Labour Court Database __________________________________________________________________________________ File Number: CD9319 Case Number: LCR14054 Section / Act: S26(1) Parties: B.W.G. FOODS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION;SALES MARKETING AND ADMINISTRATIVE UNION OF IRELAND;MARINE PORT AND GENERAL WORKERS' UNION |
Dispute concerning Permanent Health Insurance.
Recommendation:
10. The Court has given full consideration to the submissions,
both written and oral, of the parties to this dispute.
The Court notes that the new proposals cover all eligible
employees and not just those who have enjoyed benefits up to
recently. In view of this the Court recommends that the new
scheme, including the additional benefits identified by the
working party, be introduced. In return the unions should agree
to 1% of the Clause Three of P.E.S.P. increase be used to offset
the increased cost.
Division: Ms Owens Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD9319 RECOMMENDATION NO. LCR14054
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: B.W.G. FOODS LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYER CONFEDERATION)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
IRISH DISTRIBUTIVE AND ADMINISTRATIVE TRADE UNION
SALES MARKETING AND ADMINISTRATIVE UNION OF IRELAND
MARINE PORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Dispute concerning Permanent Health Insurance.
BACKGROUND:
2. B.W.G. Foods Limited is a wholesale food distribution Company
formed by the amalgamation of approximately ten independent food
distribution companies throughout Ireland. The Company employs
450 workers.
3. Five of the former companies had permanent health insurance
schemes in place for employees and the schemes were continued
following the amalgamation. The schemes generally provided for
the payment of disability benefit after six months, at the rate of
2/3 of basic pay (in some cases exclusive of social welfare
payments). One scheme paid 75% less social welfare and all had a
5% escalation clause built in. Payments were made until the
workers were fit to resume work or until they reached retirement
age. The cost of the schemes was borne by the Company.
4. In June, 1991 the Company notified the Unions about the
introduction of a new short-term disability benefit scheme. The
revised scheme provided lesser benefits to a greater number of
employees (details supplied to the Court). At a meeting held in
August, 1991 the Unions objected to the unilateral withdrawal of
the old scheme. They also objected to the introduction of the
revised scheme and to the level of its benefits without
consultation and agreement. The Company outlined its reasons for
withdrawing from the old scheme as being due mainly to a desire by
most insurance companies to withdraw from the type of business and
to the exorbitant quotes offered by other insurance companies.
5. The Company undertook to seek alternative arrangements for a
permanent health Insurance scheme, subject to cost, with benefits
similar to the previous scheme. The Company informed the Unions
in November, 1991 that it was unable to secure an alternative
scheme. The dispute was referred to the Labour Relations
Commission on 18th November, 1991. A conciliation conference was
held on 27th January, 1992. At the conciliation conference it was
agreed to set up a Working Party to examine the original scheme
(projected costs) and an alternative one and to consider the costs
involved.
6. The Working Party identified possible improvements to the new
scheme which were costed by the Company's pension consultants
(details supplied to the Court). The cost of the improvements,
based on 1991 salaries, would be #31,000 per annum. The Company
offered to implement the improved scheme provided costs were
offset against the 3% increase under Clause 3 of the Programme for
Economic and Social Progress (P.E.S.P.). Negotiations on the
P.E.S.P. were ongoing at that time. The Unions rejected the offer
and agreement on Clause 3 of the P.E.S.P. was subsequently reached
without reference to the permanent health insurance scheme.
7. The Company informed the Unions that it would not be
implementing the improved scheme because of the cost involved.
This did not meet the Unions' aspirations and the dispute was
referred back to the Labour Relations Commission. A conciliation
conference was held on 25th August, 1992. As agreement was not
reached, the Commission, with the consent of the parties, referred
the dispute to the Labour Court on 8th January, 1993 for
investigation and recommendation under Section 26(1) of the
Industrial Relations Act, 1990. A Labour Court hearing took place
on 9th February, 1993.
UNIONS' ARGUMENTS:
8. 1. The revised scheme is inferior to the one it replaced
(details supplied to the Court) and represents a worsening of
the workers' conditions of employment.
2. The Unions were prepared to recommend acceptance of the
revised scheme, inclusive of the improved benefits proposed by
the working party, provided it was implemented exclusive of
the 3% increase under Clause 3 of the P.E.S.P.
3. The Company is profitable and is capable of meeting the
cost (2.3% of payroll costs) of the revised scheme as
recommended by the working party.
COMPANY'S ARGUMENTS:
9. 1. The old scheme cannot be replaced. No insurance Company
will quote for its retention.
2. The new scheme put in place covers all employees over 25
years of age, the cost of which represents an increase of 37%
over last year.
3. The provision of permanent health insurance in the
industry is exceptional and many larger companies have no such
benefit.
4. The Company's offer on improvements in the scheme was
conditional on the Unions' acceptance of a trade-off on Clause
3 of the P.E.S.P. Since the 3% increase was settled through
other means, the Company cannot afford to implement the
revised scheme.
RECOMMENDATION:
10. The Court has given full consideration to the submissions,
both written and oral, of the parties to this dispute.
The Court notes that the new proposals cover all eligible
employees and not just those who have enjoyed benefits up to
recently. In view of this the Court recommends that the new
scheme, including the additional benefits identified by the
working party, be introduced. In return the unions should agree
to 1% of the Clause Three of P.E.S.P. increase be used to offset
the increased cost.
~
Signed on behalf of the Labour Court
Evelyn Owens
___________________
27th April, 1993. Deputy Chairman.
M.D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Daughen, Court Secretary.