FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FITZGERALD PACKAGING (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Carberry Worker Member: Ms Ni Mhurchu |
1. Relocation/Severance Package.
BACKGROUND:
2. The Company is an independently owned corrugated sheet and box manufacturer located in the Galvone Industrial Estate in Limerick. The Company was founded in 1977 and commenced operations with a workforce of ten employees. The Company was subject to a Management buyout in February, 2001. The Company currently employs 88 in two plants in Limerick.
SIPTU represents the interests of hourly paid employees.
On the 8th of March,2002, the Company announced to the workforce that as a result of its worsening financial situation, it would need to achieve substantial cost savings, including labour cost savings and relocation. The Union sought a severance package for those who could not relocate to the new premises and a relocation payment for those members who do relocate.
As agreement could not be reached the Union referred the matter to the Labour Relations Commission. Conciliation conference's were held in April, May and July, 2002. As agreement could not be reached, the matter was referred to the Labour Court under Section 26(1) of the Industrial Relations Act, 1990, on the 12th of September, 2002. A Labour Court hearing took place on the 10th of September, 2002, in Co. Kerry.
UNION'S ARGUMENTS:
Re-Location:
2. 1. The workers would have increased mileage to travel to work, most of them live in the vicinity of Fizgerald Packaging.
2. The new proposed plant is at the other side of Limerick City, traversing an extremely busy route through the City centre. This move would incur increased journey time to and from work.
3. Some of the workers walk to work.
4. The extra time lost due to the journey of approximately 7 miles to Gillogue would also require changes for members who have child-minding arrangements at home.
Redundancy Terms:
1. The Union believes that the Company's insistence at conciliation that all employees transfer to Gillogue was simply a ploy to remove the Union's right to negotiate terms for its members.
2. The Company continues to offer its Voluntary Severance proposal in the hope that members, through insecurity of employment and placing an unattainable requirement on future employment will take up the voluntary option. This is extremely disingenuous of Fitzgerald Packaging given that some of these employees have given up to 27 years service to the Company.
3. Over the years the workers have seen this business go through good times and bad, but never has such disregard for their livelihood been experienced.
COMPANY'S ARGUMENTS:
4. 1. The Company's market circumstances are such that the corrugated cardboard business continues to suffer badly from reduced demand for product arising from the effects of the international downturn. The Company's trading situation has been particularly exacerbated of late with the loss or diminution of contracts with high profile customers.
2. Actual sales have reduced by close on 21% between 2001 and 2002. The Company's 2002 audited accounts show a trading loss of £73,492 while its 2001 profit and loss account shows a net profit of £77,587 based on a turnover of £13,441,122, thus reflecting a return of just over half of one per cent which is extremely poor.
3. Management has taken a major risk in attempting to secure the future of the Company by seeking to merge the two current plants into one plant at a new location. During the course of the most recent conciliation conference held on the 17th of July, 2002, the Company put forward a reasonable offer of €1,000 gross at the time of the move plus €750 gross at the beginning of 2003 per employee. This offer is particularly generous given the context of the relocation and the Company's financial circumstances.
4. The Company has since placed its voluntary severance package on the table, accepted and effected 15 redundancies, representing a 15% decrease in staff numbers.
5. The Company cannot be expected to negotiate a redundancy package at this time in respect of a situation that may not arise. Management cannot predict whether any future redundancies will be required and secondly, even if the need for redundancies could be identified, the nature and scale of same would be impossible to ascertain at this juncture.
6. In the event that redundancies subsequently become necessary after the move to the new plant, the Company is prepared to deal with the matter through normal industrial relations procedures.
7. It would be more constructive at this point in time for the parties to focus their efforts on effecting the move to the new premises in the interests of securing the Company's future and safeguarding jobs.
8. The Company has already given the Union a safeguard in respect of any subsequent discussions on the matter of redundancies.
RECOMMENDATION:
The Union put forward two claims to the Court (i) claim for an enhanced relocation package for the move to Gillogue, and (ii) an enhanced severance package in the event of (a) employees not finding the move to Gillogue acceptable or (b) possible future redundancies due to the new conditions applying in Gillogue.
The Court has considered the written and oral submissions of the parties. The Court notes the Company's commitment that "the move to Gillogue would not involve any change in shift/work patterns, rates of pay and operational requirements". In addition, "management confirmed that they are willing to and intended to carry all employees in employment at the time of the move over to the new plant in Gillogue". However, "they were reserving their position in relation to possible future redundancies and possible future changes to shift systems".
In return for full co-operation with the move to the new location in Gillogue, the Court recommends that the lump sum offered to staff should be increased to €2000 - €1000 to be paid at the time of the move and €1000 to be paid six months later.
Given the commitments made by the Company and that the distance and time involved in the move are not excessive, the Court is of the view that the transfer to Gillogue does not justify a redundancy payment .
Management has given a commitment to deal in line with normal procedures, with the issue of a severance package in the event of future redundancies becoming a reality. The Court is of the view that this is a reasonable position and therefore does not recommend a severance package in these circumstances.
Signed on behalf of the Labour Court
Caroline Jenkinson
26th September, 2002______________________
HMCD/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Helena McDermott, Court Secretary.