Labour Court Database __________________________________________________________________________________ File Number: CD93414 Case Number: LCR14286 Section / Act: S26(1) Parties: TOPPS (IRELAND) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning redundancy terms for a worker.
Recommendation:
The Court, having considered all of the views of the parties as
expressed in their oral and written submissions, is of the view
that arrangements negotiated in respect of redundancy should not
be taken as creating precedents for future redundancy situations
but should reflect the circumstances which apply at the time.
The Court considers that there are no grounds to alter the
redundancy terms of the member concerned which, given the
circumstances, the Court does not consider were unreasonable.
The Court so recommends.
Division: MrMcGrath Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD93414 RECOMMENDATION NO. LCR14286
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: TOPPS (IRELAND) LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning redundancy terms for a worker.
BACKGROUND:
2. The Company is located in Ballincollig, Co. Cork and
manufactures bubble-gum and other products. In October and
November, 1992, the Company made 13 workers redundant. The
majority of the redundancies were voluntary. The redundancy-
package offered by the Company, but rejected by the Union, was in
line with the package which applied when previous redundancies
were effected in May, 1990 (i.e. 4 weeks' pay per year of service
up to the 19th of May, 1990, plus statutory entitlements).
Following discussions between the parties, the Company's offer was
revised to the following: Statutory entitlements, plus 4 weeks'
pay per year of service up to termination date, capped at a
maximum of 12 months' average earnings (basic pay plus average
overtime). The Union rejected the offer of a capped
redundancy-payment on the grounds that the worker in question
would lose out by approximately #600. The dispute was referred to
the Labour Relations Commission and a conciliation conference was
held on the 22nd of April, 1993, at which agreement was not
reached. The dispute was referred to the Labour Court on the 12th
of July, 1993, in accordance with Section 26(1) of the Industrial
Relations Act, 1990. The dispute was investigated by the Court,
in Cork, on the 27th of October, 1993.
UNION'S ARGUMENTS:
3. 1. Workers who did not opt for redundancy in 1990 found
that the conditions of severance have deteriorated since
then. The average salary of workers is approximately #10,000
p.a. An uncapped redundancy-package would amount to about
#30,000.
2. It is unacceptable that workers who volunteer for
redundancy should dictate the redundancy-terms for workers
who are compulsorily made redundant.
3. It is unreasonable that future redundancies will be
subject to the cut-off point of May, 1990, or be limited to
one year's salary. Redundancy terms should reflect the
present economic climate. The Company is now employing more
workers, as the order situation has greatly improved.
4. The Company is trying to impose on the workers a maximum
redundancy of one year's salary, irrespective of their
service or whether the redundancies are voluntary or
compulsory.
COMPANY'S ARGUMENTS:
5. 1. The manufacturing-plant continues to face severe
economic and competitive difficulties. The first priority
has to be the survival of the plant. In such circumstances
the Company cannot be expected to implement the terms of a
severence-package agreed at a different time and in different
circumstances to those which obtained in October, 1992. The
settlement-terms offered in any redundancy situation have to
reflect the reality the Company finds itself in at the time,
if it is to survive. The Company has to be able to put a cap
on severence-payments as is the practice in many companies
which are struggling to survive and maintain employment.
2. 10 of the 13 redundancies were carried out on a
voluntary basis, that is, 10 employees volunteered for
redundancy on the basis of the severence-package offered by
the Company.
3. Should the Company be required to implement the
severence-terms paid in May 1990, it would have to set aside
an amount equivalent to 7% of its annual payroll each year to
meet any future redundancy situation which may arise. This
is not acceptable to the parent-company and makes its
continued support of the Cork plant, through the ongoing
difficulties that it faces, a very unattractive proposition.
If future employment in the Cork plant is to be protected
then the Company must be allowed to respond to circumstances
as it finds them.
RECOMMENDATION:
The Court, having considered all of the views of the parties as
expressed in their oral and written submissions, is of the view
that arrangements negotiated in respect of redundancy should not
be taken as creating precedents for future redundancy situations
but should reflect the circumstances which apply at the time.
The Court considers that there are no grounds to alter the
redundancy terms of the member concerned which, given the
circumstances, the Court does not consider were unreasonable.
The Court so recommends.
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Signed on behalf of the Labour Court
9th December, 1993 Tom McGrath
M.K./A.L. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should by addressed to
Mr. Michael Keegan, Court Secretary.