Labour Court Database __________________________________________________________________________________ File Number: CD962 Case Number: LCR15117 Section / Act: S20(1) Parties: IDUNA IRELAND LIMITED (Represented by O'HARE & ASSOCIATES CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Redundancy terms.
Recommendation:
The Court does not see this Company as a company trading
insolvently. It is clear to the Court that its motives in
moving location were based on enhancing its profit.
Taking into account all aspects of this case the Court recommends
that the Employees be paid 4 weeks pay per year of service,
inclusive of statutory redundancy.
Division: Mr Flood Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD962 RECOMMENDATION NO. LCR15117
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
IDUNA IRELAND LIMITED
(REPRESENTED BY O'HARE & ASSOCIATES CHARTERED ACCOUNTANTS &
BUSINESS ADVISORS)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Redundancy terms.
BACKGROUND:
2. The Company commenced trading in Ireland in 1989. It was
located in Kingscourt, Co. Cavan and was involved in the
production of ladies lingerie.
In late November, 1995, Management informed the workforce
that due to financial and organisational reasons the Company
would cease its operation in Kingscourt on 22nd December,
1995.
The Union submitted a claim for 6 weeks pay per year of
service plus statutory redundancy entitlements. The Company
rejected the claim.
The Union referred the matter to the Labour Court on 28th
December, 1995 under Section 20(1) of the Industrial
Relations Act, 1990 and agreed to be bound by the Court's
Recommendation. A Labour Court hearing took place on 7th
March, 1996.
UNION'S ARGUMENTS:
3. 1. The Company adhered rigidly to wages based on the Joint
Labour Committee's rates of pay for the Womens' Clothing
Industry. The bonus scheme in operation has been the
subject of much debate and dispute, because it failed to
pay the majority of workers a reasonable return for
their efforts. Overall wages were low.
2. The workers co-operated fully with Management at all
times. The Union is satisfied that the Company's
decision to close its factory in Kingscourt had nothing
to do with the workers' job performance.
3. Management declined to attend at the Labour Relations
Commission. The Company/Union agreement provided for
processing all grievances and disputes via such
procedures.
4. The Company is not in financial difficulty. It left
Ireland in preference for a much lower wage structure in
Tunisia, with little regard for the impact its decision
would have on the workers concerned. In the
circumstances the Union's claim for 6 weeks pay per year
of service, plus statutory redundancy entitlements is
justified.
COMPANY'S ARGUMENTS:
4. 1. It was the Company's stated intention to try as far as
possible to find a buyer to take over the facility in
Kingscourt, thus maintaining as many jobs as possible in
the factory. A detailed information pack was prepared
and circulated to specific interested parties, some of
which were introduced by the I.D.A.
2. The Company throughout 1995, made time-consuming and
costly efforts to find a purchaser for the factory. The
sale was completed in early February, 1996. The new
owners wish to maintain the facility as a horseware
manufacturing operation and while certain training will
be required it has already and will continue to offer
positions of employment to the former workforce of
Iduna. The workers' skills are seen as relevant to the
new operation. Iduna's stated objective of keeping the
factory open for the workforce has been achieved.
3. The Company has at all times been willing to provide the
staff with their statutory entitlements and the
ex-gratia sum offered, together with references and
relevant statutory forms, to enable all members of the
workforce to secure re-employment as soon as possible.
4. The Company believes its offer is reasonable and
representative of other companies within the clothing
and footwear sector.
5. The Company, which operated in the clothing sector,
experienced difficulties which are experienced by many
other Irish companies operating in this sector. These
difficulties have been caused by a range of factors,
including the high relative labour cost, the effects of
international exchange rates, in particular sterling,
and the relatively penal rate of VAT which is being
charged on the production of clothes. In this regard,
the Irish clothing manufacturers federation, (ICMF), and
SIPTU representatives, met the Department of Finance
officials to argue the case for special concessions to
help maintain jobs in the clothing sector. It is
acknowledged by all sides that this is a sector which is
suffering considerably and Iduna is representative of
just one foreign company which has not been able to
withstand international market competition.
RECOMMENDATION:
The Court does not see this Company as a company trading
insolvently. It is clear to the Court that its motives in
moving location were based on enhancing its profit.
Taking into account all aspects of this case the Court recommends
that the Employees be paid 4 weeks pay per year of service,
inclusive of statutory redundancy.
~
Signed on behalf of the Labour Court
29th March, 1996 Finbarr Flood
F.B./S.G. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.