FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : TIPPERARY CRYSTAL DESIGNS LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Ms Owens Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. 1. Redundancy
2. Change in Status of Employment.
BACKGROUND:
2. Tipperary Crystal is engaged in the manufacture of full lead crystal for the home and export market. The Company has been in existence since 1988 and is one of a small number of companies which produce crystal in the traditional mouth-blown and hand-cut manner. Due to ongoing losses and un-competitiveness the Company is seeking to achieve 36 redundancies throughout its operation.
The 36 redundancies would include 13 cutters, 7 of whom the Company would intend to re-engage on a self-employed basis. The Company offered redundancy terms of 1.5 weeks' pay, inclusive of statutory entitlements, for those not being re-engaged (5 non-cutter personnel do not actually qualify for any redundancy payment) and statutory entitlement only for those being re-engaged . The Union rejected the redundancy terms offered and disputed the extent to which the redundancies are necessary. The Union referred to Labour Court Recommendation No. LCR15145 (May, 1996) which recommended, inter alia, pay cuts for the workforce. The Union claims that while the pay cuts were implemented, the Company failed to implement other aspects of the Recommendation in respect of investment in the Company and the disclosure of information by the Company to its staff. The notion of the cutters being paid off to become self-employed was also rejected by the Union which indicated that it was prepared to discuss a voluntary redundancy package.
The Company claimed that it had previously made its accounts available to the Union and that it would be prepared to have them verified by an agreed independent accountant. However, the Company indicated that it had no scope to increase the terms offered and maintained that the change in status of the cutters was an integral part of the plan which would enable the Company to avoid closure. The dispute was the subject of a conciliation conference, under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court, on the 21st of October, 1997, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 23rd of October, 1997.
COMPANY'S ARGUMENTS:
3. 1. The crystal industry has changed significantly in Ireland and throughout Europe over the past decade. Most of the Company's competitors have engaged in downsizing and out-sourcing (details supplied to the Court). Most of these companies out-source blank or finished products and distribute them under their brand name at prices with which Tipperary Crystal is unable to compete.
2. The Company has never made a profit since its inception and came close to liquidation in 1993. Through substantial investment and on foot of LCR15145, the Company continued trading and retained its tradition of mouth blown crystal. However, the Company failed to return a profit and went into receivership in October, 1996.
3. Inability to compete resulting in poor sales figures left the Company with no alternative other than to place employees on a three-day week from December, 1996. This pattern of working has remained to date with the exception of a period between 17 February and 28 March, 1997.
4. Current order books are poor. Between now and the end of February, 1998, the Company has seven days' work for the "stem shop", four days' work for "light heavies" and one day's work for the "heavy" (gift) shop.
5. A comprehensive review of the business conducted by management indicated that the Company will never compete successfully under its current modus operandi. This review further indicated that the only alternative is the immediate reduction in in-house capacity to blow and cut glass, resulting in a reduced work-force. The review has further indicated that, in order to move forward, the Company will need a sizeable injection of new capital. The existing shareholder is not prepared to risk further monies and new capital must be obtained to secure the remaining jobs.
6. Tipperary Crystal was purchased from receivership in October, 1996 by Asdon Limited which was the only prospective buyer prepared to retain the employees on the books at that date. Had Asdon not purchased the Company, the employees would have faced redundancy, on statutory terms.
7. Selection for redundancy is, where possible, on the basis of seniority by department. Departures from this criterion occur in a few specific instances in the interests of retaining key skills.
8. The package offered is the maximum affordable due to the Company's financial difficulties and the redundancies, as outlined, must be achieved.
UNION'S ARGUMENTS:
4. 1. Less than 1 year has elapsed since the present owners indicated their satisfaction with their purchase, i.e., the Company, after 4 months of careful study in the Summer of 1996, thereby reassuring the workforce in relation to job-security and investment.
2. Company sales have remained at £2m, with production wages, raw materials and overheads at £1.4m, giving a manufacturing profit of £600,000.
3. The Union rejects the notion of forced redundancy and the Company proposal to convert cutters to self-employed workers. A voluntary severance package of 6 weeks' pay for each year of service plus statutory entitlements should be applied, based on the full week, and not on the 3-day week. Additionally, the voluntary element of the severance package should be made available to workers who do not qualify for statutory redundancy payment.
4. The Company should implement LCR15145 in respect of increased investment and disclosure of information to the Union.
RECOMMENDATION:
The Court has considered the submissions, both oral and written, from the parties to this dispute. The Court also was provided with a financial statement on the current position of the Company and this statement and accounts are available to the Union.
The Court is satisfied that a restructuring plan is essential and, accordingly, recommends:-
(a) That the Company seek the number of redundancies required (i.e., 29, see (d) below) on a voluntary basis in the first instance subject to the usual condition that it must retain certain key workers.
(b) That the Company increase its offer of redundancy payment to 3 weeks per year of service including statutory.
(c) That Employees not eligible for statutory terms be paid the 3 weeks per year of service as compensation.
(d) That the Company drop its proposal to change the employment status of the cutters.
(e) That both parties continue their efforts to improve internal communications.
Signed on behalf of the Labour Court
Evelyn Owens
28th of October, 1997______________________
M.K./S.G.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.