FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH SUGAR - AND - SERVICES INDUSTRIAL PROFESSIONAL & TECHNICAL UNION TECHNICAL ENGINEERING & ELECTRICAL UNION UNION OF CONSTRUCTION ALLIED TRADES & TECHNICIAN AMICUS DIVISION : Chairman: Mr McGee Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Closure of Irish Sugar.
BACKGROUND:
2. The issue before the Court is for the severance/redundancy terms to apply for employees employed by Irish Sugar (Greencore) primarily in Mallow with a smaller number in Carlow and Thurles. The closure arises following the EU rationalisation of the sugar quota system and the closure decision is irreversible.
Following negotiations on the 22nd March, 2006 and 30th March, 2006the dispute could not be resolved at local level. The Union referred the matter to a Conciliation Conference under the auspices of the Labour Relations Commission. Meetings under the auspices of the Labour Relations Commission were held on the 7th and 12th of April, 2006.
The Union's claim is for:
- The definition of a week's pay to reflect all employees' final average gross salary;
- Number of weeks' to increase from 5 weeks pay per year of service plus Statutory to 8 weeks pay per year of service plus statutory;
- Mallow SIPTU members' average week to reflect 2007 agreed rates;
- Enhance orderly wind-down payments by a multiple of three times;
- Package to take consideration of any pay increase due from current national talks or otherwise
As agreement was not reached, the dispute was referred to the Labour Court on the 13th April, 2006 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 24th April, 2006.
UNION'S ARGUMENTS:
The severance/early retirement terms should be substantially improved for the following reasons:
3.1 12 months after the closure of the Carlow plant and despite the huge efforts and sacrifices by the workers in implementing the Change Agenda the Company is to cease production.
2. The Company is to receive at least €131 million in compensation for restructuring from the EU.
3. The employees had a reasonable expectation that they would have at least one more campaign resulting in one additional year's salary and benefits.
4. These redundancies are compulsory and must reflect the fact that the workers in no way contributed to the demise of the industry. Any final proposal must include the new payment structure reality and additional productivity associated with the new restructured organisation
5. The Company will still have a substantial business going forward with an improved share price and will continue to supply the Irish market from a lower cost base.
6. The company have extracted at least €400 million in profits since the publicly owned Sugar Industry was privatised in 1991.
COMPANY'S ARGUMENTS:
4.1 Although the only formal offer on the table at present is for Statutory Redundancy, the Company did offer at a previous meeting, a Redundancy/Early retirement package exactly the same as was agreed in Labour Court Recommendation LCRNo. 18126 dated 8thMarch, 2005 for the closure of the Carlow plant. excluding the wind down bonus payment. The offer was made strictly on the basis that it was conditional on its acceptance by all Unions and as the offer was rejected by the Unions at a meeting on the 30th March, 2006, the Company's offer automatically lapsed.
2. The Company's financial position has since dramatically worsened with its profit stream now eliminated since the Carlow closure. Irish Sugar effectively does not have the funds to pay Company standard terms and as such would require the Group to underwrite the cost of the severance package through additional borrowings.
3. At the time of the Carlow closure in LCR No. 18126 the Court noted that this package was "comparable with most of the better severance settlements achieved in recent years". It is worth noting that at that time the payment of these terms were an investment in the future success and profitability of the business. The situation the Company now faces is vastly different in that there is no future profitability.
4. Much was made by the Unions regarding the availability of the Restructuring Aid. However, these funds will only partly offset the substantial costs of existing sugar manufacturing.
5. The question of a wind down bonus payment at three times the value of that received following the Carlow closure is an outlandish claim as there is no justification for a wind down payment at all.
RECOMMENDATION:
The redundancy terms as set out in the Company/Union agreement should be implemented (i.e. 5 weeks’ pay per year of service in addition to statutory redundancy entitlement).
A week’s pay should, in this instance, be defined as actual finishing salary, excluding overtime.
The bonus payment for an orderly wind-down as recommended by the Court in LCR No. 18126 dated 8th March 2005, should also apply to the workers here concerned.
Signed on behalf of the Labour Court
Raymond McGee
26th_April, 2006______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.