Labour Court Database __________________________________________________________________________________ File Number: CD89242 Case Number: LCR12435 Section / Act: S20(1) Parties: GAELTARRA KNITWEAR LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Claim on behalf of 7 workers for payment of redundancy lump sums on existing rates of pay.
Recommendation:
8. Having considered the terms of the document in question the
Court is of the opinion that the term "a weeks pay" can only be
construed to mean pay at current rates and not at rates existing
at the time the proposal was made in 1981. The Court therefore
recommends that the Union's claim be conceded.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD89242 RECOMMENDATION NO.LCR12435NO. LCR12435
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 20(1)
PARTIES: GAELTARRA KNITWEAR LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Claim on behalf of 7 workers for payment of redundancy lump
sums on existing rates of pay.
BACKGROUND:
2. In February, 1981 Udaras Na Gaeltachta decided to sell their
business interest in a factory situated at Ballymackera, Co. Cork
to a Danish Company Stobi Aps. As a result six workers were
declared redundant. Following negotiations it was agreed to pay
the workers 4.50 weeks pay per year of service plus statutory
redundancy. In addition it was also agreed that Udaras Na
Gaeltachta would underwrite all future redundancies at the time of
change and the same formula would apply for calculating redundancy
lump sums.
3. This agreement was subsequently confirmed in writing by letter
dated 19th February, 1981 from Gaeltarra to the Union. The
relevant paragraph states: "To this end the management have
stated that no further redundancies are envisaged and that with
regard to the change of ownership, the Udaras will underwrite the
service of the relevant personnel at the time of change in the
event of their future redundancy. The Udaras also agreed to
settle in such event, terms as have been made on this occasion
(i.e. 4.50 weeks pay for each year of service in addition to the
terms of the Redundancy Act)."
4. In June, 1988 seven workers were declared redundant because of
the poor financial state of the Company. The workers were paid
the statutory redundancy lump sums by the new owners from the date
of change of ownership. Udaras Na Gaeltachta, through Gaeltarra,
paid 4.50 weeks pay plus statutory on the 1981 wage rates applying
at that time. The Union wrote to the Company seeking that the
current wage rates be applied to calculating the redundancy lump
sums. The Company refused to accede to the Union's request.
5. The Union referred the matter to the conciliation service of
the Labour Court. The Company declined an invitation to attend a
conciliation conference. The Union then referred the issue to the
Labour Court for investigation and recommendation under Section
20(1) of the Industrial Relations Act, 1969. The Union agreed to
be bound by the Court's recommendation. A Court hearing was held
in Cork on 24th May, 1989.
UNION'S ARGUMENTS:
6. 1. The Company have contravened the agreement reached in
1981. It was never stated, either orally or in writing, that
the wage rates would be frozen at 1981 levels when it came to
calculating redundancy payments at a future date. Indeed if
it had been so stated the Union would not have reached
agreement with the Udaras on that basis.
2. It is the accepted practice in Industry generally that
current wage rates are used when it comes to calculating
redundancy lump sums.
3. The Court is requested to recommend that Udaras Na
Gaeltachta pay, in accordance with custom and practice,
redundancy lump sums calculated on current wage rates.
COMPANY'S ARGUMENTS:
7. 1. The Company has honoured the February 1981 Agreement. The
Company has paid the workers concerned in accordance with that
agreement. It is unreasonable to expect the Udaras who are
not shareholders in the new Company to underwrite its
commitments now and into the future.
RECOMMENDATION:
8. Having considered the terms of the document in question the
Court is of the opinion that the term "a weeks pay" can only be
construed to mean pay at current rates and not at rates existing
at the time the proposal was made in 1981. The Court therefore
recommends that the Union's claim be conceded.
~
Signed on behalf of the Labour Court
John O'Connell
____________________
9th June, 1989. Deputy Chairman
M.D./J.C.