FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AURIVO CO-OPERATIVE SOCIETY LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Cryan Worker Member: Ms Tanham |
1. Redundancy terms.
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Union in relation to redundancy terms. The dispute relates specifically to the Union's claim for an enhanced redundancy package on behalf of approximately 300 of its members. It is the Union's claim that there are existing redundancy packages in place that should be applied to its members as sought. The Employer rejects the Union's claim arguing that it is no longer in a position to apply the terms of previously negotiated packages. The Employer maintains that since 2012 it has implemented and applied a new redundancy package. 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 4th January, 2016, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 18th February, 2016.
UNION'S ARGUMENTS:
3. 1. The Union contends that the redundancy terms sought are in line with industry norms.
2. The Union maintains that it has negotiated and agreed redundancy packages with the Employer.
3. The Union asserts that the Employer has unilaterally altered the terms of previously agreed packages.
EMPLOYER'S ARGUMENTS:
4. 1. The Employer has experienced significant financial difficulties since the economic recession of 2009 to the present day.
2. The Employer is no longer in a financial position to apply the terms of previously agreed redundancy terms and has attempted to negotiate new terms with the Union.
3. The Employer contends that it was faced with no other option than to implement and apply its altered redundancy packages since 2012.
RECOMMENDATION:
This case relates to a long running dispute between the parties concerning redundancy payment. There are historic agreements in place which provide for ex gratia payments to employees who are made redundant. These agreements were originally negotiated and agreed between the Union and a predecessor enterprise of Aurivo Co-Operative Society Limited. The Union are relying on an agreement concluded with the former Connacht Gold Co-Operative Society Limited. While this agreement provides a complex formula for the calculation of redundancy payments, its practical effect was to provide for five weeks pay per year of service with age related adjustments. The overall amount under this agreement was not capped.
There were three previous recommendations issued by the Court in relation to this dispute. In LCR19821 the Court recommended that the parties enter into negotiations for the purpose of concluding a new agreement providing for a less complicated formula on the calculation of redundancy terms and the elimination of provisions that could give rise to discrimination on grounds of age.
The parties have failed to reach agreement on new terms.
The Union has maintained its position of reliance on the Connacht Gold Agreement. The Company have offered a package comprising four weeks’ pay per year of service, inclusive of statutory terms, capped at two years pay. This proposal also provides for age related reductions. The Company maintain that this package has been applied in the case of all redundancies arising since 2012.
The Court believes that it is in the interests of both parties that finality be brought to this issue. Accordingly, the recommendations that follows are intended to apply to all redundancies arising following the acceptance of this Recommendation.
Proposed Standard Terms
The Court recommends that redundancy payments be calculated as follows: -
1. 4.5 weeks’ pay per year of service, inclusive of statutory redundancy payments.
2. Average weekly pay to be determined by dividing the previous PAYE year earnings by 52 or 53 depending on the number of weeks in the year.
3. Subject to 4, below, the total amount payable to be capped at the equivalent of two years pay.
4. The total amount payable to any individual cannot exceed their total expected earnings up to their expected retirement date, or the total amount of their statutory entitlement, whichever is the greater.
5. Employees who are affected by the maximum amount payable in accordance with 3 above should receive an additional €12,000 in recognition of long service.
The recommendations above are intended to be of general application in the case of all future redundancies and have no retrospective effect.
Closure of Achonry Butter Operation
It is noted that the immediate background to this referral is the proposed closure of the Company’s Achonry Butter Operation. In respect to the redundancies arising from that closure, the Court further recommends that the Company should provide those affected with a wind-down bonus of €275 per year of service in addition to the standard terms recommended.
Signed on behalf of the Labour Court
Kevin Duffy
26th February 2016______________________
SCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.