Seagate staff may lose out on payoff

Employees of Seagate who have succeeded in finding alternative jobs may lose some, or all of their redundancy payments.

The company has confirmed that any of the 1,100 employees leaving its Clonmel plant before the agreed date will lose a month's payment due in lieu of notice. Their entitlement to an ex gratia payment, equivalent to 11 weeks pay per year of service, will also be reviewed on a case-by-case basis.

About 30 employees are understood to have found alternative employment. But they may lose £4,000-£8,000 each, depending on their salary levels, if they leave Seagate before their agreed date of departure. The payments would be tax free.

When the company announced on December 10th that it was closing the plant most employees expected to be let go by early January. On December 17th it announced that most of them would be laid off between January 23rd and February 20th.

A smaller group of key personnel in areas like human resources, IT and maintenance have been told their services will be retained longer. Their estimated severance dates are between February 20th and April 3rd. The company has now notified the majority of employees that their "estimated" redundancy date is February 20th and that formal confirmation will follow shortly. Some employees have succeeded in persuading future employers to defer their appointments, but others have been told that the vacancy cannot be held until the end of February or maybe even later.

Seagate's spokesman, Mr Ian O'Leary, said yesterday that the company had delayed the closing of its Clonmel factory as long as possible to facilitate employees. It now needed their co-operation in having an orderly closedown.

Most employees have to give a month's notice under their contract of employment, he said. If they fail to do so they will forfeit the four weeks payment on offer from the company and will lose automatic entitlement to the ex gratia payments.

Each application from people wishing to leave early will be assessed on its merits.

However, he warned that the company would not be prepared to consider applications from the small number of key personnel needed to maintain essential operations during the plant's rundown.

Seagate announced worse-than-expected operating losses for the second quarter last week, heightening existing doubts over its plans to expand its current operation in Derry and to establish a new 1,000-job project in Ringaskiddy, Co Cork.

It said that revenues from drive operations were estimated to be approximately $1.5 billion (£1.1 billion) for the quarter.

Mr O'Leary said he would be very surprised if the company made any announcement about the Cork and Derry projects before early April.

Seagate, the world's largest diskdrive maker, has attributed the job losses in Clonmel to severe pricing pressure from Asian markets and the weaker-than-expected disk-drive demand.