Labour Court Database __________________________________________________________________________________ File Number: CD91255 Case Number: LCR13294 Section / Act: S26(1) Parties: BOART EUROPE LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the method of selection for redundancy.
Recommendation:
5. The Court has considered the submissions made by the parties.
It is quite clear that the Union have formally agreed that the
standard "last in first out" formula has been modified to ensure
the continued operation of the plant in an economic and efficient
manner. However, in order to ensure that this modification is
applied objectively, there is an onus on the Company to effect the
reduction in staffing in such a fashion as to reduce the operation
of this modification to a minimum.
Without otherwise attempting to apply general rules as to further
possible redundancies the Court recommends that the Company
eliminate any limitation on amounts of compensation, which may
disbar long serving volunteers and also negotiate terms with the
employee who is currently on long term disability.
Having achieved reductions in staffing by means of the above
process the Court recommends that the Union agree to have the
balance of employees chosen on the criterion of efficiency in
accordance with the Union/Company agreement.
Division: Mr O'Connell Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD91255 RECOMMENDATION NO. LCR13294
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT 1990
PARTIES: BOART EUROPE LIMITED
(Represented by the Federation of Irish Employers)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the method of selection for redundancy.
BACKGROUND:
2. The Company is part of an international group and
manufactures percussive rock-drilling equipment for the mining,
civil engineering and quarrying industries. It employs 163
workers. Due to a worldwide recession in the industry the
Company's trading position deteriorated in 1990 and in order to
achieve a reduction in costs Management advised the Union in
March 1991 that it would be declaring nine workers redundant. The
Company stated that it would select the nine workers to be made
redundant based on the following criteria in accordance with the
Company/Union Agreement.
(a) The maintenance of the most efficient and economic
manning of the Company.
(b) The seniority of the employee concerned all other things
being equal.
Management advised that in the previous redundancy agreement in
1982 and 1983 the same formula was used. The Company also stated
that it would impose a maximum figure on any single redundancy.
The Union advised the Company that any redundancy arrangement
would have to be negotiated on a voluntary or last-in-first-out
basis and stated that it would not be acceptable that any worker
would be refused because his/her redundancy exceeded a figure
imposed by the Company. This was rejected by the Company. The
issue was referred to the conciliation service of the Labour
Relations Commission on the 16th April, 1991.
Conciliation conferences were held on the 18th April and 8th May,
1991. Five workers were declared redundant based on proposals,
which incorporated voluntary redundancies, negotiated at the
conciliation conference held on the 18th April, 1990. As no
agreement could be reached on the remaining four redundancies the
issue was referred to a further conciliation conference on the 8th
May, 1991. No agreement was reached and the dispute was referred
to the Labour Court by the Labour Relations Commission on the 13th
May, 1991. A Court hearing was held in Limerick on the 14th May,
1991.
UNION'S ARGUMENTS:
3. 1. Five workers out of the nine required by the Company
have now been declared redundant. Five other workers also
applied but were not considered suitable. The Company has in
mind the employees they were prepared to make redundant and
that is the criteria which determines suitability as far as
Management is concerned.
2. This approach is neither fair nor reasonable in that it
will force people out of work who can ill afford to be
unemployed and who in a contracting labour market will have
little chance of securing alternative employment.
3. If, as the Company has stated, there are some workers
who are important to its operation then Management should not
restrict the opportunity of those who are prepared to go.
The Company should also ensure that the right mix of
employees are allocated to important functions.
4. The Company requires four additional candidates for
redundancy and at this point there are ten workers who have
volunteered to go.
5. The cost to the Company, this far, by manufacturing
standards, has not been expensive. In the case of five
workers already made redundant the Company has only paid for
a total of twenty-eight years' service.
COMPANY'S ARGUMENTS:
4. 1. The Union has insisted that the remaining four
redundancies would have to be implemented on the last in
first out basis. The Company cannot accept this option as
some employees working in critical areas would have to leave
and this in turn would result in the shutting down of certain
machines leading to either further redundancies or lay offs.
2. The Company has been forced to make nine workers
redundant only after all other options had been exhausted
(having already made eleven jobs or workers redundant in
other areas). In selecting workers for redundancy, the
Company took due cognizance of the Union/Company Agreement
which states that arrangements for lay-offs or redundancy
will take into account "the maintenance of the most efficient
and economic running of the Company to ensure that further
redundancy or lay-offs do not ensue and the seniority of the
employee concerned".
3. The Company has applied this selection process on two
occasions. Although this agreement is quite specific, the
Union has ignored the fact that arrangements for redundancy
must take into account the maintenance of the most efficient
and economic running of the Company. The Company accepts and
recognises that the seniority of workers must be a factor in
determining those to be made redundant. Some of the workers
declared redundant were selected on that basis.
4. If the Company is forced into making workers redundant
solely on the basis of seniority, it would then be forced to
shut down high technology machines immediately and face the
possibility of having to relocate these machines in overseas
group companies, since too many skilled workers would be
redundant. This would lead to more redundancies and the
Company's ongoing viability would be put in serious doubt.
RECOMMENDATION:
5. The Court has considered the submissions made by the parties.
It is quite clear that the Union have formally agreed that the
standard "last in first out" formula has been modified to ensure
the continued operation of the plant in an economic and efficient
manner. However, in order to ensure that this modification is
applied objectively, there is an onus on the Company to effect the
reduction in staffing in such a fashion as to reduce the operation
of this modification to a minimum.
Without otherwise attempting to apply general rules as to further
possible redundancies the Court recommends that the Company
eliminate any limitation on amounts of compensation, which may
disbar long serving volunteers and also negotiate terms with the
employee who is currently on long term disability.
Having achieved reductions in staffing by means of the above
process the Court recommends that the Union agree to have the
balance of employees chosen on the criterion of efficiency in
accordance with the Union/Company agreement.
~
Signed on behalf of the Labour Court
7th June, 1991 John O'Connell
T.O'D. / M.O'C. _______________
Deputy Chairman