FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BITECH ENGINEERING (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr Nash |
1. Redundancy terms.
BACKGROUND:
2. The Company based in Dunleer, Co. Louth is a manufacturer and exporter of domestic and industrial electrical heating appliances. The Company has been in operation since 1979 and is a wholly owned subsidiary of Glen Dimplex.
The Company has not been competitive over the past three years and has effectively been subsidised by the Glen Dimplex Group.
In December 2009 a formal restructuring plan was presented to the workforce and it was emphasised that the implementation of this plan was critical to the survival of the Company. Employees were given until 22nd January 2010 to respond individually and confidentially to the proposal. It was also made clear that the non-return of the form would be taken as a rejection of the proposal.
Over 81% of hourly paid employees rejected the proposal whilst 89% of salaried staff voted in favour of the proposal. As a result of the lack of support from the hourly paid workers, the contingency plan could not proceed. The Glen Dimplex Group subsequently withdrew its offer of investment and the restructuring proposal was withdrawn.
Bitech management was left with no alternative following the rejection of the survival plan but to announce the proposed closure of its manufacturing operation with the loss of close to 200 jobs at the site.The target for completion of the closure of almost all manufacturing operation on the Bitech site is November 2010.
Whereas the Company's survival plan proposal included enhanced redundancy terms of 3 weeks' pay per year of service, in the current situation, which is a compulsory redundancy situation, there is only statutory redundancy proposed.
The Company on request from the Union would not agree to go back to the status of its final offer and to explore the possibility of trying to reach an agreement and to avail of the states Industrial Relations Machinery if necessary.
The Union is seeking a redundancy package of six weeks pay per year of service plus statutory entitlements and maintains that there are numerous precedents locally and nationally where Multi-National employers have compensated workers by paying such terms.
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 18th March 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 28th April, 2010.
UNION'S ARGUMENTS:
3. 1. The Union contends that the Company is part of a Multinational group of companies which is a very profitable organisation.
2. The Union maintains that the products currently being produced in Bitech Engineering are not lost to the organisation but will be transferred and be manufactured in other Glen Dimplex companies.
3. The Union contends that many of the Workers in reality will never work again and that it is fair and right that they should receive a reasonable redundancy package of six weeks pay per year of service plus statutory entitlements.
COMPANY'S ARGUMENTS:
4. 1. Bitech Engineering is a stand-alone business within the wider Glen Dimplex group of companies and needs to remain viable and profitable in its own right.
2. The hourly employees rejected what the Company believes to be a necessary and reasonable proposal in circumstances where they were aware the alternative was redundancy on the basis of statutory entitlements only.
3. The Company contends that its critical financial position renders enhanced redundancy payment terms untenable and it cannot afford to pay them
RECOMMENDATION:
The Court is satisfied that the circumstances surrounding the present case are significantly different to those pertaining in the case which led to recommendation LCR19664. In that case the redundancies proposed were voluntary and were over subscribed at the time the dispute came before the Court. Furthermore, the Company were proposing to maintain a number of jobs at the plant and argued that any increase in redundancy costs would imperil its capacity to maintain employment.
In the present case the redundancies proposed are compulsory and are in the context of an effective closure of the plant.
In all the circumstances of this case the Court recommends that a redundancy package of 5 weeks pay per year of service based on average earnings, inclusive of statutory terms, be paid.
Signed on behalf of the Labour Court
Kevin Duffy
10th May, 2010______________________
MG.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.