FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : REHAB ENTERPRISES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - 36 WORKERS (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION :
SUBJECT: 1.Failure To Agree Redundancy Terms In Rehab Enterprises The Company have consistently paid those terms which amount to 6 weeks pay per year of service to workers made redundant. Any difficulty in meeting the cost of the claim should be addressed by the parent Group as has happened in the past. The Company has significant net liabilities at end of 2020 and in the absence of significant rationalisation, would deteriorate further. To accede to the Union claim would cost an additional €1.4M and the Company is unable to meet that cost.
The employer and the Trade Union have dealt with redundancies since the middle 1990’s on the basis of a collective agreement which provided that any person made redundant would receive their statutory entitlement and in addition would receive an ex-gratia payment amounting to four weeks pay per year of service with no ceiling on the amount of the ex-gratia payment. It is not in dispute that the collective agreement continued to apply to all redundancies up to 2015 and it is not clear that any redundancies have occurred since that date. The employer now proposes that the terms of this collective agreement would not apply to the redundancy of 36 workers. Instead, the employer proposes that these workers should receive their statutory entitlement upon redundancy and in addition would receive two weeks pay per year of service by way of an ex-gratia payment. The ex-gratia payment would have a ceiling of one year’s pay. The Trade Union contends that the terms of the collective agreement should apply to the current redundancies. Both parties asserted to the Court that they were not prepared to negotiate on their position. The Court notes the detailed submission of the employer which makes plain that the employer is in no position to address the Trade Union claim from its own resources. The Trade Union does not dispute that reality. However, the Court also notes that the employer is in no position to fund its current offer from within its own resources but is nevertheless satisfied that it has secured banking arrangements and a loan arrangement from the Rehab Group to allow it to make the offer. The Court notes also the undisputed history of refundable loans being made by the Group to the employer. The Trade Union has claimed that the Rehab Group have always provided financial support to the employer and contends that it is capable of continuing to do so by providing the employer with the facilities to meet the cost of their claim for implementation of the existing collective agreement. The employer has cited balance sheet reasons and an unwillingness on the part of Rehab Group to provide the necessary funding. The Court is asked to support the setting aside of an existing collective agreement in a context where the parties have not succeeded in negotiating a successor or alternative agreement. It is the view of the Court that parties to a freely negotiated collective agreement are obliged to apply the terms of the agreement until and unless they negotiate a successor agreement. The employer in this case is contending that it does not have the financial capacity to support the implementation of the collective agreement in respect of the current redundancies. It would be normal in such circumstances for the parties to attempt to negotiate an agreement which reflects the employer’s capacity to pay but the parties, as earlier noted, have indicated to the Court that they do not intend to negotiate on the positions they currently adopt. It is the view of the Court that a level of transparency is required in the current situation such that both parties are clear on the underlying facts. There is no dispute as regards the incapacity of the employer to meet the cost of the Trade Union claim. In fact, there is no dispute as regards the incapacity of the employer to meet the cost of its current offer on its own. What does not appear to be present however is a shared understanding between the parties as to the reason that the funding streams which have supported the employer’s capacity to make its current offer were not capable of supporting the implementation by the employer of its collective agreement in the case of the current redundancies. The Court therefore recommends that the Trade Union should appoint an expert to advise it and that such an expert should be facilitated by the employer to engage with the funding streams being employed to fund the employer’s current offer to the Union and to establish whether such streams have the capacity to fund the Trade Union claim. The report of the expert should be shared with the employer and against the background of the report the parties should meet to attempt to resolve the matter or alternatively should refer the matter back to the Court for definitive recommendation. The expert should be asked to complete his or her report within two weeks of the date of this recommendation or as soon as possible thereafter. The Court so recommends.
NOTE Enquiries concerning this Recommendation should be addressed to Noel Jordan, Court Secretary. |
