Labour Court Database __________________________________________________________________________________ File Number: CD91652 Case Number: AD92144 Section / Act: S13(9) Parties: GOULDING FERTILIZERS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Appeal by the Company against Rights Commissioner's recommendation S.T. 360/91 concerning a redundancy payment to the worker.
Recommendation:
5. The Court having considered the oral and written submissions
of the parties finds that there was a clear expectation on the
part of the worker that he would cease to be employed at age 65.
The terms of the agreed pension scheme indicate normal retirement
date. The Company were remiss in not advising the employee that
he would retire at normal retirement age and offering him an
extension. In all the circumstances the Court does not find that
the worker concerned should benefit from the redundancy.
Accordingly the Court upholds the appeal of the employer. The
Court, however, considers that the Company should make an
ex-gratia payment of a lump sum equivalent to the Pension payable
in respect of the period from pension date to the date on which
the employee ceased work plus £2,000. The Rights Commissioner's
recommendation should be amended accordingly.
The Court so decides.
Division: MrMcGrath Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD91652 APPEAL DECISION NO. AD14492
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969
PARTIES: GOULDING FERTILIZERS LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Appeal by the Company against Rights Commissioner's
recommendation S.T. 360/91 concerning a redundancy payment to the
worker.
BACKGROUND:
2. The worker concerned commenced employment at the Company's
Sligo plant on the 5th December, 1956. His employment terminated
on the 15th November, 1991 when he retired with a pension and
statutory redundancy lump sum. He was due to retire in March,
1991 but continued in the Company's employment by mutual
agreement. In June, 1991 the Company had made a decision to close
its Sligo plant and the permanent workers received a redundancy
settlement in excess of their statutory entitlements. The Union
claimed the same package on behalf of the worker concerned.
Following discussions between the parties the Company agreed to
pay the worker a statutory lump sum but rejected the Union's claim
for an ex-gratia redundancy payment. The issue was referred to a
Rights Commissioner for investigation. On the 27th November, 1991
the Rights Commissioner issued his recommendation as follows:
"In all the circumstances I recommend that the claimant
receives an additional £15,000 in full and final settlement
of his claim for £23,000 which represents the maximum payment
due under the Company's severance scheme".
On the 21st December, 1991 the Company appealed the recommendation
to the Labour Court under Section 13(9) of the Industrial
Relations Act, 1969. The Court heard the appeal on the 18th
February, 1992.
COMPANY'S ARGUMENTS:
4. 1. The Company does not deny that the worker concerned is
entitled to statutory redundancy. The Company, however,
disputes the Rights Commissioner's recommendation awarding the
worker substantial additional redundancy compensation. This
has presented the Company with a ludicrous situation whereby
an employee who has reached retirement age and for whom the
Company has made provision for a full non-contributory
pension, should also receive a substantial ex-gratia lump sum
from the Company.
2. The Union has quoted a case in 1987 as a precedent for the
claim. That comparison is totally invalid for the following
reasons.
(1) The worker was made redundant at age 61.
(2) The Company redundancy package at that time provided for
early retirement plus a redundancy lump sum.
(3) The package never provided for a Company ex-gratia
payment for workers who reached retirement age.
(4) The worker was not paid a pension and lump sum but was
given a lump sum as a buy-out of pension entitlement.
3. The worker concerned did not retire on his birthday in
March because of the Company's busy spring season. The
arrangement to work until November was by mutual agreement and
this arrangement suited both parties and gave the worker the
opportunity for additional earnings after normal retirement
age. At subsequent negotiations the worker readily accepted
that he had no entitlements other than his pension. The terms
of the Company pension stipulate that retirement age is 65 and
both the worker and Union are aware of this. The Company
accepts that the worker is entitled to statutory redundancy
under the Redundancy Acts, and he has been paid his
entitlements accordingly. He is not entitled to the ex-gratia
payment recommended by the Rights Commissioner. The Company
contends that the ex-gratia payment should be set aside as
otherwise employers generally would be advised not to
contemplate the extension of service to workers beyond pension
date, irrespective of the circumstances.
UNION'S ARGUMENTS:
4. 1. The other permanent workers received a redundancy package
amounting to 2½ weeks pay per year of service in addition to
their statutory entitlements. The Company refused to pay the
worker concerned the package on the grounds that he had
reached the retirement age of 65 and that the payment was not
due to him. There is no agreement by which it is accepted
that an employee retires on reaching the age of 65. The
Company had not identified any policy by which the worker
concerned or any other employee should cease employment at age
65. Following a conciliation conference the Company accepted
that it had a legal obligation to pay the worker his statutory
entitlement. It has refused all requests to make the
ex-gratia payment.
2. In 1987 another worker who is a member of the union, was
declared redundant and received the redundancy package and
also pension benefit. Subsequently within a period of twelve
months he was re-employed by the Company. This emphasises the
fact that the Company is treating the worker in a most unjust
fashion. The Company has praised the worker concerned and
stated that he was a model employee. It is unfortunate that
the worker concerned has experienced such difficulty in trying
to obtain the extra redundancy payment made to other workers.
DECISION:
5. The Court having considered the oral and written submissions
of the parties finds that there was a clear expectation on the
part of the worker that he would cease to be employed at age 65.
The terms of the agreed pension scheme indicate normal retirement
date. The Company were remiss in not advising the employee that
he would retire at normal retirement age and offering him an
extension. In all the circumstances the Court does not find that
the worker concerned should benefit from the redundancy.
Accordingly the Court upholds the appeal of the employer. The
Court, however, considers that the Company should make an
ex-gratia payment of a lump sum equivalent to the Pension payable
in respect of the period from pension date to the date on which
the employee ceased work plus £2,000. The Rights Commissioner's
recommendation should be amended accordingly.
The Court so decides.
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Signed on behalf of the Labour Court
Tom McGrath
________________________
27th May, 1992. Deputy Chairman
T.O'D./J.C.