FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ARRAMARA TEORANTA (REPRESENTED BY 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. Redundancy terms.
BACKGROUND:
2. The Company processes seaweed for use in the Alginate industry. The Minister for the Marine and Natural Resources holds 51% of the shares on behalf of the Government and the remaining 49% of shares are held by a UK based company. The Company operated two plants, one in Dungloe, Co. Donegal and the other in Connemara, Co.Galway. In July, 2001, the Company decided to close the Donegal plant because of a decline in demand, increasing costs, and having incurred substantial losses. Eleven workers were declared redundant. The Company offered workers a redundancy package of three weeks' pay per year of service inclusive of statutory redundancy. The Union rejected the offer and claimed seven weeks' pay per year plus statutory entitlements. The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 21st of August, 2001. Agreement was not reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 24th of August, 2001. The dispute was received in the Court on the 24th of August, 2001. A Court hearing was held on the 10th of October, 2001.
UNION'S ARGUMENTS:
3. 1. The Union in seeking 7 weeks' pay per year of service plus statutory is seeking to have the Minister honour his commitment that he would be "generous to workers in relation to the redundancy package." There is already an established precedent in the Company for voluntary redundancies of 6 weeks' per year of service plus statutory entitlements, paid to workers in the 1980's. Enforced redundancies, as in this case, should attract a higher redundancy package. The Company's offer is not a serious one.
2. In relation to the cost of the redundancy package, the Company has a clear advantage over most companies facing redundancies or restructuring in that a substantial restructuring fund of £350,000 (444408.32 Euro) was made available to the Company by the Government.
3. Most redundancy settlements have provided for 6-7 weeks plus statutory entitlement.
4. The Labour Court has, in the past, upheld precedents within employments in relation to redundancy settlements.
5. The claimants have given long and loyal service to the Company and are being offered less than half the redundancy package given to former colleagues who voluntarily left the Company.
6. Workers will suffer grave hardship due to the loss of their jobs. The prospects of them finding alternative employment in the region are very bleak.
COMPANY'S ARGUMENTS:
4. 1. Management accepts that the Company made ex-gratia payments amounting to 6 weeks' pay plus statutory in a previous redundancy situation. However, given the Company's current financial situation, (details supplied to the Court), it is not in a position to repeat payments made in the 1980's. The terms of any redundancy payment must take account of the commercial and economic circumstances of the Company at the time.
2. The restructuring plan for the Company provided for an allocation by the Minister of £350,000 (444408.32 Euro) to fund redundancy payments, capital expenditure in Connemara, and the outstanding liability to compensate employees in Dungloe for loss of overtime earnings.
3. The Company continues to process seaweed at the Connemara plant. This plant will require a capital investment of £100,000 (126973.80 Euro) for new machinery. The offer by the Company to pay three weeks' pay per year of service, inclusive of statutory, is part of a restructuring plan put forward in an attempt to bring the remaining operations back to profitability.
RECOMMENDATION:
Having considered all aspects of this claim the Court recommends that the Company's redundancy severance offer should be increased to four weeks' pay per year of service plus statutory redundancy entitlement. This should be accepted in full and final settlement of all claims against the Company.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th October,2001______________________
TOD/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.