Labour Court Database __________________________________________________________________________________ File Number: CD93656 Case Number: LCR14355 Section / Act: S26(1) Parties: KELLY'S LIMITED - and - MANDATE |
Dispute concerning selection for redundancy.
Recommendation:
The Court has considered the fundamental question in this case
which is whether length of service or the retention of necessary
skills in the business should take precedence in the selection of
workers for redundancy.
The Union has argued that there are equal skills among the workers
and that, therefore, the principle of last-in, first-out should
apply. On the other hand, the Company has argued that particular
skills held by two staff are critical to the survival of the
business and that these staff should be retained even though they
would be due for redundancy under the last-in first-out principle.
The Court recognises the difficulties for all parties in this
small family-run business where staff have given long service.
However, in view of the trading difficulties being experienced by
the business and the likelihood of these difficulties continuing,
the Court considers that all possible steps to protect the
business must be taken.
The Court is satisfied that the two workers that the Company
wishes to retain have special skills which are not available among
the other sales staff. Accordingly, the Court recommends that
these workers should not be included in the last-in first-out
calculation. The Court further recommends that redundancy payment
in respect of the two redundancies which the Court accepts as
essential should be 4 times statutory redundancy plus the rebate.
Division: Mr Heffernan Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD93656 RECOMMENDATION NO. LCR14355
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
KELLY'S LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
MANDATE
SUBJECT:
1. Dispute concerning selection for redundancy.
BACKGROUND:
2. 1. Kelly's Limited is a small family-run retail drapery
business and employs 7 full-time and 7 part-time staff.
2. A downturn in sales over the last two years led the
Company to seek agreement on staff cutbacks. A number of
options were explored including week-on/week-off for 4 people
or a 3-day week for 4 people or long-term lay-off for 2
people. Agreement could not be reached as there were no
volunteers and the matter was referred to the Labour
Relations Commission. Conciliation conferences were held on
19th August, 1993, 28th September, 1993 and 29th September,
1993.
3. At the second conciliation conference on 28th September,
1993, the Company indicated that, due to a further
deterioration in their trading position, they required 4
redundancies. Furthermore, they wished to retain two
employees because of their particular skills which the
Company maintained were essential to their ongoing viability.
The Union argued that the selection for redundancy should be
on a last-in/first-out basis without any reference to
particular skills. Agreement could not be reached and the
matter was referred by the Labour Relations Commission to the
Labour Court on 22nd November, 1993. The Court investigated
the issue on 16th February, 1994 in Waterford.
UNION'S ARGUMENTS:
3. 1. The four employees have a wealth of experience in the
retail trade and have extremely good relations with the
customers.
2. The principle of "last-in, first-out" must apply if
redundancies are necessary and there are no volunteers.
3. The Company's long-term plan may be to run the store
with part-time people only.
COMPANY'S ARGUMENTS:
4. 1. Four redundancies are required because of ongoing losses
and a severe downturn in trade.
2. The Company must retain experienced people in key
departments which are the mainstay of the business.
3. It is neither feasible nor practical for the Union to
suggest that all sales staff are equally interchangeable.
4. The Company must be allowed run its business as it sees
fit and this involves the retention of key people who are
necessary for its survival.
RECOMMENDATION:
The Court has considered the fundamental question in this case
which is whether length of service or the retention of necessary
skills in the business should take precedence in the selection of
workers for redundancy.
The Union has argued that there are equal skills among the workers
and that, therefore, the principle of last-in, first-out should
apply. On the other hand, the Company has argued that particular
skills held by two staff are critical to the survival of the
business and that these staff should be retained even though they
would be due for redundancy under the last-in first-out principle.
The Court recognises the difficulties for all parties in this
small family-run business where staff have given long service.
However, in view of the trading difficulties being experienced by
the business and the likelihood of these difficulties continuing,
the Court considers that all possible steps to protect the
business must be taken.
The Court is satisfied that the two workers that the Company
wishes to retain have special skills which are not available among
the other sales staff. Accordingly, the Court recommends that
these workers should not be included in the last-in first-out
calculation. The Court further recommends that redundancy payment
in respect of the two redundancies which the Court accepts as
essential should be 4 times statutory redundancy plus the rebate.
~
Signed on behalf of the Labour Court
3rd March, 1994 Kevin Heffernan
P.O.C./M.M. _______________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Paul O'Connor, Court Secretary.