Labour Court Database __________________________________________________________________________________ File Number: CD8948 Case Number: LCR12300 Section / Act: S20(1) Parties: DROGHEDA INDUSTRIAL DEVELOPMENT COMPANY - and - FEDERATED WORKERS' UNION OF IRELAND |
Claim, on behalf of two workers for extra statutory redundancy payments.
Recommendation:
6. In all the circumstances of the case, including the fact that
the employing Company is now in liquidation without sufficient
assets to meet its legal obligations, the Court does not recommend
concession of the claim.
Division: CHAIRMAN Mr Shiel Mr O'Murchu
Text of Document__________________________________________________________________
CD8948 RECOMMENDATION NO. LCR12300
INDUSTRIAL RELATIONS ACT, 1969
SECTION 20(1)
PARTIES: DROGHEDA INDUSTRIAL DEVELOPMENT COMPANY
and
FEDERATED WORKERS' UNION OF IRELAND
SUBJECT:
1. Claim, on behalf of two workers for extra statutory redundancy
payments.
BACKGROUND:
2. Drogheda Industrial Development Company controlled Drogheda
Community Training Workshop up until September, 1988, when the the
workshop was closed down. The enterprise was funded by the
training and employment authority, FAS. There were two trainers
employed in the workshop on an annual salary of approximately
#11,000. These workers who had approximately four years and four
and a half years service respectively, were made redundant on the
closure of the workshop. On 19th October, 1988 a liquidator was
appointed. Both workers received their statutory redundancy
entitlements. The Union in September, 1988, sought extra
statutory severance payments for the workers. The former Chief
Executive of the Company stated however, that this claim could not
be met. On 11th November, 1988, the Union referred the matter to
the conciliation service of the Labour Court. The liquidator
wrote to the Industrial Relations Officer of the Court stating
that there was little point in going ahead with a claim for
enhanced severance payments as the Company had no assets. The
Union then sought a Labour Court hearing under Section 20(1) of
the Industrial Relations Act, 1969. A Labour Court conciliation
conference was subsequently arranged, however, for 10th January,
1989. Due to a misunderstanding regarding the date, the Union
official was not present and the conference could not proceed.
The Industrial Relations officer chaired an informal meeting
between the liquidator and two shop stewards. The liquidator
stated that there was no money available to meet the claim and
that he would not have agreed to a referral of the issue to a full
Court hearing had the conciliation process been unsuccessful. On
23rd November, 1988, the Union referred the matter to the Labour
Court under Section 20(1) of the Industrial Relations Act, 1969.
Prior to the hearing the Union agreed to be bound by the Court's
recommendation.
UNION'S ARGUMENTS:
3. 1. Enhanced severance terms are a common feature of
redundancy settlements. The most recent survey conducted by
Industrial Relations News covering the six month period,
November 1986 to the end of April 1987, revealed that out of
26 cases, 14 (53.8 per cent) provided settlements of between
two and six weeks pay per year of service. A further two
(7.7%) provided for over six weeks pay per year of service.
2. Labour Court Recommendation No. 11,564 dated December,
1987 which concerned a similar claim made by the Union on
Friends Training Centre stated:-
"The Court noting the manner in which the
workshop was funded, with particular reliance
on AnCO,* recommends that the parties
concerned in funding and running the workshop
combine to pay the claimants a lump sum
calculated at a rate of 3 weeks pay per year
of service....."
* Now FAS.
3. Labour Court Recommendation No 11671, concerned another
a similar claim by employees of the Irish Film Institute
stated:-
"The Court has noted the financial
difficulties facing the Institute and has
also noted the long service of the claimants.
In all the circumstances of this case, the
Court recommends that the Institute, in
conjunction with the other parties concerned
in its funding, should arrange to pay the
claimants 2 weeks' pay per year of service in
addition to the statutory entitlements."
4. The Court has, therefore, recognised that funding bodies have
a responsibility to staff who are made redundant from
organisations which they fund. In this case, since the
Company has no funds from which to meet its obligations the
Union considers that the additional payments to staff should
be met by FAS, who funded and controlled the pay and
conditions of the workers.
LIQUIDATOR'S STATEMENTS:
4. The liquidator made the following statement at the Court
hearing:-
"I was appointed Liquidator of DIDCO on the
19th October, 1988. My position as
Liquidator is governed by the Companies Acts,
1963-86. I am obliged to distribute the
assets of DIDCO in accordance with the
Companies Acts and I have no power to
distribute its assets otherwise. I have
arranged the discharge of statutory
redundancy and arrears of wages due to all
the employees of DIDCO and I have received no
fees or remuneration for the considerable
work I have done in this case. I am not in
dispute with the F.W.U.I."
NOTE:
5. The Court received correspondence dated 14th February, 1988
from FAS, referring to a previous letter dated 26th April,
1988 which concerned LCR 11564. The position of the Authority
was that it could not become involved in the dispute or accept
any liability.
RECOMMENDATION:
6. In all the circumstances of the case, including the fact that
the employing Company is now in liquidation without sufficient
assets to meet its legal obligations, the Court does not recommend
concession of the claim.
~
Signed on behalf of the Labour Court
John M Horgan
14th March, 1989 --------------
A.K./U.S. Chairman