Labour Court Database __________________________________________________________________________________ File Number: CD91239 Case Number: AD9189 Section / Act: S13(9) Parties: CAHILL MAY ROBERTS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Appeal by the Company against Rights Commissioner's Recommendation No. C.W. 12/91 concerning severance payment to a worker.
Recommendation:
5. The Court has considered the submissions of the parties in
particular with reference to the circumstances out of which the
issue originally arose. Much of what transpired seems to have
arisen from a genuine misunderstanding by both parites and while
the Court can readily understand the worker's disappointment in
not receiving the benefit claimed it does seem to the Court that
the amount of compensation awarded is excessive in the
circumstances. The Court is of the opinion that the sum of #500
would be adequate and proposes that the Rights Commissioner's
Recommendation be amended to provide for that amount.
The Court so decides.
Division: Mr O'Connell Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD91239 APPEAL DECISION NO. AD8991
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969
PARTIES: CAHILL MAY ROBERTS LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Appeal by the Company against Rights Commissioner's
Recommendation No. C.W. 12/91 concerning severance payment to a
worker.
BACKGROUND:
2. In 1988 the Company decided to rationalise its buying
departments and the worker concerned, who was a buyer at the Cavan
branch, accepted a redundancy package. Details of the redundancy
package were finalised following a conciliation conference which
was held in August, 1989. This included an entitlement to a paid
up annual pension of #2,629 or alternatively the worker could
elect to commute part of her pension for a tax free lump sum of
#6,642 leaving a reduced annual pension of #1,891. The Union
claims the settlement was accepted on the understanding that the
lump sum and pension would be paid immediately. It subsequently
transpired that the benefit was only applicable when the worker
concerned reached the age of 65. The Union claimed that the
payment should be made immediately. The Company stated that it
had been advised by Irish Pensions Trust Limited that it was not
possible to make an immediate payment. Following a further
conciliation conference held in August, 1990 and at which no
agreement was reached the issue was referred to a Rights
Commissioner for investigation in March, 1991. On the 19th April,
1991 the Rights Commissioner issued his recommendation as follows:
"I recommend that the Company offers and the worker accepts
the sum of #5,000 in settlement of this dispute."
(The worker was named in the Rights Commissioner's
recommendation).
The Company on the 2nd May, 1991 appealed the recommendation to
the Labour Court under Section 13(9) of the Industrial Relations
Act, 1969. A Court hearing was held in Cavan on the 31st July,
1991.
UNIONS' ARGUMENTS:
3. 1. The Union disputed the Company's statement that the
redundancy was voluntary. The redundancy was compulsory on
the grounds that the worker had no choice as her position was
being eliminated.
2. The Company's offer of alternative employment in the Cavan
depot was not acceptable as it would have resulted in
overstaffing and the loss of employment by a less senior
worker.
3. The redundancy package (details supplied to the Court)
included the pension lump sum of #6,642. Conditional on the
Union's acceptance of the redundancy package was the Company's
statement that this payment could be made to the worker
immediately. The Company was confident at all times that it
could be paid without delay.
4. The Company has been very slow to respond to requests from
the Union that the payment be made to the worker concerned.
The Company has been inconsiderate in its treatment of the
worker. She has given twenty three years' loyal and efficient
service.
5. The matter of the pension lump sum was not raised in the
first instance by the Union. Agreement was reached on the
redundancy package on the understanding that the lump sum
would be paid by the Company immediately.
6. The Union feels that the Rights Commissioner investigated
the dispute very thoroughly and requests the Court to uphold
his recommendation awarding the worker #5,000.
COMPANY'S ARGUMENTS:
4. 1. The worker concerned volunteered for redundancy. This was
clearly understood by the worker and was emphasised by the
Company in its letter to her outlining details of the
severance package (details supplied to the Court). The
Company also made specific reference to the voluntary nature
of the redundancy at the conciliation conference in 1989. It
was specifically indicated to the worker that redeployment was
a feasible alternative if she wished. Clearly she did wish
not to do so.
2. The worker was provided with details of her pension
entitlement in March, 1989 (details supplied to the Court).
Neither the worker nor her Union representative queried any
aspects of this letter prior to a late stage in the
conciliation conference of August, 1989.
3. There was ample time available for the worker to clarify
doubts that existed in her mind regarding the content of the
letter. Had the issue been raised at an earlier point in the
conference of 30th August, 1989, the Company would have sought
clarification from Irish Pensions Trust Limited.
4. The worker was scheduled to leave the Company on the
following day, 31st August, 1989. In spite of the doubt that
clearly existed neither the worker nor her Union
representative sought a postponement of her departure, nor did
they make any attempt to contact Irish Pensions Trust Limited
during the course of August 31st, 1989 to seek clarification
on the content of the letter.
5. The Rights Commissioner has recommended that the Company
pay the worker a sum of #5,000. This is in addition to a
generous redundancy package and also in addition to her
pension benefit which includes payment of a tax free lump sum
of #6,642 at age 65 years if she chooses such an option.
6. The Company feels that the Rights Commissioner recommended
a level of settlement which far exceeds that which was claimed
on the worker's behalf. It is clearly unfair that the Company
should be obliged to make a double payment to the worker for a
single contractual entitlement.
7. The balance of equity lies with the worker getting her
entitlements in full and the Company is willing to honour its
contractual obligations under the pension scheme, but is
limited by the provisions of the 1972 Finance Act. The
Company provided a very substantial severance package and has
met all of its contractual commitments with regard to pension.
DECISION:
5. The Court has considered the submissions of the parties in
particular with reference to the circumstances out of which the
issue originally arose. Much of what transpired seems to have
arisen from a genuine misunderstanding by both parites and while
the Court can readily understand the worker's disappointment in
not receiving the benefit claimed it does seem to the Court that
the amount of compensation awarded is excessive in the
circumstances. The Court is of the opinion that the sum of #500
would be adequate and proposes that the Rights Commissioner's
Recommendation be amended to provide for that amount.
The Court so decides.
~
Signed on behalf of the Labour Court
John O'Connell
____________________
9th October, 1991 Deputy Chairman.
T.O'D./J.C.