FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : RENNICKS PLASTICS LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Carberry Worker Member: Mr. Somers |
1. (A) Increased severance terms and removal of "cap" (B) Compensation for staff with under 2 years' service (C) Inclusion in the redundancy terms of a worker who resigned.
BACKGROUND:
2. The Company is a plastic moulding company based in Kilbride, Co. Meath. There are 88 people in the Company, with 72 members in the Union. On the 23rd of August, 2002, the Company announced that the factory would close with effect from September 27th, 2002. The Company offered statutory entitlements plus 4 weeks' pay per year of service with a "cap" of 1 year's salary. The Union is seeking 6 weeks' pay per year of service, statutory entitlements and no cap. The Company's offer did not include workers with less than 2 years' service. The Union is seeking compensation pro rata for these workers. The other issue, which the Union regards as very important, concerns a worker who tendered her resignation verbally 2 days before the announcement of the closure. The Union is seeking that she be included in whatever redundancy terms are agreed, but the Company refuses to include her.
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 18th of September,2002, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 19th of September, 2002, in Navan.
UNION'S ARGUMENTS:
3. 1.Situation regarding a worker:
The worker has been employed with the Company for 8 years. The Union believes that the Company knew about the redundancies when the worker handed in her notice 48 hours prior to the announcement. She has been treated in a most unfair manner.
2.Improved redundancy terms:
Most of the workers concerned will not secure other employment. The Company is owned by the Fitzwilton Group of companies which is hugely successful. The proposed rezoning of at least 10 acres of land will ensure a huge return for this group which can afford to pay more than the 4 weeks' pay on offer.
3.Removal of cap on severance terms.
The removal of the cap would only apply to a small number of workers (8 members with approximately 17 years' service). These workers would suffer more if the 1 year cap applied, despite their long years of service.
4.Extension of severance terms to staff with less than 2 years' service:
This issue concerns 3 workers who are not covered by the Redundancy Payment Act. All 3 gave up previous employment to work with the Company. The financial cost to the Company would be minuscule.
COMPANY'S ARGUMENTS:
4. 1.Situation regarding a worker:
The worker concerned informed the Production Manager that she was resigning from the Company to take up employment elsewhere. She was not made redundant and, as such, is not entitled to redundancy terms.
2.Improved redundancy terms:
The formula of 4 weeks' pay per year of service is consistent with terms offered to workers made redundant in March, 2002. The Company considers it fair and realistic in the circumstances.
3.Removal of cap on severance terms:
The formula of statutory entitlements plus 4 weeks' pay per year of service is subject to a cap of 1 year's pay, as per the terms in March, 2002.
4.Extension of severance terms to employees with less than 2 years' service:
Employees with less than 2 years' service are entitled to 1 week's notice. However, in accordance with the Protection of Employment Act, 1977 they essentially have the benefit of 4 weeks' work.
RECOMMENDATION:
Four issues were referred to the Court for recommendation. The Court, in return for a commitment from the Union for full co-operation with an orderly closedown of the plant, recommends the following terms:-
Situation regarding a worker
The Court has given consideration to all the circumstances surrounding this case, including the fact that no entitlement to a statutory redundancy payment exists. In the context of the prevailing redundancy package on offer, the Court recommends that as a gesture of goodwill the Company should pay the claimant an ex-gratia payment of €10,000 in full and final settlement of all claims.
Improved Redundancy Terms
The Court is satisfied that the terms on offer are the accepted terms which applied in a previous compulsory redundancy situation in the Company. The Court is also satisfied that the terms are reasonable in the circumstances prevailing in this Company. Therefore, the Court does not recommend an increase in the terms offered.
Removal of cap on severance terms
The Court recommends that the ceiling on the severance terms should be increased to 15 months.
Extension of severance terms to staff with less than 2 years' service
The Court recommends that those with less than one year's service and made redundant should be paid a lump sum of €450 each, and those with more than one year's service should be paid €600 each.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th September, 2002______________________
CON/MB.
Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.