FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LITTLEFUSE IRELAND (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Ms N� Mhurchu |
1. 1. Redundancy Terms.
BACKGROUND:
2. The Company is a subsidiary of Littlefuse Inc, Chicago, USA. It manufactures Varistor Electronic components at Dundalk and employs 163 workers. Due to ongoing losses the Company has a requirement to implement a survival plan to secure the future of the Dundalk plant. The plan necessitates the outsourcing of one product to China and the implementation of 35 redundancies, 25 of which are union members. A study by independent consultants Farrell Grant Sparks was commissioned by the Union which confirmed the Company's difficulties and the need for remedial action. The Union agrees in principle with the decision to outsource and the possibility of redundancies but rejected the Company's offer of a redundancy package of six week's per year of service inclusive of statutory entitlements. 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 24th February, 2006 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 7th March, 2006.
UNION'S ARGUMENTS:
3. 1. The Company must be totally transparent in relation to its intentions arising from its current and intended outsourcing activities.
2. The Company's offer of six week's inclusive of statutory entitlements is unacceptable. Management must negotiate appropriate terms with the Union on behalf of workers impacted by these and future job losses to ensure adequate compensation in view of the circumstances by which jobs are being transferred to China. The Union is seeking ten week's pay per year of service plus statutory entitlements.
COMPANY'S ARGUMENTS:
4. 1. The Company facilitated the Union with all the information requested, including the paying for an independent financial report at the Union's request.
2. The Company's redundancy package is generous given the fact that the business has incurred significant losses over the last four years. The estimated cost of severance for 2005, including an accrual for the proposed 25 redundancies, was $5million. This equates to 71% of the profits of the Lilttlefuse Electronics Division and 30% of the entire Littlefuse Corporation's profits.
RECOMMENDATION:
The Court notes that a firm of Business Consultants nominated by the Union has independently assessed the financial and commercial circumstances of the Company. The report of the Consultants confirms that the Company is currently experiencing serious difficulties and, in the Court's view, their conclusions supports the need for the cost saving measures proposed by the Company. It is noted that there is no real dispute between the parties on this point.
In these circumstances the proposed redundancies, while regrettable, have at least the potential to safeguard the remaining jobs at the plant and should, on that account, be accepted by the Union.
It is noted that the redundancy package on offer was negotiated between the parties in July, 2003, and has been applied since in respect of redundancies in 2005. The Court does not see any compelling case for applying a different formula in the present case. Accordingly, the Court recommends that the package proposed by the Company be accepted. However, in order to bring finality to this dispute, and having regard to all the circumstances of the case, as outlined to the Court in the course of the hearing, the Court recommends that an additional flat rate lump-sum of €1,000 be added to the total redundancy payment as it applied to each individual.
Signed on behalf of the Labour Court
Kevin Duffy
13th March, 2006______________________
TODChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.