Labour Court Database __________________________________________________________________________________ File Number: CD92696 Case Number: LCR14007 Section / Act: S20(1) Parties: THORN HOME ENTERTAINMENT - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION;MANUFACTURING SCIENCE FINANCE |
Dispute concerning the calculation of redundancy lump sum payments.
Recommendation:
12. The Court given all of the circumstances of this dispute does
not find grounds for concession of the Union's claim for inclusion
of Saturday allowance in the calculations of severance pay.
The Court so recommends.
Division: MrMcGrath Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD92696 RECOMMENDATION NO. LCR14007
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969
PARTIES: THORN HOME ENTERTAINMENT
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Dispute concerning the calculation of redundancy lump sum
payments.
BACKGROUND:
2. The Company is a subsidiary of the multi-national group Thorn
EMI P.l.c., reporting to the European Rentals Division. It has 22
shops throughout the country and is engaged in the rental and hire
purchase of a range of consumer electronic products. The Company
employs 130 workers.
3. In April, 1992 the Company announced that in order to stem
continuing losses it was introducing a survival plan which
included a provision for 94 redundancies in two phases. The first
phase, which was to take place in June, 1992, involved 74
redundancies in the field service area (distribution, technical
repair etc.). This service was to be discontinued and replaced by
contractors. The second phase of 20 redundancies from other
areas of the business was to be effected between June, 1992 and
December, 1992.
4. The Unions objected to the Company's proposals and entered
into an official dispute which lasted for ten days.
5. I.B.E.C. (formerly The Federation of Irish Employers) and the
Irish Congress of Trade Unions under a joint initiative invited
both parties to a meeting. Following negotiations settlement
terms were agreed on 21st May, 1992 (details supplied to the
Court). The proposals provided for severence terms of five weeks
pay per year of service inclusive of all statutory and other
entitlements.
6. One week before the redundancies were to take place a dispute
arose between the parties concerning the definition of "a weeks
pay" under the settlement terms. The Unions contend that the
Saturday allowance of #16.52 should be included in determining a
basic week's pay in accordance with an 1980 Agreement. The
Company contend that the agreement of May, 1992 excluded the
Saturday allowance in determining a week's pay. The Saturday
allowance was payable to all field staff in return for Saturday
cover. The Company proceeded with its redundancy plan on 10th
June, 1992 and advised each worker of the Unions' position when
paying the severence terms (according to its calculations). All
the workers with the exception of two accepted the Company's
terms. The two workers concerned accepted the terms a fortnight
later.
9. The Unions subsequently lodged a claim in respect of the
Saturday allowance. The Company rejected the claim, as in its
view no dispute existed as the workers had accepted the Company's
terms and had left the employment. The Unions referred the
dispute to the Labour Court for investigation and recommendation
under Section 20(1) of the Industrial Relations Act, 1969. A
Labour Court hearing took place on 26th January, 1993. The Unions
agreed to be bound by the Court's recommendation.
UNIONS' ARGUMENTS:
10. 1. The settlement terms should have included the Saturday
allowance as this allowance was an integral part of the
workers' pay.
2. The Company included the allowance in its calculation of
the statutory element of the redundancy package as provided
for under the Redundancy Payments Acts.
3. Under the 1980 Agreement concerning a previous redundancy
settlement a week's basic pay included the Saturday Allowance
(details supplied to the Court).
4. During the course of negotiations on the May, 1992
Agreement no reference was made to the exclusion of Saturday
allowance. In the context of the previous settlement it was
logical for the Unions to expect that the allowance would be
included in calculating the redundancy lump sums.
COMPANY'S ARGUMENTS:
11. 1. A settlement agreement was reached and endorsed by both
parties on 21st May, 1992, providing for 5 weeks pay per year
of service inclusive of statutory and all other entitlements.
This specifically precluded any additional compensation or
allowances.
2. All workers were fully advised of the Unions' position on
this matter and freely accepted the Company's terms. As far
as the Company is concerned no dispute exists.
3. The Company's commercial and financial position remains
critical with a need to dramatically improve its overall
performance in order to justify its longer term viability.
Claims of this nature hinder the Company's efforts in securing
its long term future.
4. The Company has already paid a substantial amount of money
to the workers who were made redundant. There is no more
compensation available or justified under any circumstances.
RECOMMENDATION:
12. The Court given all of the circumstances of this dispute does
not find grounds for concession of the Union's claim for inclusion
of Saturday allowance in the calculations of severance pay.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
____________________
22nd March, 1993 Deputy Chairman.
M.D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Daughen, Court Secretary.