FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : VAN LEER IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Keogh Worker Member: Mr Rorke |
1. Redundancy package.
BACKGROUND:
2. The Company is involved in the manufacture of 210-litre steel drums and is based in Beggars' Bush, Dublin 4, where it employs a staff of 15. The Company is to cease its operations in Ireland for the reason that it is now required by the Environmental Protection Agency to have an integrated pollution control licence, the conditions of which cannot be met on the Company's current site, and the cost of setting up a new operation would be prohibitive. The Company has a new plant in Ellesmere, in the UK, which is currently performing at less than full capacity and which could, in two weeks, produce the total output of the Irish plant. The Company, however, does intend to maintain a distribution centre in Ireland.
The dispute concerns the redundancy package for 13 workers who have service, respectively, ranging from 2 years' to 47 years'. Following local negotiations, the Company made an offer of 4.14 weeks' pay (to include basic pay plus bonus but not overtime), plus statutory entitlements, per year of service (with an agreed cap, for one worker, at £60,000). The offer would cost the Company £435,000 which was the maximum amount for which it would receive sanction from its UK parent. The Union sought a package of 5 weeks' pay per year of service, plus statutory entitlements, which would cost the Company a further £68,000. The Union argued for such a package on the grounds that the sale of the Beggars' Bush site would realise considerable profits for the Company and also that the age profile of many of those being made redundant would limit their future job-opportunities. The matter 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 13th of May, 1999, in accordance with Section 26 (1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 13th of July, 1999.
UNION'S ARGUMENTS:
1. Six of the workers concerned will find it almost impossible to secure alternative employment due to their respective ages.
2. The wage rates in the Company are approximately £350 per week. Any of the work-force who are successful in securing further employment will be unlikely to achieve that level of pay.
3. A redundancy package of 5 weeks' pay per year of service would be reasonable, given that the Company is, and always has been, profitable. Additionally, the Company will benefit greatly from the sale of the premises, to the tune of over £3 million. It also has to be borne in mind that the Company will continue operations on the Irish market by way of a warehousing/distribution centre in the Dublin area.
COMPANY'S ARGUMENTS:
1. The Company believes that it has been fair, reasonable and honourable in its approach to negotiations with the Union to date and it has acknowledged the long service of the employees and the contributions they have made to the Irish operation. Accordingly, the Company made its final offer of approximately 4.14 weeks' pay per year of service, plus statutory entitlement, and, in so doing, the Company has sacrificed the entire statutory redundancy rebate.
2. The value of this deal is very significant for the vast majority of the 13 employees concerned, 5 of whom will receive between £50,000 and £66,000. 2 of whom will receive between £35,000 and £40,000, 4 of whom will receive between £10,000 and £20,000 and 2 of whom will receive between £2,000 and £8,000. Taking into account that the average net earnings would be between £12,000 and £16,000 per annum, the net real value of this offer is very high for the individuals affected.
3. The value of this deal, at 4.14 weeks' per year of service is about 40% higher than the previously set precedent of 3 weeks' pay per year of service which has been implemented in the Company in other circumstances. In offering 4.14 weeks' pay per year of service, as a redundancy settlement, the Company effectively spent the entire budget available to them for redundancy payments. This payment is far in excess of 2.5 weeks' pay per year of service paid in the UK and the Irish operation will not be able to convince the UK office to fund a higher level of redundancy payment.
RECOMMENDATION:
The Court, having considered the written and oral submissions, and, taking into account all aspects of the case, recommends that the Company offer of 4.14 weeks' per year of service be increased to 4.5 weeks' per year of service.
Signed on behalf of the Labour Court
Finbarr Flood
27th July, 1999.______________________
MK/BCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.