Labour Court Database __________________________________________________________________________________ File Number: CD94196 Case Number: LCR14395 Section / Act: S26(1) Parties: KLOPMAN INTERNATIONAL LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union, on behalf of 115 production workers, for enhanced redundancy terms.
Recommendation:
The Court having considered the written submissions of the parties
together with the additional verbal arguments made at the hearing
notes that it is accepted by both sides that rationalisation and
the modernisation programme are the only viable means of securing
continuation of the Company and ultimately bringing it back to
profitability.
Regrettably, the process involves a programme of redundancies and
the issue for the Court is to adjudicate on reasonable
compensation having regard to the financial resources of the
Company, and the conditions attaching to those resources.
Accordingly, the Court recommends the Company's proposals of 3
weeks pay per year of service in addition to statutory payments
should be accepted by the Union.
In relation to the lump sum payments the Court recommends the
following to replace the Company's proposals:-
Voluntary Redundancy:
(a) The Lump sum payment to be #1,000
Compulsory Redundancy:
(b) Workers employed after 3/2/92
A lump sum of #750.
(c) Workers employed after 3/2/90 (Prior to 3/2/92)
A lump sum of #500.
In addition one notional years service to be added to
the actual years of service for calculation of severance
pay. This notional year will not apply to the statutory
redundancy payment.
(d) Workers employed prior to 3/2/90
A lump sum payment of #500.
In addition two notional years service to be added to
the actual years of service for calculation of severance
pay. These notional years will not apply to the
statutory redundancy payment.
The Court so recommends.
Division: Mr Heffernan Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94196 RECOMMENDATION NO. LCR14395
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
KLOPMAN INTERNATIONAL LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union, on behalf of 115 production workers, for
enhanced redundancy terms.
BACKGROUND:
2. 1. Klopman International is involved in the manufacture of
textiles. It is a subsidiary of the Canadian Company -
International Dominion Textile Inc.. The Company employs 363
permanent and 11 temporary workers in Tralee. The Company
proposed to implement a rationalisation plan which requires
115 redundancies from the production workforce. Agreement
has been reached between the parties on the number of
redundancies. The Company offered the same redundancy terms
to the workers concerned as were negotiated in previous
rationalisation programmes at the plant. These terms provide
for redundancy payments of 3 weeks pay per year of service,
plus statutory entitlements, plus an orderly phase-out
payment of #500 to workers made compulsory redundant. The
Company offered severance payments to temporary employees
proportionate to redundancy severance terms. The Union
claimed six weeks pay per year of service, plus statutory
entitlements for all workers, with a minimum payment of
#2,000 for temporary employees and #3,000 for permanent
workers made compulsorily redundant. Management rejected the
Union's claim.
2. The dispute was referred to the Labour Relations
Commission and conciliation conferences were held on the 10th
March, 1994 and 23rd March, 1994. Following the second
conciliation conference the Company made an improved offer as
follows:
3 weeks pay plus statutory entitlements.
(a) #500 to all voluntary redundancies.
(b) In the case of compulsory redundancy, #500 to those
permanent workers who commenced employment after
3rd February, 1992; #750 to those who commenced
employment after 3rd February, 1990 but prior to
3rd February, 1992; and #1,000 to those who
commenced employment prior to 3rd February, 1990.
The Union's final position was 5 weeks plus
statutory entitlements to all workers both
compulsorily and voluntary declared redundant; a
minimum payment of #2,000 to temporary workers and
#3,000 to permanent workers made compulsorily
redundant.
3. Following a ballot of the workforce the Company's offer
was rejected by the Union. The dispute was referred to the
Labour Court on the 28th March, 1994. The Court investigated
the dispute on the 30th March, 1994. A letter recommendation
was issued on the 11th April, 1994.
UNION'S ARGUMENTS:
3. 1. The terms offered by the Company are not acceptable.
They were agreed in the 1980's when redundancies first
occurred in the Company. At that time workers enjoyed far
greater earnings due to high overtime opportunities and 4
cycle shift working In the 1991 redundancy situation workers
earnings were substantially reduced because of a change to 3
cycle shift and loss of overtime. Workers on average lost
#40 - #50 p.w.. Redundancies will now be compulsory in the
majority of cases. The workers concerned are aggrieved that
had they opted for voluntary redundancy in 1991 (when on 4
cycle shift) they would have achieved a higher level of
redundancy payment. For example a worker with ten years
service under the 1991 agreement received #10,500 in
comparison to a worker in 1994 with the same service who
received #9,400.
2. The Company's modernisation plan will result in the
introduction of new technology at the plant. Some of the
older workers may be forced to apply for redundancy and
accept terms less advantageous than in 1991.
3. The Union has given excellent co-operation to the
Company in agreeing the numbers of workers to be made
redundant. There has been excellent co-operation with the
introduction of new technology and improved productivity with
substantially less workers. The workers concerned are
entitled to reasonable redundancy payments as outlined in the
Union's claim.
COMPANY'S ARGUMENTS:
4. 1. The Company has sustained substantial losses. It was
forced to implement a survival plan in 1991, resulting in 125
job losses and a reduction from 7 day to 5 day working.
The total sales of Company product have been reduced
substantially. The Tralee plant is faced with secure
substantial investment in new technology or closure The
Company has not been able to secure finance from within the
Klopman Group and funding has been achieved through the sale
of company assets in Ireland and the proceeds used to fund
new technology.
2. Effecting a reduction in labour costs through redundancy
is intrinsic to the cost savings that must be achieved if the
Tralee plant is to become competitive after modernisation.
Management must implement the redundancies speedily and in
accordance with the budgeted provisions for severance
payments. There is limited funding available and any
additional expenditure in redundancy will result in reduced
funding for plant modernisation which is essential to
guarantee the remaining jobs.
3. The Company has had five redundancy programmes since
1980. The same formula now offered was accepted in the
earlier redundancy situations. The financial resources
available for this particular plant modernisation are
limited. Grant-aid is not available and there is no
guarantee of European Union funds. A further enhancement of
the Company offer can only derive from funds required for
capital investment. Any diminution of modernisation plans
will impact on the future job security of workers remaining
in the employment.
RECOMMENDATION:
The Court having considered the written submissions of the parties
together with the additional verbal arguments made at the hearing
notes that it is accepted by both sides that rationalisation and
the modernisation programme are the only viable means of securing
continuation of the Company and ultimately bringing it back to
profitability.
Regrettably, the process involves a programme of redundancies and
the issue for the Court is to adjudicate on reasonable
compensation having regard to the financial resources of the
Company, and the conditions attaching to those resources.
Accordingly, the Court recommends the Company's proposals of 3
weeks pay per year of service in addition to statutory payments
should be accepted by the Union.
In relation to the lump sum payments the Court recommends the
following to replace the Company's proposals:-
Voluntary Redundancy:
(a) The Lump sum payment to be #1,000
Compulsory Redundancy:
(b) Workers employed after 3/2/92
A lump sum of #750.
(c) Workers employed after 3/2/90 (Prior to 3/2/92)
A lump sum of #500.
In addition one notional years service to be added to
the actual years of service for calculation of severance
pay. This notional year will not apply to the statutory
redundancy payment.
(d) Workers employed prior to 3/2/90
A lump sum payment of #500.
In addition two notional years service to be added to
the actual years of service for calculation of severance
pay. These notional years will not apply to the
statutory redundancy payment.
The Court so recommends.
~
Signed on behalf of the Labour Court
18th April, 1994 Kevin Heffernan
T.O.D./M.M. _______________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.