FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MEROPS (NUTRITION) LIMITED (REPRESENTED BY DELOITTE AND TOUCHE) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr McGee Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Redundancy.
BACKGROUND:
2. The Company produces and distributes pet foods from its premises at Ballymount, Dublin and employs approximately 65 workers. Due to a downturn in business the Company decided to close its manufacturing facility and cease production with effect from 17th June, 2005. Following discussions with the Union the Company's final offer of a redundancy package to workers is detailed as follows;
Statutory redundancy entitlements plus 2 weeks' pay per year of service for all service with the Company.
The ex-gratia payment will be calculated by reference to basic weekly pay including all regular allowance and "compulsory overtime". All other overtime is excluded.
The maximum total entitlement (statutory plus ex-gratia) for each employee will be subject to a limit of 52 weeks pay (calculated by reference to basic weekly pay including all regular allowance and "compulsory overtime") or statutory entitlement whichever is the higher.
An amount of €50,000 will be made available to be divided amongst those affected by the maximum total entitlement and it will be divided amongst them in proportion to the impact it has upon them.
The Union rejected the offer and is claiming six weeks pay per year of service plus statutory entitlement. The Union is also claiming that the cap proposed by the Company be removed as it would have serious implications on the potential package that workers would receive. The dispute was referred to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. The dispute was referred to the Labour Court on the 30th May, 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 31st May, 2005.
UNION'S ARGUMENTS:
3. 1. The claimants have given dedicated and loyal service to the Company and made a significant contribution to its success and profitability for the past thirty five years.
2. Despite a number of attempts and a commitment given to workers the Company has failed to reward these employees by refusing to implement a pension scheme.
3. The Company is in a very strong financial position and could afford to pay workers a decent, fair and equitable redundancy package. In the circumstances the Union's claim for six weeks' pay per year of service plus statutory entitlements is reasonable.
COMPANY'S ARGUMENTS:
4. 1. The Company has sustained significant losses over the past few years. Despite these losses Management did not implement any change in workers pay or conditions.
2. The Company has been forced to cease manufacturing. This is not a downsizing situation where costs of reorganisation are recovered from future profitability.
3. In the context of its financial situation the Company considers its offer to be fair and reasonable.
RECOMMENDATION:
Having heard the submissions and arguments of the parties, the Court recommends that, in order to provide a fair resolution and to provide for a peaceful and orderly winddown of the Company's operations, the Company's final offer should be adjusted to provide for
- 3 weeks' pay per year of service in addition to statutory entitlements, ex-gratia sum to be calculated as per the Company's final offer
- the maximum total entitlement or "cap" to be increased to a limit of 78 weeks' pay. The sum of €50,000 to be divided amongst those affected by the limit to remain, on the basis already outlined.
- a minimum of 4 weeks' pay to apply to all employees affected by the closure.
Signed on behalf of the Labour Court
Raymond McGee
2nd June, 2005______________________
TOD/BRDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.