Labour Court Database __________________________________________________________________________________ File Number: CD91218 Case Number: LCR13330 Section / Act: S20(1) Parties: TETRA BUSINESS SYSTEMS (IRELAND) LIMITED - and - MANUFACTURING SCIENCE FINANCE |
Claim for improved redundancy terms and bonus payments.
Recommendation:
5. Having considered the submissions made the Court does not
recommend any amendment to the redundancy payments made by the
Company.
It does recommend that the parties meet to consider further the
proposals made by the Company to assist with the establishment of
an independent company. In this respect the Court recommends that
the parties seek expert assistance such as provided by the
Advisory Service of the I.P.C. The Court further notes the
Company's undertaking to pay any monies which may be outstanding
under the incentive scheme which formerly operated.
Division: Mr O'Connell Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD91218 RECOMMENDATION NO. LCR13330
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS 1946 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT 1969
PARTIES: TETRA BUSINESS SYSTEMS (IRELAND) LIMITED
AND
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Claim for improved redundancy terms and bonus payments.
BACKGROUND:
2. Tetra Business Systems is a wholly owned subsidary of Tetra
Limited a U.K.-based computer software company. It was
established in 1988 and employed 15 technical workers mostly
programmers at its plant in Dun Laoghaire. The workers received
their training in the U.K. The Company experienced financial
difficulties in 1989, necessitating laying off 40 U.K.-based
staff. Following a review by Management of the Dublin operation
in 1991, the Company decided that all software development
operations in Ireland should be transferred to the U.K. The
workers concerned were issued with redundancy notices on the 15th
April, 1991. They were paid their statutory entitlements plus pay
in lieu of notice. The Union is claiming redundancy payments, in
excess of the statutory terms, 4-6 weeks' pay per year of service
and (is also claiming compensation) for overtime worked since
November 1990. Management rejected the claim, stating that it
operates a well-defined redundancy policy, including an appeals
procedure (details supplied to the Court). This at times results
in payments exceeding statutory limits and is applied consistently
to take account of individual circumstances including age,
qualifications, job opportunities etc. In the case of the workers
concerned, the Company decided that the payment of statutory
redundancy entitlements was fair and reasonable. The Union
requested that the dispute be referred to the conciliation service
of the Labour Relations Commission but the Company was unwilling
to attend a conciliation conference. The Union then referred the
dispute to the Labour Court under Section 20(1) of the Industrial
Relations Act 1969 and agreed to be bound by the Court's
recommendation. A Court hearing was held on the 31st May, 1991.
UNION'S ARGUMENTS:
3. 1. All of the workers concerned commenced employment within
the last three years and some of them left good employments
to take up positions with the Company.
2. The workers concerned continued to work in the Company
until Friday, 12th April, 1991 and some were on overtime on
Saturday 13th April. When they reported for work on Monday,
15th April they were advised that the Company was closing its
Irish operation and that they would receive their statutory
entitlements.
3. The Company asked some of the workers concerned to go to
England for discussions. The outcome of these was that
Management was asking the workers to go to London to finish
programmes which had been started in Dublin.
4. Prior to November 1990, the Company had paid overtime,
but since then a system of bonus payments has been introduced
whereby workers were given a project to complete and a bonus
payment was given at the end of the project. They were then
given a second payment if and when the programme proved
successful. Some of the workers concerned worked substantial
overtime including weekend work to complete these projects
but have not been paid the bonus. All of these workers put
in a substantial effort on behalf of the Company but were
badly treated.
5. The general trend in redundancy settlements in
comparable employments is for payment of four to six weeks'
pay per year of service with a minimum payment of three
months to accommodate short service workers. There is also
the matter of bonus payments that were due to workers or
alternatively payment for overtime since last November.
COMPANY'S ARGUMENTS:
4. 1. Following the Company's decision to close its Dublin
operation, efforts were made by Management to protect and
develop the careers of the workers concerned. They were
invited to apply for positions at the Company's headquarters
in the U.K. In view of the age and mobility of the workers
it was hoped and assumed that at least 5-8 workers would be
willing to relocate to Tetra headquarters. It was also hoped
that the Company's Irish operation could be taken over and
two companies were approached. While expressing an interest,
they were unwilling to make a firm financial commitment.
Efforts were made by Management, including the provision of
practical assistance, to support the establishment of an
independent software company, majority owned and managed by
former Tetra workers.
2. The Company reviewed the severance payments to be made
to the workers concerned in the event that they were
unwilling to transfer to the U.K. or join the proposed
independent software venture. It was decided to pay the
workers concerned their statutory redundancy entitlements.
The Company considered if there were any circumstances making
it appropriate to increase these amounts but, in view of the
age, qualifications, skills and job opportunities available
to the workers, decided that additional compensation was
neither justifiable or appropriate.
3. The Company feels that it has honourably discharged all
its contractual and legal obligations (details supplied to
the Court). The root of the problem appears to be an
expectation of very large redundancy payments. The Company
considers that there is no basis for these expectations,
staff have no entitlement to such payments and given the
circumstances such expectations are neither reasonable nor
appropriate. With regard to the level of redundancy
compensation and the bonus/overtime issue, the Company has an
appeals procedure which enables any worker who feels that
he/she has been unfairly treated to appeal to a committee of
directors. The Company regards this as a particularly
important mechanism for reviewing personal circumstances.
This option is open to the workers concerned but they have
chosen not to exercise this right.
RECOMMENDATION:
5. Having considered the submissions made the Court does not
recommend any amendment to the redundancy payments made by the
Company.
It does recommend that the parties meet to consider further the
proposals made by the Company to assist with the establishment of
an independent company. In this respect the Court recommends that
the parties seek expert assistance such as provided by the
Advisory Service of the I.P.C. The Court further notes the
Company's undertaking to pay any monies which may be outstanding
under the incentive scheme which formerly operated.
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Signed on behalf of the Labour Court
21st June, 1991 John O'Connell
T.O'D / M.O'C. _______________
Deputy Chairman