FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : KERRY FOODS (DAWN DAIRIES) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Carberry Worker Member: Mr O'Neill |
1. Goodwill payment
BACKGROUND:
2. The claim is for a goodwill payment on behalf of 36 workers as a result of the transfer of the Company (Dawn Dairies) to Clona Foods. The Company was part of the Kerry Group until November 2000. The claim is for £1,000 (1,269.74 Euro) per year of service.
The Union had a number of other claims, including an improvement in the pension scheme and a save-as-you-earn (SAYE) scheme.The Union believes that expected benefits from these schemes will be denied to the workers as Clona is a much smaller operation than Kerry Foods, and it is unlikely that the schemes will be introduced there.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 13th of November, 2000, in accordance with Section 26 (1) of the Industrial Relation Act, 1990. A Labour Court hearing took place on the 15th of August, 2001, in Cork.
UNION'S ARGUMENTS:
3. 1. The Company is a highly successful multi-national company with a turnover of £2.5 billion.
2. The workers concerned have contributed greatly to the Company's success. There are 6 workers with 20 years' service and 1 worker with 33 years' service. This illustrates their commitment to the Company.
3. The workers, although shareholders in the Company, were not consulted about the sale to Clona Foods. They were made aware of it in August, 2000, after the deal was completed.
4. There is a precedent among companies such as Cablelink, Tayto, Irish Country Meats etc. for loyalty bonuses/ex-gratia payments in regard to the sale of companies.
COMPANY'S ARGUMENTS:
4. 1. The milk industry in the last 2 years has become extremely turbulent. Kerry Foods had to make a decision to improve the situation, and the sale of the Company to Clona Foods was the best option available for the employees.
2. The Company's management has had to reduce its operations from 5 to 3 in the past 8 months. It is not in a position to take on board any cost-increasing claims. It must use its resources to optimise the employees prospects in the 3 remaining operations.
3. There is no agreement or contract in place in regard to goodwill payments. Any concession of such would have serious consequences for the Company.
RECOMMENDATION:
The Court considered the written and oral submissions made by the parties.
The Court acknowledges the Company view that it did all in its power to arrive at a satisfactory outcome for the employees in difficult circumstances.
However, the Court accepts the employees' argument that their expectations and prospects have been affected by the transfer, despite the fact that the Company has met its commitments under the transfer of undertakings legislation.
It is clear that the fears of the employees expressed during the transfer could have resulted in major difficulties at the time but were addressed by progressing the case through the procedures.
The Court, having considered all the issues involved, recommends that the Company match the £25,000 provided by the new employer for distribution amongst the employees, in full and final settlement of this claim. This money to be distributed on a pro-rata basis based on service.
Signed on behalf of the Labour Court
Finbarr Flood
13th September, 2001______________________
CONChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.