Labour Court Database __________________________________________________________________________________ File Number: CD91211 Case Number: LCR13308 Section / Act: S26(1) Parties: WELLMAN INTERNATIONAL LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;MANUFACTURING SCIENCE FINANCE |
Claim by the Unions concerning the redundancy of 18 process operators who are members of S.I.P.T.U. and 3 laboratory technicians who are members of M.S.F.
Recommendation:
6. The Court has considered the submissions made by the parties.
Bearing in mind the causes which have brought about the proposed
redundancies and reorganisation, i.e. a large capital investment
in up to date plant, designed to maintain the Company's
competitive position, the Court recommends as follows on the
issues brought before it.
(a) Redundancy Selection Procedures
Having regard to the specific terms of the Company/Union
(S.I.P.T.U.) agreement and taking account of the major
increase in employers liability which the Court does not
consider warranted by the circumstances the Court
recommends that redundancies be on the basis of last
in/first out. There may however be workers with longer
service than the maximum for which the Company is liable
under this procedures who might for reasons of their own
wish to volunteer and accept this maximum (7 years) limit
in which case the Company should agree to offer them
voluntary departure.
The Court also recommends that M.S.F. accept the
redundancy of their one member concerned on a similar
basis.
(b) Total Number of Redundancies
In the light of submissions and arguments made at the
hearing the Court recommends that the Work Study
Assessment on the Bale Presses, Condux and Pellet Mill
proceed and manning decided on the basis of the present
throughput of the plant.
(c) Temporary Employees
Having regard to the very specific terms under which
these workers were engaged the Court does not recommend
that they be paid any compensation by reason of their
loss of employment.
(d) Redeployment (Job Grade Payments and Shift Premium)
The Court notes the Company's offer to 'red circle'
necessary grade payments. It recommends that
compensation for the loss of shift premium be paid in
accordance with the formula proposed by the Company.
The Court recommends that subject to these conditions
procedures for redeployment should be in accordance with
the custom and practice quoted by the Company.
Payments to Remaining Staff
The Court does not consider that, having regard to the
circumstances under which the changes are taking place
that any form of payment to the workforce remaining
after the redundancies have taken place is warranted and
recommends that the Union agree not to pursue this issue
further.
Redundancy Payments
Finally the Court recommends that the Company amends it
offer to provide for compensation to the amount of 5
weeks' pay per year of service and that this amended
offer be accepted by the Union.
Division: Mr O'Connell Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD91211 RECOMMENDATION NO. LCR13308
INDUSTRIAL RELATIONS ACTS, 1946 10 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: WELLMAN INTERNATIONAL LIMITED
(REPRESENTED BY THE FEDERATION IRISH OF EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Claim by the Unions concerning the redundancy of 18 process
operators who are members of S.I.P.T.U. and 3 laboratory
technicians who are members of M.S.F.
BACKGROUND:
2. The dispute concerns the Company's proposals to make 18
process operators and 3 laboratory technicians redundant because
of investment in new technology and changed working practices. On
27th February, 1991, the Unions were informed of the redundancies
and R.P.1 notices were issued. The Unions requested the immediate
withdrawal of the notices to allow time for discussions. The
Company initially refused, however, midway through March the
Company agreed to withdraw the notices while the dispute was going
through procedures. The dispute was referred to the conciliation
service of the Labour Relations Commission on 6th March, 1991.
Conciliation conferences were held on 4th, 9th and 15th April,
1991. During the course of discussions under the auspices of the
Commission, M.S.F. withdrew its opposition to the redundancy of 2
temporary laboratory technicians but said that it opposed the
redundancy of third permanent position. S.I.P.T.U. identified a
number of issues in dispute as follows:
(a) Voluntary redundancy to be considered before any
compulsory redundancies.
(b) The number to be made redundant to be open for discussion
pending a Work Study of a number of functions.
(c) All temporary staff 'laid off' in June, 1990, to be
included in the compensation package.
(d) Redundancy compensation to be no less than 9 weeks' pay
per year of service plus statutory entitlements.
(e) Ongoing staffing levels to be determined subsequent to
completion of redundancy programme.
(f) Redeployed staff to be selected on the basis of overall
Company seniority and guaranteed no loss of earnings.
(g) The Union reserves the right to process a claim for an
ongoing rationalisation payment.
The Company's final position was as follows:
(a) Redundancy package amounting to 4.5 weeks' pay per year
of service, exclusive of statutory entitlements.
(b) Compensation for loss of shift earnings upon redeployment
to be 4 weeks compensation of shift differential paid for
between 7-12 months period on the shift, increasing to 8
weeks compensation for between 13-24 months on the shift
and an additional 4 weeks for each additional year on
shift.
(c) Compensation for temporary staff 'laid off' in 1990 to be
made only in respect of the 3 temporary staff with
statutory entitlement.
(d) The Company maintain their right to utilise last-in
first-out (LIFO) for redundancy selection.
(e) The Company will not entertain any claims in the context
of this rationalisation programme for remaining staff.
(f) No transfer of staff in the context of this
rationalisation programme where loss of earnings would be
involved, pending the processing of this matter through
procedures.
As agreement could not be reached between the parties and the
Commission was of the view that no further efforts on its part
would resolve the dispute, the matter was referred to the Labour
Court on 23rd April, 1991, for investigation and recommendation.
The Court investigated the dispute on 9th May, 1991, in Cavan.
M.S.F.'S ARGUMENTS:
3. 1. The Union has withdrawn its opposition to the redundancy
of two temporary workers in the laboratory provided a fair and
equitable redundancy package is agreed but sees no
justification for a permanent full-time laboratory technician
to be made redundant. If this technician was dismissed there
would be a surplus of work that other members of staff would
be asked to perform. This is not acceptable to the Union.
2. Since February, 1989, there has been an agreement with the
Company that the compliment of staff in the laboratory would
remain at 30. The Company should honour this agreement.
S.I.P.T.U.'S ARGUMENTS:
4. 1. The Union believes that the Company should initially seek
volunteers for redundancy and only apply L.I.F.O. if there are
not enough volunteers. All other rationalisation programmes
in County Cavan in recent years, involving redundancies, were
implemented with Union agreement on the basis of voluntary
redundancy. In each instance, when the compensation was
acceptable, the Company got the required staff reductions and
staff who wished to leave got their wish.
2. The longest serving employee has only 18 years' service,
therefore the cost of any redundancy package would not be
prohibitive. The Company, in attempting to use L.I.F.O.,
simply wish to affect the reduction in staff on the cheapest
basis available, as those being forced out are all young with
the longest serving having just 4 years' service. The Union
believes that the older, longer serving staff should be
allowed avail of a reasonable redundancy package if they so
wish, while the younger staff with no alternative employment
available should be allowed continue their employment with the
Company.
3. The Unions have agreed that redundancies are unavoidable,
but dispute the number of redundancies required. S.I.P.T.U.
disputes the Finishing Line Bale Press manning and believes
that there should be one operator per Bale Press with a
utility operative between two Presses. The Company proposal
of one operator and one utility operative between two Presses
is unacceptable.
4. The manning levels on Condux and Pellet Mill are also not
agreed. The Union contends that Condux should have one
operative as at present and two Pellet Mill operatives rather
than the Company's proposal of a reduced manning combined
Condux/Pellet Mill operation. The Company also proposes
discontinuing rebaling operations. The Union maintains that
there is adequate work to justify retaining an operative on
this work.
5. The Company's proposal on redundancy compensation is well
below terms reached with other major employers in the region
(details provided). The rationalisation programme is designed
to increase the Company's profits at the expense of the
workers. The Company's proposals will save in excess of
#330,000 per annum in wages. There will also be increased
production through automation.
6. The Company's proposals regarding compensation for loss of
earnings upon redeployment are in breach of a Company/Union
Agreement. Paragraph 24 of this Agreement provides that there
should be no loss of grade or shift payments. As per the
Agreement the workers should retain such payments on a
personal basis.
7. The Union contends that the method of selection for
redeployment must be on overall plant seniority unless they
are protected from loss of earnings upon redeployment. Up to
1990, all transfers were lateral and on the same shift
pattern. No-one ever suffered a loss. The current situation
is that a worker with 10 years' service in the Company but
only 3 years in Department X would have to yield to someone
with less Company service but more service in Department X.
8. The Union believes that 40 temporary workers who were
'laid-off' in May, 1990, should be included in any
compensatory package on a pro-rata basis. These workers have
all served the Company well when called in at a time when the
Company was experiencing technical problems with new
equipment. Having overcome their difficulties, the Company
discarded them without any form of severance payment. With
continued automation it is unlikely these workers will be
required in the future.
COMPANY'S ARGUMENTS:
5. 1. The Company over the last number of years has suffered a
downturn in business and an increase in competition. This has
lead to the closure in May, 1990, of a Spinning Unit (equating
to 15% of total plant output) and the cessation of production
during 1990 annual holidays as a means of reducing excess
stock levels due to lack of sales. Regrettably, the sales
situation has deteriorated further in 1991, and the Company is
now forced to cease production for 14 days from 2nd June, 1991
and the plant will also close for the annual holidays again in
1991. The Company will also have a number of redundancies
(less than 5% of total workforce) as a result of the
non-continuance of the traditional methods of feeding and
storage of raw materials and the re-organisation of a number
of job functions.
2. The Unions demand that redundancies must occur on a
voluntary basis. This is rejected by the Company because it
is economically prohibitive given the cost involved and the
unnecessary departure of the more experienced workers. It is
ludicrous in these times of high unemployment for workers in
their 40's with long service with the Company and potential
employment up to normal retirement age, to want to take
redundancy. In the laboratory the longest serving employees
are aged between 35 and 40 years. It is not reasonable to
expect the Company to provide a voluntary redundancy package
for a worker who has the longest experience in the job
function and who has up to 25 years of remaining service with
the Company.
3. It has been agreed with S.I.P.T.U. that any dispute on
manning levels will be subject to independent assessment and
measurement study. The job functions in dispute are the Bale
Press operation and the combined Condux/Pellet Mill
operations. In regard to the Laboratory, it is the Company's
intention to reduce the number of employees on shift from 6 to
5 and to increase the number on day work by 1 to a total of 7
(i.e. overall reduction by 3). This plan is justified on the
basis of a significant reduction in the requirement for
in-process testing (details provided). The reduction in
workforce will not create hardship for the remaining workers.
4. The Company operates a 3 grade payment structure for
process workers. The Company has offered to 'red circle'
workers on their present grade payment in the event of being
redeployed to a lesser valued job and pending re-assignment to
appropriate job grade function, subject to vacancies arising.
5. The redeployment programme necessitates the transfer of a
number of workers from 4 shift and other shift patterns to a
lesser valued pattern. As a means of compensating these
workers the Company has offered to maintain the shift
differential for a period of time based on service as follows:
Period on Shift Maintenance of Differential
7-12 months 4 weeks
13-24 months 8 weeks
An additional 4 weeks for each full year on shift, pro rated.
There is no foundation or procedure that workers affected
should retain their current standard rate of pay. The Union
contends that Clause 24 of Memorandum of Agreement provides
for the retention of shift differentials. This is not the
Company's understanding, nor has it ever applied in similar
circumstances since the Company was established.
RECOMMENDATION:
6. The Court has considered the submissions made by the parties.
Bearing in mind the causes which have brought about the proposed
redundancies and reorganisation, i.e. a large capital investment
in up to date plant, designed to maintain the Company's
competitive position, the Court recommends as follows on the
issues brought before it.
(a) Redundancy Selection Procedures
Having regard to the specific terms of the Company/Union
(S.I.P.T.U.) agreement and taking account of the major
increase in employers liability which the Court does not
consider warranted by the circumstances the Court
recommends that redundancies be on the basis of last
in/first out. There may however be workers with longer
service than the maximum for which the Company is liable
under this procedures who might for reasons of their own
wish to volunteer and accept this maximum (7 years) limit
in which case the Company should agree to offer them
voluntary departure.
The Court also recommends that M.S.F. accept the
redundancy of their one member concerned on a similar
basis.
(b) Total Number of Redundancies
In the light of submissions and arguments made at the
hearing the Court recommends that the Work Study
Assessment on the Bale Presses, Condux and Pellet Mill
proceed and manning decided on the basis of the present
throughput of the plant.
(c) Temporary Employees
Having regard to the very specific terms under which
these workers were engaged the Court does not recommend
that they be paid any compensation by reason of their
loss of employment.
(d) Redeployment (Job Grade Payments and Shift Premium)
The Court notes the Company's offer to 'red circle'
necessary grade payments. It recommends that
compensation for the loss of shift premium be paid in
accordance with the formula proposed by the Company.
The Court recommends that subject to these conditions
procedures for redeployment should be in accordance with
the custom and practice quoted by the Company.
Payments to Remaining Staff
The Court does not consider that, having regard to the
circumstances under which the changes are taking place
that any form of payment to the workforce remaining
after the redundancies have taken place is warranted and
recommends that the Union agree not to pursue this issue
further.
Redundancy Payments
Finally the Court recommends that the Company amends it
offer to provide for compensation to the amount of 5
weeks' pay per year of service and that this amended
offer be accepted by the Union.
~
Signed on behalf of the Labour Court
John O'Connell
--------------
5th June, 1991. Deputy Chairman
B.O'N/J.C.