Labour Court Database __________________________________________________________________________________ File Number: CD92197 Case Number: LCR13634 Section / Act: S26(1) Parties: PENNEYS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union for enhanced redundancy terms.
Recommendation:
5. Having regard to the circumstances in which the restaurant is
being closed and in the light of settlements elsewhere the Court
recommends that the Company's offer be amended to provide for four
weeks pay per year of service plus statutory entitlement, a week's
pay to be defined in accordance with the provisions of the
Redundancy Acts with hourly rates to be adjusted to include Phase
II of the P.E.S.P;-
the broken service of the two specified employees to be treated as
continuous for the purpose of this exercise.
The Court recommends that the offer so adjusted should be accepted
as full and final settlement of the claims of the staff concerned.
Division: Mr O'Connell Mr Brennan Mr Devine
Text of Document__________________________________________________________________
CD92197 RECOMMENDATION NO. LCR13634
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: PENNEYS
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union for enhanced redundancy terms.
BACKGROUND:
2. Penneys took over the former B.H.S. store on the 27th March,
1992. The Company announced its intention to close the restaurant
and declare 75 workers redundant. The workers are divided into
three categories: full-time - 16, part-time 20, Saturday staff-39.
The Union submitted the following claim for redundancy
compensation:-
(1) The option of suitable alternative employment with
Penneys Dublin stores with service continuous.
(2) The service of two-full time workers who transferred to
Saturday working with a break in service to be regarded
as continuous.
(3) (a) A week's pay to be defined as: Full-time - 37.5 hours
Part-time - 18 hours and Saturday staff - Minimum of
8 hours.
(b) Pay rates to include the full 6% due under the second
phase of P.E.S.P. as from 1st April, 1992. The
restaurant assistants' top basic rate of #3.90 per
hour to apply in all cases plus 6% under P.E.S.P.
Basic hourly rates would then be as follows:
Supervisor #5.31 per hour; Kitchen porter #4.60 per
hour, Restaurant assistant #4.13 per hour.
(4) For all workers made compulsorily redundant, 7 week's pay
per year of service plus statutory entitlement and a
minimum of one year's service to apply.
Management rejected the claim. The issue was referred to the
Labour Relations Commission on the 30th March, 1992. A
conciliation conference was held on the 3rd April, 1992 but no
agreement was reached. The dispute was referred to the Labour
Court by the Labour Relations Commission on the 6th April, 1992.
The Court investigated the dispute on the 15th April, 1992.
UNION'S ARGUMENTS:
3. 1. Unlike many compulsory redundancy situations the loss of
jobs for the workers concerned is not due to any downturn in
business or demand for the service provided. The restaurant
was one of only two departments that remained in profitability
during the last 2 years of loss-making within the former
B.H.S. store generally. The workers regarded their position,
prior to the take over, as being relatively secure. The
decision to close the restaurant with the loss of their jobs
has been a great shock and caused considerable alarm, as the
age profile of the workers is not conducive to them finding
alternative employment within the catering industry. The
takeover of the B.H.S. store and the closure of its restaurant
is clearly an investment by Penneys in its future
profitability and not a situation forced on them by
loss-making. The Union believes that the Company has an
obligation to cushion the impact of its decision by
compensating the workers above the terms which they and other
companies in this business have paid to redundant workers in
loss-making situations.
2. The Union's claim must also be viewed within the context
of the rates of pay of the workers concerned compared to those
employed on the sales floor. The workers' rates of pay are
related to the catering industry and not to the distributive
trades, with the result that rates of pay are approximately
#50 per week (full-time) below the basic rates of sales
assistants. The Union's claim, therefore, represents about 5
weeks of the sales assistants pay per year of service.
Another factor is that over half of the workers are Saturday
workers. The majority are part-timers which considerably
reduces the cost and the benefit of the redundancy severance
terms sought.
3. The precedent of 7 weeks pay per year of service, plus
statutory entitlements was established by Penneys in a
settlement with the Union's Dublin Services Branch in the late
1970's. The similarity between these two cases is that the
redundancies at that time were also not due to a downturn in
business, allowing the company to compensate at a higher level
than for a situation where the company's business was under
threat.
COMPANY'S ARGUMENTS:
4. 1. The Company is prepared to consider applying the terms of
a recent settlement in Cork which was negotiated with
S.I.P.T.U. in June, 1991. This provides for 3 weeks pay per
year of service inclusive of statutory redundancy and of
additional long-service payments. The settlement terms would
cost the Company approximately #155,000. The terms would
apply to all staff regardless of whether they were successful
in obtaining alternative employment. Details of the breakdown
of the payments which workers would receive if the settlement
were recommended are supplied to the Court. It represents a
substantial cost to the Company and there are no grounds for
any further adjustment to the payments.
2. Redundancy settlements of 3 weeks pay per year of service
plus statutory entitlements applied in previous redundancies
in B.H.S. Payments of 3 weeks pay per year of service
inclusive of statutory entitlements have applied to sales
assistants in Penneys in recent years. They have also applied
in many comparable employments (details supplied to the
Court). The Company's proposal compares favourably with
previous relevant settlements in B.H.S. and Penneys. The
Company's offer is fair and is a reasonable way of dealing
with the redundancies when judged against any relevant
criteria.
RECOMMENDATION:
5. Having regard to the circumstances in which the restaurant is
being closed and in the light of settlements elsewhere the Court
recommends that the Company's offer be amended to provide for four
weeks pay per year of service plus statutory entitlement, a week's
pay to be defined in accordance with the provisions of the
Redundancy Acts with hourly rates to be adjusted to include Phase
II of the P.E.S.P;-
the broken service of the two specified employees to be treated as
continuous for the purpose of this exercise.
The Court recommends that the offer so adjusted should be accepted
as full and final settlement of the claims of the staff concerned.
~
Signed on behalf of the Labour Court
John O'Connell
_______________________
23rd April, 1992. Deputy Chairman
T.O'D./J.C.