Labour Court Database __________________________________________________________________________________ File Number: CD8936 Case Number: LCR12385 Section / Act: S20(1) Parties: NAVAN CARPETS LIMITED - and - A WORKER |
Claim by a worker concerning:- (a) Redundancy entitlements. (b) Pension being incorrectly based. (c) Overpayment of PRSI contribution.
Recommendation:
5. Having carefully considered the submissions and arguments made
to it the Court finds as follows on the three points of the claim
made by the claimant.
(1) Redundancy Entitlement:
In the absence of a factual redundancy situation at present in the
Company the Court does not recommend that the claimant can be
declared redundant.
(2) Disability Payment Base:
The Court notes that the method of determining the base of the
disability payment was determined by the terms of the Insurance
Scheme which is the guarantor of the weekly payments. It appears
to the Court however that there is a case to be met by the Company
that weekly disability pay (as distinct from pension) should be in
line with current pay rates as on 1st May, 1988.
(3) S.W. P.R.S.I. Deductions:
The Court recommends that the claimant accepts the classification
of the P.R.S.I. deductions is a matter for determination in the
first instance by the Department of Social Welfare.
The Court so recommends.
Division: CHAIRMAN Mr Shiel Mr O'Murchu
Text of Document__________________________________________________________________
CD8936 RECOMMENDATION NO. LCR12385
INDUSTRIAL RELATIONS ACT, 1946 TO 1976
SECTION 20(1)
PARTIES: NAVAN CARPETS LIMITED
(Represented by the Federated Union of Employers)
and
A WORKER
SUBJECT:
1. Claim by a worker concerning:-
(a) Redundancy entitlements.
(b) Pension being incorrectly based.
(c) Overpayment of PRSI contribution.
BACKGROUND:
2. The worker was involved in an accident at his place of work in
April, 1985. He was absent from employment on sick leave from
that date until early 1988 when he was advised by the Company that
his position within the firm was no longer available and that he
was being transferred from monthly salary to a disability scheme.
The worker disputed his entitlement to redundancy, his rate of
pension and PRSI contributions with the Company and in December,
1988 requested a Rights Commissioner's investigation into his
claims. As the company did not agree to attend at a Rights
Commissioner's investigation the worker requested a Labour Court
hearing in January, 1989, agreeing to accept the Recommendation of
the Court. The Court investigated the dispute on 27th April,
1989.
WORKER'S ARGUMENTS:
3. 1. Redundancy - on the 3rd April, 1985 the worker had an
accident at his place of work. Litigation proceedings were
finalised in December 1987. Full salary was paid to the
worker during the period April 1985 to early 1988 when he was
placed on the Company's pension scheme. The worker was seen
by two occupational medical consultants at the Company's
request and some time later was advised by the Company that
his position was no longer available. It is now evident to
the worker that the Company never had any intention of
allowing him to return to work and he is therefore entitled to
redundancy.
2. Pension incorrectly based - the worker's pension is
based on salary as at 3rd April, 1985. He was on full salary
up to early 1988 and is entitled to all salary increases
during the period April, 1985 to early 1988.
3. 3. Overpayment of P.R.S.I. contributions - once placed on
his pension scheme the worker's category of PRSI contribution
should be at K.1 rate i.e. 2.25%. The Company have made
deductions at full rate and accordingly an overpayment has
occurred.
COMPANY'S ARGUMENTS:
4. 1. Redundancy - during October, 1987, the Company
implemented a rationalisation programme. Voluntary
redundancies were requested on 17th September, 1987, with 2nd
October, 1987 being the closing date for applications - 20
Staff members applied for consideration. The Company
exercised it's right to accept or reject applications. They
finally selected 15 for voluntary redundancy. The worker
concerned with this claim first requested redundancy on 18th
December, 1987. The Company formally rejected his request as
it was not considered as an appropriate option and it was
outside the acceptance date for volunteers.
2. Pension incorrectly based - the worker was transferred
to the Company's disability scheme. This is not a pension
scheme as claimed by the worker. Under the rules of the
scheme the worker was due to transfer on to disability from
3rd October, 1985. At their discretion, the Company continued
to pay the worker's salary up to 30th April, 1988, before
transferring him on to their disability scheme with effect
from 1st May, 1988. The gross salary paid during his absence
up to 30th April, 1988, amounted to #35,769. Disability
benefit of 50% of pensionable salary as last calculated is
applicable in the worker's situation. This means that the
pensionable salary to be used is #10891.20, as this was his
salary as last calculated, i.e. on 1st January, 1985 - 50% of
this figure amounts to #5445.60 per annum, or #453.80 gross
per month. This payment has been computed by the Company's
Pension Company in accordance with the rules of the disability
scheme. It is forwarded to the Company on a monthly basis,
who in turn, are responsible for deducting tax and P.R.S.I.
before crediting the net amount to the worker's account.
3. Overpayment of PRSI contributions - the Company deducts
P.R.S.I. at the A1 rate from all disability payments, in
accordance with instructions from the Department of Social
Welfare. The Company has recently requested verification of
this directive from the Department as to the appropriate rate
to be used. To-date, no alternative directive has been issued
but should the Department advise that an incorrect rate is
being applied any overpayment will be refunded to the worker
by the Company and the Department of Social Welfare.
RECOMMENDATION:
5. Having carefully considered the submissions and arguments made
to it the Court finds as follows on the three points of the claim
made by the claimant.
(1) Redundancy Entitlement:
In the absence of a factual redundancy situation at present in the
Company the Court does not recommend that the claimant can be
declared redundant.
(2) Disability Payment Base:
The Court notes that the method of determining the base of the
disability payment was determined by the terms of the Insurance
Scheme which is the guarantor of the weekly payments. It appears
to the Court however that there is a case to be met by the Company
that weekly disability pay (as distinct from pension) should be in
line with current pay rates as on 1st May, 1988.
(3) S.W. P.R.S.I. Deductions:
The Court recommends that the claimant accepts the classification
of the P.R.S.I. deductions is a matter for determination in the
first instance by the Department of Social Welfare.
The Court so recommends.
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Signed on behalf of the Labour Court
Kevin Heffernan
11th May, 1989 ---------------
A.McG/T McC/U.S. Chairman