FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH PETROLEUM COMPANY LIMITED - AND - MANUFACTURING, SCIENCE, FINANCE DIVISION : Chairman: Mr Duffy Employer Member: Mr Keogh Worker Member: Mr. Somers |
1. Relocation / Severance.
BACKGROUND:
2. Irish Petroleum was privatised in 2001 and is now part of the Philips/Conoco group. As part of an overall rationalisation plan the company is closing its Dublin head office. The functions of head office are being transferred to Whitegate and to the UK. The staff concerned were given the option to transfer to these locations or be made redundant. The offer of relocation was rejected by the staff.
Management put forward proposals for a redundancy/early retirement package for those who did not wish to transfer to the new locations as follows:
( a) Early Retirement: Available to workers over 50 - pension with 4 years service credit and actuarial discount from 50 to 55. In addition, a lump sum of 6 weeks pay per year of service including statutory, plus a special payment of 4 months pay, including statutory notice. A limit of 2.5 year's pay applied at age 55 reducing to 6 months at age 64.
(b) Severance: 8 weeks pay per year of service including statutory, subject to a limit of 2.5 years pay plus a special payment of 4 months pay (including pay in lieu of statutory notice).
The Union rejected management's proposals.
The dispute was referred to the Conciliation Service of the Labour Relations Commission. Conciliation conferences were held on the 12th and 24th February, 2003, but agreement was not reached. The dispute was referred to the Labour Court on the 27th February, 2003 in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 9th April, 2003, the earliest date suitable to the parties.
UNION'S ARGUMENTS :
Early Retirement-Over 5o's
3. 1. The Union is seeking additional service credit for these employees from 4 years to 6.75 years.
2. The special lump sum payment should be increased from 4 months to 6 months pay and it should be paid in addition to any limit placed on the sum based on 6 weeks pay per year of service. It should be paid exclusive of statutory notice pay.
COMPANY'S ARGUMENTS :
4. 1. The claim for 6.75 years service credit has no valid basis and is unsupportable by reference to any oil industry practice. A 4 year service credit is fair and reasonable considering that it would be applied to all, in recognition of the Dublin office demographics.
2. The claim for payment in lieu of notice in addition to the special payment is not supportable by any oil industry comparison. The offer of a 4 month special payment (inclusive of pay in lieu of notice) is reasonable given that employees will have been employed 2 months longer than originally envisaged.
UNION'S ARGUMENTS :
Redundancy - Under 50's
5. 1. The additional pensionable service credit should be increased from 4 years to 6.75 years and should be made pensionable for those qualifying under revenue rules.
2. The special lump sum payment should be increased from 4 months pay to 6 months pay and should be paid exclusive of statutory notice pay.
3. For both the under and over 50's employees, the limit of 2.5 years pay is unfairly restrictive. The Union wants it removed or adjusted to eliminate the discriminatory effect on a small number of long serving staff.
COMPANY'S ARGUMENTS :
6. 1. The claim for service credit pensionability in the severance programme represents a far greater cost today than it would have in the past. The Company's offer is competitive overall and any concession in this area would have to be matched by reductions in other areas.
2. The claim for payment in lieu of notice in addition to the special payment is not supportable by any oil industry comparison.
RECOMMENDATION:
The Court has taken full account of the submissions made by the parties. The Court is of the view that the proposals put forward by the company are in the higher range of voluntary severance terms which have applied within the sector. Nonetheless, having regard to what applied previously, the Court recommends that the following modifications be made to the company's proposals:
- That the additional service credit be increased from 4 years to 5 years.
- That the special lump sum payment be increased from 4 months pay to 6 months pay, inclusive of payment in lieu of notice.
The final proposals put forward by the company, as modified by the recommendation above, should now be accepted.
Signed on behalf of the Labour Court
Kevin Duffy
28th April, 2003______________________
LW/LWDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.