Labour Court Database __________________________________________________________________________________ File Number: CD90243 Case Number: LCR12912 Section / Act: S67 Parties: YOUGHAL CARPET (YARNS) LIMITED - and - IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION |
Claim by the Company concerning the redundancy of four middle management positions in the context of a rationalisation programme.
Recommendation:
5. The Court, having regard to the current trading position of
the Company, considers that the managements proposals on
redundancy and phasing out of jobs are in the circumstances not
unreasonable, but is of the opinion that the redundancy terms
should be amended to provide for three weeks per year of service,
inclusive of statutory payments and that the terms so amended be
accepted by the staff concerned.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD90243 RECOMMENDATION NO. LCR12912
INDUSTRIAL RELATIONS ACT, 1946 TO 1976
SECTION 67
PARTIES: YOUGHAL CARPET (YARNS) LIMITED
and
IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION
SUBJECT:
1. Claim by the Company concerning the redundancy of four middle
management positions in the context of a rationalisation
programme.
BACKGROUND:
2. The Company, in February, 1990, indicated that due to a number
of trading factors, such as a reduction in both prices and demand
and the strength of the punt against sterling, it urgently
requires savings. The Company has decided to obtain these savings
through a reduction in staff numbers. The Company is seeking
approximately thirty redundancies in total throughout the Company.
Four positions in the middle management group are scheduled for
redundancy (Industrial Engineer, Maintenance Supervisor, Data
Processing Officer and Asst. Dyer) and one position, that of
Office Manager, is due to be phased out. The present appointee in
the position to be phased out will be retained on other work.
Since the announcement of the Company's proposals one of those to
be made redundant, the Industrial Engineer, has obtained
alternative employment and another to be made redundant has passed
away. This means that only two middle management positions will
be made redundant. The Union rejected the Company's proposals and
on 18th April, 1990, the dispute was referred to the conciliation
service of the Labour Court. At a conciliation conference held on
26th April, 1990, the Company offered a redundancy settlement of
twice statutory entitlements. This was rejected by the Union who
disagree with the need for further redundancies among this group.
As agreement could not be reached the matter was referred to the
Labour Court on 21st May, 1990, for investigation and
recommendation. The Court investigated the dispute on 24th May,
1990.
COMPANY'S ARGUMENTS:
3. 1. The Company is facing fierce price competition and a
worsening demand for its products. Output has dropped by 20%
compared to the previous 18 months, resulting in serious fixed
cost escalation. The Company has been compelled to seek a
reduction in indirect fixed costs. The savings thus generated
will be applied to reduce selling prices and hopefully
increase sales volumes, which are critical in a volume
sensitive plant.
2. The Company must achieve the savings involved to remain
viable and secure the remaining jobs. Failure to achieve
these savings will lead to much more serious consequences and
threaten the future viability of the Company. The
rationalisation plan has been designed to ensure that earnings
of the remaining employees are not affected.
3. The Company is offering a redundancy settlement of twice
statutory entitlements plus a lump sum of #450 for those with
over seven years service. The Company will select those to be
made redundant on a seniority basis, retaining the longest
serving employees in so far as this is possible.
4. As the Company requires a full-time Works Study
Engineer, it will be necessary to move the Dyehouse Planning
Manager, who is a qualified Works Study Engineer, into this
position. This results in a number of positional changes
including the transfer of a clerical/administrative employee
to the Dyehouse Manager position.
5. The duties of the Data Processing Officer will be
carried out by the Data Processing Manager, whose workload has
been reduced following computer decentralisation within Group.
The Maintenance Supervisors functions will be transferred to
the remaining managers in that department.
6. The Company's freedom of movement in transfers has been
restricted on health grounds and skills available to carry out
key tasks.
UNION'S ARGUMENTS:
4. 1. Where redundancy is concerned, the middle management
group are at a decided disadvantage viz a viz other sections
of the workforce. In other sections there is the possibility,
that in the event of an upturn in trade, operatives will be
re-employed. This has happened in the past. Middle
management positions, once gone, will not be replaced. One of
the reasons this group is faced with redundancies is that
employees of Youghal Holdings Ltd were given positions in the
Company thus putting pressure on positions held by the middle
management group. This has not happened with other groups.
4. 2. The Union rejects the proposal to transfer the Data
Processing Officers work to the Data Processing Manager as
this work is proper to middle management. The Union also
rejects the proposal to transfer an employee in the
clerical/administrative area who is represented by another
union to a middle management position presently held by a
member of this Union.
3. Middle management have always been co-operative in
regard to transfers and flexibility but they are not prepared
to accept any transfers consequent on any redundancies. In
1984, when the Company proposed similar redundancies, middle
management in an effort to maintain numbers forfeited a 4%
salary increase. This cost is still ongoing to each member of
the group.
4. The Company have put forward the question of costs as a
justification for the need for redundancies. The Union
maintains that production volumes in 1989 were up 43.75% on
1980 volumes. During the same period staff numbers fell by
21%. This shows the substantial contribution the workforce
has made to the lowering of costs and also the profit of
approximately #1m. made in 1989.
5. The Union contends that the proposals in respect of the
Office Manager position, which deal mainly with an alternation
of duties and of title, are more appropriate to separate
discussions and negotiations.
6. Given the resignation of one employee in this group and
the tragic death of another, the Union believes that there is
no need for further redundancies in the middle management
group.
RECOMMENDATION:
5. The Court, having regard to the current trading position of
the Company, considers that the managements proposals on
redundancy and phasing out of jobs are in the circumstances not
unreasonable, but is of the opinion that the redundancy terms
should be amended to provide for three weeks per year of service,
inclusive of statutory payments and that the terms so amended be
accepted by the staff concerned.
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Signed on behalf of the Labour Court
John O'Connell
11th June, 1990 ---------------
B O'N/U.S. Deputy Chairman