FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH FLAVOURS AND FRAGRANCES LIMITED (REPRESENTED BY DR EUGENE MCCARTHY - AND - A GROUP OF WORKERS REPRESENTED BY UNITE TRADE UNION AND MR GARETH KYNE DIVISION : Chairman: Mr Hayes Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Redundancy Terms
BACKGROUND:
2. This case concerns a dispute between the Company and workers (both Union and non-Union) in relation to a claim for an enhanced redundancy package. The workers are seeking an enhanced package on the basis that the Company is extremely profitable and is moving its operation out of Ireland, not due to a lack of business or viability, but to consolidate its operations in Tilburg, Holland, which they claim will increase its commercial success.
Management's position is that it has offered an extremely generous package which recognises the contribution of the workers over many years operating in Ireland. It further contends that in the current economic climate it is necessary to move its operations for business reasons.
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 26th January, 2010 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 26th February, 2010.
UNION'S ARGUMENTS:
3 1 The Company is moving its operations for commercial reasons. It is, and will remain, extremely profitable due largely to the efforts of the workers over many years. In such exceptional circumstances the workers are justified in seeking redundancy terms that are well above the norm.
2 The Union's claim for both groups of workers is for nine weeks' pay per year of service (P.Y.O.S.) inclusive of statutory entitlements with no cap. Previous redundancies in the Company were six weeks' pay P.Y.O.S. inclusive of statutory entitlements uncapped and in the current situation of compulsory redundancies due to the relocation of the businesss, the package should exceed the established precedent.
COMPANY'S ARGUMENTS:
4 1 The Company acknowledges the service and contribution of the workforce in its Irish operation. As a result it is offering a generous redundancy package of five weeks pay P.Y.O.S. in addition to statutory entitlements capped at two years' salary. For those affected by the cap, an additional €1000 P.Y.O.S. above the cap will also be paid. This package is in the upper quartile of redundancy packages within comparable employments.
2 The pension fund also needs to be brought back to solvency. The Company is committed to doing this but any increase in the cost of the redundancy package will greatly affect the funds available to be lodged to the pension fund.
RECOMMENDATION:
The Court notes that the Company is closing its plant in Ireland as part of a major restructuring programme that is unrelated to the performance of the Irish Company. The Company further indicated that it held the Irish workforce in high regard and was anxious to conclude an agreement that was fair and reasonable in all the circumstances of the situation.
The Court notes the exceptional circumstances of this case and without establishing any precedents for the future, recommends that the Company’s offer be increased as follows
•That the Company’s redundancy offer of 5 weeks pay per year of service plus statutory entitlements be increased to 8 weeks' pay per year of service inclusive of statutory redundancy entitlements.
•That the overall cap on the total level of compensation to be paid to any member of staff be raised from 2 to 2.75 years' pay.
•That the additional payment of 1,000 euro per year of service in excess of the cap be maintained
The Court noted the Company’s indication that it was well disposed towards addressing the shortfall in the Pension Scheme within the overall cost of the closure of the Company.
The Court, therefore, further recommends that the Company take the necessary steps to put the Pension Scheme in funds to meet its full commitments and liabilities.
Signed on behalf of the Labour Court
Brendan Hayes
18th March 2010______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.