FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : NUVOTEM TEORANTA (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Redundancy / Severance Terms
BACKGROUND:
2. The dispute before the Court concerns the redundancy terms offered to thirty workers employed by Nuvotem Teo. The workers were made redundant on 23rd May, 2005 and the Company has offered to pay statutory entitlements only. The Union are seeking only the average redundancy severance package of 4 weeks per year of service and believe that this is lower than the average or normal applied in similar circumstances in Donegal and as such is a very reasonable claim.
The dispute could not be resolved at local level. The Union referred the claim to the Labour Court on the 18th May, 2005 in accordance with Section 20(1) of the Industrial Relations Act, 1969 and agreed to be bound by the Court's recommendation. A Labour Court hearing took place on the 6th July, 2005.
UNION'S ARGUMENTS:
3.1 The pay and conditions of the workers was modest to low by any standards or comparisons.
2. The workers were only earning the National Minimum Wage of €7.00 per hour, which means that the severance package will be low in absolute terms.
3. The workers did not receive other employment benefits which are considered the norm and taken for granted in other employments such as a pension scheme.
4. The prospect for all of these workers finding alternative employment in a part of Donegal with high unemployment rates of 15.6% and rising (3 to 4 times the national average of 4.7%) is very slim.
5. The Union believes that 2 weeks pay per year of service plus statutory entitlement is very modest.
COMPANY'S ARGUMENTS:
4.1 The Company is privately owned and has limited access to capital. The building is leased and the bulk of the machinery is 20 to 25 years old.
2. The Company accounts have been forwarded to the Union's financial department. The 2004 accounts show increasing losses on the Company's core European business. There is no cash in the business.
3. In July and December, 2003, September and December 2004 the Company faced a cash crisis and needed emergency funding from the two shareholders to avert an insolvency situation. These cash injections with the redundancy finance equal to €670,000.
4. The shareholders have advised the Company that the financial requirements to keep the Company trading has almost depleted their personal resources.
5. The Company states that the 60% rebate is already factored into the financing of the redundancy payments to staff.
6. The Company does not have the money to improve the redundancy terms and is therefore not in a position to provide any ex-gratia payments above statutory entitlements.
RECOMMENDATION:
Having regard to all the circumstances of the case the Court is of the view that it would be reasonable for the Company to improve its offer by paying the workers the rebate on the statutory redundancy payments.
The Court recommends accordingly
Signed on behalf of the Labour Court
Kevin Duffy
12th July, 2005______________________
JBChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.