Labour Court Database __________________________________________________________________________________ File Number: CD93200 Case Number: LCR14045 Section / Act: S26(1) Parties: VIRGINIA MILK PRODUCTS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the amount of an ex-gratia redundancy payment.
Recommendation:
5. The circumstances of this case are unusual in a number of
respects. Firstly, the claimant rejected redeployment, secondly
he lost a substantial pension rebate because of negotiating
difficulties and thirdly his earnings power was inflated because
of manning arrangements preparatory to the introduction of the
changed boilerhouse arrangements. These unusual aspects are
recognised by the Union who gave an undertaking at the hearing
that this case would not be regarded as a precedent to be followed
if other redundancies should arise.
Having considered all aspects of the case, the Court considers
that the Company should pay the claimant #40,000 inclusive of all
statutory entitlements in full and final settlement of his claim.
Division: Mr Heffernan Mr Keogh Mr O'Murchu
Text of Document__________________________________________________________________
CD93200 RECOMMENDATION NO. LCR14045
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: VIRGINIA MILK PRODUCTS LIMITED
(REPRESENTED BY THE IRISH BUSINESS EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the amount of an ex-gratia redundancy
payment.
BACKGROUND:
2. In May, 1992 the Union submitted a claim for payment of the 3%
increase provided for under Clause 3 of the Programme for Economic
and Social Progress (P.E.S.P.). Following unsuccessful local
negotiations the issue was referred to the Labour Relations
Commission. Conciliation conferences were held on the 19th
January and 12th February, 1993 at which agreement was reached on
rationalisation proposals involving 3 workers in the boilerhouse
which was demanned following conversion to gas. Two of the
workers were redeployed. The worker concerned was to be made
redundant. Agreement could not be reached on a severance package
and the dispute was referred to the Labour Court by the Labour
Relations Commission on the 22nd March, 1993. A Court hearing was
held on the 15th April, 1993.
UNION'S ARGUMENTS:
3. 1. The worker concerned has been employed for the past 20
years, most of this time in the boilerhouse, on a continuous
shift basis. He has worked substantial overtime over the past
year following the retirement of 2 workers who were not
replaced. The remaining 3 workers were offered two
alternative production positions and one redundancy as part of
the Company's rationalisation proposals. The Company's
preferred option was the redeployment of the two junior
workers on the grounds that they were more adaptable outside
the boilerhouse. The worker wished to retain his job in the
boilerhouse and the Union contends that there is sufficient
work to keep the worker concerned there.
2. The Company's offer is insufficient given the workers long
service and present salary of #24,200. It is the first
redundancy in the plant in twenty years. The Company will
effect substantial savings as a result of the demanning of the
boilerhouse. It is a highly profitable Company and can will
afford to pay the worker a substantial compensation package.
The Union's claim is for #60,000. It is not attempting to
establish a precedent in this case.
COMPANY'S ARGUMENTS:
4. 1. The conversion of the boilerhouse to gas was essential in
order for the Company to remain competitive. It has honoured
Clause 3 of P.E.S.P. in full and this was paid prior to the
conclusion of the redundancy issue. If a last in first out
redundancy policy had been implemented the worker concerned
would not have been made redundant. He refused an offer to
transfer to production work and by virtue of this refusal,
volunteered for redundancy. The only obligation on the
Company is to provide statutory entitlements.
2. A Company offer of #38,000 inclusive of a pension rebate
of #4,000 which had to be accepted by 31st December, 1992 was
refused by the worker and the #4,000 is no longer included.
The Company's present offer of #34,000 is more than reasonable
and equates to 4.7 weeks per year of service. It well exceeds
the average ex-gratia payment in the dairy sector as a whole
and is very generous in the context of the wider food
industry.
RECOMMENDATION:
5. The circumstances of this case are unusual in a number of
respects. Firstly, the claimant rejected redeployment, secondly
he lost a substantial pension rebate because of negotiating
difficulties and thirdly his earnings power was inflated because
of manning arrangements preparatory to the introduction of the
changed boilerhouse arrangements. These unusual aspects are
recognised by the Union who gave an undertaking at the hearing
that this case would not be regarded as a precedent to be followed
if other redundancies should arise.
Having considered all aspects of the case, the Court considers
that the Company should pay the claimant #40,000 inclusive of all
statutory entitlements in full and final settlement of his claim.
~
Signed on behalf of the Labour Court
Kevin Heffernan
_____________________
22nd April, 1993. Chairman.
T.O'D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.