Labour Court Database __________________________________________________________________________________ File Number: CD90589 Case Number: LCR13060 Section / Act: S67 Parties: GREENHILLS FOODS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning redundancy terms.
Recommendation:
5. The Court has considered the matters at issue in the light of
the submissions made by the parties. It does not consider that
any change in the redundancy terms offered by the Company are
warranted but in view of the fact that no pension arrangements
exist such as those which exist in the major Company within the
group the Court is of the opinion that the Company's offer in lieu
of the existence of such pension arrangements should be amended in
two respects:
(i) To take account of service after the age of 25 and
(ii) to increase the amount of the offer in this respect of
#200 per year of qualified service.
The Court recommends that the employer's offer so amended be
accepted by the staff concerned.
Division: Mr O'Connell Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD90589 RECOMMENDATION NO. LCR13060
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: GREENHILLS FOODS LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning redundancy terms.
BACKGROUND:
2. The Company is involved in the manufacture of yoghurts under a
number of brand names and employs 38 workers. It is part of a
Group including Premier Dairies which was taken over by Waterford
Express Dairies in March, 1990. The new owners decided to cease
the operation of the Company due to unfavourable trading and
accumulated losses. The closure of the Company was announced to
the Union on the 6th September, 1990 and notice of redundancy to
all employees expires on the 31st October, 1990. The Union is
claiming redundancy compensation amounting to six weeks' pay per
year of service plus statutory entitlements. The Company has
offered four weeks' pay per year of service inclusive of statutory
entitlement at average weekly earnings subject to a weekly maximum
of #250. The Company has also offered #125 per year of service
for all service in excess of age 41 in an attempt to ameliorate
the lack of pension entitlements. The Company has also stated
that should negotiations regarding redundancy compensation in
Premier Dairies produce a more advantageous formula, this would be
applied to the workers concerned in due course. The Union
rejected the Company's offer. The issue could not be resolved in
local discussions and was referred to the conciliation service of
the Labour Court on the 3rd October, 1990. A conciliation
conference was held on the 9th October, 1990 but no agreement was
reached. The dispute was referred to the Labour Court on the 10th
October, 1990. A Court hearing was held on the 12th October,
1990.
UNION'S ARGUMENTS:
3. 1. The Company has offered redundancy terms based on the
formula that had been agreed in Premier Dairies in 1986. This
offer was unanimously rejected in a secret ballot of the
workers. The Union feels that it is incorrect of Management
to try to treat the workers concerned in the same fashion as
those in Premier Dairies. The average wage of the workers in
the clerical area is #207 and in the factory #200 p.w., these
figures include bonus/commission and overtime. Their average
service is approximately ten years. The workers in Premier
Dairies have far higher wages and their service ranges from
thirty to forty years. Any redundancies which have occurred
in Premier Dairies have been on a voluntary basis, the workers
concerned will not have a choice, this is a compulsory
redundancy situation.
2. The workers are at a further disadvantage in that they are
not in a pension scheme. These factors combined together mean
that a redundancy settlement of four weeks' per year of
service including statutory entitlements is of far greater
value on average to the volunteer in Premier Dairies, than to
the person being made redundant due to the closure of
Greenhills Foods. Management has indicated that it is
preparing a package for Premier Dairies, which will seek a
large number of redundancies. It made no secret of the fact
that it is refusing to negotiate a fairer settlement for
Greenhills Foods in order to depress expectations in Premier
Dairies and to avoid anything that could be used as a
precedent.
3. This is totally unjust, in the Union's view. Greenhills
Foods has been a separate, stand - alone Company for as long
as it suited Management which steadfastly refused to accept
that any link in pay or conditions could exist between the two
Companies. Now, when asked to agree a settlement which will
take account of the different circumstances of those employed
in Greenhills Foods, especially the lack of a pension scheme,
Management wishes to link that agreement with Premier Dairies.
4. The workers concerned will suffer greatly by the loss of
their jobs, most will find it impossible to obtain alternative
employment in the near or medium future. The workers have
assisted the Company previously in difficult times, e.g.
foregoing part of their pay increase in 1984, taking on extra
work and merchandising. Management stated their appreciation
and assured the workers concerned that their loyalty would be
reciprocated. This now seems to have been forgotten in
Management's anxiety to get the workers to accept an
inadequate offer.
COMPANY'S ARGUMENTS:
4. 1. The redundancy offer is very fair by comparison with
settlements applying generally in industry and in the dairy
and related sectors specifically.
2. The cost of the Company's offer, inclusive of the nett
cost of statutory provisions is #368,000. This cost is
enhanced by the fact that the Group must also accept
responsibility for the effects of the accumulated losses and
interest charges generated since 1985 and must fund these
costs - costs which enabled employment to continue over that
period.
3. The Group has not sought to avoid these extra costs
through Receivership or Liquidation of Greenhills Foods, but
has behaved in a responsible way in fairly meeting the claims
of the workers through the offers referred to above.
4. The Group, in addition to its position in Greenhills
Foods, is facing an extremely serious trading position in
Premier Dairies, necessitating an overall review of cost
effectiveness there. The Unions in Premier Dairies are
advised of this position and await, the presentation of a
restructuring plan by Group Management this month. Therefore
nothing should be done for Greenhills Foods employees which
would create a cost increasing precedent in respect of other
areas of the Group.
5. Although it must be stated that the Group has not plans to
apply any enhancement of the 'Group' redundancy compensation
formula in the Premier Dairies case, the workers concerned are
assured that they will not be disadvantaged by comparison.
RECOMMENDATION:
5. The Court has considered the matters at issue in the light of
the submissions made by the parties. It does not consider that
any change in the redundancy terms offered by the Company are
warranted but in view of the fact that no pension arrangements
exist such as those which exist in the major Company within the
group the Court is of the opinion that the Company's offer in lieu
of the existence of such pension arrangements should be amended in
two respects:
(i) To take account of service after the age of 25 and
(ii) to increase the amount of the offer in this respect of
#200 per year of qualified service.
The Court recommends that the employer's offer so amended be
accepted by the staff concerned.
~
Signed on behalf of the Labour Court
John O'Connell
_________________________
25th October, 1990. Deputy Chairman
T.O'D./J.C.