Labour Court Database __________________________________________________________________________________ File Number: CD94146 Case Number: LCR14425 Section / Act: S26(1) Parties: CELTIC COASTERS LIMITED - and - TWO WORKERS;EDWARD O'MAHONEY AND COMPANY |
Claim for enhanced redundancy settlement.
Recommendation:
In all the circumstances of this case the Court is of the view
that the Company should offer, and claimants accept, payment equal
to 2 weeks pay per year of service and statutory entitlement in
full settlement of the claim.
Division: Ms Owens Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD94146 RECOMMENDATION NO. LCR14425
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
CELTIC COASTERS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
TWO WORKERS
(REPRESENTED BY EDWARD O'MAHONEY AND COMPANY)
SUBJECT:
1. Claim for enhanced redundancy settlement.
BACKGROUND:
2. The Company is part of the Jones Group and has provided a
river transport service to oil companies in the Port of Cork
area for 34 years.
In 1992, the Company advised that, due to the devaluation of
sterling, it was experiencing increasing trading
difficulties. The Company proposed a reduction of four
workers as follows:
1) One Engineer - early retirement with pension based on
completed years of service plus ex-gratia lump sum.
2) Three Ratings - one who had reached normal retirement
age with normal pension and would not be replaced. Two
other ratings would receive statutory entitlement plus
temporary pension lump sum, plus 3.25 weeks per year of
service ex-gratia severance payment. Severance payment
to be deferred until beginning of 1994. This deferral
was because of uncertainty at that time about the
continued operations of the Company beyond the end of
1993. The payment of the deferred portion of ex-gratia
payment was dependent on the Company being able to
renegotiate sufficient contracts with the oil companies
to continue in business into 1994.
Following a Rights Commissioner's investigation in February
1993, 20% of the severance payment was paid immediately with
the balance to be paid in 1994. The Company sought a
reduction in annual payroll cost of #80,000 through the
redundancies.
The Company operated one ship "Celtic 4", which has a
capacity of 1,300 tonnes. In March, 1993, Irish Shell
informed the Company that it would not be using vessels of
less than 3,000 tonnes during 1994. In May, 1993, Esso
informed the Company that it would be terminating its
contract in November, 1993. Shell and Esso accounted for
two-thirds of the Company's business. The Company decided to
terminate its business and issued redundancy notices to all
workers, to take effect from end of October, 1993.
The Company offered statutory redundancy but the two workers
sought statutory redundancy plus 3.25 weeks per year of
service. The dispute was referred to the Labour Relations
Commission. Two conciliation conferences took place, on 27th
October, 1993 and 18th November, 1993 but no agreement was
reached. The dispute was referred to the Labour Court under
Section 26(1) of the Industrial Relations Act, 1990 on 28th
February, 1994. A Labour Court hearing took place on 25th
April, 1994.
WORKERS' ARGUMENTS:
3. 1. The two workers concerned were employed in the Company
for 32 years and 33 years respectively as Captains of
the "Celtic 4". They contributed greatly to the success
of the Company and the Jones Group. The Company, along
with Dublin Shipping, were the shipping division of the
Jones Group. The turnover in the shipping division
(details supplied to the Court) was #8.9 million
approximately in 1991/92.
2. The two workers had their weekly wages reduced by #350
per week as a result of the closure of the Company.
They have also lost VHI payments and various allowances.
3. The two workers are in the Jones Group pension scheme
and deserve greater compensation than that which they
have been offered.
COMPANY'S ARGUMENTS:
4. 1. The three workers who received statutory redundancy plus
3.25 weeks per year of service in 1993 did so on the basis
that the Company would continue to operate with future
earnings. The Company is no longer trading and is no
longer viable. It cannot afford to pay more than
statutory entitlements.
2. The Company hoped to reduce payroll costs by #80,000 per
annum with the redundancy of four workers in 1993. In
fact, the reduction was only #10,000 per annum. The
Company has shown a trading loss in the three years to
1993.
3. The workers being made redundant will receive statutory
redundancy plus the benefit of a good pension plan.
RECOMMENDATION:
In all the circumstances of this case the Court is of the view
that the Company should offer, and claimants accept, payment equal
to 2 weeks pay per year of service and statutory entitlement in
full settlement of the claim.
~
Signed on behalf of the Labour Court
3rd May, 1994 Evelyn Owens
C.O'N./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.