CD/14/20 RECOMMENDATION NO. LCR20698
(CCC-140647-13)
INDUSTRIAL RELATIONS ACTS, 1946 TO 2012
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES :
ACC BANK
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
UNITE & SIPTU
DIVISION :
Chairman : Mr Duffy
Employer Member : Ms Cryan
Worker Member : Ms Tanham
SUBJECT:
1.
Severance terms / early retirement.
BACKGROUND:
2. This dispute concerns the redundancy terms and retirement arrangements for 180 employees being made redundant. This 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 14th January, 2014, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 7th February, 2014.
UNIONS' ARGUMENTS:
3 1 The Workers are being made redundant due to the imprudent lending carried out by the Bank.
2 The Bank is part of the very profitable Rabobank Group.
3 The Bank should pay enhanced redundancy and retirement terms to the Workers.
BANK'S ARGUMENTS:
4 1 The terms offered by the Bank are fair in the circumstances.
2 Rabobank is a cooperative bank so the cost of this claim would be born by members rather than shareholders.
3. Concession of the Unions' claim would make the Bank's future more difficult.
RECOMMENDATION :
This referral relates solely to the terms of the package offered by the Bank to those who will be made redundant as part of a restructuring arrangement which is in the process of implementation.
Negotiations have taken place between the parties on a range of issues which have arisen in that context. These negotiations were facilitated by an agreed third-party and have been the subject of conciliation at the LRC. While substantial progress was made on other issues, overall agreement could not be reached until the matter now before the Court is finalised.
Having considered the submissions made by the parties the Court recommends as follows:
Redundancy terms
The Unions’ claim is for the same terms as those recommended by the Court in Recommendation LCR19612, namely 8 weeks' pay per year of service, inclusive of statutory terms capped at the equivalent of 3 years' pay. That Recommendation was issued in 2009 and was based on what the Court then considered to be the norm prevailing in the banking sector as a whole. It is clear that the situation has changed significantly since that time and the type of package then recommended by the Court no longer reflects the scale of redundancy payments paid in similar circumstances in analogous employments.
There are, however, features of the redundancies proposed in this case which are different from those applying in some of the other cases involving redundancies in similar employments. It is clear to the Court that the redundancies are, in reality, compulsory. It also appears that the service profile of those likely to be made redundant is lower than that found in similar employments in which redundancies occurred. These are factors that have influenced the Court in recommending, on an exceptional basis, somewhat enhanced terms. Consequently, the recommendations that follow are intended to reflect the particular circumstances pertaining in this case and should not be regarded has having any precedent value.
Having regard to all the circumstances of this case the Court recommends that the Bank’s offer be modified as follows:
· Redundancy payments should be 5.5 weeks' pay per year of service inclusive of statutory terms
· A cap equal to 104 weeks' pay should apply. That cap should apply to ex-gratia payments only and should not include statutory redundancy payments or payment in lieu of notice.
Early Retirement
The Court does not believe that there is any reasonable basis upon which it could recommend arrangements for early retirement beyond the offer made by the Bank, the details of which are set out in the Bank’s submission to the Court.
Other issues
On acceptance of this Recommendation the parties should resume their discussions through the facilitation process or the LRC with a view to finalising agreement on all outstanding issues within a timeframe of not more than eight weeks.
Signed on behalf of the Labour Court
Kevin Duffy
24th February, 2014 ______________________
JMcC Chairman
NOTE
Enquiries concerning this Recommendation should be in writing and addressed to Jonathan McCabe, Court Secretary.