Labour Court Database __________________________________________________________________________________ File Number: CD94256 Case Number: LCR14711 Section / Act: S26(1) Parties: IRISH FERTILIZER INDUSTRIES - and - TECHNICAL ENGINEERING AND ELECTRICAL UNION |
Pension Rights.
Recommendation:
In addressing the issue in dispute between the parties the Court
was presented with two very firmly held contradictory views. The
Company insists that the claimants are day workers whose
conditions of employment state "you may be required to go on
shift", whilst permanent shift workers conditions state "you will
be required to go on shift".
Annual salary for the purpose of pension is defined as excluding
any "variable employments", and the Company argues, therefore,
that day workers who may be required to work shift are not
entitled to include shift premium on a pro-rata basis in
calculating pension entitlement.
The term "variable employment" is certainly significant in the
evidence presented. It appears to the Court that the part-time
shift is regular and rostered and is in fact compulsory. The
numbers of shifts are static and everyone involved works the
shifts on a strict rota basis.
The Pension Scheme is in operation since 1971 and this problem did
not surface until a few years ago. It is not clear to the Court
when this method of work was introduced and it may well be that
the problem only came to light in recent times. However, the
Company/Union Agreement is in place since 1988 and this issue does
not appear to have been raised during negotiations. The Pension
Scheme is contributory and the Court has verified that shift
allowance is paid gross. Separate pension statements clearly show
the deduction of pension contribution on basic pay. The Company,
with some justification, highlighted the cost of conceding the
claim. In 1990, the financial position had deteriorated to such
an extent that the Company's cost base had to be restructured and
included significant redundancies to bring the Company into a
stabilised financial position The losses to date are significant
by any standard and have yet to be reduced. Management further
submits that the claim is contrary to the terms of both Clauses 4
and 6 of the P.C.W.
Taking all aspects of the claim into account, and in particular
the past history of the Company, the Court has concluded that to
recommend concession of the Union's claim (which it considers to
have merit) at this time would be contrary to Clause 4 of the
P.C.W. which specifically refers to pensions and the capacity of
an enterprise to absorb additional costs involved in improvement
to Pension Schemes.
The Court further recommends that during the period from now to
the expiration of the P.C.W. the parties should jointly address
the financial implications to the Pension Scheme of any extension
of benefits.
Division: Ms Owens Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD94256 RECOMMENDATION NO. LCR14711
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
IRISH FERTILIZER INDUSTRIES
AND
TECHNICAL ENGINEERING AND ELECTRICAL UNION
SUBJECT:
1. Pension Rights.
BACKGROUND:
2. The workers concerned in the dispute are employed by the
Company as electricians at its factory in Cork. They are
employed as day workers and are transferred to shift working
for short periods to provide silent hours cover.
There are two categories of workers in the Company i.e.
permanent shift workers and day workers. Shift workers are
paid a shift premium of one-third of basic pay which is
included as part of their annual salary for pension purposes.
In early 1993, the Union submitted a claim on behalf of the
electricians for the inclusion for pension purposes of their
shift premium earnings. Local level discussions took place
but no agreement was reached. The dispute was referred to
the Labour Relations Commission. A conciliation conference
was held on 16th February, 1993. As no agreement was reached
the dispute was referred by the Labour Relations Commission
to the Labour Court on 4th May, 1994 in accordance with
Section 26(1) of the Industrial Relations Act, 1990. A
Labour Court hearing took place in Cork on 8th October, 1994.
UNION'S ARGUMENTS:
3. 1. Permanent shift workers in the Company have their shift
premiums included for pension purposes. Similar
conditions on a pro rata basis should apply to the
workers concerned for the period they operate on shift.
2. Clause 3.4 of the Company/Union agreement states "The
basic conditions pertaining to regular shift working,
and any additional entitlements like holidays, etc.,
apply pro rata in relation to the period of part-time
working". In the circumstances there is no justifiable
reason for the Company to exclude pensions from this
clause.
COMPANY'S ARGUMENTS:
4. 1. There are two categories of employees in I.F.I. i.e.
permanent shift workers and day workers. These
categories have different conditions of employment in a
number of respects. The electricians who are the
subject of this claim are day workers, and have the
conditions of employment of day workers.
2. The electricians are day workers who are transferred to
shift working for a period or periods in the year. They
have signed a contract of employment accepting the
conditions including those referring to pension
entitlements.
3. Clause 7.2 of the Company/Union agreement covers
pensions and refers to the pension booklet for
contributions and benefits. The pension booklet,
reflecting the pension rules defines annual salary for
pension purposes. This definition specifically excludes
"variable employments" and "overtime".
4. Concession of the claim would lead to other claims by
other workers in irregular working patterns whose
compensatory payments are not pensionable.
5. The claim is prohibited under clause 4 of the Programme
for Competitiveness and Work.
RECOMMENDATION:
In addressing the issue in dispute between the parties the Court
was presented with two very firmly held contradictory views. The
Company insists that the claimants are day workers whose
conditions of employment state "you may be required to go on
shift", whilst permanent shift workers conditions state "you will
be required to go on shift".
Annual salary for the purpose of pension is defined as excluding
any "variable employments", and the Company argues, therefore,
that day workers who may be required to work shift are not
entitled to include shift premium on a pro-rata basis in
calculating pension entitlement.
The term "variable employment" is certainly significant in the
evidence presented. It appears to the Court that the part-time
shift is regular and rostered and is in fact compulsory. The
numbers of shifts are static and everyone involved works the
shifts on a strict rota basis.
The Pension Scheme is in operation since 1971 and this problem did
not surface until a few years ago. It is not clear to the Court
when this method of work was introduced and it may well be that
the problem only came to light in recent times. However, the
Company/Union Agreement is in place since 1988 and this issue does
not appear to have been raised during negotiations. The Pension
Scheme is contributory and the Court has verified that shift
allowance is paid gross. Separate pension statements clearly show
the deduction of pension contribution on basic pay. The Company,
with some justification, highlighted the cost of conceding the
claim. In 1990, the financial position had deteriorated to such
an extent that the Company's cost base had to be restructured and
included significant redundancies to bring the Company into a
stabilised financial position The losses to date are significant
by any standard and have yet to be reduced. Management further
submits that the claim is contrary to the terms of both Clauses 4
and 6 of the P.C.W.
Taking all aspects of the claim into account, and in particular
the past history of the Company, the Court has concluded that to
recommend concession of the Union's claim (which it considers to
have merit) at this time would be contrary to Clause 4 of the
P.C.W. which specifically refers to pensions and the capacity of
an enterprise to absorb additional costs involved in improvement
to Pension Schemes.
The Court further recommends that during the period from now to
the expiration of the P.C.W. the parties should jointly address
the financial implications to the Pension Scheme of any extension
of benefits.
~
Signed on behalf of the Labour Court
21st March, 1995 Evelyn Owens
F.B./M.M. ____________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.