FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : HENRY DENNY & SONS - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Redundancy severance terms.
BACKGROUND:
2. This case concerns a dispute between Henry Denny & Sons (Tralee) Ltd and SIPTU in relation to voluntary redundancy terms available to workers employed by the Company. The Company is involved in the production of foodstuffs and is part of the Kerry Foods Group. It is seeking the redundancies on a voluntary basis as it is moving part of its production to the United Kingdom.
The Union is seeking 12 weeks pay per year of service on the basis that previous redundancies in the Company were of a higher monetary value. The Company is offering four weeks pay per year of service plus statutory entitlements with a cap of
€75,000 on the basis that it cannot sustain the additional costs of an enhanced redundancy package
The dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 15th March 2007 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 3rd April 2007.
UNION'S ARGUMENTS:
3. 1. The Company's offer is unacceptable. Previous redundancies in the Company in 2000/2001 were of a higher monetary value than the terms currently offered based on the higher levels of overtime that existed at that time.
2. The introduction of a cap of €75,000 on the redundancy payments is also rejected. The cap did not apply previously and would adversely affect redundancy entitlements of workers with long service.
COMPANY'S ARGUMENTS:
4. 1. The offer of 4 weeks pay per year of service plus statutory entitlements capped at €75,000 is a reasonable one. The Company have continuously applied National Wage Increases despite ongoing financial difficulties.
2. Previous redundancies in the Company were of a higher monetary value on the basis of higher levels of overtime which prevailed at the time.Workers were compensated previously for the loss of overtime.
3. The reason the Company is transferring its "Ready to Cook" production to the United Kingdom is to remain competitive at its current location. It cannot sustain the additional costs of the Union's claim.
RECOMMENDATION:
It became clear to the Court in the course of the hearing that the source of the present dispute lies in the reduction in overtime available to the Claimants. This, the Union contends, will impact significantly on the likely monitory value of redundancy payments which the application of the agreed formula will produce for individuals.
This arises from the previous arrangement whereby average overtime in the 13 weeks preceding redundancy is taken into account in the calculation of redundancy payments.
Regrettably, the parties failed to quantify with any degree of particularity the historic levels of overtime worked by individuals relative to current levels and the extent to which that reduction will affect the amounts which will become payable to individuals. This has not assisted the Court in its consideration of the case. However, the Court is aware of the urgency of resolving the current dispute and for that reason it has not exercised the option of referring the parties back for further negotiations on these matters.
In all the circumstances of this case the Court recommends on that the formula for redundancy pay agreed in 2000/2001 should apply, namely 4 weeks pay per year of service plus statutory entitlements, without the application of a cap. However, as an exceptional measure, and in the interest of resolving the current dispute, the Court believes that some amelioration of the affects of the reduction in overtime can be justified in the particular and unique circumstances of this case. Accordingly, the Court recommends that in the calculation of pay for the purpose of applying the agreed redundancy formula each employee who opts to accept the Company's redundancy offer should be credited with additional notional earnings equivalent to the value of 10 hours overtime per week.
Signed on behalf of the Labour Court
Kevin Duffy
12th April, 2007______________________
AH/MC.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.