FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GMT IRELAND (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Doherty Worker Member: Ms Ni Mhurchu |
1. Severance package
BACKGROUND:
2. The Company was established in 1995 and is a subsidiary of a German based family run business. It is involved in the manufacture of rubber components for the automotive and engineering sectors. As a result of serious trading difficulties, the Company initially placed a number of staff on a short term working basis before finally finding it necessary to terminate the contracts of a number of employees.
The Union's claim is on behalf of its members whose employment was terminated, for enhanced cessation payments.
The Company rejects the claim on the basis that it can only afford to pay statutory entitlements.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 11th September 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 19th November 2003.
UNION'S ARGUMENTS:
3. 1. The Company terminated the employment of the members without consultation with the Union and therefore the members were forced to leave their employment without a reasonable redundancy package.
2. The Company stated that the parent Company which is based in Germany would not approve a payment over and above the statutory entitlements and this is not accepted by the Union.
3. The members were made redundant in order to allow longer serving members of staff to resume working full time. Only a small number of staff resumed full time working immediately as a result of this. When the orders increased for business, the remaining staff resumed work full-time. This also resulted in the recruitment of a further six staff.
COMPANY'S ARGUMENTS:
4. 1. Financial difficulties as a result of a reduction in orders placed the Company in a situation where it was necessary to terminate the employment of a number of its staff. These staff were selected on the criteria of last in/ first out.
2. The Company discharged all of its statutory obligations to the employees and the claim by the Union is not well founded.
3. It was necessary to terminate the employment of a number of staff, to facilitate the return to full time work of longer serving members of staff, who had been placed on short term working arrangements as a result of trading difficulties.
RECOMMENDATION:
The Court considered the written and oral submissions made by the parties.
While the Court accepts that redundancies can arise as a result of business decline, the Court views these redundancies as different to the norm.
These employees were made redundant to allow others to go on full time working, a decision taken by Management without discussions with the Union.
It is also different in that the business improved within a few months to the extent that a number of staff were recruited.
While noting the arguments made by the Management in relation to payments over and above statutory obligations, the Court believes these employees given the circumstances are entitled to a payment.
The Court therefore recommends that Ms. Heffernan and Ms.Ward be paid compensation equivalent to 3 weeks pay and that Mr. Cloherty be paid a lump sum equivalent to 2 weeks pay in addition to payments he has already received.
Signed on behalf of the Labour Court
Finbarr Flood
5th December 2003______________________
JO'CChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jo O'Connor, Court Secretary.