FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DAMOVO IRELAND LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Redundancy Terms.
BACKGROUND:
2. Damovo Ireland was established as part of the Damovo Group in May 2001 following the sale of Ericsson Business Systems to Apax Partners. The Organisation in Ireland has a current staff of 74, comprising of sales, engineering, finance, human resources and administration services. The issue before the Court relates to a voluntary severance package to be negotiated as part of on going restructuring of the Company.
The Company operates in the engineering sector and has been suffering steady losses. In an effort to halt the losses the Company sought changes in work practices. The Union are insisting on a voluntary redundancy package as part of the proposals.The Union are willing to negotiate a voluntary early retirement package subject to an agreed level of enhanced pension funding in addition to a redundancy lump sum. The Union claims that the Company are unwilling to inject any capital into the pension scheme to allow for the provision of early retirement options for some workers.
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 the 3rd February, 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 5th April, 2005.
UNION'S ARGUMENTS:
3.1 A letter to the Union dated 20th April, 2001 from Ericsson Business Communications Ltd. guarantees members 5.5 weeks average gross pay, exclusive of statutory entitlements, no ceiling. Paragraphs 2,3, and 11 of said letter confirmed by Apax Partners in accordance with Apax's understanding of the rights of employees of Ericsson Business Communications Ltd in a letter to the Union dated 4th May, 2001.
2. The Union expect the Company to honour the guarantees given at time of transfer of ownership.
COMPANY'S ARGUMENTS:
4.1 Due to the critical financial situation currently prevailing, the Company are working to a deadline to deliver on the necessary changes to make the organisation viable. The Company is fighting for survival.
2. A Company has been given a budget for the purpose of a restructuring programme on the understanding that it will be achieved within a reasonable timeframe and within budget.
3. The market in which the Company operates has changed radically. The Company are competing in a highly competitive systems integration arena.
RECOMMENDATION:
Following on the change of ownership in the business the Company gave the Union a number of commitments in respect of terms and conditions of employment. These commitments were confirmed in a letter from the Company to the Union dated 20th April, 2001. In relation to possible future redundancies this letter recites what the Court can only interpret as an unqualified commitment to continue the then existing arrangement of 5.5 weeks pay per year of service exclusive of statutory entitlements. This commitment must be given due consideration by the Court.
The Court has also had regard to the financial and commercial circumstances of the employment, which appear also to have been taken into account by the Union in formulating its counter offer to that tabled by the Company.
Having regard to all the circumstances of the case, and in seeking to maintain a balance between financial position of the Company and the commitments which it gave in 2001, the Court recommends that a redundancy package of 5 weeks gross pay per year of service inclusive of statutory entitlements be applied, subject to a cap of 156 weeks pay.
The Court does not recommend that early retirements be made available, nor does it recommend a minimum payment.
On acceptance of this recommendation the Court recommends that the parties resume discussions on the measures required by the Company and that those discussions be completed within eight weeks. In the event of final agreement not being reached in that time the matter may be referred back to the Court.
Signed on behalf of the Labour Court
Kevin Duffy
7th April, 2005______________________
JBChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.