FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GALLAHERS (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL ENGINEERING AND ELECTRICAL UNION AMICUS AEEU DIVISION : Chairman: Mr Flood Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Redundancy terms.
BACKGROUND:
2. The Company employes 228 workers at its plant in Tallaght. Following a review of its European operations the Company decided to close the manufacturing facility at Tallaght and declared 121 workers redundant. The Company offered a severance package as follows:
Redundancy pay- 6 weeks pay per year of service plus statutory entitlements
March bonus
Loyalty bonus
3 years added service to pension scheme
3 years service for redundancy purposes up to 10 years service.
The Company's offer amounted to €18.80 million. At local negotiations in September, 2003 Management made further proposals which increased the offer to €20.65 million. The offer was rejected by the Unions.
The Unions submitted their claim as follows:
7 weeks pay per year of service (based on P60 earnings) plus statutory entitlements
A loss of employment lump sum of €12,500
Enhancement of pension - 5 years additional service to be added to pension scheme.
Management rejected the claim. The dispute was referred to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. The dispute was referred to the Labour Court in September, 2003 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 3rd November, 2003.
UNIONS' ARGUMENTS:
3. 1. Basing the non-statutory severance payment on P 60's would affect approximately 70% of the claimants who have worked overtime as requested by the Company. The use of this formula is widespread in severance agreements and exclusion of these earnings is unfair.
2. The lump sum compensation claimed by the Unions has been reduced by 50%. and is in lieu of significant benefits enjoyed by the claimants.
3. The pension claim involves an additional 2 years over the Company's offer.
4. The Company is very profitable and can afford to pay a top of the range settlement.
5. The claimants have made a significant contribution to the Company's profitability.
COMPANY'S ARGUMENTS:
4. 1. The Company's offer is one of the most lucrative available. It is a severance deal that recognises that jobs are being lost and the commitments to the Company from the job holders. While the Company is fully aware of the implications of redundancy for workers the average settlement is very substantial, takes cogniscance of all such concerns and is more than generous.
2. The Company is not at liberty to operate in complete isolation from the rest of the Gallaher Group as there are redundancy negotiations taking place throughout the Group.
RECOMMENDATION:
The Court, having considered the written and oral submissions recommends that the Company offer of 8th September, 2003 should be re-offered by the Company and should be accepted by the Employees.
The Court is satisfied that the offer is an appropriate one to match the circumstances that currently prevail.
Signed on behalf of the Labour Court
Finbarr Flood
10th November, 2003______________________
TODChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.