FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IARNROD EIREANN - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION NATIONAL BUS & RAIL UNION DIVISION : Chairman: Mr McGrath Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. Compensation for loss of earnings.
BACKGROUND:
2. The dispute concerns a claim by the Unions for compensation on behalf of 50 members employed by the Company following the loss of the Bell Lines container traffic. The staff involved include freight staff in North Wall and Waterford, and signal persons and Locomotive Drivers on the Waterford line.
The Company claims that it transported containers for Bell Lines throughout the country for over 25 years. It also provided direct road deliveries to Limerick, Sligo, Longford, and Ballina.
However, Bell Lines went into liquidation on the 4th July, 1997. The loss of revenue to the Company as a result of the liquidation was £2.65m.
The Unions claim that its members should be compensated by the Company for the loss of earnings as a result of roster changes following the liquidation of Bell Lines. The losses arise from the loss of overtime and shift premia.
The Company rejects the Union's claim for compensation and states that the losses to its members is due to a loss of business and, therefore, no compensation is justified.
As no agreement was possible between the parties, the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 31st July, 1997 but no agreement was reached. The dispute was referred to the Labour Court under Section 26 (1) of the Industrial Relations Act ,1990. The Court investigated the dispute on the 9th September, 1997
UNIONS' ARGUMENTS:
3. 1. There is an agreed formula for compensation for the loss of earnings of 2.5 times the annual loss and with a maximum amount payable. The formula should apply in this case but with no maximum applying.
2. These earnings were not casual earnings. They were rostered earnings for the different grades concerned.
3. The workers concerned have adopted their lifestyles on the basis of their permanent level of gross earnings. They have obtained mortgages based of these earnings.
4. Some workers may lose their homes as a result of the loss of earnings. Others may have to seek voluntary severance and use the lump sum to reduce their mortgages.
5. There is an agreed procedure where changes to work practices are necessary. The Company is in breach of those procedures.
COMPANY'S ARGUMENTS:
4. 1. The Company does not receive a grant/subsidy from the Government in relation to its freight business. It must meet its own costs and compete in a very competitive market.
2. Iarnrod Eireann was incorporated in 1987. At that time there were 800 licensed freight hauliers. At present there are over 3,200 operating in the freight market.
3. The Company is seeking to reduce its cost base by £30m per annum in order to meet future investment and protect employment.
4. The loss of the Bell Lines business was outside the control of the Company. In the circumstances, earnings can not be guaranteed.
5. The imminent closure of the Asahi plant in Ballina will give rise to further revenue loss to the Company of £0.9m per annum.
6. Concession of the claim would have serious knock-on effects for the Company.
RECOMMENDATION:
The Court having considered all of the issues raised by the parties in their oral and written submissions finds that the liquidation of a client company has resulted in a significant loss of revenue and as a consequence the necessity for the operational changes proposed.
The Court is fully cognisant of the impact these changes have on the earnings of the workers concerned and would request the company to ameliorate the effects as far as possible.
The Court, however, given the circumstances of this case does not find grounds for concession of the claim for compensation of the earnings and accordingly rejects it.
It was brought to the attention of the Court that certain employees eligible for severance terms are not in a position to be released at this time and that this delay may affect the terms they will receive at their release.
It is the view of the Court that employees so affected should have their severance terms calculated by reference to their present earnings.
The Court so recommends.
Signed on behalf of the Labour Court
Tom McGrath
25th September, 1997______________________
L.W./S.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.