Neville v Waters Munster Glass Ltd

 
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Employment Appeals Tribunal

EAT: Neville v Waters Munster Glass Ltd

Employment Appeals Tribunal

Abstract:

EAT - Employment law - Redundancy - Whether there was a genuine redundancy of the claimant's position.

The determination of the Tribunal was as follows:-
Respondent's case:
1

The Tribunal heard evidence from the managing director of the WMG group and shareholder of the respondent company. In June 2003 the company was in serious financial difficulty and insurance costs were also crippling the glass industry. The company had to look at ways of reducing overheads and this included staff numbers. A total of twenty five staff were made redundant and they also dispensed with the use of company cars and trucks. In August 2003 witness bought out the major shareholder and then set about re-structuring the company. The union sought a 4% wage increase for its members which the company could not afford to pay and following discussions the union agreed not to proceed with their requested wage increase and to co-operate with the planned redundancies. The directors and managers were aware of the financial state of the company and as the claimant was involved in the financial area and reported to witness and the chairman, he too was fully aware.

2

Meetings were held wit the claimant and the overall plan was presented to him which included a proposal that all management were to take a wage cut. All of the individuals involved except the claimant agreed to the wage cut. Other cost cutting measures were introduced in relation to the use of motor vehicles for official purposes. The claimant was also given the option to work on a three day week but he refused. The claimant knew what needed to be done for the sake of the company and everybody suffered a “little pain”. Since he was not willing to compromise there was no option but to make the claimant redundant in July 2003. Witness took over some of the claimant's work in the first few months following his redundancy and there was pressure mounting from the banks seeking end of month figures. In September a pan-time consultant was taken on and worked for a period of five or six months. After some time the accounts were showing a small profit with witness and a colleague putting personal funds into the company in addition to other investors also coming on board. The claimant was paid one months notice and he calculated his own redundancy. He was paid an additional amount over and above the statutory redundancy however the claimant was not happy as he felt this additional figure ought to have been calculated in line with that of a director. In a year when bonuses and salary increases related to the performance of the company the claimant was the only one who sought payment of bonus/salary increase even though they were showing losses rather than a profit

3

In cross-examination witness told the Tribunal that in September the company was showing a profit and a consultant was employed in September 2003. This person was taken on as an employee in April 2004. He worked initially on a two day week basis and then progressed to a three day week. The claimant had previously been asked to work on a three day week basis and he refused.

4

The Tribunal heard evidence from an employee who is involved in the area of sales and money collection. He now works in the area of transport and has been a director since 1989. In June/July 2003 he was asked to take a reduction in salary and he and others agreed in order to save the company. He has worked in the glass for forty years and thirty were spent with the WMG group. If salary cuts were not put in place the company would close down. He also said that the claimant had been asked to become a director but he refused.

5

The Tribunal also heard evidence from Mr L who said that in June/July 2003 when he was factory manager he was present at a meeting where staff were asked to take a 20%-25% reduction in salary. He and other staff members accepted the reduction but the claimant refused. It was his belief that if salaries were not reduced that the company could not survive financially. Alter the holiday period in July there was an increase in sales with...

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