FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BIO MEDICAL RESEARCH (BMR) (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr. Somers |
1. Redundancy terms.
BACKGROUND:
2. The claim relates to the closure of the Company's Donegal plant and redundancy terms for 43 workers. The Company designs and markets the Slendertone beauty/fitness range of products. Despite strong growth in 2000/2001, the Company claims that it had accumulated losses of €17 million by the end of December, 2002. A decision to outsource products to a third party resulted in 75 redundancies in the Donegal facility between January and March, 2003. Those workers received the following redundancy terms in January, 2003:
- The then statutory redundancy payment plus three weeks' pay per year of service
- A ceiling or cap on earnings per employee set at €13,000
- Employees with less than two years' service to receive two weeks' pay per year of service on a pro rata basis.
The Company hoped to retain the remaining 43 workers but continuing losses meant it had to close the Donegal facility, resulting in the current redundancies. The Union was seeking redundancy terms of (new) statutory terms plus 2.5 weeks' pay per year of service with no cap.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. At the conference the Company confirmed its original offer as above to the 43 workers or, as an alternative, 3 weeks' pay per year of service inclusive of statutory with no cap. The Union rejected the offer and the dispute was referred to the Labour Court on the 7th of July, 2003, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 3rd of September, 2003, in Donegal.
3. 1. The Company is currently sourcing out its product and is concentrating on research development and marketing. It has secured €14 million of investment through Venture Capitalists. The Union believes that the Company will return to profitability.
2. The 2.5 weeks' pay per year of service plus statutory entitlements with no cap is a reasonable expectation for the workers concerned.
3. The difference between what the Company is offering and what the Union is seeking is very little.
COMPANY'S ARGUMENTS:
4. 1. The Company has sustained major losses over the last year and is not in a position to increase its offer. It is relying on securing third party funding to finance the redundancy terms.
2. The current package is similar to the one offered in March, 2003, and the Company believes that it is fair.
3. There is a considerable difference between what the Union is seeking and what the Company is offering (details supplied to the Court).
RECOMMENDATION:
The Court does not believe that the changes in the statutory redundancy scheme is in itself a justification for seeking cost-increasing improvements on the terms agreed in respect of the last set of redundancies. The Court does, however, note that the terms agreed in December 2002/January 2003, were to be offered on a voluntary basis, or last- in, first-out in the absence of sufficient volunteers. The present redundancies have resulted from the closure of the plant and will be compulsory for all remaining staff. In these circumstances, the Court believes that some modification of the previous terms is warranted.
The Court recommends that the Company improve its offer to one of 3.75 weeks' pay per year of service, inclusive of statutory redundancy, and that there be no cap on the amount receivable.
Signed on behalf of the Labour Court
Kevin Duffy
18th September, 2003______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.