LCR20042

SUBJECT:
1. Redundancy


BACKGROUND:

2. The issue before the Court concerns the voluntary redundancy payment made by the Company to the worker. After a lengthy discussion process, an agreement on restructuring was reached between the Company and the Union in April, 2010. The Spring Agreement included a provision for a voluntary redundancy scheme. The worker availed of the scheme. It is the Union's claim that the calculation for her redundancy payment was less than her colleagues due to the fact that she was on out of work on long term sickness at the time of the agreement. The Company's position is that the worker signed a termination agreement which clearly stated the figure she would receive as a redundancy sum.

The Union referred the case to the Court on the 26th November, 2010, in accordance with Section 20(1) of the Industrial Relations act, 1969. A Labour Court hearing took place on the 24th March, 2011.

UNION'S ARGUMENTS:

3. 1 The Spring Agreement 2010 was freely entered into by the Company and Union. It was binding on both parties so that all sections had to be honoured in full. The section of the Agreement that covers redundancy lays out clearly what every member who voted for the Agreement is entitled to.

2 The Company in the worker's case calculated her package in line with the guidelines set out in the Redundancy Payments Act. This seriously reduced her entitlement as it meant that her total calculation was basic pay due to her absence from March 2009 to January 2010

3 The Company would not engage with the Union as they are obliged to do under the agreement but rather embarked upon a process of dealing with the Union's members on an individual basis. This culminated in them making the worker sign a full and final settlement clause before releasing her redundancy cheque.

COMPANY'S ARGUMENTS:

4. 1 The worker signed and accepted a Termination Agreement. No further payment is due to the worker.

2 The Company objected to a Rights Commissioner investigation as it had not been notified of any grievance by the Union or the worker.

3 The Worker compromised any claim under the Industrial Relations Acts by means of the Termination Agreement signed in May 2010.


RECOMMENDATION:

The Court notes that the Claimant in this case signed a full discharge on receiving her redundancy payment. In normal circumstances the Court would take the view that a discharge of this nature, signed in circumstances in which the worker had the opportunity to obtain independent advice as to the implications of signing the document, is definitive evidence that the amount recieved was accepted in full and final settlement of all claims.

There is, however, a point which the Court believes should be addressed. The Court was told that the Company calculated the redundancy lump sum in issue by reference to the formula set out in the Redundancy Payments Acts 1967 - 2003. The relevant provision is at schedule 3 of the Act of 1967 and in particular at paragraphs 14 and 15 of the schedule. The combined effect of these provisions appear to suggest that the Company erred in its interpretation of the Act by including time during which the Claimant did not actually work for the purpose of making its calculations.

The parties should revisit this case by reference to the statutory provisions referred to and if it is established that an error occurred the Claimant's redundancy payment should be adjusted accordingly.



Signed on behalf of the Labour Court



Kevin Duffy
12th April, 2010______________________
DNChairman



NOTE

Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.