Labour Court Database __________________________________________________________________________________ File Number: CD86135 Case Number: LCR10918 Section / Act: S67 Parties: BORD NA MONA - and - BORD NA MONA GROUP OF UNION |
Claim for the protection of Pension benefits where redundancy or early retirement occurs as a result of structural redundancy.
Recommendation:
5. The Court, having considered the submissions made by the
parties does not consider it feasible to recommend further changes
in the present pension and redundancy terms which would involve
the Company in future commitments the costs of which cannot
properly be estimated.
Division: Mr O'Connell Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD 86135 THE LABOUR COURT LCR10918
CC 8624 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR10918
Parties: BORD NA MONA
and
ICTU GROUP OF UNIONS
Subject:
1. Claim for the protection of Pension benefits where redundancy
or early retirement occurs as a result of structural redundancy.
Background:
2. On 25th April, 1986 the Court issued recommendation No. 10,434
following a hearing on 14th March, 1986. One of the issues before
the Court on that occasion was that of changes in the
Superannuation Scheme. In its recommendation the Court stated
inter alia that:-
"The Court is of the opinion that these (pension) issues
should be dealt with by way of a seperate hearing to be
arranged without undue delay".
On 14th November, 1986, this hearing to deal with pension benefits
took place. The Unions statement of claim was as follows:-
(1) the Amendment of Article 34 of the Superannuation
Scheme so as to provide that a worker declared
redundant having less than 60 years of age but with 10
years' service in the Scheme be given an option of
deferred pension benefits in line with those available
at normal retirement age
(2) the provision of 5 years' added pensionable service to
workers 55 years or above who are made redundant or
who, by opting for early retirement, are facilitating
job shedding or rationalisation of operations
(3) a revaluation of pensions/benefits arising from
redundancy retirements to keep pace with pay or the
Department of the Public Service authorisations for
pension adjustments
(4) the cost of the above benefits should be met by the
"Board" and should not be a charge on the 50/50 fund
(details of which are with the Court)
(5) the benefits should be back-dated to 1/1/1984, (the
retrospective date agreed in the case of payment of
redundancy compensation) and applied to redundant
workers since then
(6) these benefits should apply in future instances of
redundancy and early retirement.
Unions' arguments:
3. (i) The Unions contend that under current Bord na Mona
pension rules and regulations, workers being made
redundant are seriously disadvantaged by not obtaining
potential pension benefits to which they would be
entitled if structural redundancy did not occur.
Structural redundancy is inevitable as supplies of
industrial peat diminish.
(ii) The redundancy/early retirement package available in
Bord na Mona is less favourable than similar schemes
existing in other commercial state bodies such as the
E.S.B., N.E.T., and the Sugar Company. The redundancy,
early retirement schemes in these companies provide for
five years added pensionable service where workers are
made redundant. The Board na Mona redundancy package
does not.
(iii) The all-in cost of the labour force is as necessary a
charge on the industry as the cost of servicing loans
for development. The workers concerned had an
expectation of full-time work to retiring age in the
same way as the Board's Bankers expect interest
payments on outstanding investments. The labour
investment should be treated on parity with capital
investment and it should be given equal treatment by
the industry.
(iv) The Bord na Mona Superannuation Scheme has not been
structured to take account of structural redundancy.
Provision was made in 1978 for occasional redundancy
only. At that time, alternative work was readily
available. It is not available now. Moreover, the
Superannuation Scheme, (Art. 34), does not provide any
viable option for employees that is, an option between
a return of contribution with 3% interest and a full
value deferred pension.
(v) The Unions are very concerned that financial
arrangements should be made by means of payments into
the Superannuation Fund by Bord na Mona, which should
leave the employees no worse off at normal retiring age
than if structural redundancy had not occurred. This
may not involve any amendment to the Superannuation
Scheme. It merely involves a special payment to the
Scheme as has already been recommended and agreed where
seasonal work was substituted for full-time work.
(vi) In June 1980 pensionable service for unpaid time where
employees were at a disadvantage was recommended by the
Court (Recommendation No. 5799 refers).
(vii) Provision for special payments into the Superannuation
Funds, by the "Board" on behalf of workers affected by
circumstances of redundancy (or lay-off) has already
been undertaken by the industry (details with Court).
(viii)The Unions have had prior experience of the operation
of the Redundancy Scheme, in association with the
existing superannuation rules and regulations. The
losses incurred by the workers on these occasions are
of grave concern to the Unions. The pension loss in
structural redundancy should be a general charge on the
industry. It should not fall so heavily on the
redundant employee or on the 50/50 superannuation fund
(details with Court).
(ix) The Court is not being requested to make any
recommendation in relation to the structure of the
Superannuation Scheme. Payments into the Fund do not
affect the structure of the scheme, but they determine
the value of benefits.
The Boards Arguments:
4. (a) This claim has been rejected on the grounds that there
is no need for such a scheme because large scale
overmanning is not envisaged. Furthermore, it is
questionable that a scheme which might be formulated
now would be relevant or, indeed, acceptable at a
future date if an overmanning situation did arise.
(b) The Board contends that it is preferable to negotiate a
scheme when a factual situation exists, in which case
the circumstances relevant to that time could be taken
into account in formulating an early retirement scheme.
This has been the situation in companies where early
retirement packages have already been introduced. They
had an immediate need to shed large numbers and the
schemes formulated were pertinent to the circumstances
of the day and the employment conditions in them at
that time. The financial circumstances of those
companies were relevant factors in the formulation of
their schemes.
(c) Bord na Mona has in place a redundancy package which
was recommended by the Labour Court and has been
accepted by all Unions on behalf of those already made
redundant. That package was relevant to the
circumstances which existed at that time and the
Unions' qualified acceptance bears this out. Since
that time a change in the conditions of employment has
been agreed with the Unions which has enhanced the
redundancy package. This change means that any
individual may now retire with a gratuity and pension
from the age of sixty onwards. In a redundancy
situation workers over sixty years of age may now opt
to retire early with a gratuity and pension plus the
redundancy package (details with Court).
(d) The Company is satisfied that the redundancy package
recommended by the Court plus the Optional Early
Retirement Scheme since agreed with the Unions and
membership will meet any overmanning situation which
may arise in the foreseeable future. The Optional
Early Retirement Scheme as already negotiated has
resulted in an increased contribution from both the
Board and the membership. Extending the scheme
downwards would involve a substantially greater
injection of funds into the superannuation schemes.
The Board, after two bad production seasons, is unable
to pay its way and cannot therefore commit itself to
extra expenditure.
RECOMMENDATION:
5. The Court, having considered the submissions made by the
parties does not consider it feasible to recommend further changes
in the present pension and redundancy terms which would involve
the Company in future commitments the costs of which cannot
properly be estimated.
~
Signed on behalf of the Labour Court
7th January, 1987 John O'Connell
P.F./U.S. ----------------
Deputy Chairman