Labour Court Database __________________________________________________________________________________ File Number: CD9165 Case Number: LCR13220 Section / Act: S67 Parties: RENTOKILL LIMITED - and - MANUFACTURING SCIENCE FINANCE |
Dispute concerning early retirement payments to a worker.
Recommendation:
5. Having considered the submissions from the parties the Court
is of the view that the Company's position is reasonable and
therefore the Court does not recommend concession of the Union's
claim.
Division: Ms Owens Mr McHenry Mr Rorke
Text of Document__________________________________________________________________
CD9165 RECOMMENDATION NO. LCR13220
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS 1946 TO 1976
SECTION 67
PARTIES: RENTOKILL LIMITED
(Represented by the Federation of Irish Employers)
AND
MANUFACTURING SCIENCE FINANCE
SUBJECT:
Dispute concerning early retirement payments to a worker.
BACKGROUND:
2. The worker was employed as a sales manager with the Company
since 1961. He left the Company on early retirement in April
1989. Agreements were entered into regarding the worker's
departure and the current dispute centres around the
interpretation of the agreements. Pension arrangements were
agreed and set out in a Company letter dated 22nd February, 1989,
paragraph 3 of which states".... the Company picks up the sag in
earnings from April 1990 to November 1993 with a pension
supplement through to your 65th birthday at which time you will be
entitled to receive your state retirement pension". Prior to July
1990 the worker's income consisted of a pension payment and a
social welfare payment. The worker's social welfare payments were
not liable to tax. After July 1990 the worker's income consisted
of his original pension payment plus the Company's supplementary
payment as the worker's P.R.S.I. benefit had expired, The net
result was that the worker became liable for income tax and his
net take home pay was reduced by #124.45 (details supplied to the
Court). The Union now claims that the Company should make up the
worker's shortfall in take home pay.
The Company declined stating that the payment of the supplementary
pension fulfilled its commitment to pick up the sag in earnings
from April 1990 to November 1993. The matter could not be
resolved locally and was referred to the conciliation service of
the Labour Court on 2 October, 1990. A conference was held on 14
December, 1990 but no agreement was reached. The matter was
referred to a full Court hearing. A Labour Court investigation
was held on 19 February, 1991.
UNION'S ARGUMENTS:
3. 1. On 3 April, 1989 the worker left the Company under the
terms of a voluntary early retirement scheme. In the letter
of the 22nd February, 1989 the Company committed itself to
"pick up the sag in earnings from April 1990 to November 1993
with a pension supplement. The worker was therefore assured
by the Company that they would pick up any shortfall between
what his earnings would be had he remained in their
employment and the accumulative total of his pension plus
State payment. The letter clearly leaves the liability for
the shortfall with the Company. The Company has so far
refused to discharge this liability and the Court is
recommended to find in the worker's favour.
COMPANY'S ARGUMENTS:
4. 1. The worker is seeking further enhancement of his pension
arrangements. The Company is satisfied that full
entitlements have been received under the present agreement.
The worker was credited with 5 additional years' service and
a supplementary pension was paid 15 months after he left the
Company when his social welfare entitlement was exhausted.
The pension improvements were paid for by the Company.
2. The worker is now seeking the supplementary pension to
be increased to cover loss of earnings as a result of this
payment becoming liable to income tax. It is the Company's
view that income tax returns are the liability of the
individual concerned. No commitment was ever given to the
worker that his income tax returns would be paid. The
original agreement provided for, among other items a
substantially enhanced pension arrangement. The Company is
not in a position to contribute any more funds.
RECOMMENDATION:
5. Having considered the submissions from the parties the Court
is of the view that the Company's position is reasonable and
therefore the Court does not recommend concession of the Union's
claim.
~
Signed on behalf of the Labour Court
7th March, 1991 Evelyn Owens
J.F./M.O'C. ________________
Deputy Chairman