Labour Court Database __________________________________________________________________________________ File Number: CD95367 Case Number: LCR14998 Section / Act: S20(1) Parties: GALWAY DOCK/OIL COMPANIES (Represented by THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Redundancy Agreement
Recommendation:
On the Union side it is claimed that the payment of £39,000 to
pension funding, as part of the agreement reached at L.R.C., was
understood to cover both the employers and employees contributions
to the scheme.
The Employers claim that at no stage did they give any undertaking
as to what the £39,000 would achieve or fund.
At the hearing, the Employer's side indicated that the shortfall
might be nearer £4,000 than £40,000 and undertook to clarify the
situation.
The Court consulted with the I.R.O. who dealt with the case and he
is adamant that he, like the employees, believed that the
employees would not have to make any further contributions in
relation to this specific issue.
Based on the above, the Court recommends that the employer pays
the shortfall outstanding, when this is clarified.
Division: Mr Flood Mr Pierce Mr Walsh
Text of Document__________________________________________________________________
CD95367 RECOMMENDATION NO. LCR14998
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969
PARTIES:
GALWAY DOCK/OIL COMPANIES
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
Redundancy Agreement
BACKGROUND:
In 1993, the Oil Companies (Leeside Oil and Irish Shell)
sought a total buy-out of the 29 dockers whom they employed
in the Galway Docks. The Oil Companies were one of the
employers who used the Docks. The other employers were dry
goods dealers.
The Oil Companies made an initial offer of £150,000 on 14th
February, 1994, which was rejected. The Union was seeking a
partial buy-out and expressed concern regarding the issue of
pensions. The dispute was discussed at local level and was
then referred to the Labour Relations Commission. The Oil
Companies increased their offer to £175,000 at a conciliation
conference on 23rd June 1994. At a second conference on 29th
June, 1994, a figure of £300,000 was agreed.
The Oil Companies maintain that the money was to be divided
as the dockers saw fit and was inclusive of any deal on the
pension fund. The Union decided on a figure of £9,000 per
docker, which left a balance of £39,000 out of the total of
£300,000. The dispute concerns the use of the £39,000 and as
to whether it is the employer's or employee's contribution to
the pension fund.
The Oil Companies, when employing dockers, contributed 60% of
the employer's contribution, with the Dry Cargo employers
contributing the remaining 40%. The Union claims that in
October, 1994, the dockers were informed that they would have
to continue to contribute to the pension fund as if they were
still employed by the Oil Companies. It also claims that it
understood that the £39,000 would be used to fund its share
of the pension scheme, leaving the dockers with no further
contributions to make. The Oil Companies maintain that they
did not specify how the money was to be used i.e. whether it
was a buy-out of the employer's share, the employee's share
or a combination of both. A total of £87,000 is needed to
buy out the pension fund.
The dispute was referred to the Labour Court by the Union on
the 13th July, 1995, in accordance with Section 20(1),
Industrial Relations Act, 1969. A Labour Court hearing took
place on 16th October, 1995.
UNION'S ARGUMENTS:
1. The £39,000 was part of the total buy-out. As such, it was
money to be used for the benefit of the dockers, not the Oil
Companies. The dockers decided to forego dividing the
£39,000 among themselves and opted instead to use the money
to buy out their contribution to the pension fund.
2. The dockers cannot be expected to continue contributing to
the pension fund as they are no longer employed by the Oil
Companies. The Day Cargo employers have stated that they
will not pay more than the 40% of the employer's contribution
which they have always paid.
COMPANY'S ARGUMENTS:
1. A letter from the Industrial Relations Office (IRO) regarding
the agreement states:
There will be a total buy-out of the Dockers Section by
the Oil Companies and their employment relationship will
be terminated.
The Oil Companies gave no indication or commitment as to what
the £39,000 would fund i.e. whether it was to be used for
employers or employees. The £300,000 was an all-in
settlement and cannot be increased. It was never stated that
the entire Oil Companies' portion of the pension fund would
be paid off as part of the deal.
RECOMMENDATION:
On the Union side it is claimed that the payment of £39,000 to
pension funding, as part of the agreement reached at L.R.C., was
understood to cover both the employers and employees contributions
to the scheme.
The Employers claim that at no stage did they give any undertaking
as to what the £39,000 would achieve or fund.
At the hearing, the Employer's side indicated that the shortfall
might be nearer £4,000 than £40,000 and undertook to clarify the
situation.
The Court consulted with the I.R.O. who dealt with the case and he
is adamant that he, like the employees, believed that the
employees would not have to make any further contributions in
relation to this specific issue.
Based on the above, the Court recommends that the employer pays
the shortfall outstanding, when this is clarified.
~
Signed on behalf of the Labour Court
20th December, 1995 Finbarr Flood
C.O.N./A.K. ---------------
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.