Labour Court Database __________________________________________________________________________________ File Number: CD90412 Case Number: LCR13003 Section / Act: S67 Parties: LOMBARD AND ULSTER BANK - and - MANUFACTURING SCIENCE FINANCE |
Dispute concerning redundancy terms for four workers.
Recommendation:
5. Having considered the submissions made by the parties the
Court has come to the conclusion that nothing in the circumstances
surrounding the closure of the Athlone branch is such as to
warrant a major departure from the terms paid generally by
comparable institutions. Therefore the Court recommends that, in
the first instance the workers concerned give serious
consideration to the possibilities to transfer elsewhere in the
Company but if such prove unsuitable the terms offered in the
Industrial Relations Officer's letter of the 18th July, 1990
should be accepted.
Division: Mr O'Connell Mr Keogh Mr O'Murchu
Text of Document__________________________________________________________________
CD90412 RECOMMENDATION NO. LCR13003
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: LOMBARD AND ULSTER BANK
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
AND
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Dispute concerning redundancy terms for four workers.
BACKGROUND:
2. In March, 1990 the manager of the Athlone branch of the Bank
was transferred and was not replaced. In May, 1990 the Bank
decided to close the Athlone branch with a view to redistributing
business to its nearby surrounding branches. There are four
workers directly involved in the closure. The Union rejected the
proposed closure and gave notice of industrial action if any
attempt were made to close the Athlone branch. No agreement was
reached at local level and the question of a voluntary redundancy
package was referred, on 22nd June, 1990, to the conciliation
service of the Labour Court. Conciliation conferences were held
on 29th June, 11th July, and 17th July, 1990 and the final
position of both sides including the best offer available from the
Bank were outlined by the Industrial Relations Officer (I.R.O.) to
both sides in a letter dated 18th July, 1990. The final offer by
the Bank in relation to alternative work opportunities was as
follows:-
(a) one vacancy exists in Ulster Bank in Athlone which is
available only to a person who takes up employment with
Ulster Bank by 20th July. Ulster Bank will provide
notification of interview arrangements. A salary of #10,000
per annum approximately will apply.
(b) re-deployment opportunities at Lombard and Ulster Bank are
available in either Portlaoise, Cavan or Dublin.
(c) a position exists as branch relief cover on a permanent basis
throughout the year with Lombard & Ulster Bank.
(d) the Bank will seek to make arrangements for an early
interview for a vacancy that exists in United Domimons Trust
(U.D.T.), Athlone.
The Bank's offer at conciliation in relation to redundancy terms
is as follows:-
(a) Five weeks pay per year of service inclusive of statutory
entitlement (maximum payment 104 weeks).
(b) Personal loans to be continued at staff rate until the date
of re-payment.
(c) Deferred pension will become payable at 65 years of age.
(d) House loans - staff loans to be continued on current terms
for a period of twelve months after termination.
(e) Company to make available tax and pension expertise to advise
staff.
(f) The Bank is willing to engage the services of Pauline Hyde
(Ireland) who are out-placements consultants".
The proposed work alternatives and the redundancy terms were
unacceptable to the Union. The Union's claim for a voluntary
redundancy package is as follows:-
1. Six weeks pay per year of service plus #500 (inclusive of
statutory entitlements).
2. Mortgages to remain at preferential rate for 24 months
following departure and to be retained by the Bank at
commercial mortgage rates thereafter.
3. Personal loans to be retained at preferential rates for
remainder of term.
4. Luncheon vouchers to be included as salary for calculation
purposes.
5. The result of the outstanding wage round negotiations to be
included for salary calculation purposes.
6. Pro-rata profit sharing to date of departure.
7. Additional lump sums of:-
#3.500 for 20 - 25 years service
#2,500 for 15 - 19 years service
#2.000 for 10 - 14 years service
#1,500 for 5 - 9 years service
#750 for 0 - 4 years service.
8. The package to remain open, while the branch remains open,
for a period of not less than three months.
The Company rejected the claim and as no agreement could be
reached the matter was referred on 23rd July, 1990 to a full
hearing of the Labour Court which was held on 3rd August, 1990.
UNION'S ARGUMENTS:
3. 1. The Union is totally opposed to the closure of the Athlone
branch of the Bank and attended the hearing without prejudice
to its position, and does not accept the Bank's stated reasons
for closure. The Union is not prepared to accept either the
Bank's proposals for alternative employment or compulsory
redundancies and therefore the voluntary redundancy package
must be improved upon by the Bank.
2. The Athlone branch is profitable and viable. The staff
concerned have made a major contribution to the profitability
of the branch despite the disadvantage of a poor location.
They have had an expectation of secure employment and were
never given the impression that closure was a possibility.
The decision to close the branch has come as a shock to the
staff and whatever voluntary redundancy package is recommended
should be left open for a period of not less than three
months.
3. The Bank is profitable and claims that by closure of the
Athlone branch it will eliminate significant overhead costs.
Redundancy packages already negotiated with loss makers or
poor performances within the banking sector have generally
included payments of five weeks per year of service. In the
unusual circumstances of this case the Bank can afford to pay
significantly more than the voluntary redundancy terms
offered.
4. The redundancy terms offered at conciliation did not
attract volunteers. The Unions proposals represent the most
realistic chance of attracting volunteers while recognising
the significant contribution by the small number of staff
involved.
COMPANY'S ARGUMENTS:
4. 1. Following the Bank's decision to close the Athlone branch
it made every effort to explore alternate work opportunities
for the staff concerned. Unfortunately these proposals were
not taken up by the staff.
2. The terms contained in the I.R.O. letter of 18th July,
1990 are very good and compare favourably with settlements in
the banking sector and beyond. Apart from the redundancy lump
sum payment other elements of the package are very good. The
terms should be accepted by the Union and there is no need for
a three month period to consider them as requested by the
Union.