FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SCHWARZ PHARMA LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr McGee Employer Member: Mr Doherty Worker Member: Ms Ni Mhurchu |
1. Dispute concerning the terms for compulsory redundancies.
BACKGROUND:
2. The Company is located in Shannon Industrial Estate. In late 2003 the Company announced a widespread rationalisation programme which involved 120 redundancies to take place throughout 2004 and 2005. Discussions commenced under the auspices of the Labour Relations Commission. A proposal of the Industrial Relations Officer dated 5th December, 2003 was accepted by the parties which provided for seven weeks pay per year of service inclusive of statutory entitlements. It was agreed that the redundancies in the first instance would be on a voluntary basis. The proposal provided, inter alia, that "in the event of insufficient volunteers the Company will implement a compulsory redundancy programme. In that event the parties will immediately engage in discussions to put in place the appropriate arrangements."The Company subsequently stated that it has not received a sufficient number of volunteers and required compulsory redundancies to make up the shortfall. Thirty seven redundancies are now required of which fourteen are involved in this claim. At local discussions the Union sought enhanced terms for workers being compulsorily declared redundant. Management rejected the claim. The dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 10th November, 2004 but agreement was not reached. The dispute was referred to the Labour Court on the 26th November, 2004 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 19th January, 2004.
UNION'S ARGUMENTS:
3. 1. The claimants had an expectation of future pensionable employment with excellent terms and conditions. They had built their lifestyles around this and many have mortgages and large financial commitments. The real cost of a substantial improvement on the voluntary terms to the Employer is small because of the relatively short service involved. Of the 14 workers being made redundant their service ranges from 3.5 to 2.8 years.
2. It is widely accepted in Industrial Relations practices countrywide that compulsory redundancy attracts a higher level of remuneration than any voluntary package because of the forced nature of the redundancy.
COMPANY'S ARGUMENTS:
4. 1. The redundancy package brokered by the Industrial Relations Officer represents a very generous package. The future of the Shannon Plant will centre on active pharmaceutical ingredient manufacture which will require major investment over the next three years. The overall Schwarz Pharma operation Division is in a loss making situation and is striving to break even in 2006.
2. The redundancy package on offer is one of the highest ever negotiated in the region involving significant cost to the Company.
3. It is essential that the Company's rationalisation plan is implemented in full. It was clearly outlined by the Company in 2003 that if sufficient volunteers did not apply then the Company would have to revert to compulsory redundancies to fill the shortfall. It was also clearly outlined that because the final redundancy package was so generous there would be no additional enhancement of the terms for workers being compulsorily declared redundant.
RECOMMENDATION:
The Court has carefully considered the oral and written submissions of the parties. In the circumstances of this particular redundancy situation, it is the view of the Court that the terms agreed at conciliation are generally in line with established norms. The Court recommends, however, that any worker being declared compulsorily redundant should receive an ex-gratia lump sum payment of €1,000 in addition to the terms already agreed.
Signed on behalf of the Labour Court
Raymond McGee
24th January, 2005______________________
todDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.