Labour Court Database __________________________________________________________________________________ File Number: CD91409 Case Number: LCR13474 Section / Act: S67 Parties: FORAS AISEANNA SAOTHAIR - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute regarding the retention of five year guarantee of pension rights.
Recommendation:
5. The Court having considered the views of the parties expressed
in their oral and written submissions notes that the legal
provisions setting up F.A.S. contain safeguards for the employees
which do not allow any worsening of working conditions following
transfer to the new body (F.A.S.) after establishment day.
In accordance with the provisions of the Act any changes should
only be made after negotiation and agreement. In the case before
it the Court takes the view that the "Five Year Guarantee" of
Pension should be retained in respect of those employees who were
members of the AnCO Pension scheme prior to transfer to a
wholetime position on the staff of An Foras Aiseanna Saothair.
The Court so recommends.
Division: MrMcGrath Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD91409 RECOMMENDATION NO. LCR13474
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 67, INDUSTRIAL RELATIONS ACT, 1946
PARTIES: FORAS AISEANNA SAOTHAIR
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute regarding the retention of five year guarantee of
pension rights.
BACKGROUND:
2. Prior to the formation of Foras Aiseanna Saothair (F.A.S.) in
January, 1988 employees of AnCO enjoyed pension benefits under the
AnCO Superannuation Scheme which was introduced in 1969. Under
the scheme members were entitled to a particular benefit known as
"The Five Year Post Retirement Guarantee". This benefit provided
for the payment of a lump sum in the event of a pensioner dying
within five years of retiring, the sum paid being the equivalent
of the difference between the pension already paid and that which
the worker would have received had he/she survived for five years
after retiring.
In 1983, at the request of the Department of Public Service
(D.P.S.), AnCO submitted for approval a Draft Superannuation
Scheme and a Draft Spouses' and Children's Scheme which included
amendments approved in 1977 by the D.P.S. and a number of
amendments/enhancements which did not have the approval of the
appropriate Departments. The amendments were implemented prior to
their being formally approved by the Ministers for Labour and
Finance and were still in existence when F.A.S. was set up in
January, 1988. From 1988 to 1990 the Union sought assurances from
F.A.S. that the full benefits under the 1983 schemes would
continue to apply to all former AnCO staff. The matter was not
resolved and on 18th May, 1990 the Union conducted a ballot for
industrial action. On 7th June, 1990 F.A.S., after further
discussions with and the formal approval of the Departments of
Labour and Finance, put forward settlement proposals. After the
meeting one issue remained unresolved, that of the Five Year Post
Retirement Guarantee. The Department of Finance considered that
the operation of this Guarantee and the normal Spouses' and
Children's Benefits would result in payment of a
disproportionately high benefit to spouses and dependants. The
dispute was referred to the conciliation service of the Labour
Court on 10th January, 1991 at which agreement was not reached.
The dispute was referred to the Labour Court on 6th August, 1991
under Section 67 of the Industrial Relations Act, 1946, and the
Court investigated the dispute on 16th October, 1991.
UNION'S ARGUMENTS:
3. 1. Section 8(7)(a) and 8(7)(b) of the Labour Services Act,
1987 (Appendix 1) guarantees the continuation of all
superannuation benefits enjoyed by AnCO staff prior to the
setting up of F.A.S. By failing to implement the Five Year
Guarantee, which was a provision under the original AnCO
Superannuation Scheme, F.A.S. would be in breach of the Act.
2. The suggestion by F.A.S. that staff may opt for the Five
Year Guarantee in addition to the Spouses' and Children's
Scheme by making an extra contribution and in fact making the
benefit self-funding is unacceptable.
EMPLOYER'S ARGUMENTS:
4. 1. The Five Year Guarantee was in existence prior to the
introduction of a Spouses' and Children's Scheme. It was
never the intention that the two schemes would exist together
as benefits under both are similar and would result in payment
of benefits being duplicated.
2. The Spouses' and Children's Scheme, in common with normal
public sector schemes, provides adequate benefit. F.A.S. has,
however, given the Union the option to retain the Five Year
Guarantee through the payment of an additional contribution by
members in order to finance the scheme. This is the practice
in some public sector areas where it works successfully. The
extra cost to members would be very low and would be unlikely
to exceed 0.5%. Non-members of the Spouses' and Children's
Scheme would retain the five Year Guarantee.
RECOMMENDATION:
5. The Court having considered the views of the parties expressed
in their oral and written submissions notes that the legal
provisions setting up F.A.S. contain safeguards for the employees
which do not allow any worsening of working conditions following
transfer to the new body (F.A.S.) after establishment day.
In accordance with the provisions of the Act any changes should
only be made after negotiation and agreement. In the case before
it the Court takes the view that the "Five Year Guarantee" of
Pension should be retained in respect of those employees who were
members of the AnCO Pension scheme prior to transfer to a
wholetime position on the staff of An Foras Aiseanna Saothair.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
_______________________
15th November, 1991 Deputy Chairman
A.O'S./J.C.
APPENDIX 1
Labour Services Act, 1987
Section 8 Subsection 7(a) + 7(b)
(7)(a) A scheme or schemes under subsection (1) shall, as respects
a person transferred by section 7 to a whole-time position
on the staff of An Foras, provide for the granting to or in
respect of him of superannuation benefits upon and subject
to terms and conditions that are not less favourable to him
than the terms and conditions applied to him immediately
before the day on which he was so transferred in relation
to the grant of such benefits.
(b) Where, during the period between the establishment day and
the coming into operation of a scheme under this section,
superannuation benefits would have been granted to or in
respect of a person transferred by section 7 to the staff
of An Foras in respect of his employment with An Chomhairle
or the Agency or as an officer of the Minister, the
superannuation benefits shall be granted and paid to or in
respect of the person by An Foras.