FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ABB TRANSFORMERS (WATERFORD) (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION UNITE AND A NON-UNION STAFF GROUP DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr O'Neill |
1. Redundancy terms / closure of plant.
BACKGROUND:
2. On the 25th June, 2009, the Company announced the closure of its plant in Waterford after 53 years in operation. The compulsory redundancy terms offered to the 178 Workers falls short of expectations as many of them believe that due to the current economic climate they may never work again. The Company agreed to negotiate with all employee representatives on a combined basis consisting of 3 Union Officials and 9 Employees Representatives. While some progress was made there remains a major gap regarding the substantive issue.
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 24th September, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 8th October, 2009.
UNION'S ARGUMENTS:
3. 1. The Unions and the non-Union Staff Group have put forward a 16-point package, the terms of which represent an appropriate recognition for the loyal service and the circumstances in which the Workers have been placed as a result of the decision to close the plant.
2. For the Company which reported world wide profits in excess of $4 billion in 2008, the package sought is fair, equitable and affordable.
COMPANY'S ARGUMENTS:
4. 1. The Company has offered a substantial severance package that represents all of the profit / return for the last nine years.
2. The Plant is scheduled to cease production at the end of March 2010 which will coincide with the completion of a major contract. All staff are expected to be required until that time while an orderly wind down is completed.
RECOMMENDATION:
The matter before the Court concerns the Unions’ and the non-Union Staff Group's claim for a substantially improved redundancy package than that being offered for their members and the non-Union Staff Group being made redundant due to the forthcoming closure of the Company in March 2010. The Company is closing its Waterford operations due to the downturn in demand for its products.
The Unions and the non-Union Staff Group sought the following :
- 8 weeks’ average pay per year of service inclusive of the statutory redundancy payment.
- Total payments to be capped at €180,000.
- Average pay to include basic, shift allowance, overtime and bonus payment.
- €1,000 per year of service “orderly wind-down” payment.
- Continuation of the ‘Doctor Scheme’ payment until 2011.
- The Company offered the following package :
On the basis of employees co-operating with an orderly wind-down to the closure of the Company: -- Statutory redundancy payment plus 4 ½ weeks’ pay per year of service.
- Total payments to be capped at 2 years’ salary plus a long service payment conprising:-
- o €5,000 for those employees with 20 – 29 years service
o €10,000 for those employees with 30 – 39 years service
o €15,000 for those employees with 40 + years service
- A week’s pay to be defined as basic pay plus shift premium.
- In all cases the overall package not to exceed net pay to retirement less Social Welfare Benefits (otherwise statutory redundancy payments only would apply).
- Redeployment opportunities for suitably qualified employees in the global ABB
- Continuation of the ‘Doctor Scheme’ payment until the end of the calendar year 2010.
- Provision of Outplacement Services.•
- Reimbursement of Education Fees up to €1,500 where prior approval granted.
- Package for those employees who wish to exit before March 2010.
Having considered the oral and written submissions of both parties, the Court recommends that the Company’s severance package as outlined above should be amended as follows and accepted : -
- The enhanced redundancy package offered should be amended to 6 weeks’ average pay per year of service inclusive of statutory redundancy payment with a cap of 3 years of average earnings.
- A week’s pay to include basic, shift, overtime and bonus, calculated over the previous 12 months.
The Court makes this recommendation in full and final settlement of the Unions’ and the non-Union Staff Group's claims.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
27th October, 2009______________________
JFDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.