FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : MICROTHERM LTD (IN LIQUIDATION) - AND - A GROUP OF WORKERS (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION) DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Enhanced redundancy payments.
BACKGROUND:
2. The case before the Court involves workers who were formerly employed by Mictothern Ltd., Co. Limerick, which has ceased trading and is in Voluntary Liquidation. The dispute concerns a claim for enhanced redundancy payments. The Union claims that the Company failed to engage in normal Industrial Relations practices by refusing to attend the Labour Relations Commission for Conciliation to discuss its claim and were in breach of the Company/Union Agreement. The Workforce were informed in October 2006 by the Company that the Limerick Plant would cease trading and they were in the process of appointing a Liquidator and that Statutory Redundancy payments of 2 weeks per year of service would be paid to employees. Following the announcement by the Company, the Unions sought to engage with the Company regarding it's decision and with the help of the Labour Relations Commission requested that the Company engage in discussions. However the Company advised the Labour Relations Commission that they would not be in a position to engage in such discussions and would not attend a Conciliation Conference.
The Workers referred their claim to the Labour Court on the 11th April, 2007 for hearing in accordance with Section 20(1) of the Industrial Relations Act, 1969 and agreed to be bound by the Court's recommendation. The Unions are seeking 6 weeks per year of service based on P60 earnings with no cap, plus payment of statutory entitlements. A Labour Court hearing took place on the 27th June, 2007
UNION'S ARGUMENTS:
3.1 The Company states that it is a 'stand alone company' and are unable to pay any enhanced redundancy payments to the workers. The Union cannot accept the Company's position in this regard. Following a Labour Court hearing in November, 2005, the Company claimed that their parent company was Microthern GmbH, Germany and had manufacturing plants in Europe, Canada, Brazil and China.
2. The Company also stated at that hearing which resulted in a Labour Court Recommendation LCR 18392 that they were seeking assistance from their associated company in Germany to honour the terms of LCR 18392,
3. The Unions believe that the Company has acted in a dishonourable fashion to the workers by:
- Refusing to enter discussion with the Unions;
- Not providing the workers with any notice of Redundancy;
- Insisting the statutory payment of 2 weeks per year of service would suffice;
- Would not attend at the Labour Relations Commission.
4. The Union claims that the workers have given long service to the Company and a large percentage of workers have given over 20 years service. The workers have always accepted and embraced the financial position of the Company and have co-operated when the Company required them to reduce their working week on more than one occasion which has contributed to the success of the Company over the years.
COMPANY'S ARGUMENTS:
4.1 The Representative of the Liquidator of the Company stated that the Company is being wound up by way of a Creditors' Voluntary winding up. Claims have been submitted on behalf of the employees and are being dealt with under the following headings:
Redundancy
Section 14 of the Redundancy Payments Act, 1979 provides "There shall be included among the debts which under Section 285 of the Companies Act, 1963, are, in the distribution of the assets of the company being wound up, to be paid in priority to all other debts.... any lump sum (or portion of a lump sum) payment under this Act, (1979 Act, by such a company".The Liquidator is therefore only obliged to admit as a preferential creditor those employees entitled to statutory redundancy. The statutory redundancy is calculated as to two weeks per year of service plus one bonus week up to a maximum sum of €600 per week. The Liquidator is prepared to admit redundancy claims on this calculation and to pay the same.
2.Employee claims to arrears of wages.
Section 285 of the Companies Act, 1963 (as amended) admits as a preferential payment due to any employee to a maximum of €600 per week. The Liquidator stated that he is prepared to pay arrears of wages, if any due to the employees up to a maximum of €600 per week per employee.
RECOMMENDATION:
This dispute came before the Court as an industrial relations matter and the Court's recommendation is formulated in that context.
The Court is satisfied that the requirements of fairness and equity dictates that the workers displaced by the closure should receive reasonable compensation for the loss of their employment. The Court recommends that the workers concerned should receive an ex-gratia payment of four weeks pay per year of service plus their statutory entitlements.
The Court would strongly urge the shareholders of the Company to make funds available so as to facilitate the implementation of this recommendation.
Signed on behalf of the Labour Court
Kevin Duffy
9th_July, 2007______________________
JBChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.