Labour Court Database __________________________________________________________________________________ File Number: CD91584 Case Number: LCR13505 Section / Act: S26(1) Parties: BONABENTURE TEXTILES IRELAND LIMITED - and - G.M.B. |
Claim by the Union on behalf of approximately 12 workers for enhanced redundancy compensation.
Recommendation:
5. Having considered the submissions made by the parties and
taking account particularly of the critical financial situation of
the Company, the Court does not recommend concession of enhanced
redundancy payments as claimed by the Union.
Division: Mr O'Connell Mr McHenry Mr Devine
Text of Document__________________________________________________________________
CD91584 RECOMMENDATION NO. LCR13505
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT, 1990
PARTIES: BONABENTURE TEXTILES IRELAND LIMITED
(Represented by the Federation of Irish Employers)
and
G.M.B.
SUBJECT:
1. Claim by the Union on behalf of approximately 12 workers for
enhanced redundancy compensation.
BACKGROUND:
2. The Company, which was established in 1983, manufactures
ladies' cotton knit garments for export to the U.S.A. It is a
member of the Bonaventure group of companies, whose head quarters
is in Hong Kong. The Company claims that it has accumulated
losses since 1984 of £6.8m. Employment in the Company has gone
from nearly 600 in 1984 down to 180 by 1991. Given the continued
recession in the U.S.A., the Company's marketplace, with no
prospect of an improvement and the financial difficulties being
experienced by the Company it was necessary to put together a
survival plan to continue trading. Part of this survival plan
required a rationalisation in the staff numbers. As a result, in
May, 1991, the 12 workers here concerned and a number of other
workers were made redundant. All those made redundant received
statutory entitlements only. The Union is claiming that the
redundancy compensation paid is too low and should be increased to
a level of 4 weeks pay per year of service under age 41 and 5
weeks pay per year of service over age 41. The Union also
believes that the rebate paid to the Company should be paid to the
workers made redundant. The Company has rejected the Union's
claim on the grounds that given its very serious financial
circumstances it is not in a position to meet the claim. As no
agreement could be reached locally the matter was referred to the
Labour Relations Commission on 28th May, 1991. No agreement was
recorded at a conciliation conference held on 27th August, 1991,
and on 3rd October, 1991, the parties requested that the matter be
referred to the Labour Court for investigation and recommendation.
The Commission on 5th November, 1991, referred the matter to the
Labour Court in accordance with Section 26 of the Industrial
Relations Act, 1990. The Court investigated the matter on 29th
November, 1991.
UNION'S ARGUMENTS:
3. 1. The Company claims to have accumulated losses of £6.8m
since 1983. The Union does not believe that this figure
correctly reflects the situation. The Union contends that
through a system of transfer pricing, the Irish operation
shows a loss while profits are maximised elsewhere.
2. If the Company was serious about making a profit in
Ireland it would have supplied the work necessary to keep the
factory going. The workforce have proved capable of producing
at any targets set and at a profit.
3. The redundancies will save the Company an estimated
£300,000 per annum. The workers concerned, who received only
the minimum statutory entitlement, should be paid some of that
saving. They have lost their jobs and security of income. In
the circumstances the Union's claim is not unreasonable.
COMPANY'S ARGUMENTS:
4. 1. The Company is in a critical financial situation with
accumulated losses amounting to £6.8m. In such circumstances
it is unreasonable to expect payment of ex-gratia sums on foot
of redundancies. (Audited accounts and pricing details
provided to the Court).
2. The Company did not have the funds to meet its statutory
obligations and had to borrow from another group company to
secure the statutory entitlements of those made redundant.
3. The Company still employs 150 workers with the principle
objective being one of survival and following on from this the
objective of moving the Company back into profitability. This
will take considerable time. Payment of enhanced redundancy
would be detrimental to the security of the remaining jobs.
4. Since the Company's establishment, redundancy payments,
where they have applied, have been paid in all cases on
statutory terms only.
RECOMMENDATION:
5. Having considered the submissions made by the parties and
taking account particularly of the critical financial situation of
the Company, the Court does not recommend concession of enhanced
redundancy payments as claimed by the Union.
~
Signed on behalf of the Labour Court
John O'Connell
18th December, 1991 ---------------
B O'N/U.S. Deputy Chairman