FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : RALEIGH IRELAND LTD (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Keogh Worker Member: Mr O'Neill |
1. Dispute concerning redundancy terms.
BACKGROUND:
2. The Company is a sales, warehousing and distribution company based in Dublin which sells and distributes Raleigh products. It employs 27 workers. Sales have decreased significantly since 1995, culminating in a severe downturn in 1998. This has necessitated a re-structuring of the Company's operations in Ireland. The Company decided to close its warehousing and distribution functions with the loss of 12 jobs. The Company offered redundancy terms of two weeks pay per year of service plus statutory entitlements. The Union rejected the offer. The dispute was referred to the Labour Relations Commission and a conciliation conference was held on the 22nd of January, 1999. The conciliation conference was adjourned to allow the Company review its position with UK management. Subsequently, the Company amended its offer to statutory plus three weeks basic pay per year of service for each completed year of service subject to a cap of 18 months basic pay. The Union rejected this offer. Further agreement was not possible and the dispute was referred to the Labour Court by the Labour Relations Commission on the 15th of February, 1999. A Court hearing was held on the 2nd of March, 1999. A letter recommendation was issued on the 8th of March, 1999.
UNION'S ARGUMENTS:
3. 1. The workers concerned have given long and loyal service to the Company. Many have remained in the employment throughout three separate re-location of premises from 1980 to the present time. During this time three separate re-structurings took place within the Company, resulting in job losses. These were dealt with through the agreed mechanism of voluntary redundancies, all of which received better redundancy settlements than that now proposed by the Company, in a compulsory redundancy situation.
2. The workers feel let down by the Company in that their loyalty and commitment has not been reciprocated. The severance package offered is a derisory one. They cannot understand why they are being asked to accept severance terms less favourable than all the other workers in the Company who over the years accepted voluntary redundancy packages. The Company offer falls far short of previous settlements. Because of the workers age profile they will find it impossible to obtain alternative employment. The Union seeks 5 weeks pay per year of service plus statutory entitlements.
3. Another element to be considered is the pay and conditions that workers have built up over many years of Union involvement in the Company. Their basic pay is reasonable, sick pay, leave, service pay and meal allowances were better than most. They will not be able to secure alternative employment with such conditions. They worked overtime consistently throughout the years. These are important considerations when considering final severance terms. Workers deserve to be treated more favourably in respect of severance terms because of the compulsory nature of the redundancies.
COMPANY'S ARGUMENTS:
4. 1. Because of the Company's very serious financial situation the Company considered various options and was left with no alternative but to declare the workers concerned redundant. The Company has had to take similar difficult decisions throughout Europe.
2. Initially the Company pointed out that in its current financial state it could not pay out more than the statutory entitlements but the Company, in the interest of reaching an amicable solution, made a realistic offer of two weeks pay per year of service plus statutory. The Company subsequently revised this offer to that currently proposed. The restrictions placed on this offer allowed the Company the financial flexibility to move to three weeks for the majority of workers affected. The Company cannot increase this offer due to its extremely serious financial situation. To do so would jeopardise the recovery plan which in 1999 still shows the business with a significant loss before tax.
RECOMMENDATION:
The Court has taken into account the serious financial situation of the Company, and also the method of communicating and implementing these redundancies. The Court is of the view that employees' fears and anxieties are real and should have been considered. Very little communication has taken place and no form of outplacement/counselling has occurred. The majority of the employees in question have had long service and are concerned about their future employment prospects.
The Court recommends that a redundancy package of 3 weeks' pay per year of service, plus statutory entitlement, should be paid. The ex-gratia payment should be calculated on average earnings, over the 13-week period prior to being declared redundant. There should be no cap or ceiling on the amount. The entitlement should be based on the service as used in the Redundancy Acts and not on completed years of service. The Court also recommends that the employees should be given details of their pension entitlements, their tax and PRSI situation. Every effort should be made to assist employees in seeking alternative employment.
The Company should consider seeking a professional outplacement service to assist them in the above tasks, if they do not have access to such expertise themselves.
Signed on behalf of the Labour Court
Caroline Jenkinson
19th March, 1999.______________________
TOD/BCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.