Labour Court Database __________________________________________________________________________________ File Number: CD94721 Case Number: LCR14665 Section / Act: S26(1) Parties: TUAM ENGINEERING - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;MANUFACTURING SCIENCE FINANCE;TECHNICAL ENGINEERING AND ELECTRICAL UNION;AMALGAMATED ENGINEERING AND ELECTRICAL UNION |
Claim by the Unions on behalf of 38 workers for enhanced severance terms.
Recommendation:
The Court, having considered all of the issues raised together
with the views expressed by the parties in their oral and written
submissions, recommends as follows:-
1. Severance Terms - The proposed severance terms be accepted.
2. Share of proceeds of Sale of Assets - The Court does not
recommend concession of the Unions' claim.
3. Claim for restoration of Pension Benefits - That the claim of
the Unions should not be pursued.
4. Pension - Notional service - The Court does not recommend
concession of the Unions' claim.
5. Option to convert lump sum - That the Company seek to make
such arrangements as will achieve concession of the Union's
claim.
Division: Mr McGrath Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD94721 RECOMMENDATION NO. LCR14665
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
TUAM ENGINEERING
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
MANUFACTURING SCIENCE FINANCE
TECHNICAL ENGINEERING AND ELECTRICAL UNION
AMALGAMATED ENGINEERING AND ELECTRICAL UNION
SUBJECT:
1. Claim by the Unions on behalf of 38 workers for enhanced
severance terms.
BACKGROUND:
2. The Company is a wholly owned subsidiary of Greencore
(formerly the Irish Sugar Company). It has sustained
substantial losses in the past number of years. In July,
1994 the Company announced closure plans unless a
comprehensive set of cost reduction measures were accepted by
the workforce. The unions objected to the Company's
proposals and following the threat of an industrial dispute
notice of closure was withdrawn. The dispute was referred
to the Labour Relations Commission and a conciliation
conference was held on the 14th October, 1994. A firm of
engineering consultants was engaged. Their report indicated
that the Company's proposals were not sufficient to achieve
viability and more severe measures were required. A further
conciliation conference was held on the 16th October, 1994 at
which the Unions accepted that closure was inevitable. The
Company offered a redundancy package which provided for 5
weeks' pay per year of service plus statutory entitlements.
The Unions submitted a claim for the following terms:-
(i) 7 weeks pay per year of service plus statutory
entitlements
(ii) workers to be paid lump sum payments arising from
the sale of assets
(iii) restoration of 1986 pension holiday and cost
reduction package from 1986
(iv) appropriate early retirement terms.
The Company rejected the Unions' claim and the dispute was
referred to the Labour Court by the Labour Relations
Commission on the 19th December, 1994. The Court
investigated the dispute on 9th January, 1995.
UNIONS' ARGUMENTS:
3. 1. Redundancy: The Company's offer (5 weeks plus statutory
entitlements) was agreed at the time when Greencore was
in a serious loss making situation. It is currently
very profitable and in these circumstances the unions
claim for increased payments is totally justified.
2. Sale of assets: The Company has stated that as
engineering is not part of its core business it will be
disposing of buildings, plant and machinery. The
workers concerned, whose chances of future employment
are very bleak, are justifiably entitled to a share in
the sale of assets.
3. Restoration of cost reduction package: In 1986 the
workforce entered into a cost reduction agreement to
assist the Company in a difficult trading period. The
package consisted of a pension holiday (cost of
restoration approximately #80,000) and employees working
two hours free of charge each week (cost savings
#45,000). The workers made these sacrifices in the
interests of the future viability of the Company and
security of employment. As the Company is now
terminating the workers' employment those cost
reductions should be restored.
4. Early retirement option: As the workers are being
deprived of achieving normal retirement the Unions are
seeking the following:-
- In the 55 - 60 age group the Company must improve
early retirement terms through the provision of up
to ten added years to give an immediate pension at
age 55 or over without any actuarial reduction and
qualifying pro-rata at age 50.
- In both the 60 age plus and the 55 - 60 age
groups the application of the Company's lump sum of
one year's pensionable salary in full without the
pro-rata reductions which currently apply.
5. Greencore has made substantial profits during the past
five years and can afford to accede to the Unions'
claims. The workers concerned have long service in the
employment and made a significant contribution to the
Company. They have virtually no prospects of future
employment.
COMPANY'S ARGUMENTS:
4. 1. The Company's redundancy package is more than
reasonable. A ceiling is not applied and some workers
will receive substantial payments. (Details supplied to
the Court).
2. The Unions' claim in relation to the sharing of assets
is unrealistic. The costs associated with the
redundancy payments and the substantial losses
accumulated by Tuam Engineering over the years demand
that the Company offset whatever monies it can secure
against those losses.
3. In 1986 the workers refused to forego national wage
rounds and accept pay cuts which were essential to
assist the Company in a difficult period. The saving in
Company contributions to the Pension Scheme, arising
from the agreed suspension of Company contribution to
the Pension Scheme for 1 year, was #41,812. There was
no agreement to 'restore' that year. The objective was
cost reduction and any payments foregone by the workers
cannot be restored. The Company experienced substantial
losses in that year.
4. The Unions' claims to get the 'notional service' for
pension purposes accorded to those workers in the 60/65
age group extended downwards to those in the 55/60 age
group are completely unrealistic. The pension/gratuity
terms applied at Tuam Engineering are well ahead of
those applying in either the engineering or food
sectors. There is no basis for increasing the terms.
The claim would have prohibitive cost implications and
would have major repercussive effects in other sectors
of the group.
5. The claim to have the option of converting Company lump
sum to pension, for all those being made redundant and
who wish to do so was considered and the Company
indicated that it had no objection to such arrangements
subject to approval of Trustees and the Revenue
Commissioners.
RECOMMENDATION:
The Court, having considered all of the issues raised together
with the views expressed by the parties in their oral and written
submissions, recommends as follows:-
1. Severance Terms - The proposed severance terms be accepted.
2. Share of proceeds of Sale of Assets - The Court does not
recommend concession of the Unions' claim.
3. Claim for restoration of Pension Benefits - That the claim of
the Unions should not be pursued.
4. Pension - Notional service - The Court does not recommend
concession of the Unions' claim.
5. Option to convert lump sum - That the Company seek to make
such arrangements as will achieve concession of the Union's
claim.
~
Signed on behalf of the Labour Court
23rd January, 1995 Tom McGrath
T.O'D./D.T. --------------
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.