FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : COUNTER PRODUCTS MARKETING LIMITED T/A CPM IRELAND (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Redundancy terms.
BACKGROUND:
2. The case before the Court concerns a dispute between the Company and the Union on behalf of its members in relation to an enhanced redundancy package. The Company operates as a service provider servicing clients in the licensed trade sector in locations such as hotels, pubs and restaurants. The Company contends that as a result of the downturn in the economy and a business requirement to achieve greater efficiencies, it is seeking to make 22 employees redundant with all redundancies to be effected by October, 2011. The Company is offering a redundancy package comprising of statutory entitlements and an ex-gratia payment of three and-a-half weeks' pay per year of service primarily on a voluntary basis. The Company asserts that if the sufficient amount of redundancies sought are not forthcoming voluntarily, it would have no alternative other than to implement compulsory redundancies on a last-in/first-out (LIFO) basis in accordance with geographical requirements. The Union rejects the Company's proposal and contends that the redundancy package offered is not in line with industry norms and furthermore has been inherited from a previous business which was subsequently taken over by the Company. The Union is seeking an enhanced redundancy package parallel to that of a named comparator company and comprising of statutory entitlements and eight weeks' pay per year of service.
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 27th July 2011, in accordance with Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 19th August, 2011.
UNION'S ARGUMENTS:
3. 1.The Union is seeking an improvement on the Company's redundancy terms as this will effectively be a compulsory redundancy situation as there are insufficient volunteers.
2.Redundancy packages in the Drinks Industry have ranged from 4.5 weeks' pay per year of service plus statutory entitlements to 8 weeks' pay per year of service plus statutory entitlements.
COMPANY'S ARGUMENTS:
4. 1. The Company contends that the redundancy terms offered are fair and reasonable and are in line with industry practices.
2. The Company further contends that the comparator companies quoted by the Union are not operating in the same industry and therefore cannot be used as comparators.
RECOMMENDATION:
The issue before the Court concerns the Company’s redundancy package on offer to 22 employees following the acquisition of a contract under the European Community (Protection of Employees on Transfer of Undertakings) Regulations 2003 (S.I. No. 131) (the Regulations).
The Company offered to pay three-and-a-half weeks’ pay per year of service plus the statutory redundancy payment subject to a cap of two years’ salary. While the Union accepted that the Company’s offer is in line with the normal terms which have generally applied in this particular industry, however, it sought an improvement in the severance terms on offer.
Having considered the oral and written submissions of both parties the Court notes that the terms on offer are those which previously applied in the taken-over Company and hence are protected by the Regulations. Furthermore, the Court notes the Union’s acceptance that the Company’s offer is in line with the terms which have normally applied.
Accordingly, the Court upholds the Company’s offer as reasonable in the circumstances.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
24th August 2011______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.