FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PIERCE ENGINEERING LIMITED - AND - TECHNICAL, ENGINEERING AND ELECTRICAL UNION AMALGAMATED ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Carberry Worker Member: Ms Ni Mhurchu |
1. Proposed relocation.
BACKGROUND:
2. Pierce Engineering is part of the Waterford Stanley Group. It has two divisions, one making cooker parts, and "Pierce Pack" which produces refuse equipment.
The Company propose to sell its existing site and to relocate to two new sites which are currently available under a long term lease agreement. It claims that the relocation is necessary for the future viability of the Company. The Company is prepared to offer a minimum of €700 per employee on transfer to the new site.
The Unions are seeking (1) a dividend from the sale of the site and (2) a disturbance payment. The Unions are also concerned about possible redundancies in the Company following the move to the new locations.
Management stated that it was prepared to enter into a legally binding agreement which would safeguard the payment of agreed ex-gratia terms in the event of redundancy arising within the next five years.
As no agreement was possible between he parties the dispute was referred to the Labour Relations Commission. Following a number of conciliation conferences the Industrial Relations Officer put forward proposals on the 11th October, 2002, to resolve the dispute. However, the proposals were rejected following a ballot of the members.
The dispute was referred to the Labour Court on the 11th October, 2002, under Section 26(1) of the Industrial Relations Acts, 1990. The Court investigated the dispute on the 22nd October, 2002.
UNIONS' ARGUMENTS:
3. 1. The workers have given many years service to the Company and are entitled to seek a dividend from the sale of the site.
2. The workers are concerned about the possibility of future redundancies when the Company moves to the new location.
3. The "Pierce Pack" division should get similar redundancy terms previously paid in accordance with LCR 16937.
4. The Unions have consistently sought redundancy terms for six employees which would address the site dividend issue and accommodate the relocation process.
COMPANY'S ARGUMENTS:
4. 1. The relocation is necessary from an environmental point of view and will provide employees with modern day working facilities which meet health and safety requirements.
2. The Company has been losing money for a number of years and viability can only be restored by moving to new premises which will allow streamlining of operations and improvements in productivity levels.
3. The Company has found no precedent for paying a dividend from the sale of the current site and cannot consider making such a payment.
4. In the event of "Pierce Pack" being sold the employees would have their rights protected under the Transfer of Undertakings legislation.
RECOMMENDATION:
In substance the Unions' claim is for the payment, on account, of redundancy payments against the possibility of redundancies occurring at some point in the future. In the Court's experience, this type of claim is unprecedented, particularly in circumstances where redundancy is neither contemplated or imminent.
The Court notes that the Company has agreed to enter into legally binding agreement which would safeguard the payment of agreed ex-gratia terms in the event of redundancy arising within the next five years. The Unions are, however, concerned at the value of the agreement in the event of insolvency within that period. There is however no basis on which it might be feared that insolvency would occur.
In the Court's view it should be possible for the parties, in consultation with their legal advisors to overcome the perceived difficulties articulated to the Court, so as to secure the agreed terms for the relevant period in the unlikely event of insolvent liquidation.
With regard to the terms offered on transfer, the Court recommends that those terms should be modified so as to provide for a minimum payment of €1,000 rather than €700 as proposed.
Signed on behalf of the Labour Court
Kevin Duffy
29th October, 2002______________________
LW/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.