FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SENNHEISER - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms O'Donnell Employer Member: Mr Marie Worker Member: Mr McCarthy |
1. Redundancy package.
BACKGROUND:
2. This dispute could not be resolved at local level. As agreement was not reached, the dispute was referred to the Labour Court on 4 July 2018 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 4 September 2018.
UNIONS ARGUMENTS:
3. 1. The Union believes that a previous agreement relating to redundancy terms which was balloted on and accepted by both parties in 2005, was to be used on this occasion, as it had been on two previous occasions.
2. The Union says that this agreement was never renegotiated. The Union wrote to the Company in 2009 stating that the Union will be seeking a better agreement for the future.
3. The Union members are deeply upset that when the Company was in a worse financial situation it still agreed to pay the 6 weeks' ex-gratia per year of service plus 2 weeks' statutory redundancy to their colleagues in 2006 and 2010.
EMPLOYER'S ARGUMENTS:
4. 1. The Company says that during 2006 when it had to make 16 weekly paid employees positions redundant, the Company made an offer, that was ring fenced and without procedent, of 8 weeks' pay per year of service inclusive of statutory entitlement.
2. The average length of service for employees in 2006 whose positions were being made redundant was considerably shorter and the average weekly earnings were much lower. The Company also received a 60% rebate on all statutory redundancy payments from the State.
3.The Company says that the harsh reality is that the Company finances cannot afford the demands of an additional week per year of service compensation.
RECOMMENDATION:
The issue in dispute between the parties concerns the terms of the redundancy package to be applied to the positions being made redundant. The Company is restructuring the plant as a result of which some lines are being discontinued and others are being transferred to another location outside the jurisdiction. The Employer has proposed a package of six weeks salary per year of service inclusive of statutory plus a gratuity of €127 per year of service per employee and no cap on final lump sum. There are also a number of add-ons, described in the Employer’s written submission to the Court as “further concessions” that are not in dispute. The Union is seeking that package be enhanced to eight weeks salary per year of service inclusive of statutory entitlement.
Union Case
In March 2018 the Company informed the Workers and their Union that a business decision was made to close the majority of the plant in Tullamore only a small number of production workers will remain therefore the redundancies are in fact compulsory. In previous group redundancies in 2006 and 2010 the terms of the redundancy package had been six weeks ex-gratia plus two weeks statutory with no cap applied to the Lumpsum. The Union also looked for a number of add-ons. It is the Unions contention that the Employer’s counter offer of four week’s ex-gratia plus two weeks statutory with no cap plus add-ons came as a complete surprise to the Workers as they all understood that the accepted rate was six plus two weeks and no cap. While the parties engaged on this issue under the auspices of the WRC they were not able to resolve their differences. In their submission to the Court the Union highlighted that the previous arrangement was also applied in 2016 to two workers. It is their contention that there was no discussion or agreement to change the previous rate and therefore the Workers were entitled to expect that they would receive that rate.
Employer’s case
Difficult trading conditions and challenging competitive pressures have led to a need to restructure the Tullamore plant. Without the restructuring the plant in Tullamore will not survive. Historically when redundancies were implemented in 2003,2004 and 2005 the package on offer was 3.5 week’s pay per year of service inclusive of statutory entitlement. In 2006 and 2010 it is the Employers contention that the staff involved had much shorter lengths of service and the Employer was able to avail of a rebate system that was available at that time. Therefore, the cost to the Employer was much lower than in 2018. The Employer did not dispute that the higher amount had been paid in 2016 but directed the courts attention to a recent Adjudication decision which had not been appealed by the Union where the Adjudication Officer had recommended four plus two weeks statutory which was in line with the proposed package the Employer had set out.
Discussion
It is clear to the Court that the parties have engaged in a productive manner in relation to the forthcoming restructuring. This is evident in the number of add-on issues that have been resolved between the parties. The Court notes the Employer’s position that in the past the redundancy packages have varied depending on the circumstances existing at that point in time and the finances of the Company and that the 8-week package referred to applied to a smaller number of staff and did not attract the same add-ons. The Union do not dispute that the numbers involved were fewer and that the add-ons were not the same but feel that the circumstances warrant the higher number of weeks i.e. six-week ex-gratia plus two weeks statutory with no cap on the lumpsum.
Having considered the submissions of both parties and listened carefully to the oral submissions on the day the Court recommends that the Employer should increase their proposal from 6 weeks’ salary per year of service inclusive of statutory entitlement to 7 weeks’ salary per year of service inclusive of statutory entitlement with no cap on the lumpsum, plus the gratuity of €127 per year of service. All other elements of the Employer’s proposal, as set out in the Employer’s written submission to the Court and described as “further concessions” should apply in addition.
The Court so Recommends.
Signed on behalf of the Labour Court
Louise O'Donnell
CC______________________
13 September 2018Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ceola Cronin, Court Secretary.