FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : LACPATRICK DAIRIES - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms O'Donnell Employer Member: Mr Marie 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 Union on behalf of its members is seeking enhanced redundancy terms as it contends that following this Employer's merger with Lakeland Dairies in April 2019, the Company is highly profitable and is in a position to concede this claim. The Union is seeking the application of a 2006 redundancy package which was paid to employees who were made redundant in Lakeland Dairies at that time. The Employer rejects the Union's claim arguing that it is not in a financial position to offer enhanced terms above those that are currently on offer to these employees.
The dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 13th September, 2019, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 23rd September, 2019.
UNION'S ARGUMENTS:
3. 1. The Union maintains that its members are entitled to have the terms of the 2006 Lakeland Dairies redundancy package applied in these circumstances.
2. The Union further maintains that the Company is highly profitable and is financially capable to concede the cost of this claim.
EMPLOYER'S ARGUMENTS:
4.1. The Employer contends that it has made every effort to assist the exiting employees to the best of its ability, however it is not in a financial position to offer enhanced redundancy terms.
2. The Employer asserts that it was not a party to the 2006 agreement and there is no justifiable basis for the Union to seek those redundancy terms to be applied to this current situation.
RECOMMENDATION:
The dispute between the parties is in relation to redundancy terms. Following a merger on the 1stof April 2019 LacPatrick Dairies became a subsidiary company within Lakeland Dairies Co-operative Society Limited. Following on from the merger a comprehensive review of the merged businesses took place. This review resulted in management presenting a remedial Plan to the board on 30thAugust 2019. The impact of the remedial plan is that there will be a reduction in the number of jobs required in LacPatrick Dairies. The remedial action is required because of the financial difficulties encountered by LacPatrick over a number of years. The Employer engaged with the Workers through their Union. There is no dispute in relation to the number of redundancies (44) covered by this claim but the parties were unable to agree the terms of the redundancy package.
Union's Position
The Union is seeking the application of the terms of a 2006 agreement between Lakeland Dairies and SIPTU. The Union was unable to confirm if these terms had been applied to any redundancies in Lakeland Dairies since that date. The Union did not dispute that since that deal was done the rebate system no longer applies and that the economic climate that existed then has changed substantially. It is the Union's submission that since the merger Lakeland have injected large sums of money into LacPatrick and that there was no basis for Lakeland Dairies not to fund a redundancy package . It is also their submission that since the companies have now merged staff from LacPatrick Dairies should be able to have the 2006 Lakeland package applied to them. The Union accepted in response to a question from the Court that each subsidiary within the group has to be financially viable within its own right.
Employer's Position
LacPatrick Dairies has been in financial difficulty for some time. The Employer is hoping that following this re-organisation of work and downsizing of the workforce that the company will eventually operate on a profitable basis. However, they do not see that happening in the short-term. The Employer has worked with local employers and other bodies to assist the Worker’s in finding alternative employment. It is their submission that these workers were never part of the Lakeland agreement and are not covered by it. They also submitted that the agreement was done at a time that the Employer could claim a 60 % rebate on the statutory element of any package. It is the Employer’s submission that they have made a reasonable offer considering the financial difficulties of the Company. The Employer made it very clear that Lakeland Dairies will not fund the redundancy package and that the cost of the package will be a charge on the company accounts of LacPatrick.
The Court having read the parties submissions and listened carefully to the submissions on the day recommends as follows;
4 weeks pay per year of service (inclusive of statutory redundancy payments)
Average weekly pay to be determined by dividing the 2017 P60 by the number of weeks in that year.
The above to be capped at the equivalent of two years pay
The total amount payable to any employee cannot exceed their total expected earnings up to their normal retirement age (66thbirthday). Full statutory redundancy will be paid regardless of this limit
Plus €900 top up payment (not covered by cap)
Plus €2,500 in recognition of service equal to or more than 10 years (not covered by cap)
Plus €5,000 in recognition of long service equal to or more than 20 years (not covered by cap)
The Court recommends this in full and final settlement of the Union’s claim.
The Court so Recommends
Signed on behalf of the Labour Court
Louise O'Donnell
26th September 2019______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.