FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DAWN FRESH FOODS LIMITED (FETHARD CO. TIPPERARY) (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr Shanahan |
1. Redundancy terms.
BACKGROUND:
2. The Company is part of the Arrow Group and produces chilled and frozen ready-made meals both for the Irish but primarily UK markets. Due to a declining market, unfavourable currency exchange rates and increasing costs of raw materials, energy and transport the Company announced in June last that the long established and state-of-the-art Fethard Plant would close towards the end of 2013 with the loss of over a hundred jobs. Following the announcement negotiations began on the redundancy terms between Union and Management without success.
The issues 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 19th August, 2013, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 17th September, 2013.
UNION'S ARGUMENTS:
3. 1. The redundancy terms paid as part of the restructuring/survival plan of 2011 was statutory entitlement plus a once-off €500 per person ex-gratia payment was a voluntary scheme not endorsed by the Union as being in any way acceptable. Those that stayed suffered financial hardship as a result of that plan. This now is a compulsory redundancy scheme and therefore warrants an enhancement to take cognisance of this fact.
2. As recently as February 2013 a sister company initiated a voluntary redundancy scheme wherein the terms offered were statutory plus one week's pay per year of service plus €300 per year of service. Our members have financial commitments that will affect their families into the future and must be appropriately compensated for the loss of their jobs. The Union believes that an enhanced offer of four weeks' pay per year of service inclusive of statutory entitlements is reasonable and would be of the opinion that a group company the size of the Arrow Group and its shareholders could well afford it.
COMPANY'S ARGUMENTS:
4. 1. Practical support is being offered by the Company to help equip the Workers as best they can for future employment and this includes CV workshops, interview skills workshops and mock interviews. The Company is also liaising with the local VEC and FAS regarding courses.
2. The funding is not available to pay anything other than statutory terms as obliged by law. The Company is heavily insolvent and the total cost of statutory redundancy which is estimated to be €1.3 million must be sourced from outside the Company from Directors, shareholders and stakeholders who have kept the Company afloat over an extended period.
RECOMMENDATION:
The matter before the Court concerns a claim by the Union for an ex-gratia redundancy payment of four weeks’ pay per year of service inclusive of statutory redundancy. The Company rejected the claim due to its financial circumstances and stated that it would pay statutory redundancy payments. The Company is due to close on 25thOctober 2013 with the loss of 104 jobs.
Having considered the submissions of both parties the Court is of the view that the Company should pay an ex-gratia redundancy payment. The Court recommends statutory redundancy plus one week’s pay per year of service plus a once-off lump sum of €500.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th September, 2013______________________
JFDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.