FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : T.J.T. MANUFACTURING LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Dispute concerning various issues related to the closure of the plant.
BACKGROUND:
2. The Company produced causal trousers and employed 160 workers at its plant in Kiltimagh. The dispute relates to the closure of the Kiltimagh plant due to loss of contracts which is scheduled to take place on the 9th of July, 1999. The Company intends to fulfil all its legal obligations under the Redundancy Payments Act and other relevant legislation. The Union, while accepting the inevitability of the closure has rejected the Company's offer of statutory redundancy. The Union's claim is for three weeks pay per year of service plus statutory entitlement. The Company rejected the claim. The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 2nd of June, 1999. Agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 4th of June, 1999. A Court hearing was held on the 24th of June, 1999. A letter recommendation was issued on the 25th June, 1999.
UNION'S ARGUMENTS:
3. 1. Because the redundancy is compulsory, workers should receive three week's pay plus statutory entitlements which would be the industry norm.
2. The workforce has been reduced from 160 to 85 in eighteen months and redundancy payments were not made to any of these workers. The Company, therefore, achieved a huge cost saving.
3. The Company will receive a 60% rebate from the statutory redundancy. This should be given to the workers as part of whatever deal is agreed.
4. Workers with less than two years service (7-8 workers) who at present have been offered no redundancy should receive some consideration.
5. The Union is concerned at the possibility that the plant will not be sold before the 9th of July, 1999, and that all deductions form workers' wages will be paid up to date, and that workers receive their holiday entitlements etc.
6. The Union seeks that first preference be given to workers from Kiltimagh in the event of the expansion of the Galway operation.
COMPANY'S ARGUMENTS:
4. 1. Substantial investment was made in the plant and in equipment and training. The Company had a three year contract to supply Farah UK on a cut, make and trim basis and was also supplying independent retailers in Ireland. This contract was lost and was the major factor in the loss of profitability. The Company, despite strenuous efforts was unable to fill that gap. The Company decision to close was as a result of continuing and mounting losses. It had been on a one day week for several months.
2. The Company, in view of its financial situation (details supplied to the Court), can only pay all statutory entitlements. Even to meet these responsibilities it would be necessary to sell the plant at Kiltimagh and the product in stock. The Company is still awaiting completion of the sale of the plant. Its offer to pay statutory entitlements is fair and reasonable in the circumstances.
RECOMMENDATION:
The Court has considered the submissions of the parties and has also considered a report on the financial position of the Company, submitted on a confidential basis with the agreement of the Union.
Having regard to the Company's financial circumstances, as disclosed by this report and subject to the fixed assets of the Company being sold, the Court considers that the maximum redundancy payment which it could recommend at this time is statutory entitlements plus 60%. The Court also recommends that following the sale of its fixed assets the Company should furnish the Court with information as to the amount realised. In the event of a surplus, the Court may consider making a further recommendation that a portion of any such surplus be used to further enhance the redundancy payment recommended.
All other statutory payments due to employees should also be paid in full at the date of closure.
Signed on behalf of the Labour Court
Kevin Duffy
2nd July, 1999______________________
T.O'D./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.