FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LITTLEFUSE IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Mr McGee Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Redundancy package.
BACKGROUND:
2. The dispute relates to the Company's decision to close its manufacturing facility in Dundalk and move production to China. The current workforce of 134 will be reduced on a phased basis up to June, 2008, when manufacturing will cease.
In July, 2005, the Company claims that it put together a 2-year survival plan to bring the business back to profitability by 2007. In early 2006 the Company implemented a number of redundancies as part of the survival plan. The redundancy terms were 6 weeks' pay per year of service, inclusive of statutory entitlements. Following a Labour Court hearing the package was enhanced by €1,000 per person (LCR 18501). The Union is seeking the following terms in relation to the proposed redundancies in the current dispute.
1. 10 weeks pay per year of service for each member
2. A loyalty / co-operation bonus of €15,000 to each employee for a smooth transition of work to China.
3. A written guarantee from Littlefuse Corporate that the pension fund will be fully funded and all future pension liabilities underwritten by them.
4. A training allowance of €4,000 for each member
5. Negotiate an agreed value for the loss of VHI/BUPA, medic checks, and Company GP
6. Application of Towards 2016 to be factored into redundancy payments
7. Sale of the Dundalk site and funds used to assist the above claim or site put in trust for employees
8. All redundancy on a last in, first out (LIFO) basis.
The Company has offered the same terms as applied in LCR18501.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 15th of September, 2006, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 10th of November, 2006.
UNION'S ARGUMENTS:
3. 1. The Union does not believe that the Company ever had a survival plan as it claimed in July, 2005.
2. The decision to move production to China is purely for economic reasons. The Company is a multi-million dollar company which is well capable of conceding a favourable package to the workers, many of whom will not be able to find another job.
3. The workers have co-operated with changes introduced by the Company for 40 years and have continued to do so in the present situation.
COMPANY'S ARGUMENTS:
4. 1. The redundancy terms on offer are generous. One week's pay is defined as basic pay plus 25% shift premium with no cap applied. The average package will be €97,000 and the overall cost to the Company is estimated at €14.3 million.
2. The Union's claim is unrealistic, particularly the €15,000 loyalty / co-operation bonus. The package on offer is appropriate compensation for the closure.
3. The Company has, at significant cost, engaged the services of an outplacement firm to assist people in the transition from their employment. National wage agreements will be paid as they fall due. The Company has also made a major investment in the pension scheme (details supplied to the Court.)
RECOMMENDATION:
Having considered the submissions of the parties, the Court recommends that:-
(a) the terms already outlined in LCR 18501 should apply to those workers now being made redundant with the following amendments,
(i) the €1000 lump sum recommended by the Court on that occasion should be increased to €3000 in order to take account of liabilities under "Towards 2016",
(ii) last in, first out should apply (as agreed),
(b) the Company should provide the Union and its members with a written assurance regarding the funding of the pension scheme,
and that with these terms and amendments, the workers should co-operate in the orderly wind-down of the business.
Signed on behalf of the Labour Court
Raymond McGee
22nd November, 2006______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.