FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ABBOTT IRELAND - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Goodwill payment
BACKGROUND:
2. The Company is a wholly owned subsidiary of Abbot Laboratories, Chicago, USA, a healthcare company which has approximately 60,000 employees worldwide. Abbott currently has seven locations in Ireland. The dispute concerns 420 workers who are employed in what was formerly the Abbott Ireland plant in Donegal Town. The dispute concerns a claim for a goodwill payment.
In August, 2003, Abbott Laboratories announced that part of the company was to "split off". The hospital products business was to become a new and completely separate business which became known as Hospira Limited. This involved moving approximately 14,000 workers worldwide, including the 420 in Donegal. In November, 2003, the Unions wrote to the Company regarding a number of issues of concern, including the goodwill payment which is at the centre of the current dispute. The parties met a number of times in the following month. The Unions were seeking a substantial payment and gave examples of other companies that had given goodwill payments, citing Cadbury Ireland Limited as their preferred option. At a final meeting in March, 2004, the Company rejected the claim.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 31st of August, 2004, in accordance with Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 14th of July 2005 in Sligo, the earliest date suitable to the parties.
UNIONS' ARGUMENTS:
3. (1) The Company operated in Donegal for almost 24 years and for all that time it had a dedicated, committed, skilled and loyal workforce, something the Company has freely admitted.
(2) The Company is hugely successful and the contribution of the workers has played a big part in this success. The workers have fully co-operated with the transfer of the business to Hospira. Their contribution should be financially rewarded.
(3) A number of other much less successful companies have made goodwill payments in similar circumstances.
COMPANY'S ARGUMENTS:
4. (1) The split up of part of the Abott business is not similar to a sell off where the company / shareholders can potentially make a large profit. Hospira is a totally separate company made up of former employees of Abbot, and the corresponding assets and business activities were transferred from Abbott.
(2) The terms and conditions of the employees, including non-contributory pension/death/disability plans were all transferred to the new company, preserving service etc. Hospira is currently trying to introduce a share purchase plan similar to that in Abbott.
(3) Of the 14,000 employees who moved to Hospira worldwide, only the workers in Donegal have made a goodwill payment claim.
RECOMMENDATION:
The Court notes that what is involved in this case is in the nature of a company restructuring rather than the sale of a business. In that regard, the circumstances applying in this case are substantially different from those of many of the employments referred to by the Unions.
The Court further notes the conditions of employment of the staff have been carried over to the new company.
Having regard to all the circumstances of the case, the Court does not recommend concession of the Unions' claim.
Signed on behalf of the Labour Court
Kevin Duffy
2nd August, 2005______________________
CON/PCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.