Labour Court Database __________________________________________________________________________________ File Number: CD91177 Case Number: LCR13282 Section / Act: S26(1) Parties: CORAS IOMPAIR EIREANN - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union on behalf of workers in the catering services of Irish Rail for the inclusion of commission payments in the calculation of pension entitlements.
Recommendation:
5. Having considered the submissions from both parties the Court
is satisfied that there is considerable merit in the Union's claim
on the following grounds.
(a) The Court is of the view that the claimants are in a
unique position in the Company as the only group whose
earnings are made up of basic rate and commission. The
Court considers that "commission" earnings are a distinct
form of remuneration and cannot be equated with any other
form of allowance or overtime earnings. The Court
accordingly accepts the Union's claim that commission
earnings should be taken into account to some degree for
pension purposes.
(b) Taking note of the complexity involved in making any
alteration to the pension scheme the Court recommends
that the parties meet to agree a formula for implementing
this recommendation and that when agreement is reached it
be referred to the appropriate institution for amending
the scheme.
Division: Ms Owens Mr Collins Mr Walsh
Text of Document__________________________________________________________________
CD91177 RECOMMENDATION NO. LCR13282
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: CORAS IOMPAIR EIREANN
IRISH RAIL
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union on behalf of workers in the catering
services of Irish Rail for the inclusion of commission payments in
the calculation of pension entitlements.
BACKGROUND:
2. Workers in the catering services department are paid a basic
weekly wage plus a commission payment (service charge). There are
two types of commission payment, one of which relates to food
sales and the other to bar sales. The C.I.E. pension schemes are
not service related and the amount of pension paid depends on the
member's basic weekly rate of pay at retirement. The definition
of wages and salary excludes payments for overtime, bonuses,
commissions, travelling expenses, subsistence, etc. Since the
scheme is not co-ordinated with social welfare payments the
workers receive this pension in full and also their Social Welfare
entitlements. The main pension scheme does not provide for
additional voluntary contributions but the Company has entered
into a Trust Deed with Irish Life and members can make additional
contributions to supplement his/her pension. On 19th November,
1990 the Union wrote to Irish Rail and submitted a claim on behalf
of staff in the catering department for the inclusion of
commission payments in the calculation of pension entitlements.
On 22nd November, 1990 the Company wrote to the Union and stated
that the pension scheme is a statutory one which provides for
contributions based on basic rates of pay only and that the
inclusion of commission for pension purposes is statute barred.
On 26th November, 1990 the matter was referred to the conciliation
service of the Labour Relations Commission, and a conciliation
conference was held on 14th February, 1991. The Union's position
is that the basic rates of pay of the workers is low due to the
additional commission payments which these workers receive.
Therefore, because of this the workers are at a disadvantage in
relation to other groups of workers in the calculation of pension
entitlements which are also therefore very low. The Company's
position is that the terms of the pension scheme apply equally to
all groups of workers and that if the claim was conceded payments
such as commission would have to be included in the calculation of
pension entitlements for all groups of workers. Agreement could
not be reached on the matter and on 25th March, 1991 the Labour
Relations Commission referred the matter to the Labour Court for
investigation and recommendation. The Court investigated the
dispute on 24th April, 1991.
UNION'S ARGUMENTS:
3. 1. Once again the catering workers employed by Irish Rail are
at a disadvantage in relation to their conditions of
employment in comparison to all other sections of workers in
the Company. Due to the workers pay system which includes a
large percentage of commission based payment (in some cases
over 50% of earnings), the workers' pensions at retirement are
not a true reflection of their earnings. This situation means
that the workers concerned experience financial hardship at
the most vulnerable period of their lives. It also does not
reflect the workers long and loyal years of service to the
Company.
2. In the Hotel and Catering Industry, workers' pensions are
based on the average earnings which include the average
commission payments for three years prior to retirement. In
our negotiations with Irish Pensions Trust on the introduction
of an income continuance plan it was agreed between the
parties that for the purpose of that scheme members' payment
from the scheme would be based on the Irish Rail general
operatives basic rate of pay which is presently #152 per week.
The present pension scheme for the workers concerned here
discriminates against them as the pension paid to other groups
of workers is a true reflection of their earnings whereas it
is not for this group of workers due to their low basic rates
and large percentage of commission payment. The workers'
pension entitlements should reflect their true earnings.
COMPANY'S ARGUMENTS:
4. 1. The pension scheme is not service related and irrespective
of whether a member has 15, 20, 30 or 40 years' service they
receive the same rate of pension on retirement. The pension
scheme is related to pay bands and not to 80ths of retiring
salary and unlike most pension schemes it is not co-ordinated
for social welfare payments. The workers therefore receive
their pension in full and also their full social welfare
entitlements. To the Company's knowledge there is no company
in the catering trade whose pension scheme takes into account
the service charge and pension schemes in general exclude
payments which can fluctuate from week to week. Concession of
the Union's claim would result in a radical change in the
pension scheme and would bring it outside the criteria applied
to pension schemes generally. The claim is being sought by a
very small number of the scheme's members. It is significant
that despite the fact that there is a pension committee which
was set up by the Unions this claim is only being pursued by
S.I.P.T.U. Neither the I.C.T.U. trade union group nor the
pensions committee is involved and this is probably due to the
fact that when a similar issue was raised and the adverse
implications for the majority of workers explained the Unions
did not pursue the matter.
2. The fact that overtime, bonuses, commission, etc cannot be
taken into account in determining the level of pension payment
does not mean that the workers concerned cannot supplement
their pensions to take account of these fluctuating
emoluments. The Ostallan Iompar Eireann scheme which can be
taken as normal for those firms in the catering trade which
operate schemes provides that a member may supplement the
normal pension benefit under the scheme by making additional
voluntary contributions which qualify for full relief for
income tax purposes. While C.I.E.'s main pension scheme does
not contain provisions for additional voluntary contributions
the Company has entered into a Trust Deed with Irish Life and
it is now possible for any member of the C.I.E. wages grade
scheme to make additional contributions to supplement his/her
pension. Due to the fluctuating nature of service payments
the trustees could not ensure that there were adequate funds
invested to meet the benefits payable if the service charge is
included for pension purposes. In all the circumstances, the
Union's claim should be rejected.
RECOMMENDATION:
5. Having considered the submissions from both parties the Court
is satisfied that there is considerable merit in the Union's claim
on the following grounds.
(a) The Court is of the view that the claimants are in a
unique position in the Company as the only group whose
earnings are made up of basic rate and commission. The
Court considers that "commission" earnings are a distinct
form of remuneration and cannot be equated with any other
form of allowance or overtime earnings. The Court
accordingly accepts the Union's claim that commission
earnings should be taken into account to some degree for
pension purposes.
(b) Taking note of the complexity involved in making any
alteration to the pension scheme the Court recommends
that the parties meet to agree a formula for implementing
this recommendation and that when agreement is reached it
be referred to the appropriate institution for amending
the scheme.
~
Signed on behalf of the Labour Court
Evelyn Owens
________________________
14th May, 1991 Deputy Chairman.
U.M./J.C.