FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CAMBREX CORK (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION NO. 2 BRANCH AND APT BRANCH DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Redundancy.
BACKGROUND:
2. The Company is based in Cork and manufacturers bulk Active Pharmaceutical Ingredients (API’s) and intermediates for the generic (out of patent) and contract manufacturing markets. In March 2004 workers were informed of the Company’s plans for a reorganisation of the Company. The dispute relates to the redundancy of 13 workers due to this reorganisation and involves two branches of SIPTU-Cork, the No 2 branch and the APT branch. Five of the redundancies (compulsory) affect supervisory workers of the APT branch, the others are production operator posts, including a general maintenance man and engineering stores post who are members of the No. 2 Branch.
- The Company initially offered 3 weeks pay per year of service plus statutory redundancy with a cap as per the redundancy legislation. The Union sought 6 weeks pay per year of service plus statutory in line with a deal done in 1987. Following discussions with the workers and the Union the Company presented a termination package as follows:
- Statutory redundancy terms plus 3 weeks pay per year of service worked. A weeks pay was determined to be basic pay plus the following additional elements where appropriate - shift premium, changeover, standard company bonus and canteen allowance.
The package was rejected by the Unions.
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 the29th April, 2004in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 2nd June, 2004.
UNION'S ARGUMENTS:
3.1. Other pharmaceutical companies have offered redundancy packages of 6 weeks pay per year of service ex gratia plus the new statutory entitlements. Redundancy packages prior to the new statutory entitlements gave 7 weeks pay per year of service plus statutory entitlement that formed part of restructuring plan.
2. The Company’s insistence on a compulsory element to the redundancies is highly unusual, particularly where there is a pool of people from whom voluntary redundancy can be sought. The Union maintains that this is unfair and the Company may be forcing people out of a job who want to stay, while retaining people who may wish to leave.3. The Unions are seeking negotiations on restructuring to commence immediately, on a redundancy package which reflects industry standards as well as conditions that workers are relinquishing be put in place and that selection for redundancy be on the basis of seniority not compulsory.
4. The Company has refused any option of redeployment for the workers of APT branch to general operative level, which would have been contingent on non-displacement of others.
5. The Company has acted in a pre-emptive manner with the issuing of RPI’s while the issues in dispute were ongoing through agreed industrial relations mechanisms.
COMPANY'S ARGUMENTS:
4.1. The final redundancy package proposed by the Company is additional to the identified costs and the projected losses for 2004.2. The final Company package was designed to fairly compensate employees being made redundant consistent with the Company’s ability to get appropriate funding. In this respect, the package was structured to ensure that the cost would not negatively impact upon the future status of the Company in Cork.3. The comparisons or reference by the Union to other companies are not relevant. This Company has it’s own unique economic and business circumstances which dictated what was possible.
4. The Company considers the final package to be significant in terms of the actual yield for the individual workers who are involved with this redundancy.5. The Company needs to have full co-operation and commitment to its three objectives in the re-organisation plan:
- The conclusion of the redundancy phase on a sensible basis is an important stage towards that process.
- The cost limit on funding approval with the Parent HQ has been reached.
- There is an expectation that no further cost escalation will follow.
RECOMMENDATION:
The Court has given consideration to the submissions of all parties to the dispute. The Company require the immediate compulsory redundancy of 5 supervisors and a further eight redundancies at a later stage, mostly on a voluntary basis. The Company offered a termination package of statutory redundancy terms plus 3 weeks pay per year of service worked. A weeks pay to be determined as basic pay plus following additional elements where appropriate - shift premium, changeover, standard company bonus and canteen allowance.
The Union sought six weeks pay per year of service plus statutory entitlement and that all redundancies should be on a voluntary basis.
Selection for Redundancy
The Court recommends that the redundancies should take effect as proposed by the Company. However, at the hearing a position was presented, to allow four of the process operators/engineering stores reduction in numbers to be selected from this group as a combined group, rather than as two separate groups (therefore four people would be selected from a workforce of 38, rather than 3 from 36 and 1 from 2). This was presented to the Court as a more satisfactory method of proceeding with selection for voluntary redundancies. The Court recommends acceptance of this method by both sides.
Severance Package
In the circumstances of this case, the Court sees substantial difference between redundancies on a voluntary basis and redundancies on a compulsory basis. Consequently, the Court recommends acceptance of the Company's proposals for those opting for voluntary redundancy but for those employees who are being made redundant on a compulsory basis, the severance package should be enhanced with the addition of €250 per year of service.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
9th_June, 2004______________________
JB/Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.