Labour Court Database __________________________________________________________________________________ File Number: CD95411 Case Number: LCR14930 Section / Act: S26(1) Parties: MARATHON PETROLEUM IRELAND LIMITED (THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;TECHNICAL ENGINEERING AND ELECTRICAL UNION |
Improvement in pension scheme.
Recommendation:
The Court considered the written and oral submissions made by the
parties. The Court's view is that while the Pension Scheme is
obviously a good scheme, concerns are arising in relation to the
possible termination of work in the offshore gas fields, before
the claimants reach a full period to qualify for full pension.
The Court does not recommend a change in the current scheme.
However, the Court does recommend that the Company enters into
discussions with the claimants to explore the options suggested by
the claimants to overcome the fears expressed, including the
option for the claimants to contribute to the Scheme.
Division: Mr Flood Mr Pierce Mr Walsh
Text of Document__________________________________________________________________
CD95411 RECOMMENDATION NO. LCR14930
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
MARATHON PETROLEUM IRELAND LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL ENGINEERING AND ELECTRICAL UNION
SUBJECT:
Improvement in pension scheme.
BACKGROUND:
The dispute concerns a claim by the Unions for an improved
pensions and benefit scheme. There are approximately forty
workers involved who work on the Kinsale Head gas fields.
The Company provides a contributory defined benefit pension
scheme for all workers. At present, the workers'
contribution is 2% of pensionable salary with early
retirement provision subject to actuarial discount to 50
years of age. Benefit is calculated on consolidated pay
rates. Spouses and dependent pension cover and "death in
service" benefit is provided for. Maximum pension benefit is
two thirds of final pensionable salary after forty years
pensionable service.
The Unions claim that the dispute mainly concerns the
National Wage Agreements in 1983. At that time the Company
offered a 3% reduction in the pension scheme from the then 5%
to the present 2% in return for an 8 year moratorium (1983 -
1991), with Company to make up any shortfall. The Unions
claim that the only contribution being made is by the
workers, with a minimal contribution from the Company. The
Company maintains that the workers could use the reduction in
the pension scheme (in 1983) to make Additional Voluntary
Contributions (AVC Plan). The Unions are seeking the
following improvements in the scheme:
: The final pensionable pay which would cover wage basis,
time period, e.g. final year only, social welfare
deductions etc.
: Death in service including amount payable, widows and
survivors entitlements.
: Death after retirement.
: Early retirement from age of 50 upwards and a reduction
of the normal retiring age and cash options.
: Post retirement escalation.
: Contribution.
: Members participation and trusteeship.
The dispute was referred to the Labour Relations Commission
and a conciliation conference took place on 15th March, 1995.
No agreement was reached and the dispute was referred to the
Labour Court on 13th July, 1995, in accordance with Section
26(1), Industrial Relations Act, 1990. A Labour Court
hearing took place on 20th September, 1995, in Cork.
UNIONS' ARGUMENTS:
1. The present pension scheme requires that a worker has to be
employed for 40 years before attaining a full pension. The
anticipated lifespan of the Kinsale Head gas fields is
approximately another 6 years. Most of the workers involved
in the dispute will not have achieved forty years' service by
that time and will not benefit fully from the pension scheme.
2. The Company has attempted to use the terms of the Programme
for Economic and Social Progress (PESP) and the Programme for
Competitiveness and Work (PCW) as a means to preclude the
Unions from improving the pension scheme. Clause 4 of the PCW
stipulates that "Unions are not precluded from making claims
for improvement of pension schemes where these are
substantially out of line with appropriate standards in
comparable employments". The Company's pension scheme is out
of line with comparatory companies.
3. The moratorium in 1983 gave the Unions the right to negotiate
an improved pension scheme from 1991. The Company has failed
to-date to have any serious discussions on the matter.
COMPANY'S ARGUMENTS:
1. The Company's pension scheme is not out of line with
comparatory Irish pension schemes and, in many respects,
exceeds benefits applying to them. Workers can continue to
contribute to the AVC Plan to their own benefit.
2. The Unions are seeking a scheme which will facilitate early
retirement and enhanced benefits. This would place a
completely unacceptable cost burden on the Company and many
of its employees (details supplied to the Court).
3. The 1983-1991 moratorium centred on the reduction of the
employees contribution rate in return for no claims during
the eight years. The pension scheme continues to be very
competitive. The Unions' claim is prohibited under the terms
of clause 4 of the PCW.
RECOMMENDATION:
The Court considered the written and oral submissions made by the
parties. The Court's view is that while the Pension Scheme is
obviously a good scheme, concerns are arising in relation to the
possible termination of work in the offshore gas fields, before
the claimants reach a full period to qualify for full pension.
The Court does not recommend a change in the current scheme.
However, the Court does recommend that the Company enters into
discussions with the claimants to explore the options suggested by
the claimants to overcome the fears expressed, including the
option for the claimants to contribute to the Scheme.
~
Signed on behalf of the Labour Court
9th October, 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.