FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FINE ART LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - GRAPHICAL, PAPER AND MEDIA UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Redundancy terms for 5 plate-makers and 10 printers
BACKGROUND:
2. The Company (now Coleridge Fine Arts Limited) was founded in 1972 to provide a finishing service for the printing industry. Due to the loss of a major customer, the Company has been forced to reduce its capacity and costs in line with its projected level of sales and, accordingly, is seeking 15 voluntary redundancies from among its craft employees. Of the total current staff of 89, there are 23 printers and 11 plate makers. The Company, in December, 1999, offered a redundancy package comprising 2 weeks' pay per completed year of service, plus statutory entitlement, plus payment in lieu of notice, with the Company reserving the right to accept or reject volunteers. The offer was rejected by the Union which is seeking an increase in the non-statutory component of its offer to 4 and a half weeks' pay per year of service. The Union points out that the Company offered 5 weeks' pay per year of service as part of a redundancy package in 1996. However, the Company states that this offer could not be repeated due to its current financial situation.
The dispute was the subject of 2 conciliation conferences under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court, on the 10th January, 2000, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation on the 28th of January, 2000. Both parties made written submissions to the Court which were expand upon, orally, and in subsequent correspondence to the Court.
COMPANY'S ARGUMENTS:
3. 1. The Company offer is fair and reasonable given its current financial positions (details supplied to the Court).
2. The claim put forward by the Union is excessive and unrealistic especially in view of the fact that the redundancies will be on a voluntary basis.
3. Entitlements under the Company offer would range from £7,998 to £35,491 and the average entitlement is £21,138 per employee. Twelve employees have an entitlement amounting to over 65 weeks' pay per year of service. The total package is expected to cost the Company at least £286,000 and, depending on which workers actually volunteer, might exceed £394,000.
4. Due to the long service record of the employees concerned, the Company would not be able to increase the number of weeks' pay per year of service without imposing a cap on the total number of weeks paid. The payment of an extra half a week's pay per year of service, without the implementation of a cap, would cost the Company an additional £56,000, on average, and possibly as much as £78,509.
5. The projected profits for the Company over the years 2000, 2001, 2002, after allowing for the savings envisaged by the 15 redundancies, but excluding the costs of redundancy, are respectively, £48,000, £129,000 and £210,000.
6. It is imperative to reduce staffing levels to ensure the future viability of the Company for those remaining in its employment.
UNION'S ARGUMENTS:
4. 1. The loyal service of the Company's employees over the past 28 years must be recognised and they are determined to achieve a settlement that takes cognisance of their contribution to the success of a Company that has developed into a large group of companies over the years.
2. If the Company wishes to restructure, it must realise that just like any investment, whether it be in the area of new machinery or redundancies, it will have to pay the price of that restructuring in order to achieve the co-operation of the workforce in agreeing the major changes required of them.
3. Many of the workers concerned, both printers and plate-makers, are over the age of 45 and will face the prospect of not being able to find work again in the printing industry due to their age profile or because their level of skills has been surpassed with ongoing technological developments.
4. The notion of a cap being applied is unacceptable to the Union as some of the more senior volunteers would receive only marginally more from an increased Company offer than was originally offered.
RECOMMENDATION:
The Court has given serious consideration to the submissions made by both sides. The Court understands the Company's need to restructure and to reduce the number of workers employed. The Company has incurred serious losses in recent times and is projected to continue to make losses in the coming years. The Court also recognises the difficulties redundant employees may encounter in this specialised industry, where they do not possess the up-to-date skills.
The Company has offered a voluntary redundancy package. There is, accordingly, no compulsion on staff to leave their employment. Similarly, the Company has the right to choose from the list of those employees who opt to avail of the voluntary redundancy package.
The Court recommends that the offer made by the Company, in December, 1999, should be increased to the following:-
- Statutory redundancy entitlement, plus
- Three weeks' pay per year of service, plus
- payment in lieu of notice.
The Court recommends that the overall package should be subject to a maximum payment of £40,000 per employee.
Signed on behalf of the Labour Court
Caroline Jenkinson
10th March, 2000______________________
M.K./U.S.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.