FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : L M ERICSSON IRELAND LIMITED - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr McGee Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Severance terms
BACKGROUND:
2. The Company is a wholly owned subsidiary of L M Ericsson, a Swedish multi-national. It operates across a number of sites in Dublin and one in Athlone. Its activities are broken into three main units - Market Unit, Global Professional Services and Research and Development (R&D). The Company took a decision in January, 2009 to close the R&D Unit in Dublin and transfer its activities to other Ericsson locations and partners. All 300 employees in the Dublin Unit have been affected and all roles will become redundant by 30th June, 2010. Twenty roles in support functions will also become redundant. The main issue in dispute is the severance package on offer. The Company has offered 5 years' pay per year of service plus statutory redundancy. The Union would accept the 5.5 years but it would have to include all earnings i.e. bonuses and on-call payments, plus a lump sum for compulsory redundancy and one for a training grant.
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 4th June, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 1st July, 2009.
UNION'S ARGUMENTS:
3. 1. This is not a case of redundancy; the Company is closing the Dublin unit for monetary reasons and the work is being redistributed to Sweden and locations in China and eastern Europe. The Company did not consult with the Union on the redundancies.
2. There is a 2001 agreement which granted a lump-sum of 5,000Irish Punts for compulsory redundancy and a training grant of 3,000 Irish Punts. Both of these should apply in the current circumstances. The agreement also states that voluntary redundancies should be considered in all circumstances and this should apply into the future.
COMPANY'S ARGUMENTS:
4. 1. The decision taken by Sweden was final and the Company was unable to exert any influence. Every effort was made to reduce the number of redundancies but this was not possible.
2. The Company has provided an extensive employee support programme (details supplied to the Court) and the package on offer is very fair and equitable. The Company will not be given any additional funding by Sweden which views the package as extremely generous and not one which in its totality is replicated elsewhere.
RECOMMENDATION:
Having considered the submissions of the parties, the Court considers that the severance package offered by the Company in this case is one which should be accepted by the Union. The Court further considers that a minimum severance payment of €8,000 should apply in the case of those being made redundant. The Court does not consider that, in the circumstances of this case, payment of a training grant is appropriate.
The Court so recommends.
Signed on behalf of the Labour Court
Raymond McGee
10th July, 2009______________________
CONDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.