FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BANK OF IRELAND - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Pierce Worker Member: Ms Ni Mhurchu |
1. Improvements in Pension Scheme.
BACKGROUND:
2. The dispute before the Court, which has been ongoing since 1996, concerns the Union's claim on behalf of approximately 400 workers for improvements in the Bank's Service Staff Pension Scheme. The Scheme is a non-contributory, defined benefits scheme which integrates benefits with state pensions. Pensionable salary is defined as annual salary at date of retirement inclusive of service pay and overscale allowances where appropriate, less an adjustment in respect of members state pensions.
The workers concerned are employed by the Bank as porters, cleaners, drivers, computer sorters and security guards. The Union is seeking the inclusion of regular rostered overtime in the calculation of pay for pension purposes and that integration of the Scheme with social welfare benefits should cease.
Local level discussions failed to resolve the issue and the matter was referred to the Labour Relations Commission. Conciliation conferences took place on the 23rd of February, 1996, 13th of August, 1997, and the 24th of June, 1998. As agreement could not be reached the dispute was referred to the Labour Court on the 25th of June, 1998 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 17th of August, 1998.
UNION'S ARGUMENTS:
3. 1. The Service Staff Pension Scheme is out of line with other schemes in the Bank. The integration of pension benefits with social welfare pensions should cease. This would bring the workers concerned into line with the vast majority of Bank of Ireland employees.
2. The Bank produced a Peoples Policy document in 1991, stating clearly that all employees would be treated equally. This commitment has not been fulfilled. In an employment where equality between staff is continually stressed, it is unacceptable to have differently structured pension schemes.
3. The workers are seeking the inclusion of regular rostered overtime for the calculation of pay for pension purposes. This type of overtime is generally recognised for the calculation of holiday pay. The workers concerned are the lowest paid in the Bank's employment and depend on this overtime to meet their financial commitments. In the circumstances the Union's claim that regular rostered overtime be included for pension purposes is reasonable.
4. It is envisaged that the old age pension will increase to £100 in the near future. This will reduce the Bank's obligation under the terms of the pension scheme. In such circumstances it is unacceptable that the state should subsidise a major financial institution.
BANK'S ARGUMENTS:
4. 1. Concession of the Union's claim would result in the Bank incurring costs as follows:-
- an additional contribution approximating to 5% of the salary payroll of the
members would need to be paid to support the retirement benefits accruing in respect of the members future periods of pensionable service. This would equate to approximately £200,000 per annum.
- additional past service liabilities approximating to £3.5m would arise,
- in addition, if all years of service with the Bank were to count for the
purpose of pension entitlement, a further additional capital liability of some
£400,000 would be incurred.
2. The Bank Service Staff Scheme is one of the leading schemes in terms of benefit, particularly so as it is non-contributory. This contention is supported by the results of the 1997 'Benefits Survey' undertaken by the Irish Association of Pension Funds. This survey, to which 247 members contributed, indicated that:-
- 83% of firms surveyed operated a defined benefit scheme,
- 63% of schemes are contributory,
- 74% of schemes provide benefits which are integrated with State benefits,
- 50% of schemes calculate pension on final salary, with 34% based on pay
averaged over 3 years,
- 87% of schemes are based on an accrual rate of 1/60th for each year of
service.
The survey reveals that the average rate of pensionable salary paid by contributory members is 4.8% which contrasts sharply with the non-contributory nature of the Bank scheme.
3. The Bank operates an attractive Service Staff Pension Scheme which compares favourable with other employments, whether they be directly or indirectly comparable. Its main competitor, AIB Bank, operates a non-contributory, state integrated, defined benefits scheme, with a 1/60th accrual rate for its service staff. This is a more immediately comparable group of workers, who have in fact similar benefits.
4. The Service Staff Scheme is not the only integrated scheme in operation in Bank of Ireland Group. Integrated schemes also operate in Lifetime and ICS Building Society.
5. This claim is not justified and is in breach of the terms of Partnership 2000. The Bank committed to PCW and Partnership 2000 in good faith and has applied the terms agreed on the due dates in all cases. In addition, the Bank is a firm supporter of the underlying principles of these agreements and the positive impact which they have had on economic growth and stability. In the circumstances the Court is respectfully requested to support the Bank's view and to dismiss this claim.
RECOMMENDATION:
The Court is satisfied that this claim is precluded by Clauses 6 and 4 of Partnership 2000.
The Court is, however, also satisfied that these employees were given to understand, in their discussions on Peoples Policies for the 1990's, that the issue of harmonisation including pensions, would form part of the discussion on the future.
The Court, therefore, while rejecting the claim under Partnership 2000, recommends that the issue be discussed by the parties as part of any future plans, or at the end of Partnership 2000.
Signed on behalf of the Labour Court
Finbarr Flood
4th September, 1998______________________
F.B./D.T.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.