour Court for
investigation and recommendation. A Court investigation into the
dispute was held on 20th January, 1989.
UNION'S ARGUMENTS:
3. 1. Since 1977, under various rationalisation programmes, a
reduction of 126 jobs has been effected in Rathmore. All of
these were by means of voluntary severance terms which were
dictated by the Company. This particular approach, although
objectionable to the Union, proved successful until now. This
substantial drop in numbers has brought about a radical change
in the age and service profiles on site. This is the reason
why the Company's present offer has not worked.
2. Under the terms of the present package, the payment
criteria are the same as those which determine payment levels
within the Redundancy Payments Acts. In terms of the
voluntary aspects of the package, these criteria are perceived
to discriminate on two counts, viz the ceiling of #211 which
falls far short of the average weekly wage of #300 for
Rathmore production workers and the 41 years of age service
determinant.
3. The Union has tabled a claim for six weeks' pay per year
of service, exclusive of statutory entitlements. This was
done through the medium of the conciliation officer when it
was obvious that the Company's initiatives had failed. So far
the Company has failed to make any constructive response to
this claim.
4. Compulsory redundancy would not suit the Company as it
is the younger and probably more flexible element of the
workforce, whose service ranges from 12 to 15 years, who would
face dismissal under compulsory redundancy. This cannot suit
the Company and certainly a number of longer serving employees
are interested in taking voluntary redundancy under the right
circumstances.
5. The concept of compulsory redundancy has been
emphatically rejected by the workfroce. They have worked hard
to sustain this employment over the years and will not under
any circumstances allow twenty five or more of their
colleagues to be made compulsorily redundant.
6. In recent times, major changes in work practices and job
reductions have resulted in labour costs becoming a smaller
proportion of overall production costs in Rathmore. The
workers there have also accepted the disciplines of shift
working with all the attendant social, psychological and
physical disadvantages.
3. 7. Cadbury Ireland is a soundly based and profitable
manufacturing Company. It has had consistent profits over the
last number of years and is in a very strong financial
position. It is part of a large multinational corporation
which itself is in a good financial position. The workers
have fully co-operated in the Company's efforts to reach this
position and it is not acceptable for the Company to turn
around and impose redundancy on them. The Company is in a
position to pay generous redundancy compensation. The Union,
therefore, sees no need for a compulsory redundancy programme.
8. The Union is also seeking that two early retirements
which took place in August, 1988 be counted in the number of
redundancies, thus reducing the requirement by two.
COMPANY'S ARGUMENTS:
4. 1. The Company considers that the terms on offer compare
more than favourably with terms on offer among comparable
businesses. The package offered, in line with the Redundancy
Payments Acts, is constructed to take account of relevant
factors such as age, service etc.
2. In arriving at its decision to go ahead with the
investment in Rathmore the Company has taken account of all
investment costs, including the cost of redundancy. Against
this background the final offer made by the Company is the
maximum affordable. The Company has approached the numbers
reduction programme in accordance with the Rules and
Conditions of Employment and the Factory Operating Agreement
(details supplied).
3. It has been the practice in the past that voluntary
redundancy terms were not negotiated. The Company believes
that they cannot be negotiated as it is not the negotiating
parties but the individuals who will determine the final
outcome. However, the Company did take account of the points
raised by the Union Committee and the final voluntary offer
reflects these considerations.
4. The Company accepts that the terms for forced redundancy
is a matter for determination through normal industrial
relations procedures and, therefore, any considerations given
to the case must centre around the most junior employees. The
Company cannot consider the Union's claim, which is excessive
in cost terms, either as a voluntary or a compulsory
redundancy package.
5. The Company considers that there are a number of people
who are prepared to accept voluntary redundancy but who are
not coming forward until they are satisfied that the Company
has made its final offer.
RECOMMENDATION:
5. The Court finds that the terms offered by the Company for
redundancy compare favourably with what has been agreed throughout
industry in recent years. Having regard to the structure of the
Company's proposal, the Court recommends that the lump sum
incentive element of #10,000 be increased to #12,000 and that the
total proposals so amended should be accepted in final settlement
of the dispute.
~
Signed on behalf of the Labour Court
John M Horgan
20th February, 1989 --------------
R.B./U.S. Chairman