Labour Court Database __________________________________________________________________________________ File Number: CD90436 Case Number: LCR13214 Section / Act: S67 Parties: EDUCATIONAL BUILDING SOCIETY - and - MANUFACTURING SCIENCE FINANCE |
Claim for additional pension benefits.
Recommendation:
5. The Court has considered the submissions from the parties and
the additional information submitted subsequent to the hearing.
Taking all the points made into account the Court is satisfied
that the basis for the Union's claim for enhanced pension is not
valid and accordingly the Court does not recommend concession of
the claim.
Division: Ms Owens Mr Keogh Mr Devine
Text of Document__________________________________________________________________
CD90436 RECOMMENDATION NO. LCR13214
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: EDUCATIONAL BUILDING SOCIETY
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Claim for additional pension benefits.
BACKGROUND:
2. The claim concerns a worker who has been employed by the
Society as a Branch Manager since 1972. He had previously worked
for another company but on transferring to the E.B.S. he lost
his accrued pension rights. He was 41 years of age at that time
and on retiring at normal age (65) from the Society his pension
entitlement would be 24/60ths. The full pension is 40/60ths. In
1988, following some years of negotiation the E.B.S. Manager's
Association (of which the worker concerned is a member) concluded
an agreement with the Society whereby managers who lost part of
their pension entitlements from their previous employers, by
reason of joining the Society, would have the option of having
their lost service bought back by the Society. The Society agreed
to pay 70% of the cost while 30% was to be borne by the individual
manager. The worker concerned was not included in this scheme.
The Union claims that in line with the other managers in the
Society the worker concerned should have his pension contributions
back funded to give him full pension on retirement. Management
has rejected the claim and maintains that no contractual
commitment was entered into in this worker's case and the cost of
back funding same would be prohibitive. The issue could not be
resolved at local discussions and was referred to the conciliation
service of the Labour Court on the 11th June, 1990. Conciliation
conferences were held on the 25th July and the 10th October, 1990
but no agreement was reached. The dispute was referred to the
Labour Court on the 5th November, 1990. A Court hearing was held
on the 10th January, 1991. Subsequent to the hearing
correspondence was received from both parties which was considered
by the Court.
UNION'S ARGUMENTS:
3. 1. The circular from the Managers Committee regarding the
pension purchase scheme was very specific about who was
covered by this arrangement:
"All eligible managers will be contacted in the near
future with figures relative to each individual. It
should also be understood that the offer refers only to
existing members of the pension scheme, who because of
age and previous employment would have a reasonable
expectation of entitlement to a full pension."
Given the situation the worker waited to be contacted with his
"figures." The contact never came and he made enquiries only
to be told that the Society did not deem him "eligible" under
the arrangement.
2. The Union believes that the worker is being discriminated
against. He fits the criteria for eligibility perfectly and
is the longest serving manager in the Society. He is the only
Union member at manager level in the E.B.S. who fits the
eligibility criteria, who has been excluded from the
arrangement. Clearly this situation is grossly and manifestly
unfair. The worker is a member of the pension scheme, he did
lose pension rights on joining the E.B.S. and "because" of age
and previous employment does not have a "reasonable
expectation of entitlement to a full pension." The Society
cannot justify the worker's exclusion from the scheme yet
continues to maintain it. The Union is seeking sixteen years
pension under the 70/30 split purchase agreement.
SOCIETY'S ARGUMENTS:
4. 1. During 1985 the Society recognised the need to recruit
managers from the banks who had specific banking, resources
gathering and lending expertise and experience. They were to
undertake a specific business development brief. This
recruitment was necessary to gear the Society up for the
introduction of new products and services to compete in a
deregulated environment. These category of recruits were
given a commitment following extensive cost analysis and
negotiations with the Manager's Association, that the Society
would introduce the scheme for purchase of "back pension"
years enabling them to achieve a full pension entitlement. At
no stage during negotiations was the case of the worker
concerned raised as both sides recognised that the arrangement
was only for those who had received a commitment from the
Society on the pension issue, and whose duties included a
business development brief which the worker's does not.
2. The worker concerned is 60 years of age and the cost of
augmenting him to a full 40/60ths pension is #56,000 for the
Society and #24,500 for the worker. This cost is prohibitive
for both sides.
3. The knock on effects of augmenting the worker's pension
would face the Society with a total cost of #340,000 for five
other managers who are members of the scheme and of a similar
age as the worker concerned. Such an increase in cost could
not be sustained.
RECOMMENDATION:
5. The Court has considered the submissions from the parties and
the additional information submitted subsequent to the hearing.
Taking all the points made into account the Court is satisfied
that the basis for the Union's claim for enhanced pension is not
valid and accordingly the Court does not recommend concession of
the claim.
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Signed on behalf of the Labour Court
Evelyn Owens
_____________________
6th March, 1991 Deputy Chairman.
T.O'D./J.C.