Labour Court Database __________________________________________________________________________________ File Number: CD90224 Case Number: LCR12845 Section / Act: S67 Parties: PAKO (EUROPE) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the terms of a redundancy package.
Recommendation:
5. Having considered the detailed written and oral submissions
from the parties and noting the position of the Company, the Court
recommends that without creating a precedent the Company increase
its offer to 4 weeks pay per year of service plus statutory
entitlement and retain earnings for a period of 16 weeks for
employees who may have to transfer as a result of the
implementation of these redundancies.
The Court further recommends that both parties accept this
recommendation.
Division: Ms Owens Mr Keogh Mr Devine
Text of Document__________________________________________________________________
CD90224 RECOMMENDATION NO. LCR12845
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: PAKO (EUROPE) LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the terms of a redundancy package.
BACKGROUND:
2. The Company commenced operations in Limerick in 1981 and is
involved in the photographic and print industry. Its parent
Company is based in the U.S.A. and suffered major financial and
market losses in 1982. Despite the difficulties of the parent
Company employment levels reached a peak of over 200 in 1985 at
the Irish plant. Subsequently there was a fall in product demand
and the Company introduced short time working in 1987, 1988 and
1989. Some production workers left during this period but did not
receive any compensation other than their statutory entitlements.
The Union had sought extra payments but the Company rejected the
claim. Compulsory staff redundancies occurred in 1986 and in 1989
and the Company paid a redundancy package of 3 weeks pay per year
of service plus statutory entitlements. In April, 1990 the
Company proposed that 21 production workers be made redundant. No
agreement was reached on the terms for redundancy at local level
and the matter was referred to the conciliation service of the
Labour Court. A conciliation conference was held on 27th April,
1990 and the Company made the following final offer:-
1. The Company agrees to accept the principle of plant wide
seniority as the basis of selection for compulsory
redundancy subject to a review of skill requirements after
the voluntary uptake.
2. Redundancy terms of three weeks per year of service,
subject to a minimum payment of #3,000, will be paid in
addition to legal entitlements to minimum notice and
redundancy payments.
3. Permanent interdepartment and shift transfers required to
restore balance after redundancy will retain higher rate of
pay for a three month period following transfer.
This offer was rejected by the Union who sought #1250 per year of
service, with a minimum payment of #5,750. On 2nd May, 1990 the
matter was referred to a full hearing of the Labour Court which
was held in Limerick on 9th May, 1990.
UNION'S ARGUMENTS:
3. 1. The Company has already shed about 60 production workers
without paying any compensation. The workers have suffered
short time working, lay-offs, redundancies, and a nine month
pay pause. The workers have also lost out because due to
lay-offs they do not have sufficient contributions to qualify
for full Social Welfare entitlements. The workers have made a
considerable contribution to the Company and should be
compensated accordingly.
2. The Company's offer should be increased in order to ensure
that most of the proposed redundancies are on a voluntary
basis. Voluntary redundancies would be in the best interests
of all concerned and those who opt for voluntary redundancy
should be compensated not only for the loss of their jobs but
also for the past short time working.
3. When staff reductions were made the Company paid
redundancy of 3 weeks per year of service plus statutory
entitlements. The Company has effectively reduced its
production workforce from 147 to 91 without any cost for
enhanced redundancy payments. In view of the Company's record
on redundancies, lay-offs, and short time working the Unions
claim should be conceded.
4. In regard to the Company's proposals for the basis of
selection for compulsory redundancy and transfers, they cannot
be adequately dealt with until the extent of the voluntary
uptake becomes known and the restructuring within the Company
is agreed. However in relation to staff transfer after the
redundancy package is implemented the rate should be retained
on a "red circle" basis.
COMPANY'S ARGUMENTS:
4. 1. The Company is struggling for survival in attempting to
cope with the combined effects of a cash flow crisis, lack of
profitability and reduced product demand. It must be
recognised that in this situation the Company is only able to
fund the terms offered with great difficulty.
2. The Company have always dealt fairly and equitably with
all its employees, whether unionised or not. A situation
where one group of employees fare better than another group in
similar economic circumstances is not justified.
3. The Company's offer both in terms of the formula used and
the amounts offered is competitive with companies forced into
redundancies in similar economic/trading circumstances.
4. The immediate reason for this redundancy is a fall off of
approximately 20% in product requirement in 1990. Having
regard to the extent of short time working in recent years it
was felt that on this occasion a fundamental re-assessment of
the size of the operation the Company can realistically
support on an on-going basis was required. The result was a
decision to reduce employment levels by 21. Given this
reduction it is hoped that the employment continuity of the
remaining employees can be maintained.
5. It is reasonable to expect agreement on arrangements for
re-balancing the remaining workforce as part of an overall
agreement on redundancy when the need for that re-balancing
arising directly from the selection method used. The
compensation terms offered by the Company are generous given
the commitments in the house agreement to
flexibility/interchangeability and to the employees obligation
to move from date work to shift work and vice versa.
RECOMMENDATION:
5. Having considered the detailed written and oral submissions
from the parties and noting the position of the Company, the Court
recommends that without creating a precedent the Company increase
its offer to 4 weeks pay per year of service plus statutory
entitlement and retain earnings for a period of 16 weeks for
employees who may have to transfer as a result of the
implementation of these redundancies.
The Court further recommends that both parties accept this
recommendation.
~
Signed on behalf of the Labour Court
Evelyn Owens
___________________________
11th May, 1990. Deputy Chairman
A.S./J.C.