FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : VITRA IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Murphy Worker Member: Mr Nash |
1. Redundancy Terms.
BACKGROUND:
2. The Company is involved in the manufacture and distribution of ceramic tiles in Arklow. The dispute concerns a claim for enhanced redundancy terms for seven workers formerly employed by the Company. The Union is seeking six weeks' pay per year of service inclusive of statutory entitlements. The Company has offered statutory entitlements only.
In August, 2008, the Company indicated that due to a downturn in business it would be necessary to introduce short-term working as an alternative to periods of shutdown and some redundancies. A number of workers were put on temporary lay-off. When the situation did not improve some of those on temporary lay-off decided to take statutory redundancy. However, the seven workers concerned, who were involved in the production area continued on temporary lay-off in the hopes that the area would re-open. When the Company advised the Union in January, 2010, that it was unlikely that the production area would re-open, the Union stated that it would be seeking enhanced redundancy terms for any workers made compulsorily redundant. In the event the Union made its claim for the seven workers concerned.
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 6th October, 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 6th January, 2011.
UNION'S ARGUMENTS:
3. 1. The Company clearly stated that the lay-offs in the production area were temporary and that it was the intention to re-open this area. However, the Company decided to relocate its production to Russia which is a low-cost economy compared to Ireland and this resulted in compulsory redundancy for the seven workers concerned. This was a different situation to the other workers who had earlier opted to accept statutory redundancy.
COMPANY'S ARGUMENTS:
4. 1. The Company suffered a major decrease in business in 2008 owing to the downturn in the construction sector. It made every effort to keep the Company running as a going manufacturing concern but this did not happen. It is custom and practice in the Company to pay statutory redundancy only, whether in Ireland or in its other European locations. To make an enhanced payment to the seven workers concerned would add to the critical financial situation in which the Company finds itself.
RECOMMENDATION:
The Court has fully considered the submissions made by the parties in this case.
While the position of others made redundant has been referred to by the employer, the Court is satisfied that the circumstances in which those workers came to be redundant was significantly different in that they terminated their own employment voluntarily by reason of having been kept on lay-off. In this case those affected were made compulsorily redundant.
Secondly, the Company referred to the position of associated plants in other jurisdictions in which no enhanced redundancy payments have ever been made. Unlike those countries there is a tradition in this country of paying additional or ex-gratia redundancy payments where the economic circumstances of the employment permit.
In all the circumstances of the case the Court is satisfied that it would be reasonable to recommend that the Company offer, and the Union accept, an ex-gratia redundancy payment of two weeks' pay per year of service, in addition to statutory terms, in full and final settlement of the Union's claim.
The Court so recommends.
Signed on behalf of the Labour Court
Kevin Duffy
17th January, 2011______________________
CONChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.