FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BALLINAMORE TEXTILES LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Owens Employer Member: Mr Keogh Worker Member: Mr Rorke |
1. Introduction of pension scheme
BACKGROUND:
2. The Company manufactures children's clothes and employs approximately 160 people at its Ballinamore plant in Co. Leitrim. It is part of the Cooneen group of companies. The Union's claim is for the introduction of a defined contribution benefit scheme on behalf of 130 workers under Clause 4 of the Programme for Competitiveness and Work (PCW).
The Union first made its claim in early 1995. The issue was referred to the Labour Relations Commission (LRC) and a conciliation conference took place on 13th July, 1995. At that stage, the Union's claim was for a 6% contribution from the employer and 3% from employees. Disagreement over the retiring age, whether it was 65 or 66, caused the conciliation conference to be adjourned. Two more conciliation conferences followed without the issue being resolved.
At a fourth conciliation conference on 11th October, 1996, the Union changed its claim to a 3% contribution from the employer and 1% contribution from the employees. It also sought death-in-service cover. The Company proposed to implement a retirement gratuity scheme, effective from 1st January, 1997, consisting of a lump sum of £1,500 gross, conditional on the person retiring being beyond his/her 60th year and having 25 years minimum service. The Union was prepared to withdraw its claim provided the terms of the retirement scheme could be negotiated. As the Company was not agreeable to this, the dispute was referred to the Labour Court on 6th December, 1996, in accordance with Section 26(1) , of the Industrial Relations Act, 1990. A Labour Court hearing took place on 16th April, 1997, in Cavan.
(In 1995, the Women's Clothing and Millinery Joint Labour Committee (JLC) established a working party to examine the issue of pensions across the clothing sector. Discussions are ongoing at the present time).
UNION'S ARGUMENTS:
3. 1. The Company has an ageing workforce. The Union's claim would cost very little and would be jointly funded between employer and employees. The Company is profitable and could afford the pension scheme. If the JLC agrees to introduce a pension scheme for the industry in the future, the Company will have to fund the cost of the scheme under the provisions of an employment regulation order (E.R.O.). To date, none of the current workers would qualify for the Company's proposed retirement gratuity scheme as the Company was not established until 1972.
COMPANY'S ARGUMENTS:
4. 1. The clothing industry is highly competitive and faces an increasing threat from low wage economies in the far east and from high technology/high productivity European producers. The current instability of the Irish punt against sterling has had a major negative impact on profits (the U.K. market still accounts for 60% of exports in the industry).
2. The Company recorded small profits from 1989-1991 but suffered losses of £37,884 in 1992, £7,510 in 1993, £58,042 in 1994 and £55,148 in 1995. The Company cannot afford to introduce a pension scheme in light of the losses mentioned. It was willing to introduce a retirement gratuity scheme which would pay £1,500 gross to the person retiring, but the Union was not willing to accept this without negotiations taking place. There are ongoing discussions within the JLC regarding the introduction of a pension scheme within the industry. These talks should have been allowed to conclude first before the Union made its claim.
RECOMMENDATION:
The Court has considered the submissions from both parties and recommends as follows:-
PENSION SCHEME:The Court considers that this claim would be better dealt with at J.L.C. level where, it is understood, talks are in progress on the issue of a Pension Scheme.
RETIREMENT GRATUITYThe Court considers that the Company proposal as set out in Appendix 2 of its submissions to the Court should be accepted, subject to the proposed gratuity payment being raised to £2,000.
Signed on behalf of the Labour Court
Evelyn Owens
15th May, 1997______________________
C O'N/U.S.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.