FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : WATERFORD CRYSTAL LTD - AND - UNITE DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Mr O'Neill |
1. Redundancy Terms, Phased Payments, & Deferred Pension Arrangements
BACKGROUND:
2. The dispute before the Court concerns the Union's claim for enhanced redundancy terms and the protection and preservation of deferred pensions agreements. In November 2007, the Company announced that it would be outsourcing some of its production. A result of this was that redundancies were sought in the Company's Irish and UK operations. In March 2008 agreement was reached between the Company and Union over the terms of redundancy. In April 2008 and July 2008 with the agreement of staff, the redundancy terms were further amended due to the financial position of the Company. Instead of a lump sum being paid, a phased mechanism of payment over 52 weeks was introduced. The Company informed the Union in October, 2008 that due to its financial position further outsourcing of jobs was necessary and that it could not pay the redundancy terms as agreed in March 2008.
The company is seeking to reach agreement with the Union with a view to expediting the implementation of its restructuring programme. The Union's position is that there is no reason their members claims cannot be met on the basis that the Company plans to return to profitability.
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 27th November, 2008 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 16th December, 2008.
UNION'S ARGUMENTS:
3. 1 If the Union on behalf of its members are prepared to accept an unprecedented phasing of redundancy terms to assist the Company in achieving cost savings, then the Company must also take unprecedented action by committing to extending the redundancy payment by a further 26 weeks and guarantee that the Union's members will receive payment.
2 The decision to make an additional 481 and possible 591 of the Union's members redundant is not based on the uncompetitiveness of the Company, but by a decision to outsource profitable products to Eastern Europe for greater profit.
3 Nowhere in the Building and Competitive Platform Agreement 2003 or the individual agreements the Company entered into with Union members does it refer to these terms being merely options or that employees must be in employment at age 58 before these agreements are valid.
COMPANY'S ARGUMENTS:
4. 1 It is not possible to enhance the redundancy terms. The only way in which the current terms could be sustained is through the phased payment mechanism currently being applied.
2On the introduction of the phased mechanism payment, the Company issued an additional payment to the severance package. This additional amount was introduced to recognise the interest that would be earned on the withheld element of the severance package over the phasing period.
3 The agreements reached in 2003 and 2005 enabled eligible employees to leave the Company at 58 years of age should they so wish on the agreed terms stipulated in the agreements. Such employees who leave the Company prior to reaching 58 years of age, particularly those leaving with redundancy payments, will not be able to avail of the deferred pension severance option as the redundancy payment already received will be viewed as a full and final settlement.
RECOMMENDATION:
The matter before the Court concerns the severance terms for employees leaving under the Company’s proposed Restructuring Programme. The Union submitted three claims; enhanced redundancy terms, increase in the duration of phased payments and a guarantee of payments and, honouring of the 2003 deferred pension agreement.
A further matter concerning the Company’s Pension fund was raised however, as this was not an issue which was jointly referred to the Court, the Court declined to adjudicate on it.
-enhanced redundancy terms, increase in the duration of phased payments&a guarantee of such payments
The Union submitted a claim for an increase in the redundancy terms on offer since November 2007, when the Company made an announcement on 14th October 2008 to cease manufacturing at its Waterford Crystal plant. In July 2008 it was agreed between the parties to phase the severance terms paid under the 2007 deal over a period of 52 weeks. The Union are now seeking an enhancement of the terms and the extension of those terms by a further twenty-six weeks. It is also seeking a guarantee that the phasing payments will be honoured in full.
Having considered the position of both parties, the Court finds that the terms on offer are fair and reasonable in the circumstances and does not recommend an enhancement of the terms nor does it recommend an extension of the phasing period. The Court notes that the Company gave a commitment that the phasing payments would be paid in full and the Court hereby reinforces that commitment.
-honouring of the 2003 deferred pension agreement
An agreement reached in 2003 on behalf of 114 Craftworkers at the time, provided for a deferred pension package when the employee reaches 58 years of age. To date there are 85 such remaining workers. The Union contends that the Company are now not honouring this agreement and the redundancy proposals supersede the agreement.
Having considered the positions of both parties as expressed in their oral and written submissions, the Court is of the view that there has not been sufficient discussion on this issue and accordingly, recommends that the parties should meet to have further discussions. This process should be completed by no later than 16th February 2009. In the event that there are still outstanding issues on this matter they may be referred back to the Court.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
7th January,2008______________________
DNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.