FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ALLEGRO LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MARINE, PORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. Redundancy terms.
BACKGROUND:
2. The Company was the largest company in the ambient grocery sector until February, 1999, when the Proctor & Gamble agency (representing 47% of Allegro turnover) was transferred to another agency. As a result, a survival package was agreed which included a formula for voluntary redundancy, new working arrangements and the sale of parts of the business.
The Union claims that in early 1999, it learned that the Company was in negotiations with a third party, Gillespie & Co., (part of the Fyffes Group), with a view to possible merger. The Union believed that this merger would result in 'New Allegro' and that all jobs would be secure. One of the results of the merger (which took place in July, 1999) was that the Company's logistics business (warehousing and distribution) would cease, resulting in approximately 40 redundancies. It is the redundancy terms for the 40 workers which are the basis of the present dispute. The original voluntary redundancy terms were three weeks' pay per year of service inclusive of statutory redundancy, with a ceiling of £25,000. The ceiling was then increased to £30,000, and this is still the offer for the 40 workers concerned, plus a sum of £500 per person. The Union's view is that the redundancies are compulsory, and is seeking six weeks' pay per year of service, plus statutory, and no ceiling.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place on the 30th of September, 1999. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 5th of October, 1999, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 15th of October, 1999.
UNION'S ARGUMENTS:
3. 1. The first the Union knew of the 40 redundancies was at a meeting on the 20th of September. Up to that point it had believed that all the workers would continue to be part of 'New' Allegro.
2. The Company had been the industry leader in the logistics business, with a turnover of over £200 million per annum. Much of the success came from the contribution of the workers.
3. The total cost of the package offered by the Company is £570,000. It is estimated that a saving of 15 pence - 20 pence per case moved by Flancare (the company now providing logistic services for Allegro/Gillespie) would result in a saving of £750,000 - £1 million per annum for the Company.
COMPANY'S ARGUMENTS:
4. 1. The decision to close the uncompetitive distribution operation was inevitable in the context of the difficulties faced by the Company. The situation is totally changed from what it was in 1998.
2. The Company has been as fair as it can in the circumstances by providing a settlement for the workers at the expense of its shareholder. Ordinary shareholders will receive nothing, and the preference shareholders will receive only a fraction of their investment.
3. If the Company is to remain viable, it cannot afford to pay more than it has already offered. A significant number of employees have already settled for the current package.
RECOMMENDATION:
The Court considered carefully the written and oral submissions made by both parties.
The Court finds that this redundancy is different to the previous cases in that this is a compulsory redundancy. The Court, having considered all the issues involved, recommends that the Company offer be accepted subject to the three weeks' pay per year of service being increased to four weeks' pay per year of service, and the ceiling of £30,000 being increased to £35,000.
Signed on behalf of the Labour Court
Finbarr Flood
22nd October, 1999______________________
C.O'N./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.