Labour Court Database __________________________________________________________________________________ File Number: CD95577 Case Number: LCR14992 Section / Act: S26(1) Parties: VITA CORTEX (Represented by THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
New pension scheme.
Recommendation:
The Court, having considered the written and oral submissions made
by the parties, makes the following recommendations:-
1. The employees accept the proposed contributory scheme in
order to retain the benefits of the old scheme;
2. The Company to increase its funding to £46,000 and to recost
the employees' contribution on this basis;
3. Compensation to a level of £14,000 in total to be paid to the
affected employees, on a basis to be agreed.
Division: Mr Flood Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD95577 RECOMMENDATION NO. LCR14992
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
VITA CORTEX
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. New pension scheme.
BACKGROUND:
2. The Company, which was established in 1963, employs a total
of 135 people at five locations in Ireland.
A non-contributory defined benefit pension scheme has been in
operation since 1976 for approximately 59 production staff in
Cork. The dispute concerns the Company's inability to
continue the scheme, and proposals to introduce a new
contributory pension scheme or a non-contributory defined
contribution scheme, with possible reduced pensions due to
insufficient funds. A number of meetings took place between
the Company, the Union and I.P.T., the Trustees of the
pension scheme, but agreement could not be reached.
Between 28th September, 1994 and 3rd July, 1995 several
conciliation conferences were held by the Labour Relations
Commission, but, again, no agreement was reached. The
dispute was referred to the Labour Court under Section 26(1)
of the Industrial Relations Act, 1990 on 4th October, 1995.
An investigation took place in Cork, on 9th November, 1995.
UNION'S ARGUMENTS:
3. 1. The workers have enjoyed a non-contributory defined
benefit pension scheme, since 1976, which entitles them
to one sixtieth of wages per year of service. The Union
does not accept that members must now contribute five
per cent of their wages to maintain the present scheme
or accept a reduced non-contributory scheme, which would
pay only one hundred and one thirtieth per year of
service.
2. The Union proposed that members with less than fifteen
years service would contribute to the new scheme, but
this was rejected by the Company as a high percentage of
staff have in excess of twenty years service.
3. A couple of years ago the Union approached management
regarding the possible introduction of a contributory
pension scheme. Management stated that the Company was
financially strong and would be capable of maintaining
the non-contributory scheme into the future.
4. The compensation proposals put forward by the Company at
conciliation are not acceptable to the Union.
COMPANY'S ARGUMENTS:
4. 1. In 1993, the Company's funding of the existing
non-contributory pension scheme was £20,000 per annum.
By the year 2000 a sum of £80,000 per annum would be
necessary to maintain the scheme. The Company can
afford only £46,000 per annum, which is double the
previous funding.
2. The Company's proposal of 5% contributions from staff
would result in net contributions of between £2.84 and
£4.22 per week, depending on individual tax
circumstances. This proposal was rejected by the Union.
3. The introduction of a non-contributory defined scheme
for existing staff and a contributory defined
contribution scheme for new staff from January, 1994,
was also rejected by the Union.
4. The Company proposed a choice of two compensation
packages amounting to £14,595 or £15,400. The Company's
priority was to invest as much as possible into the
pension scheme, rather than to pay large amounts of
compensation.
RECOMMENDATION:
The Court, having considered the written and oral submissions made
by the parties, makes the following recommendations:-
1. The employees accept the proposed contributory scheme in
order to retain the benefits of the old scheme;
2. The Company to increase its funding to £46,000 and to recost
the employees' contribution on this basis;
3. Compensation to a level of £14,000 in total to be paid to the
affected employees, on a basis to be agreed.
~
Signed on behalf of the Labour Court
4th December, 1995 Finbarr Flood
D.G./D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Ms. Dympna Greene, Court Secretary.