Labour Court Database __________________________________________________________________________________ File Number: CD91648 Case Number: LCR13541 Section / Act: S20(1) Parties: COMPUTER MAINTENANCE IRELAND LIMITED - and - A WORKER |
A dispute concerning the level of a severance payment to the worker.
Recommendation:
5. The Court taking account of the fact that the complainant was
a manager and that he had given satisfaction to the Company
consider in equity and in final settlement of his claim that he
should be paid an additional £600.
Division: MrMcGrath Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD91648 RECOMMENDATION NO. LCR13541
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(1) INDUSTRIAL RELATIONS ACT, 1969
PARTIES: COMPUTER MAINTENANCE IRELAND LIMITED
and
A WORKER
SUBJECT:
1. A dispute concerning the level of a severance payment to the
worker.
BACKGROUND:
2. 1. The company is a subsidiary of ICS Computing Group
Limited which is incorporated in Northern Ireland. The
holding Company is Lamont Holdings PLC. which is incorporated
in Scotland. The company, commenced operations in the
Republic of Ireland in 1982. Up until it closed on 31st
August, 1991, it employed 39 workers in the maintenance of
computer equipment and the supply of computers and network
systems. There were approximately 40 workers employed in the
North of Ireland.
2. The worker commenced employment with the company on 3rd
February, 1986 as a salesman to sell hardware (mostly
printers) which was a new departure for the company. By the
time the worker was to be made redundant on 22nd September,
1991, he was a manager of a division of 7 workers selling
several product lines.
3. When the worker was declared redundant he received
£1,000 statutory redundancy payment and an ex-gratia sum of
£2,384. A dispute arose as to the level of redundancy payment
and the worker referred the matter to a Rights Commissioner.
The Company refused to attend a Rights Commissioner's hearing
and the worker referred the dispute to the Labour Court for
investigation and recommendation under Section 20(1) of the
Industrial Relations Act, 1969. The worker agreed to be bound
by the Labour Court recommendation. A Labour Court
investigation took place on 15th January, 1992.
WORKER ARGUMENTS:
3. 1. The worker received a redundancy payment of 8 weeks' pay
which included statutory entitlements. This did not
compensate for his work, effort, time and success with the
company (details supplied). The payment received does not
compare favourably with severance payments for similar foreign
owned companies in the computer industry which had decided to
cut or reduce their workforce in Ireland (details supplied).
The holding company has an annual turnover of in excess £100
million. A sister company was sold to management in 1986 and
payments of 4 times statutory in addition to statutory
redundancy were made to workers.
2. In a reply to the Rights Commissioner, the company
stated that it would be grossly unfair to other workers if
this worker was to be given any preferential treatment. There
is a strong case for preferential treatment on the basis of
the worker's position with the company and the fact that there
were only 3 workers in the company who had longer service.
The worker has not been able to find a comparable position
with another Company. A precedent was established in
February, 1991 when 2 managers were made redundant by the
company. These managers were given payments which were much
greater than the severance payments, which the worker
received. The worker is seeking 5 weeks pay per year of
service.
COMPANY ARGUMENTS:
4. 1. In 1991 the company in the Republic of Ireland was faced
with a continuing loss making situation due to the extremely
competitive nature of the market and the inability to generate
a level of sales which would make the operation viable. The
company sold part of the business (details supplied), thus
safeguarding the jobs of as many workers as possible.
Redundant workers received equal settlements. It would be
unfair to other workers to give a preferential settlement to
this worker.
2. It is unfair to compare the company's redundancy terms
with the terms paid by large multi-nationals which still operate
in this country. A larger settlement was indeed given to 2
managers who were made redundant in February, 1991. The
decision to pay larger settlements was made in the context of
a recovery plan for the company. The worker has already
received an ex-gratia sum of £2,384.62 in addition to
statutory entitlements. The company believes it has treated
the worker fairly and equitably.
RECOMMENDATION:
5. The Court taking account of the fact that the complainant was
a manager and that he had given satisfaction to the Company
consider in equity and in final settlement of his claim that he
should be paid an additional £600.
~
Signed on behalf of the Labour Court
Tom McGrath
31st January, 1992 ------------------
J.F./U.S. Deputy Chairman