Labour Court Database __________________________________________________________________________________ File Number: CD90668 Case Number: LCR13165 Section / Act: S67 Parties: HILLBURGH LTD T/A LYNX EXPRESS DELIVERY NETWORK - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
SUBJECT: 1. Claim for enhanced redundancy payments.
Recommendation:
5. Having considered the submissions made and particularly having
regard to the settlement made in similar circumstances by an associated
Company the Court recommends that the amounts already paid to the
workers be increased to provide for sums to the equivalent of 5 weeks
pay per year of service in addition to statutory entitlements.
Division: Mr O'Connell Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD90668 RECOMMENDATION NO. LCR13165
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS 1946 TO 1976
SECTION 67
PARTIES: HILLBURGH LTD T/A LYNX EXPRESS DELIVERY NETWORK
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim for enhanced redundancy payments.
BACKGROUND:
2. 1. The Company is a wholly owned subsidiary of the British
National Freight Consortium Plc (NFC) and is involved in the
express delivery business. NFC was a nationalised company prior
to privatisation and floatation on the stock exchange in 1982.
The Company traded in Ireland since 1986 as Lynx and as
International Carriers since 1981. The Company decided to cease
trading in the Republic of Ireland and negotiations are in hand to
franchise its operation to an Irish company. The 3 workers
concerned in the Irish operation received notice of redundancy
with RP1 forms on 26 June, 1990. The Company ceased operation on
1 October, 1990. The 3 staff had 6, 7 and 8 years' service
respectively.
The monies paid to the staff as against statutory entitlement are
set out below:
Statutory Entitlement Actual Payment
Employee 1 # 651.44 #2,198.61
Employee 2 #1,190.00 #5,724.00
Employee 3 # 797.40 #2,303.60
The Above terms include lump sum cash payments in lieu of notice
which the Company was not obliged to pay.
2. The Company argues that the staff are bound by its terms of
employment which bind the rest of its worldwide staff. The
redundancy package offered was standard with that available to its
other staff and was not negotiable. The Union sought 8 weeks' pay
per year of service. It argues that any settlement must take full
account of local conditions and norms.
3. No local negotiations were held about the dispute and the
issue was referred to the Conciliation Service of the Labour Court
on the 3rd September, 1990. No agreement was reached at a
conciliation conference of the 25th September and the matter was
referred by both sides to a full hearing of the Labour Court. A
Labour Court investigation took place on 9th January, 1990.
UNION'S ARGUMENTS:
3. 1. The Company, a division of National Carriers originally
formed part of British Rail. Within the Republic the negotiating
Unions for British Rail were and are SIPTU and TSSA. In all
negotiations with British Rail and other foreign companies
operating in Ireland full cognizance is taken of local conditions.
It is entirely unreasonable of the Company to simply apply
conditions from other countries to an Irish situation. The Union
has been seeking since July 24, 1990 to discuss compensation and
severance terms with the Company. The first meeting took place on
25 September at Conciliation at which no progress was made. The
position is that the Company are closing a very viable business
with the only recompense for staff being one weeks pay per year of
service, which is the UK legal minimum or slightly more than the
legal requirement in the Republic for their age group. No serious
effort has been made to provide the workers with alternative
employment. It is acknowledged that interviews were held by the
Company who is to take over the franchise but this was viewed as a
charade.
2. There are an extensive range of settlements on record for
workers made redundant. The average would be 4/5 weeks per year
of service. In circumstances such as this case a much higher
formula could be expected and an automatic option of a similar
job. It would be expected that the work and staff would
automatically transfer to the franchisee. In addition to the loss
of jobs and salaries, the workers have also lost their pension
rights and their rights as shareholders in NFC. In the
circumstances 8 years' pay per year of service is reasonable.
3. The Company argue that the Union is obliged to accept the
redundancy terms of one week's pay per year of service as it is
the norm for NFC companies in the UK and forms part of an
agreement with TSSA and NUR. The terms are also the legal minimum
for the UK and therefore can hardly be classed as an agreement
with the Unions involved. Negotiations with foreign companies
operating in Ireland have always reflected the distinct
differences in the Republic and this applies to grades, scales,
hours, wage rounds and severance terms. In 1987 another NFC
company, Containerway, closed in identical circumstances and an
agreement specific to the three staff involved was negotiated by
TSSA. This involved 5 weeks' pay per year of service and the Act.
The workers in this case who are employed by a division of the
same Company should certainly be paid no less than their
colleagues of Containerway.
COMPANY'S ARGUMENTS:
4. 1. The NFC group and in particular Lynx operate a universal
agreement relating to terms of employment. It is necessary not to
deviate from this agreement in order to protect shareholders
interests and the large number of employees. The conditions are
acceptable to Unions operating in Britain.
2. The workers concerned did not have nor seek Union
representation until such time as the question of redundancy
arose. This is to be regretted as had there been representation,
the Company is satisfied it's full terms and conditions would have
been acceptable.
3. The Company contends that its former staff are bound by the
Company's terms of employment which bind the rest of its worldwide
staff. The monies paid in 2 instances represent 13 times weekly
salary and in the third case 24 times weekly salary. In addition
the Company spent some considerable time seeking to redeploy staff
to other NFC group companies in Ireland and the Franchisee.
Unfortunately none of these efforts were successful. The decision
to franchise the Irish operation of the Company was regrettable
but necessary because of losses in the division. The Company must
state that any deviation from its standard terms and conditions
would have a serious and detrimental effect on NFC policy towards
future investment and employment in the country.
RECOMMENDATION:
5. Having considered the submissions made and particularly having
regard to the settlement made in similar circumstances by an associated
Company the Court recommends that the amounts already paid to the
workers be increased to provide for sums to the equivalent of 5 weeks
pay per year of service in addition to statutory entitlements.
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Signed on behalf of the Labour Court
21st January, 1991 John O'Connell
J.F. / M.O'C. _______________
Deputy Chairman