Labour Court Database __________________________________________________________________________________ File Number: CD90281 Case Number: LCR12987 Section / Act: S67 Parties: CLEANAWAY LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;AMALGAMATED UNION OF ENGINEERING WORKERS |
Dispute concerning the level of redundancy compensation.
Recommendation:
7. Having considered the submissions made by the parties the
Court has come to the conclusion that whatever benefits may derive
to the Company which contracted with Cleanaway to provide the
service, that the redundancy arises from a loss of business by
Cleanaway Limited who will not gain any long term productivity
advantage from the changes.
In the circumstances the Court recommends that the Company's offer
be amended to provide for payment of #1,600 per year of service
inclusive of statutory entitlement to each of the workers
concerned and that the offer so amended and subject to the same
conditions as offers already made should be accepted by the
workers concerned.
The Court does not recommend that the pension fund be augmented by
reason of the costs involved, nor does it recommend that the
worker who has already left the employment of the Company should
benefit from the terms above.
Division: Mr O'Connell Mr Keogh Mr O'Murchu
Text of Document__________________________________________________________________
CD90281 RECOMMENDATION NO. LCR12987
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: CLEANAWAY LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
AMALGAMATED UNION OF ENGINEERING WORKERS
SUBJECT:
1. Dispute concerning the level of redundancy compensation.
BACKGROUND:
2. The Company is under contract to a Cork chemical company to
provide a service for sea disposal of effluent. Because the
client has developed an alternative method of disposing of the
effluent it is terminating its contract with the Company in
August, 1991. As a result the Company will be making 27 workers
redundant.
3. Discussions on the amount of redundancy which will be paid
commenced at local level. The Company offered redundancy terms of
#1,100 per year of service, inclusive of statutory redundancy
entitlements. The offer was rejected by the Unions who claimed
payment of 8 weeks pay per year of service plus statutory
redundancy entitlement on behalf of 26 of the workers and that the
Company augment the pension scheme.
4. The issues were referred to the conciliation service of the
Labour Court on 20th March, 1990. A conciliation conference was
held on 18th May, 1990. At the conciliation conference the
Company increased its offer to #1,300 per year of service
(inclusive of statutory redundancy lump sum entitlements) subject
to orderly completion of the contract. The revised offer was
rejected by the Unions. The parties consented to a referral to
the Labour Court for investigation and recommendation. A Court
hearing was held in Cork on the 18th July, 1990.
UNIONS' ARGUMENTS:
5. 1. The Company is not going out of business. The contract
with its client Company will terminate in August, 1991. It is
very lucrative. The move to end sea dumping is dictated by
growing environmental pressure rather than the actual
operation itself.
2. No money will compensate for the loss of a job
particularly as most of the workers concerned because of their
age and skills will more than likely not secure work again.
They are seamen and their specialised work is not readily
available. The limited jobs being advertised have an upper
entry age limit of 45 years.
3. In view of the age of the workers and the fact that they
have given long and loyal service to the Company (there has
never been a stoppage due to industrial action) the Unions are
seeking to have the pensions augmented for those workers over
50 in line with similar settlements in the recent past
(details supplied to the Court).
4. The crewmembers have been living under the shadow of
threatened redundancies for over 2 years for the client
Company had threatened to dispense with one ship in 1988.
(The Company operates two ships, one permanent and one on
standby; it was the standby ship which the client company
wished to dispense with). Following protracted negotiations
on manning levels and redundancy agreement was reached at the
eleventh hour. However because of all the uncertainty which
this caused one crew member left and secured alternative
employment. His position was subsequently filled by the
Company. However, the worker concerned was given to
understand that he would qualify for redundancy payment and is
therefore included in this claim. While he may not legally be
entitled to redundancy there is no doubt that he is entitled
to an ex-gratia payment.
COMPANY'S ARGUMENTS:
6. 1. The redundancies arise from the loss of the sea disposal
contract. When the contract is terminated the Company's
operations will cease in Ireland and there will be a
considerable loss of revenue.
2. The Company's offer compares very favourable with other
settlements in recent years and is in line with previous Court
recommendations. The Unions' claim- 8 weeks pay plus
statutory in addition to augmented pensions - are excessive
and unrealistic. The lump sum claim far outstrips any
reasonable view of what is fair. (It would cost the Company
approximately #1.5 million). The Company is not prepared to
augment the pension for three reasons: (a) The cost. The
workers belong to a non-contributory scheme specifically set
up for them. Any improvement in benefit would have to be met
by an injection of funds from the Company. (b) It is not
necessary since an option exists which allows staff to add to
these benefits by additional voluntary contributions. (c) The
workers could supplement their entitlements in a tax efficient
manner from the redundancy compensation offered by the
Company.
3. The worker who left of his own volition did so in
August/September, 1989 when it was clear that the contract
would be continued. The discussions on redundancy and manning
levels referred to by the Unions took place in February, 1988.
Therefore the worker concerned is not entitled to redundancy
or ex-gratia payment.
RECOMMENDATION:
7. Having considered the submissions made by the parties the
Court has come to the conclusion that whatever benefits may derive
to the Company which contracted with Cleanaway to provide the
service, that the redundancy arises from a loss of business by
Cleanaway Limited who will not gain any long term productivity
advantage from the changes.
In the circumstances the Court recommends that the Company's offer
be amended to provide for payment of #1,600 per year of service
inclusive of statutory entitlement to each of the workers
concerned and that the offer so amended and subject to the same
conditions as offers already made should be accepted by the
workers concerned.
The Court does not recommend that the pension fund be augmented by
reason of the costs involved, nor does it recommend that the
worker who has already left the employment of the Company should
benefit from the terms above.
~
Signed on behalf of the Labour Court,
John O'Connell
___21st___August,__1990. ___________________
M. D. / M. F. Deputy Chairman