Labour Court Database __________________________________________________________________________________ File Number: CD95700 Case Number: LCR15108 Section / Act: S26(1) Parties: CHADWICKS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION |
Dispute arising from a claim for improvements to the Company's pension and sick-pay schemes.
Recommendation:
Having considered the submissions from the parties the Court
recommends as follows in relation to the two claims presented:
(1) SICK-LEAVE
The Court recommends that the parties agree that the sick-pay
scheme for outdoor staff be revised to match the terms of the
indoor staff scheme, with the exception of the first five days of
absence being unpaid. The overall length of sick-pay entitlements
for outdoor staff should match the corresponding periods for
indoor staff of equivalent service. This means that the duration
of paid sick-leave allowance should be the same for both groups.
The parties should discuss and agree a system to monitor/control
any risk of abuse of the new entitlements, and to address the
existing higher absenteeism of outdoor staff.
(2) PENSION SCHEME
Taking into account the very recent introduction of the scheme and
the restraints that then existed, from the Unions' point of view,
the Court recommends that when the first Actuarial Report is
issued (the Court understands this to be Autumn '96) the parties
should meet and agree the introduction of a "Spouse Pensions on
Death in Retirement" scheme.
Division: Ms Owens Mr Pierce Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95700 RECOMMENDATION NO. LCR15108
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
CHADWICKS LIMITED
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION
SUBJECT:
1. Dispute arising from a claim for improvements to the
Company's pension and sick-pay schemes.
BACKGROUND:
2. The Unions are seeking improvements to the Company's pension
scheme (which came into effect in January, 1993) for all
workers and also improvements to the sick-pay scheme for
outdoor workers only. They contend that the pension scheme
is inadequate and, accordingly, are seeking the following
changes to it:-
(i) full service credit back to 1981;
(ii) spouses' and orphans' benefit;
(iii) indexation of benefits;
(iv) improved benefits in respect of early retirement
on the grounds of ill-health.
In relation to the sick-pay scheme, the Unions' position is
that the scheme that is in operation for outdoor workers is
inferior to that enjoyed by other workers.
The Company claims that its pension scheme is in line with,
or better than comparators' schemes and that the cost of
implementing the improvements proposed by the Unions would be
prohibitive.
The dispute was the subject of a conciliation conference
under the auspices of the Labour Relations Commission, on the
7th of December, 1995. The Company was not prepared to
concede on the issue of the pension scheme. However, it
indicated that it would be prepared to consider improvements
in the sick-pay scheme conditional on the Unions withdrawing
their claim in respect of the pension scheme. The Company's
proposed improvements were to be on the understanding that a
waiting period of 5 days would apply to any enhanced system,
over and above the current arrangements.
Agreement was not reached between the parties and the dispute
was referred to the Labour Court, on the 13th of December,
1995, in accordance with Section 26(1) of The Industrial
Relations Act, 1990. The Court investigated the dispute on
the 1st of February, 1996.
UNIONS' ARGUMENTS:
3. PENSION SCHEME:
1. Given the Company's trading performance, its prominent
position in Irish business, the scale of its resources
and, having regard to the findings of the survey by the
Irish Association of Pension Funds (I.A.P.F.), it is
reasonable to conclude that the pension scheme is
substantially out of line with schemes in comparable
employment.
2. The Company, which is part of the Grafton Group, is
amongst Ireland's "Top 100 Companies". Accordingly, the
use of street-corner D.I.Y. shops for the sake of
comparison is unreasonable and unacceptable.
3. There is no good reason for the rejection of the
Unions' claim on the grounds of the relatively recent
origin of the scheme. The scheme is inadequate
vis-a-vis comparable employments and the Company has the
resources to effect the required rectification.
Therefore, the Company should respond positively to the
Unions' claim.
4. Regarding the cost of the scheme, there has been no
negotiation on the matter. The Company argues that
concession of the Union claim would increase the cost of
the scheme by 75%. However, there has been no joint
attempt to consider what permutations might lend
themselves to the addressing of the issue. The workers
merely seek average benefits for which they are prepared
to contribute the same proportion as their counterparts
in good employments generally.
5. The earnings of shareholders have increased dramatically
in 1994 and 1995 (details supplied to the Court). This
situation contrasts with the minimal increase in
earnings received by employees. Although the pension
scheme was improved, the employees effectively paid the
Company's contribution with their own 3%.
6. The Company has emphasised the superiority of its
'defined benefit' scheme over 'defined contribution'
schemes. Whilst this may be the case, it hardly
justifies the other inadequacies in the Company's
scheme. Furthermore, the I.A.P.F. survey reveals that
94% of schemes are defined benefit schemes.
SICK-PAY SCHEME:
The Company's offer includes a discriminatory provision
mitigating against the outdoor workers and is
accordingly unacceptable. It must be brought into line
with the scheme for indoor workers. Otherwise, the
provision applying at the initial stages of any period
of illness must be offset by extending cover at the
latter end, or, alternatively, by increasing the
attendance bonus at the end of the year.
COMPANY'S ARGUMENTS:
PENSION SCHEME:
4. 1. It is clear from any analysis of recent surveys of
pension plans that the current scheme is not, to quote
Clause 4 of the Programme for Competitiveness and Work,
"Substantially out of line with appropriate
standards in comparable employments".
In fact, within its own sector it is substantially ahead
of those of the vast majority of the Company's direct
competitors, very few of which have any pension plans at
all in place (details supplied to the Court).
2. This Union's claim is for a substantial increase to
contribution levels of approximately 92 %. This claim
cannot be substantiated and is unwarranted.
3. A review of Court Recommendations in recent years on the
subject of pension schemes (implementations and
provisions) would suggest that the Company has been
particularly proactive in this regard and not out of
line with Court Recommendations in the matters under
consideration today.
4. The current scheme has only been introduced very
recently and has quickly moved forward with the
participation of member trustees, to a position well
ahead of schemes in general and at a time when many
employers are opting for defined contribution pension
plans which eliminate the employer liability for future
promised benefits.
5. The confidential report submitted by the scheme's
administrators, a company with significant and wide
expertise in this area, suggests that the improvements
now sought would be very costly and, at least,
inappropriate at this stage in the development of this
plan.
6. During negotiations, no suggestions were made by the
Unions in relation to offsetting the costs of their
claims. They clearly and unfairly expect the Company to
absorb the costs involved and this is both impractical
and unrealistic having regard to the economic,
commercial and competitive circumstances applying to the
Company's operations.
7. The Company should not have to face the current claim on
pensions and the attendant costs having so recently
completed a deal with the Unions on these terms and
conditions of employment.
SICK-PAY SCHEME:
1. There is no legal obligation requiring employers to make
payments to their employees during absence from work due
to illness or injury. An IBEC survey in all regions in
1993 shows that of the five hundred and seventy two
companies concerned only 66% had a formal sick-pay
scheme for full-time manual workers and 88% for
non-manual employees. The survey also confirmed that it
is usual that these categories are covered by separate
schemes where schemes exist and for waiting days to be
part of the manual scheme to a much greater extent than
for non-manual staff.
2. Any considered changes to the current scheme for outdoor
staff must take particular cognizance of the
implications for increased frequency and duration of
absences, the effect on the Company's ability to provide
the requisite quality of service to its customers and
all associated costs.
3. The Company must be supported in seeking an improvement
in current attendance levels. It must not move to a
position where, because of improved benefits, it is
exposed to the possibility of an absence proliferation
with intermittent days off being regarded as acceptable.
RECOMMENDATION:
Having considered the submissions from the parties the Court
recommends as follows in relation to the two claims presented:
(1) SICK-LEAVE
The Court recommends that the parties agree that the sick-pay
scheme for outdoor staff be revised to match the terms of the
indoor staff scheme, with the exception of the first five days of
absence being unpaid. The overall length of sick-pay entitlements
for outdoor staff should match the corresponding periods for
indoor staff of equivalent service. This means that the duration
of paid sick-leave allowance should be the same for both groups.
The parties should discuss and agree a system to monitor/control
any risk of abuse of the new entitlements, and to address the
existing higher absenteeism of outdoor staff.
(2) PENSION SCHEME
Taking into account the very recent introduction of the scheme and
the restraints that then existed, from the Unions' point of view,
the Court recommends that when the first Actuarial Report is
issued (the Court understands this to be Autumn '96) the parties
should meet and agree the introduction of a "Spouse Pensions on
Death in Retirement" scheme.
~
Signed on behalf of the Labour Court
28th March, 1996 Evelyn Owens
M.K./S.G. _______________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.