Labour Court Database __________________________________________________________________________________ File Number: CD95455 Case Number: LCR15054 Section / Act: S26(1) Parties: UNIVERSITY COLLEGE GALWAY (Represented by THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Abolition of 'claw-back' on pension scheme.
Recommendation:
The Court has considered the very detailed submissions and
additional information submitted subsequent to the hearing.
The Court, in Recommendation No. 8936 stated that:
"the provision in the new scheme of the deduction of 1% claw
back of the final salary as detailed is not unreasonable in
the context of pension schemes generally" and accordingly did
not recommend in favour of the claim for exemption from
"claw-back" to pre-1982 staff.
The Court is still of this view.
The Court is satisfied that the operation of "claw-back" to the
claimants is not unreasonable and is satisfied that the reasons
some academic staff were exempted do not apply to the claimants.
The Court, accordingly, does not recommend concession of the
claim.
Division: Ms Owens Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95455 RECOMMENDATION NO. LCR15054
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
UNIVERSITY COLLEGE GALWAY
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
Abolition of 'claw-back' on pension scheme.
BACKGROUND:
The dispute before the Court concerns the Union's claim on
behalf of approximately 100 technicians for the abolition of
the 'claw-back' payable on death or retirement under the
terms of the College's Joint Pension Scheme (JPS).
The 'claw-back' refers to the deduction from the lump-sum
payable on retirement or death, of a contribution of 1% of
final salary, in respect of each year of service prior to 1st
January, 1983, from which periodic (1.5%) contributions have
not been paid to the Spouses' and Children Pension Scheme.
Prior to 1982, there were a number of pension schemes in the
College applying to different staff groups. They were as
follows:-
(A) Scheme No. 1 - applied to all statutory posts academics
and senior administrative staff.
(B) Scheme No. 2 - applied to all administrative, clerical
and non-statutory academic personnel.
(C) Technicians' Insured Scheme - applied to all technical
staff.
(D) Construction Industry Federation Scheme - applied to
trade-craft and general operative grades.
With effect from 30th April, 1982 a new non-contributory
pension scheme, with a contributory spouses and children
scheme, was introduced by the College to cover all permanent
employees. The scheme is similar to the pension scheme in
operation in the Public Service generally. All staff had the
option of joining the new pension scheme up to 31st December,
1982. Staff employed after that date in pensionable
positions were obliged to join the JPS. The new scheme was
the subject of a Labour Court hearing in June 1984 (LCR No.
8936 refers).
The take-up of the scheme from academic/administrative groups
was low (approximately 50%). In an effort to attract a
greater take-up the College subsequently removed the
requirement for a claw-back in respect of members of the
JPS who transferred from Pension Schemes No. 1 and No. 2.
The Union is seeking the abolition of the claw-back in
respect of its technician members and argues that there is no
reason for them to be discriminated against.
Local level discussions took place but no progress was made
and the matter was referred to the Labour Relations
Commission. A conciliation conference was held on 1st
February, 1995 but agreement could not be reached and the
dispute was referred to the Labour Court on 4th August, 1995.
under Section 26(1) of the Industrial Relations Act, 1990. A
Labour Court hearing took place in Galway on 12th September,
1995. Following the Court hearing the parties submitted
additional information to the Court.
UNION'S ARGUMENTS:
1. At the Labour Court hearing which led to LCR 8936 the FWUI,
on behalf of the technicians, made an explicit link between
extending the closing date of entry into the new scheme and
the claw-back. The Court recommended that the parties should
try to incorporate changes to provide an incentive to members
of the old schemes to transfer to the new scheme and extend
the closing date of 31st December, 1982.
2. The College's interpretation of the above recommendation was
to provide an incentive to some members of the older schemes
but not to others. This interpretation is unacceptable to
the workers concerned. While the Court found that the
claw-back was not unreasonable in the context of such schemes
generally, it made no finding as to whether it was reasonable
in the context of a Joint Scheme where claw-back had been
abolished for part of the membership.
3. There is no justification for the College's actions in
offering incentives to a group of non-JPS members to join the
scheme. It should not be allowed to use an alleged
deficiency in the scheme to justify continued discriminatory
treatment of the technicians.
4. The College has interpreted Labour Court recommendations to
suit themselves. In any Joint Scheme, equity demands that
the technicians be treated equally.
COMPANY'S ARGUMENTS:
1. The proof of the attraction to the technical staff of the
JPS, is the fact that approximately 90% of them are in it
voluntarily, after advice from the unions, as against 50% or
less from Pension Scheme No. 1.
2. As a matter of public policy, the Court will be aware that
the "claw-back" is widespread throughout the public sector
and that for those reasons it would have to be maintained
because of possible consequential claims throughout the
sector.
3. The removal of the "claw-back" requirement, in respect of
members of the JPS transferring from Pension Schemes Nos. 1
and 2, reflected the fact that these members already held a
substantial part of the Spouses' and Children's benefits
being introduced under the JPS. A similar argument does not
apply in relation to members of the JPS transferring from the
Technicians Insured Scheme.
4. The argument could also be made that the claim is precluded
under the PCW on the grounds that, in the JPS the benefits
the technical and maintenance staff enjoy, they are not
substantially out of line with appropriate standards in
comparable employments given that in the rest of the public
sector their colleagues would be subjected to the 1%
claw-back, added to the fact that the benefits they receive
and options they can obtain, under the JPS, are better than
those under their old schemes.
RECOMMENDATION:
The Court has considered the very detailed submissions and
additional information submitted subsequent to the hearing.
The Court, in Recommendation No. 8936 stated that:
"the provision in the new scheme of the deduction of 1% claw
back of the final salary as detailed is not unreasonable in
the context of pension schemes generally" and accordingly did
not recommend in favour of the claim for exemption from
"claw-back" to pre-1982 staff.
The Court is still of this view.
The Court is satisfied that the operation of "claw-back" to the
claimants is not unreasonable and is satisfied that the reasons
some academic staff were exempted do not apply to the claimants.
The Court, accordingly, does not recommend concession of the
claim.
~
Signed on behalf of the Labour Court
4th January, 1996 Evelyn Owens
F.B./A.K. ---------------
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.