Dell off the hook for massive payouts to redundant Limerick workers

COMPUTER giant Dell has avoided having to fork out massive additional payments to hundreds of Limerick workers made redundant in January 2009 after making a successful appeal to the Employment Appeals Tribunal.

COMPUTER giant Dell has avoided having to fork out massive additional payments to hundreds of Limerick workers made redundant in January 2009 after making a successful appeal to the Employment Appeals Tribunal.

It followed a case taken by 28 former employees - among 1900 who lost their jobs - to the Rights Commissioner, who found their representatives had not been adequately consulted on the redundancy plans.

Rights Commissioner Michael Rooney had found in November 2009 that Dell had not complied with employment legislation where if an employer is proposing collective redundancies, it needs to consult with staff representatives on seeking alternatives or mitigating job losses.

Workers had argued that letters issued by Dell on January 8, 2009, effectively meant their jobs were gone before any such consultation had begun.

Mr Rooney awarded the 28 workers two weeks wages each - the total amounting to around €40,000 - but the company lodged an appeal at the Employment Appeals Tribunal. Dell was potentially facing a much higher bill as around 500 more former workers also had cases pending.

But the multinational is no longer on the hook after the Employment Appeals Tribunal overturned the decision of the commissioner. The tribunal drew a distinction between the timing of the company’s “strategic” business decision to move manufacturing from Limerick to Poland and its later initiation of consultations with staff.

The tribunal had heard evidence from former Dell worker Denis Ryan that rumours were abounding in the latter part of 2008 that Dell was to cease manufacturing in Raheen. There had even been a report in the New York Times speculating on the future of the Limerick plant.

Staff were still “shocked” when called to a meeting in January 2009 that production was moving to Poland with a loss of 1900 jobs, Mr Ryan said. Management had given a negative response when asked at this meeting whether the jobs could be saved. He had opened a letter from the company - dated January 8, 2009 - from which he understood that his job was “gone”.

Peter O’Brien BL, for the employees, argued at the tribunal hearing that Dell was well used to making decisions and moving pieces around on its “corporate global chess board” but had in this instance failed to engage in “real and meaningful” consultation with its Limerick employees. The minimum requirement was for consultations to begin 30 days before the first employee was dismissed. It had been clear to employees that the decision to make them redundant had been taken some time prior to January 8, 2009 and the only discussions thereafter concerned severance and redundancy payments.

Dell argued that the meeting on January 8, 2009, was held to inform staff of a strategic decision. Letters sent out on that date were intended as part of a “reaching out” to staff. These were “nothing more than indicative letters” which provided no specifics on redundancies.

A period of three months of consultation with employees, individually and with teams, had only began afterwards and no single employee had been served with notice before April 2009.

Mark Connaughton SC, for Dell, said any letters sent to employees before then could not be interpreted as termination notices.

It was Dell’s case that no breach of the Protection of Employment Act had taken place. The company had not started consultations too late and the strategic decision to migrate work to Poland was the company’s alone to make.

Tribunal chairman James Lucey found that Dell had been entitled to make a strategic commercial decision and that the meeting of January 8, 2009 was the commencement of the relevant process. Dell was “not in breach” of the Protection of Employment Act and the decision of the Rights Commissioner was overturned.

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