FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GOBLIN (IRELAND) LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Keogh Worker Member: Mr O'Neill |
1. Redundancy Terms.
BACKGROUND:
2. The Company, which is a subsidiary of the privately-owned American-based Shop-Vac Corporation, commenced production in Tralee, Co. Kerry, in 1980 and currently employs 220 permanent workers. The Irish plant is involved in the production of vacuum cleaners and steam cleaners for domestic and commercial use. The Company's product is sold through distribution companies owned by the Shop-Vac Group, throughout the U.K., France, Germany, Holland and Austria, and through independent distributors in other European countries.
The Company's commercial and trading position has deteriorated sharply in recent years and, consequently, the Company is for sale and the requirement for 43 redundancies has been announced. The Company offered a redundancy package of 2 weeks' pay per year of service, plus statutory entitlements, based on the principle of last in first out (LIFO). The Union rejected the Company proposal for the reason, it claims, that redundancies should be on a voluntary basis only. The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission following which a proposal emanated which provided for voluntary redundancies, within the Company's overall rationalisation budget of £220,000, as follows:-
(1) The Company will seek volunteers for redundancy in the first instance at two weeks' pay per year of service plus statutory, subject to a ceiling of £6,000. This ceiling is set against the context of the Company's budgetary position;
(2) In the event of under-subscription, compulsory redundancies will occur based on LIFO at 3 weeks' pay per year of service plus statutory, as applicable;
(3) It is the intention of the Company to revert to a normal 5-day working week on successful finalisation of the rationalisation programme.
The proposal was rejected by ballot of the workforce. The dispute was referred to the Labour Court, on the 5th of May, 1998, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 11th of May, 1998.
COMPANY'S ARGUMENTS:
3. 1. The Company has done its utmost to ensure its ongoing survival in very difficult commercial circumstances (details supplied to the Court). It has a bona fide requirement to obtain 43 redundancies from amongst its hourly-paid production employees. This will help to secure the remaining one hundred and sixty jobs within the Company.
2. The proposal made by the Labour Relations Commission represents the maximum that the Company can afford, as evidenced by the requirement to impose a ceiling in recognition of the Company's financial constraints in funding the package. The Corporate Company will not accept any dilution of the proposal, especially if additional costs are involved. Accordingly, the package should be accepted as the best deal that can be achieved in the circumstances.
UNION'S ARGUMENTS:
4. 1. The workers rejected the proposed redundancy package on the grounds that they had been misled in relation to the ongoing position of the Company. At no time did the Company state that the requirement for 63-day week which it implemented in January, 1998 was due the result of the loss of markets and market share (details supplied to the Court). The workforce believes that the Company is in a position to finance a considerably improved redundancy package, being a very profitable Company, a fact not disputed by management.
2. The Company should offer 4 weeks' pay, inclusive of statutory entitlements and with the ceiling of £6000 removed. Similar packages have been provided for in equivalent situations elsewhere (details supplied to the Court).
3. Recognition should be given to the workforce whose commitment has contributed to the success of the Company in Ireland. They will be made redundant through no fault of their own and after years of dedicated service should be compensated appropriately.
RECOMMENDATION:
The Court considered the written and oral submissions made by the parties.
It would appear from the arguments made that the main reason for rejection of the Industrial Relations Officer's proposal, recommended by both sides for acceptance, was the ceiling in (1) of the proposal.
The Court recommends that the ceiling of £6,000 be increased to £8,000 and that the Industrial Relations Officer's proposal be amended accordingly.
Signed on behalf of the Labour Court
Finbarr Flood
15th May, 1998______________________
M.K./S.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.