Labour Court Database __________________________________________________________________________________ File Number: CD88877 Case Number: LCR12408 Section / Act: S67 Parties: IRISH FERTILIZER INDUSTRIES - and - IRISH TRANSPORT AND GENERAL WORKERS UNION - IFI GROUP |
Compensation claim for temporary lay-off.
Recommendation:
5. Having regard to the stocking position in the company at the
time and the eventual financial outcome of the lay-offs to the
workers, the Court does not recommend concession of the Unions'
claims other than the payment by the company of the claimants
pension contributions for the six week period.
Division: CHAIRMAN Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD88877 RECOMMENDATION NO. LCR12408
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: IRISH FERTILIZER INDUSTRIES
(Represented by the Federated Union of Employers)
and
IRISH TRANSPORT AND GENERAL WORKERS UNION - IFI GROUP
SUBJECT:
1. Compensation claim for temporary lay-off.
BACKGROUND:
2. The factory manufactures C.A.N. fertilizer. In May, 1988
there were indications that the C.A.N. market had reduced by 20%
due to a reduction in livestock numbers in the country, concern
about milk quotas, a mild winter and wet spring. Employee
representatives were appraised of the situation in June and in
July management advised that they intended to lay-off employees
for a six week period. As the majority of employees had
outstanding holidays, management sought to reduce the actual
lay-off period to four weeks by asking all groups to accept a
declared two weeks holiday period, followed by four weeks lay-off.
Agreement was not achieved with all groups and the company
laid-off employees from 27th July, 1988 to 5th September, 1988.
The Union then sought compensation for the lay-off period as
follows:-
1. Payment of first 3 waiting days for Social Welfare.
2. Payment of differential between wages received in
employment and Social Welfare.
3. Flat compensation sum of #350.
4. Agreed lump sum for loss of O/T.
5. Pension/VHI contributions made during the period.
The claim was referred to the conciliation service of the Labour
Court and a conciliation conference took place on 3rd November,
1988. The company rejected the claim and the union requested a
Labour Court hearing. The company agreed and the Court
investigated the dispute in Arklow on 9th May, 1989.
UNION'S ARGUMENTS:
3. 1. The company stated at the conciliation conference that
it was not claiming "inability to pay". Recently published
figures show that the company had made a profit of #5.4
million in the period ending 31st December, 1988.
2. It is questionable as to whether or not the company was
entitled to lay-off staff. Lay-offs are not permitted in the
public sector under the terms of the Programme for National
Recovery. The state owned company Nitrigin Eireann Teoranta
is the major shareholder in the Company.
3. The practice of paying compensation to laid-off workers
is widely accepted by the semi-state and private sectors
(details of examples supplied). The Labour Court in
Recommendation Nos. 9653, 9580, 9930, 11898, 12067 and 12260
has recommended concession of compensation claims.
COMPANY'S ARGUMENTS:
4. 1. The factors causing the reduction in demand for
fertilizer were totally outside the control of the company and
when indications of a market shrinkage were evident the
company advised its employees of the position.
2. The company is 51% owned by N.E.T. and 49% owned by
I.F.I. It has its own Board of Management and is a private
company for the purposes of payment of wages etc.
3. When a temporary closure of the factory was unavoidable,
the company sought to minimise the impact on employees by:-
(a) Selecting a period that coincided with the traditional
holiday time and school holidays in the area.
(b) Sought agreement to have two weeks holiday period
declared and thereby reduce the actual lay-off, from a
payment aspect, to four weeks.
(c) Facilitated employees by agreeing to pay cash for part
of outstanding holidays.
(d) Retained payroll staff to process tax rebates during the
lay-off. This facility relieved employees of having to
claim tax rebates themselves from the tax office.
(e) On resumption of work offered to change the payment
system from the "back week" system to payment in the
current week. The proposal was rejected by employees on
the basis that it might compromise their other claims in
respect of the lay-off.
At the conciliation hearing it was conceded that the lay-off
period would be reckonable as service for all service related
entitlements.
4. In continuous manufacturing operations where lay-offs are
caused by conditions outside the control of the company it is
not the practice to compensate employees. There have been a
number of lay-off situations in the company in the past for
which no compensation was paid. To do so on this occasion
would set a precedent for the future.
5. Taking tax rebates and Social Welfare payments into account,
employees who were laid off have had more of an annual income
than that which they would have earned had they worked
continuously during the year.
RECOMMENDATION:
5. Having regard to the stocking position in the company at the
time and the eventual financial outcome of the lay-offs to the
workers, the Court does not recommend concession of the Unions'
claims other than the payment by the company of the claimants
pension contributions for the six week period.
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Signed on behalf of the Labour Court
Kevin Heffernan
22nd May, 1989 ----------------
A.McG/U.S. Chairman