Labour Court Database __________________________________________________________________________________ File Number: CD89189 Case Number: LCR12388 Section / Act: S67 Parties: MAXOL LIMITED - and - IRISH TRANSPORT AND GENERAL WORKERS' UNION |
Reduction in the clerical/administrative grade by 16 workers.
Recommendation:
5. Having regard to general developments in the oil-distribution
business and to the particular situation of the Company,the Court
accepts that the rationalisation proposed by the Company is
essential to its continued viability.
In this context, the Court has considered the submissions made by
the parties and has examined the individual elements of the claim
submitted by the Union, particularly those relating to pension
payments. In this connection the Court agrees with the Company's
interpretation and application of the provision of credit for
extra years for pension entitlements. The Court is of the view
that the overall package offered by the Company is reasonable in
all the circumstances of the case and recommends that it be
accepted by the Union subject to the following amendments by the
Company:-
- Discussions to take place immediately between the parties on
claim (4) on page 7 of the Unions submission to the Court.
(See paragraph 3.3(iv) of this Recommendation).
- The six-months payment in lieu proposed by the Company
should be distinct from holiday entitlements which should
be treated separately and on an individual basis.
The Court so recommends.
Division: Mr Fitzgerald Mr Heffernan Mr Walsh
Text of Document__________________________________________________________________
CD89189 RECOMMENDATION NO. LCR12388
INDUSTRIAL RELATIONS ACTS, 1946 AND 1976
SECTION 67
PARTIES: MAXOL LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Reduction in the clerical/administrative grade by 16 workers.
BACKGROUND:
2. On 7th December, 1988, the Company announced its
Rationalisation/Re-organisation Plans. These involved the
shedding of 26 jobs. Under the plan 16 clerical/administrative
jobs are to be made redundant, 15 of which are presently held by
members of the Union. To date the approach has been on a
voluntary basis and a total of 7 have opted to go. The Union is
insisting that it is incumbent on the Company to do all in its
power to achieve the balance by voluntary means. The Union is
totally opposed to compulsory redundancy. The Company maintains
that it has made every reasonable effort to deal with the job
reductions through voluntary redundancies rather than compulsory
ones. The Company says it still requires a reduction of 9 more
clerical/administrative jobs and now has no alternative but to
secure these on the basis of last in first out, wherever
practical. The Company's redundancy terms are as follows:
Staff under 50 years of age
5.5. weeks' pay per year of service subject to a maximum of
2.5 years pay
plus
Redundancy Act payments
plus
6 months pay in lieu of notice (inclusive of all statutory
entitlements)
plus
Refund of superannuation contributions or deferred pension or
bond.
Staff over 50 years of age
Lump sum based on the following scale:
Age 50 - 19 months pay
51 - 17 " "
52 - 15 " "
53 - 13 " "
54 - 11 " "
55 - 9 " "
56 - 9 " "
57 - 9 " "
58 - 6 " "
59 - 3 " "
60 - Nil " "
plus
Pension based on actual service discounted at 4% for each year
left before reaching 60 years of age.
plus
6 months pay in lieu of notice.
plus
Pension credit for years between 60 and 65.
No agreement could be reached at local level and on 1st February,
1989, the issue was referred to the conciliation service of the
Labour Court. No agreement was reached at a conciliation
conference held on 15th February, 1989, and on 3rd March, 1989,
the matter was referred to the Labour Court, for investigation and
recommendation. The Court investigated the matter on 31st March,
1989. (Additional information was furnished by the parties
subsequent to the Court hearing).
UNION'S ARGUMENTS:
3. 1. The Company is seeking an excessive number of
redundancies. A maximum of 5 jobs are surplus. If the
Company can attract sufficient volunteers then the Union will
accept it but under no circumstances will the Union
countenance compulsory redundancies.
2. For many years the Company has acknowledged an on-going
commitment to honour 'the historical relationship on matters
of salaries and conditions within the oil industry.' This is
enshrined in the agreement covering the transfer from McMullan
Bros. to Maxol Limited. What more important 'condition of
employment' can one have other than a satisfactory
severance/early retirement package. Within the oil industry
there have been voluntary packages available for some time.
The emphasis in the other oil companies has been on attracting
staff over 50 years of age and the pension element has been
the focal point. All of the industry has been able to cater
for its over staffing situation with voluntary redundancy.
The Company should take the same approach.
3. If further volunteers are to be attracted a number of
areas must be addressed.
(i) The unaqualified guarantee given to all staff when the
pension age was altered from 65 to 60 that credit
would be given for up to five (5) years service in the
pension scheme should be honoured.
(ii) Staff between age 55 and 60 should be given credit for
their remaining years to 60 years i.e. maximum of 5
years' credit.
(iii) The discounting arrangement for those taking early
pension should be reduced from 4% to 3% for all staff
over 50.
(iv) Staff over 50 should be given the option of having the
'under 50' criteria applied to them if they so wish,
subject to them not receiving any more than their
potential nett pay.
(v) The 6 months pay in lieu of notice etc., should only
include statutory minimum notice. Holidays etc.,
should be excluded as it is discriminatory and
divisive.
(vi) Provision of a pension for staff below 50 in line with
the arrangements made in the recent Texaco 'package'
(details provided to the Court).
(vii) Lump sum provision for staff over 50 to be improved as
follows:-
Age Offer Claim
50 19 months 24 months
51 17 " 22 "
52 15 " 19 "
53 13 " 17 "
54 11 " 15 "
55 9 " 12 "
56 9 " 10 "
57 9 " 9 "
58 6 " 7 "
59 3 " 4 "
4. The Union believes that if the package is improved further
volunteers will be forthcoming. The Union therefore asks the
Court to recommend that all the redundancies be achieved on a
voluntary basis and that with a view to achieving this that
the Union's proposals be introduced.
COMPANY'S ARGUMENTS:
4. 1. The most pressing reason for the Company's rationalisation
plan is related to a weak financial position brought about by
the reduction of 10p a gallon that was imposed by the Minister
for Industry and Commerce on the oil industry generally in
July, 1987. This decision turned the Company from a profit
making situation to a heavy loss making one. There is no
possibility of returning to profitability unless stringent
remedial action is taken.
2. Most of the major oil companies have had reductions in
staff numbers. These, coupled with new work practices and
distribution methods have placed the Company in an
uncompetitive position. The Company has also lost significant
business to new entrants operating on a lower cost basis. In
addition there is further market erosion by 'cross border
traders.'
3. Some of the re-organisation steps that were agreed with
the Union in 1985, were only finally phased in last Autumn.
The main one of these related to the passing of the Dublin
home heating business to authorised distributors. This move
has resulted in a massive reduction in the number of customers
and clerical activity being handled in the Dublin offices.
This has led to significant overmanning that must be
addressed.
4. The Company would have preferred to achieve the reduction
in staff numbers through voluntary redundancies on the
generous terms offered. However, this has not been possible.
The Union has stated that even if the terms were greatly
enhanced, it is still doubtful that there would be sufficient
volunteers. Thus the Company must resort to compulsory
redundancies.
5. The Union is seeking terms better than the best terms on
offer in the industry. It is inappropriate for the Company,
with its independent nature, size and resources to offer any
more than it has. At a previous Labour Court Hearing in July,
1987, the Company stated in its submission to the Court that:
"........ there can be little sense in asking a relatively
small Irish Company that is having to pour more and more of
its resources into matching the competition on the
commercial front to link its pay round negotiations to what
happens in the subsidiaries of some of the biggest
companies in the world."
In recommending in favour of the Company in that case, the
Court obviously accepted the validity of this approach, a
validity that surely must extend to this matter as well.
(L.C.R. 11375 refers).
6. The Company's main concern is to treat staff as generously
as resources allow while ensuring that it is less expensive to
make staff redundant than to continue their employment. The
Union's demands are unrealistic from a cost point of view and
beyond the limit of the Company's resources.
7. Valuable time has now been lost in dealing with this issue
and the negative impact on the Company's important commercial
activities cannot be overstressed. The Company has made a
genuine effort to try to deal constructively with the Union
and feels it can no longer delay implementing its plans.
RECOMMENDATION:
5. Having regard to general developments in the oil-distribution
business and to the particular situation of the Company,the Court
accepts that the rationalisation proposed by the Company is
essential to its continued viability.
In this context, the Court has considered the submissions made by
the parties and has examined the individual elements of the claim
submitted by the Union, particularly those relating to pension
payments. In this connection the Court agrees with the Company's
interpretation and application of the provision of credit for
extra years for pension entitlements. The Court is of the view
that the overall package offered by the Company is reasonable in
all the circumstances of the case and recommends that it be
accepted by the Union subject to the following amendments by the
Company:-
- Discussions to take place immediately between the parties on
claim (4) on page 7 of the Unions submission to the Court.
(See paragraph 3.3(iv) of this Recommendation).
- The six-months payment in lieu proposed by the Company
should be distinct from holiday entitlements which should
be treated separately and on an individual basis.
The Court so recommends.
~
Signed on behalf of the Labour Court
Nicholas Fitzgerald
________________________
12th May, 1989. Deputy Chairman
B.O'N/J.C.