Labour Court Database __________________________________________________________________________________ File Number: CD91165 Case Number: AD9129 Section / Act: S13(9) Parties: MC GOWAN & COMPANY - and - IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION |
Appeals by the Union and the Company against Rights Commissioner's Recommendation Number C.W. 77/91 concerning redundancy.
Recommendation:
3. Having regard to the current financial situation of the
Company the Court is of the opinion that the Rights Commissioner's
Recommendation should be amended to provide for an immediate
payment of #3,000 but in having regard to the employee's long
service the Court further is of the view the Company makes three
further payments of #2,000 (i.e. total of #6,000) at 12 monthly
intervals on or before the 4th April each year.
The Court so decides.
Division: Mr O'Connell Mr McHenry Mr Devine
Text of Document__________________________________________________________________
CD91165 APPEAL DECISION NO. AD2991
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
INDUSTRIAL RELATIONS ACT, 1969
SECTION 13(9)
PARTIES: MC GOWAN & COMPANY
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION
SUBJECT:
1. Appeals by the Union and the Company against Rights
Commissioner's Recommendation Number C.W. 77/91 concerning
redundancy.
BACKGROUND:
2. The Company is involved in the business of warehouse and
distribution to the drapery trade. It currently employs five
workers. The worker concerned was employed as a van
driver/packer. He has twenty one years service with the Company.
Due to increasing financial difficulties experienced as the result
of competition in the market place the Company was unable to pay
its workforce phases 2 and 3 of the Programme for National
Recovery due in April, 1989 and April, 1990. Following a number
of meetings between the parties the Company advised the Union of
its decision to contract out its deliveries with the consequential
redundancy of the worker concerned. The Union resisted the issue
of notice of redundancy to the worker but following conciliation
conferences held in January and February, 1991 the Union agreed to
explore the possibility of securing an acceptable redundancy
package that could resolve the issue. The Union proposed a
redundancy settlement of 5 weeks per year of service plus
statutory entitlements. This proposal was rejected by Management.
The Union amended its claim to 4 weeks plus statutory
entitlements. Management also rejected this claim. The issue was
referred to a Rights Commissioner for investigation on the 4th
March, 1991. On the 7th March, 1991 the Rights Commissioner
issued his recommendation as follows -
"I recommend that the Company offers and the worker accepts
the sum of #6,500 inclusive of Statutory Entitlements and of
any retrospection."
(The worker was named in the Rights Commissioner's
recommendation).
Both parties appealed against the Rights Commissioner's
recommendation (the Company on 15th March, 1991 and the Union on
22nd March, 1991) under Section 13(9) of the Industrial Relations
Act, 1969. A Court hearing was held in Sligo on the 27th March,
1991.
UNION'S ARGUMENTS:
3. 1. The Union was always opposed to the issuing of redundancy
notice to the worker concerned. However, at subsequent
meetings with the Company the Union did eventually concede
that a decent redundancy offer from the Company might solve
the issue.
2. The Union was at all times eager to assist the Company in
taking steps to rectify its financial position, but by being
asked to accept a redundancy the Union was bailing out the
Company without concessions from Management.
3. The Union was willing to discuss the question of
short-time working provided that it was spread evenly across
the Company to include all members of staff including
Management. The worker was unfairly singled out for a
redundancy which could have been avoided if the Union's
proposal for universal short-time working was acceptable to
Management.
4. The Rights Commissioner's recommendation is not acceptable
to the Union because the sum recommended is insufficient.
Given the worker's long service, and the distinct possibility
that he may not obtain employment in the foreseeable future
the Union is claiming a substantial lump sum payment.
COMPANY'S ARGUMENTS:
4. 1. The Company finds itself in an invidious position in view
of the financial straight-jacket that it finds itself in
(details of the Company's accounts supplied to the Court).
Urgent steps are required to reduce its losses, and drastic
measures must be taken to return to profitability within a
reasonable period of time. Otherwise the Company faces
certain closure with the loss of all jobs presently afforded.
2. The distribution of its goods has, over the years, proved
without doubt to be an unwarranted and unsustainable cost,
which must now be reduced by the contracting out of this
aspect of the operation. The proposed redundancy of the
worker is unavoidable and the Company is anxious to negotiate
an amicable settlement.
3. The Union's suggestion of a redundancy settlement based on
4 weeks pay per year of service plus statutory entitlement is
ludicrous having regard to the financial plight of the
Company. Such a suggestion indicated that the Union was not
prepared to take on board the seriousness of the Company's
position. Even with regard to the sum of #6,500 recommended
by the Rights Commissioner, and even if this sum was
acceptable to the Union, this would be unrealistic relative to
the need to give effect to real and immediate savings, rather
than to have them cancelled by such a move to borrow against
future savings.
4. It is the Company's objective to preserve, in so far as
possible, the remaining jobs still left in the Company, and in
order to do so it is essential to implement the redundancy of
the worker concerned. In view of the critical circumstances
in the Company, the offer by Management of #2,400, is having
regard to the present situation, more realistic than the terms
offered by the Rights Commissioner.
DECISION:
3. Having regard to the current financial situation of the
Company the Court is of the opinion that the Rights Commissioner's
Recommendation should be amended to provide for an immediate
payment of #3,000 but in having regard to the employee's long
service the Court further is of the view the Company makes three
further payments of #2,000 (i.e. total of #6,000) at 12 monthly
intervals on or before the 4th April each year.
The Court so decides.
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Signed on behalf of the Labour Court
John O'Connell
________________________
28th March, 1991. Deputy Chairman
T.O'D./J.C.