FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PFIZER IRELAND LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Cryan Worker Member: Mr Shanahan |
1. Redundancy issues.
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Union on behalf of its members in relation to (i) a claim for redundancy for two employees on Long-Term Disability (LTD) and the method of calculation of the redundancy terms and (ii) the method of calculation of redundancy terms in accordance with a Company/Union Agreement. The first leg of the Union's claim relates to two named employees who are currently on long term disability. In 2010, the Employer communicated a Voluntary Redundancy Programme and both employees expressed an interest and later on confirmed acceptance of the package on offer by the Employer. However, an issue later arose in relation to the calculations of the terms of the packages offered to both employees. The Employer asserts that the packages offered to both employees are consistent with a Company/Union Agreement established in 2004. The Union rejects the Employer's position and is seeking an enhanced package on behalf of both employees.
In relation to other redundancies effected within the Company and in terms of future redundancies, the Union is seeking the application of a method of calculation based on the best thirteen weeks in accordance with a Company/Union Agreement. The Union contends that the Employer is in breach of the terms of this Agreement by refusing to allow the inclusion of a Christmas Bonus, Attendance Bonus and Service Pay in the calculation of redundancy terms. The Employer rejects the Union's claim, arguing that the Agreement does not allow for this method of calculation and furthermore, concession of the Union's claim would significantly impact the Company's financial position.
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 22nd June 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 8th November, 2012.
UNION'S ARGUMENTS:
3. 1. The Union contends that there is an agreed formula in place in relation to employees on Long-Term Disability and in this instance the Employer is acting in breach of the terms of an existing agreement by not applying the agreed formula in the calculation of redundancy terms.
2. The Union maintains that the Employer is also breaching the terms of an agreement in relation to the calculation method of the best thirteen weeks to include a Christmas Bonus and Service Pay. The Union further maintains that previous redundancy deals have been calculated using this formula. Accordingly the Union is seeking the application of this formula to recently effected and future redundancies.
EMPLOYER'S ARGUMENTS:
4. 1. The Employer is of the view that there is no agreed formula in relation to the calculation of redundancy payments for employees onLong-Term Disabilityand furthermoreit is not in a position to offer enhanced redundancy packages to the two concerned employees in these circumstances.
2. In terms of the best thirteen weeks method of calculation, the Employer strongly asserts that this method of calculation has always been carried out exclusive of all additional pay items such as Christmas bonus, Attendance Pay and Service Pay and must be carried out in this manner going forward.
RECOMMENDATION:
This case concerns two issues referred by the Union (i) redundancy terms for two workers on long term disability and (ii) method of calculation of redundancy terms.
- (i)redundancy terms for two workers on long term disability
The matter before the Court concerned the method of calculating redundancy terms for the two workers on long term disability. As the workers in question are no longer in receipt of wages and the agreed formula for calculating the Company’s ex-gratia redundancy payments is based on the best thirteen weeks’ pay in the previous three years, the Company submitted two alternative offers to address this issue. Firstly, it offered to calculate the ex-gratia based on the current basic pay for the grade on the condition that it achieved the necessary headcount reduction from its core workforce, or alternatively it offered to pay statutory redundancy plus a package devised in line with their Assurance Provider.
Having considered all aspects of the claim the Court recommends that workers in question should accept the first offer proposed by the Company and the parties should enter into discussions on how to achieve the necessary savings through a reduction in headcount from its core workforce.
- (ii)method of calculation of redundancy terms
The second matter before the Court concerns the method of calculating redundancy terms. The agreed formula for calculating the Company’s ex-gratia redundancy payments is based on the best thirteen weeks’ pay in the previous three years. The Union claimed that to enhance the overall calculation these weeks should include the weeks when the Christmas Bonus, annual Service Pay and Attendance Bonus is paid.
The Company stated that the best thirteen weeks’ pay in the previous three years, inclusive of basic pay includes all standard payments e.g. rostered overtime, shift premium and reserve hours. It submitted that Christmas Bonus, Service Pay and Attendance Bonus payments have never been included in the formula.
The January 2004 agreement states at page 67:
- “The Financial worth of the future Redundancy payment will be the 4.5 weeks at a rate equal to the best consecutive 13 weeks in the prior 3 years, including shift pay, where appropriate.”
Having considered all aspects of the claim is satisfied that in practice the formula has never included Christmas Bonus, Service Pay and Attendance Bonus payments as part of the calculation of ex-gratia redundancy payments and accordingly does not recommend in favour of the Union’s claim.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
28th November 2012______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.