FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1); INDUSTRIAL RELATIONS ACT; 1990 PARTIES : SPS UNBRAKO (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Keogh Worker Member: Mr. Somers |
1. Terms of redundancy.
BACKGROUND:
2. The Company is a subsidiary of an American Corporation - SPS Technologies. It manufactures standard socket set screw products and employs 180 workers at Shannon. The dispute concerns the amount of redundancy that workers should receive when being made compulsorily redundant. The Company currently operates a voluntary severance package of 4 week's pay per year of service including statutory entitlements. In March, 1999, the Company decided to outsource product and make 30 workers redundant. The Union submitted the following claim;-
5 weeks plus statutory for each year of service.
Minimum notice of 8 weeks to be paid.
The reference period to be the best 13 weeks of the previous 52.
The Company rejected the Union's claim. Following a management review of the business ,the number of redundancies was reduced to 8. These were effected on the Company's voluntary terms in September/October 1999. These terms were offered to a setter on permanent night shift whose position was being declared redundant. The Union rejected the Company's offer.
The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 18th of April, 2000. No agreement was reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 4th of May, 2000. A Court hearing was held in Limerick on the 20th of June, 2000.
UNION'S ARGUMENTS:
3. 1. In a significant number of companies in the Shannon and Mid West Region, the normal redundancy package paid is 5 weeks plus statutory entitlements. A number of companies in the region have paid 6 weeks plus statutory and 5.5 weeks plus statutory (details supplied to the Court).
2. In the vast majority of instances in a compulsory redundancy situation,it is the junior worker with the least service who is affected ,i,e' last in first out,' therefore, the cost to the Company is minimal. The setter on nights is also the junior worker in this instance.
3. Due to the nature of this Company and its fluctuating cycles it is of the utmost importance that agreement is reached on a compulsory redundancy package. This would enable both sides to move forward in a professional manner when similar situations arise in the future.
COMPANY'S ARGUMENTS:
4. 1. The established redundancy terms ,as offered represent a fair and reasonable settlement for the employees involved, taking into account service profiles, wage rates, shift overtime, and redundancy payouts achievable. The terms offered must be considered against the background of a very positive labour market at present in the Mid West Region.
2. The cost of redundancy must be balanced with the need to maintain a viable business. The business is operating in a mature declining market with limited scope within its sector for development. Considerable reinvestment in plant has to be secured to take advantage of opportunities which exist.
The terms on offer are established since 1980 and in fact were accepted by both Unions in 1999, for the same redundancy scenario, the same reasons, in the same department.
3. The fact that the Company is compelled to re-organise the business to secure the long term viability of the remainder of the workforce is not a valid Union argument for improvement of the formula. Account must be taken that the business is operating in Shannon since 1960 with 34% of the workforce having more than 20 years service.
4. The issue here is not the redundancy costs for one individual but the ongoing cost implications for the business. Further restructuring may well be necessary to underpin and sustain the Company in its efforts to move into viable and sustainable products capable of being produced competitively at Shannon.
5. The Company have minimised the impact of the redundancy through re-deployment and re-training of employees and also retained a number of employees in the set screw section. This is not a compulsory redundancy in that valid suitable alternative employment exists within the Company. The individual chose not to stay with the Company and is seeking considerably enhanced terms in excess of those availed of by his colleagues.
RECOMMENDATION:
The Court having considered the written and oral submissions made by the parties and taking into account the particular circumstances of this case, recommends that the Company offer on redundancy be accepted, but with the number of weeks pay per year of service to be 4½ rather than 4 as proposed.
Signed on behalf of the Labour Court
Finbarr Flood
4th July, 2000______________________
TOD/CCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.