Labour Court Database __________________________________________________________________________________ File Number: CD95522 Case Number: LCR14923 Section / Act: S26(1) Parties: IRISH PRODUCTIVITY CENTRE - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
(a) Redundancies (b) Status of employees
Recommendation:
In considering the submissions and verbal arguments presented in
this dispute, the Court took cognisence of the critical position
of the Company whose very continued existence appears to hang in
the balance. It was clear to the Court that there was an acute
awareness of this positon by both parties.
The Court was asked to rule as to whether the I.P.C. was a part of
the public service and, accordingly, entitled to the conditions
etc. applying in the Public Service. Whilst undoubtedly a
relativity exists, particularly with regard to salary levels, the
Court is not convinced that a substantive case can be made to
support the argument that the I.P.C. is part of the Public Service.
The Court sees the I.P.C. as a normal stand alone business,
registered as such. Correspondence from the Department of
Enterprise and Employment would support this view.
In addressing the central problem of selection for redundancy, the
Court sees no reason why the principle of L.I.F.O. should not be
applied in the Administrative area.
The Court accepts that in the new structure proposed, consultants
may be required to have a profile which will meet a variety of
challenges using new techniques whilst retaining established
skills. The principle of L.I.F.O. may, therefore, not be
appropriate to consultant posts. Provided that management can
establish transparency in its selection process, through the use
of an independent assessor, the Court would urge the Union to drop
its opposition to the selection process for consultants. The
Court would be willing to assist in nominating an independent
assessor should the parties so wish.
Finally, the Court recommends that the parties agree payment of
redundany at a level of 4 weeks pay per year of service (inclusive
of statutory).
The Court so recommends.
Division: Ms Owens Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95522 RECOMMENDATION NO. LCR14923
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
IRISH PRODUCTIVITY CENTRE
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. (a) Redundancies
(b) Status of employees
BACKGROUND:
2.1 The Irish Productivity Centre (I.P.C.) was established in
1963. It operates through a Council comprising of six
members of the I.C.T.U., six members of I.B.E.C. and an
observer from the Department of Enterprise and Employment.
The Centre is grant-aided by the Department of Enterprise and
Employment.
2 The Centre earns fees through the provision of consultancy
services. The Department began a gradual reduction in its
financial support for the Centre in 1970 and by 1988 all
direct Grant-in-Aid had ceased. Financial support continued
however, through an E.U. funded programme and direct
subvention.
3 By 1992, the Centre was in a financial crisis as the level of
financial support continued to diminish. A restructuring
programme was implemented which resulted in the loss of
twenty-three full-time posts through voluntary and compulsory
redundancies. The Department of Enterprise and Employment
agreed the financial package for the redundancies.
4 In 1994, the Council and the management of the Centre agreed
that the restructuring which had taken place in 1992, had not
achieved its desired effect. The Council commissioned a firm
of consultants to undertake a review of the financial
position and operations of the Centre.
5 The consultants reported to the Council that there were three
options open to them:-
(1) Immediate closure
(2) Reversal into an existing State agency
(3) Restructuring
The Council and the Department agreed that the preferred
option was that of restructuring on the following basis:-
(1) That a Business Plan be prepared on a realistic
cost basis which would see the elimination of the
Grant-in Aid over a defined period.
(2) That the plan would receive the support of the
staff.
(3) The restructuring costs (redundancy payments) would
be the same as offered in 1992.
The proposed restructuring will result in further
redundancies both for administrative and professional staff.
The Union is in dispute with the Centre in respect of (i) the
public sector status of its members in the I.P.C. and (ii)
the method of selection for redundancy and the financial
terms of the redundancy package on offer. As no agreement
could be reached between the parties, the dispute was
referred to the conciliation services of the Labour Relations
Commission.
Conciliation conferences took place on 28th July, 1995 and
4th September, 1995 but no agreement was reached. Both sides
agreed to refer the dispute to the Labour Court under Section
26(1) of the Industrial Relations Act, 1990. The Court
investigated the dispute on 19th September, 1995.
UNION'S ARGUMENTS:
3.1 It is the Union's contention that the employees of I.P.C.
enjoy public sector status and as such should be offered
redeployment within this area. The Centre experienced the
same rigours of the embargo on recruitment/promotions in the
public service, as any other public service section. The
Department of Enterprise & Employment has dictated staffing
levels since 1972. It has also controlled the direction and
policies of I.P.C. by means of its financial input.
2 The employees of I.P.C. have also been remunerated on scales
of pay linked directly to Civil Service rates of pay which
the Department of Enterprise & Employment sanctioned. All
special pay awards were implemented and management or the
Department did not indicate that the status of the employees
was in question. Labour Court Recommendation 2912 clearly
establishes a link between the status of I.P.C. employees and
the public sector.
3 The Department of Enterprise & Employment should fund
redundancy payment of six weeks' pay per year of service for
those being made redundant. Similar payments have been made
in relation to redundancies in Bord Failte, An Bord Tractala,
and the Oireachtas Secretariat.
4 If there are redundancies, it should be on the basis of "last
in, first out" (LIFO) and the redundancy terms should reflect
what is on offer in the public sector. The Union rejects
management's selection process for those employees to be made
redundant. The criteria used by management does not take account
of fairness and equity or natural justice required of the
employer and set out in the Unfair Dismissals Act and
Redundancy Payments Acts.
COMPANY'S ARGUMENTS:
4.1 The Company rejects the Union's claim that the staff of
I.P.C. enjoy public sector status. The staff are linked to
the public sector in relation to the terms and conditions of
employment, but that is as far as it goes.
2 The management of I.P.C. must have the right to select those
whom they consider should be made redundant and those who
are to be retained. It cannot process the redundancies on a
simple "last in first out" basis. The I.P.C. must select
those with the skills necessary to ensure continuity of
expertise.
3 The redundancy terms are those which were on offer in 1992.
No improvement on these terms can be entertained.
4 The I.P.C. require a capital injection of #330,000 from
Government to survive. The figure has been agreed but will
not be granted until a viable business plan has been put in
place which will include the necessary redundancies. The
Government will fund the redundancy package.
RECOMMENDATION:
In considering the submissions and verbal arguments presented in
this dispute, the Court took cognisence of the critical position
of the Company whose very continued existence appears to hang in
the balance. It was clear to the Court that there was an acute
awareness of this positon by both parties.
The Court was asked to rule as to whether the I.P.C. was a part of
the public service and, accordingly, entitled to the conditions
etc. applying in the Public Service. Whilst undoubtedly a
relativity exists, particularly with regard to salary levels, the
Court is not convinced that a substantive case can be made to
support the argument that the I.P.C. is part of the Public Service.
The Court sees the I.P.C. as a normal stand alone business,
registered as such. Correspondence from the Department of
Enterprise and Employment would support this view.
In addressing the central problem of selection for redundancy, the
Court sees no reason why the principle of L.I.F.O. should not be
applied in the Administrative area.
The Court accepts that in the new structure proposed, consultants
may be required to have a profile which will meet a variety of
challenges using new techniques whilst retaining established
skills. The principle of L.I.F.O. may, therefore, not be
appropriate to consultant posts. Provided that management can
establish transparency in its selection process, through the use
of an independent assessor, the Court would urge the Union to drop
its opposition to the selection process for consultants. The
Court would be willing to assist in nominating an independent
assessor should the parties so wish.
Finally, the Court recommends that the parties agree payment of
redundany at a level of 4 weeks pay per year of service (inclusive
of statutory).
The Court so recommends.
~
Signed on behalf of the Labour Court
4th October, 1995 Evelyn Owens
L.W./A.K. -------------
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Larry Wisely, Court Secretary.