FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LUFTHANSA SHANNON TURBINE TECHNOLOGIES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Terms of compulsory redundancy package.
BACKGROUND:
2. The Company was initially founded in 1991 and was purchased by Lufthansa Technik in 1996. It is involved in the repair of aircraft engine turbine components and currently employs 168 workers.
On the 4th of June, 2003, management met with the Union to announce that a total of 29 jobs were being declared redundant as a result of ongoing losses. Twenty of these positions were in the direct workforce. SIPTU sought that the redundancies would be on a voluntary basis, with selection based on last in, first out (LIFO). If redundancies were to be compulsory, the Union was seeking 8 weeks' pay per year of service plus statutory entitlements i.e. a total of 10 weeks' pay per year of service. Management stated that LIFO could apply but subject to the retention of key skills. By the 7th of July, 2003, only 8 applications for voluntary redundancy had been received.
A number of conciliation conferences at the Labour Relations Commission took place. At one of the meetings on the 24th of June, 2003, the Company offered 3.5 weeks' pay per year of service plus statutory entitlements. On the 15th of October, 2003, the Company announced that a further 10 redundancies were needed, and that it intended to close the voluntary redundancy package on offer of 3.5 weeks' pay per year of service plus statutory entitlements. This offer would now apply to the compulsory redundancies, of which the Company is seeking 14.
As the parties could not reach agreement at the conciliation conferences, the dispute was referred to the Labour Court on the 21st of October, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 17th of November, 2003.
UNION'S ARGUMENTS:
3. 1.The workers facing compulsory redundancy have short service of approximately 5 years or less. Because of this, the overall cost to the Company will be minimal.
2. Industry in the Shannon region has been going through a difficult time recently, making it more difficult for those being made redundant to get alternative employment.
3. The Company has been highly profitable in the past, with the workers concerned being contributors to this success. Redundancy terms in Shannon have tended to be well in excess of the national average.
COMPANY'S ARGUMENTS:
4. 1. There is no precedent for the redundancy settlement being sought by the Union. Most settlements are in the region of 3.75 - 6.5 weeks per year of service, including statutory entitlements.
2. The Company has experienced significant financial difficulty in the last 2 years which has necessitated the current redundancy programme, and the Union has acknowledged this.
3. The Company would be concerned at any knock-on implication if the Union's claim were conceded.
RECOMMENDATION:
Having regard to the compulsory nature of the redundancies, the method of selection separately recommended by the Court and relatively short service of those likely to be selected, the Court recommends as follows:
- The Company should improve its offer by a ½ week per year of service, giving 6 weeks' per year of service inclusive of statutory terms.
- There should be payment in lieu of notice.
- An additional week's pay (calculated on the same basis as for the purpose of 1 above) should be added to the combined total under 1 and 2 above.
Signed on behalf of the Labour Court
Kevin Duffy
24th November, 2003______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.