FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : TEVA PHARMACEUTICAL IRL - AND - SIPTU / AGEMO DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Redundancy Selection And Terms
BACKGROUND:
2. This case concerns a dispute between the Company and the Unions in relation to redundancy terms and selection criteria. The Company is transferring part of its manufacturing business out of Ireland resulting in redundancies in the Solid Dose area of its business. The Unions' position is that redundancy selection should be based on Last In/First Out (L.I.F.O.) whereas Management contends that to ensure future viability it must focus on skill retention when selecting workers for redundancy. The Unions are also seeking an enhancement of the redundancy terms and the retention of staff in certain areas of the business.
The dispute was not 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 matter was referred to the Labour Court on 21st October, 2009 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 25th March 2010, the earliest date suitable to the parties.
UNIONS' ARGUMENTS:
3 1 The Unions do not accept the need for compulsory redundancies. Redundancies should be on a voluntary basis in the first instance and if compulsory on the basis of last in first out (L.I.F.O.). In addition, workers are easily transferable between both areas of the business which would facilitate the application of seniority within the organisation.
2 The Unions claim for enhanced redundancy terms is fair and reasonable in the circumstances. In the current economic climate it will be difficult to obtain work elsewhere and the package on offer is both insufficient and out of line with comparable employments within the sector.
COMPANY'S ARGUMENTS:
4 1 The Company must maintain staffing levels within the 'Inhaler' Plant to ensure continued productivity of that area in the future. It cannot transfer workers from the 'Solid Dose' area as the required skill sets of both areas are different. The Company is, therefore, unable to apply general seniority as requested by the Unions.
2 The Company/Union Agreement provides for the retention of key skills in selecting workers for redundancy and also the redundancy terms applicable. The Unions' claim for enhanced redundancy is out of line with the Agreement and unsustainable in the current circumstances.
RECOMMENDATION:
The issue before the Court concerns the selection criteria for redundancy and the ex-gratia redundancy terms. The Solid Dose part of Company’s business will close down with a resulting loss of 315 jobs at the end of 2010.
The Company proposed to select employees for redundancy based on the terms of its 1996 collective agreement with the Unions under which the primary consideration is the protection of employment of as many people as possible. It provides for the retention of those skills necessary to ensure the continued efficient operation of the business (including regulatory compliance) and seniority of service.
The Company outlined to the Court its necessity to maintain skills which are unique to its Inhalations part of the business and accordingly rejected the Unions’ claim for selection based on seniority. The Company stated that to dilute the skills which are unique to Inhalations would be fatal to the Waterford business, as this part of the business is a niche area that combines medication with highly developed delivery devices and is the only one of its kind in Ireland.
The Unions, on the other hand, sought voluntary redundancy with selection criteria based on seniority within specific grades and operated on the LIFO principle which selection criteria would entail the selection of some Inhalations employees and the transfer of some Solid Dose employees to Inhalations. It disputed the Company’s contention that the skills were unique and submitted that there was no significant difference between the skills.
The Unions also sought an improvement in the Company’s proposed ex-gratia redundancy payment given both the scale and compulsory nature of the redundancies.
Having considered the positions of both parties as expressed in their oral and written submissions, the Court notes that there may be an opportunity to deal with some of the Unions’ requests for the retention of employees in the following areas:
•minimizing compulsory redundancies by allowing a certain number of voluntary redundancies;
•saving of craft jobs by looking at the various contract roles in the business;
•elimination of temporary jobs; and
•the transfer of a limited number of employees to Inhalations.
The Court recommends that these options should be explored further in an effort to minimize compulsory redundancies as far as possible. This exercise should be conducted immediately and be completed by no later than 14th May 2010. Beyond that exercise, the Court recommends that the 1996 collective agreement’s selection criteria should prevail and the Company’s proposals to retain key skills should be accepted by the Unions concerned.
The Court recommends that in all the particular circumstances of the closure of the Solid Dose part of the business, the Company’s proposed ex-gratia redundancy package should be improved to 8 weeks’ pay per year of service inclusive of statutory redundancy entitlements and a week’s pay should be based on average earnings. All other aspects of the Company’s proposed package should be retained.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
19th April 2010______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.