Labour Court Database __________________________________________________________________________________ File Number: CD92300 Case Number: LCR13664 Section / Act: S26(1) Parties: JAMES MCMAHON LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
A dispute concerning a claim by the Union for the payment of enhanced redundancy payments to clerical workers.
Recommendation:
The Court has considered all of the views expressed by the parties
in their oral and written submissions.
With regard to references made by the parties at the hearing to
industrial action currently taking place in the Company the Court
wishes to make it clear this issue was not before the Court and
accordingly the following recommendation refers only to the
dispute in respect of redundancy payments.
The Court would however suggest to the parties that they deal with
the matter referred to above in accordance with the provisions of
the Programme for Economic and Social Progress and their agreed
procedures.
The Court in considering the issue of redundancy terms whilst
accepting the view of the Union that the extension of new
technology is an element in the Company strategy, it is clear to
the Court from the information supplied that there is a need for
rationalisation if the future of the Company and the security of
employment are to be protected.
Given all the circumstances the Court considers the following
redundancy terms should apply in respect of this case.
"2.5 weeks per year of service plus statutory entitlements
with a minimum payment of #3,500 and a maximum payment of
#20,000.
The Court so recommends.
Division: MrMcGrath Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD92300 RECOMMENDATION NO. LCR13664
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT 1990
PARTIES: JAMES MCMAHON LIMITED
(REPRESENTED BY FEDERATION OF IRISH EMPLOYERS)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. A dispute concerning a claim by the Union for the payment of
enhanced redundancy payments to clerical workers.
BACKGROUND:
2. The Company is a builders providers business and currently
employs 21 clerical workers. Since June, 1991 the Company has
experienced a major downturn in business. By March, 1992 there
had been no improvement in the situation. The Company met with
the Union and informed it of the need to reduce the clerical staff
by six. It was intended that the reduction would be achieved
through voluntary redundancies and if there were not sufficient
applications for redundancy, that redundancies would be
implemented on a 'last in first out' basis. The Company proposed
that the terms which would apply would be similar to those which
had applied within the Company since 1986, that is, that those
being made redundant would receive three times their statutory
entitlement subject to a minimum of #3,500 and a maximum of
#15,000. The Union rejected this proposal and sought the payment
of six weeks' pay per year of service in addition to statutory
entitlements with no maximum applicable.
The dispute was referred to the conciliation service of the Labour
Relations Commission on 2nd April, 1992. Conciliation conferences
were held on 15th May, 1992 after which the Company's offer had
changed to two and a half weeks' pay per year of service plus
statutory entitlement with a maximum of #18,000 applicable.
Agreement between the parties was not reached and the dispute was
referred to the Labour Court on 21st May, 1992 under Section 26(1)
of the Industrial Relations Act, 1990. The Court investigated the
dispute on 25th May, 1992 and a letter recommendation issued on
28th May, 1992.
UNIONS ARGUMENTS:
3. 1. The Union cannot accept the redundancy terms proposed by
the Company. It feels that these terms do not fairly
acknowledge or compensate for the many years of service which
the members have given to the Company. All the workers
concerned have long service, with thirteen years being the
shortest. It is felt that the Company is in a position to
pay in excess of what is offered and to be in line with other
companies within the region who pay from 3 to 6 times the
weekly salary. The Union is adamant that a maximum payment
should not apply.
2. The Company has solely blamed the recession for the need
to rationalise. The introduction of new technology was also
a factor in the need to reduce the number of clerical staff.
The Company paid the 3% applicable under Clause 3 of the
Programme for Economic and Social Progress (P.E.S.P.) to
another section for its co-operation with the new technology.
The Union also believes that a figure in the region of
#300,000 was invested in the computerisation.
COMPANIES ARGUMENTS:
4. 1. The payment of three times the statutory redundancy
entitlement subject to a minimum of #3,500 and a maximum of
#15,000 has been the norm within the Company since 1986.
These terms have been implemented and accepted right across
the board and can be deemed, therefore, to be the custom and
practice within the Company. Yet in order to address and
expedite the matter the Company agreed to compromise and
deviate from the normal custom and practice, by agreeing to
pay two and a half times the weekly wage plus the statutory
entitlement up to a maximum of #18,000. This compromise was
rejected by the Union.
It is imperative that control is maintained over the cost of
redundancies and in order to do this a ceiling must apply.
2. The Company is in a serious financial position. There
is no indication that this will improve. It cannot afford to
accede to the Union's demands and claims that the redundancy
terms which have been custom and practice since 1986 must be
applicable in this case.
RECOMMENDATION:
The Court has considered all of the views expressed by the parties
in their oral and written submissions.
With regard to references made by the parties at the hearing to
industrial action currently taking place in the Company the Court
wishes to make it clear this issue was not before the Court and
accordingly the following recommendation refers only to the
dispute in respect of redundancy payments.
The Court would however suggest to the parties that they deal with
the matter referred to above in accordance with the provisions of
the Programme for Economic and Social Progress and their agreed
procedures.
The Court in considering the issue of redundancy terms whilst
accepting the view of the Union that the extension of new
technology is an element in the Company strategy, it is clear to
the Court from the information supplied that there is a need for
rationalisation if the future of the Company and the security of
employment are to be protected.
Given all the circumstances the Court considers the following
redundancy terms should apply in respect of this case.
"2.5 weeks per year of service plus statutory entitlements
with a minimum payment of #3,500 and a maximum payment of
#20,000.
The Court so recommends.
~
Signed on behalf of the Labour Court
15th September, 1992 Tom McGrath
A.N.S./M.H. ------------------------------------
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Ms. Aoibheann Ni Shuilleabhain, Court Secretary.