FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1); INDUSTRIAL RELATIONS ACT; 1990 PARTIES : QUALITY PLASTICS LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Cryan Worker Member: Mr Nash |
1. Redundancy Terms
BACKGROUND:
2. The Company was founded in 1970 and has been involved in the extrusion of plastic pipe for the construction sector since then. In late 2006 the Company was sold in its entirety to a company called Pipelife International. On the 18th April, 2011 the Company announced its decision to reduce its staffing levels by 20 (that figure has now risen to 28) out of a total workforce of 88. It sought voluntary redundancies but there were no applications. The dispute concerns the level of redundancy payments. The Union is seeking what it claim is agreed terms paid to all those made redundant to date i.e. statutory plus 4 weeks' pay per year of service plus a payment of €5,000. It is also seeking that the redundancies should be voluntary. The Company's case is that the most it can offer is statutory plus 1.4 weeks' pay per year of service. It also wants the redundancies on a last-in, first-out (LIFO) basis.
The dispute was referred to the Labour Relations Commission (LRC) and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 24th June, 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 21st July, 2011.
UNION'S ARGUMENTS:
3. 1. The Company's redundancy offer has constantly changed and reduced since the announcement in April.
2. An agreement between the parties on redundancy terms has existed since 2008; this included 4 weeks' pay per year of service and it has been consistently applied in all redundancies since that date. To pay the workers concerned less would be unfair.
COMPANY'S ARGUMENTS:
4. 1. The downturn in the building sector has had a severe impact on the Company's business. It has no choice except to effect the redundancies needed due to the lack of demand for its products. It cannot afford to pay redundancies terms at the same rate it did during the "Celtic Tiger" years.
2. The Company has been given a limited "pot" of money by Pipelife with which to pay the redundancies. When the number was 20 the offer included 2 weeks' pay per year of service; however when the number increased to 28 redundancies the offer had to decrease to 1.4 weeks' pay.
3. Pipelife has already closed plants in Spain, Portugal, Croatia and Romania as they were deemed unprofitable. If the Company has to pay above its current offer it could risk the future of the Irish plant.
RECOMMENDATION:
The Court notes that the Union's claim is based on a redundancy package previously agreed and implemented within the employment. It is understandable that the Union and its members would aspire to the same terms in respect to the current redundancies.
The Court is satisfied, however, that the circumstances now pertaining are substantially different to those in which the previous package was agreed. On the basis of the information before it, the Court is satisfied that a package of that magnitude is not now attainable.
Against that background the Court recommends that the Company offer and that the Union accepts the following terms:-
- A redundancy payment of four weeks pay per year of service inclusive of statutory terms. For this purpose all elements of pay should be calculable.
- There should be no cap on the amount receivable.
- The redundancies should be offered on a voluntary basis in the first instance. If sufficient volunteers are not forthcoming selection should be on LIFO throughout the plant.
- There should be a minimum payment, pro rata to that paid in the previous redundancies. Accordingly, those taking voluntary redundancy should receive a minimum of €3,500 and those being made compulsorily redundant should receive a minimum of €6,000.
Signed on behalf of the Labour Court
Kevin Duffy
4th July, 2011______________________
CONChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.