FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : DONEGAL PARIAN CHINA LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - A GROUP OF WORKERS (REPRESENTED BY PATRICK LIPSETT, PAUL MCGEE AND LINDA DOWNEY) DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Redundancy / Severance Terms.
BACKGROUND:
2. A letter recommendation issued on the 24th of March, 2005.
The Company is located in Ballyshannon, Co Donegal. It manufactures handcrafted pottery and heavy decorated china for the tourist and giftware market. It was established in 1985 and currently employs 44 full-time and 10 part-time staff.
The Company was taken over by Beleek Pottery Limited in December, 2000. In January, 2005, the Company announced its intention to close down operations in Ballyshannon with the loss of all jobs. The reason given was a huge downturn in sales. Following a meeting with management, the workers' representative sought a redundancy package of 4 weeks' pay per year of service which is the same as the claim before the Court, i.e. 2 weeks' pay per year of service plus statutory redundancy. The Company offered statutory redundancy i.e. 2 weeks' pay per year of service, plus one bonus week. The Company also stated that there would be 15-20 production jobs on offer in Beleek.
The workers rejected the offer and referred the case to the Labour Court on the 10th of February, 2005, in accordance with Section 20(1) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 23rd of March, 2005, in Galway. The workers agreed to be bound by the Court's recommendation.
UNION'S ARGUMENTS:
3. 1. The workers, most of whom have at least 15 years' service, have given long and loyal service to the Company. However, the Company is unwilling to accept that it has a responsibility beyond the legal minimum requirement.
2. Pay and conditions of employment are modest to low by any standard comparison. The basic rate of pay is barely above the current National Minimum Wage of €7.00 per hour. This means that the severance package will also be low.
3. The Company has, by its own admission, been profitable during most of its period in Donegal. Much of this success is down to the hard work of the employees. The prospect of finding alternative work in the region is slim.
COMPANY'S ARGUMENTS:
4. 1. The Company was left with no alternative but to close the factory in Donegal. Sales had fallen dramatically in the last few years - down 60% in January 2005 compared to January 2000. (The Company supplied details of its financial situation to the Court).
2.The events of 11th September, 2001, had a significant effect on the Company's performance. Beleek Pottery had to send more and more of its orders to Donegal Parian China in 2003 to alleviate the slack in the manufacturing process as a result of lost orders.
3. The Company cannot afford to add another 2 weeks' pay per year of service to the cost of the redundancy.
RECOMMENDATION:
Having regard to all the circumstances of this case, including the financial position of the employment, the Court is of the view that a severance package of 1.5 weeks' pay per year of service plus statutory entitlements is appropriate. This should be applied to all staff affected by the closure, including those who have already left the employment.
The Court so recommends
Signed on behalf of the Labour Court
Kevin Duffy
4th April, 2005______________________
CON/MB.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.