FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : CORAS IOMPAIR EIREANN - AND - TRANSPORT SALARIED STAFFS' ASSOCIATION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Ms Ni Mhurchu |
1. Appeal against Rights Commissioner's recommendation IR450/99/JH.
BACKGROUND:
2. On the 14th of January, 1998, the Group Chief Executive advised the Head of Human Resources that his post would be abolished with effect from the 1st of May, 1998, and that he was being declared redundant from that date. Following local negotiations the Company verbally agreed to retain the employee in employment until mid-March, 1999, when he would have ten years' service with the Company. This date was subsequently extended to the 30th of April, 1999. The Association, on the employee's behalf, claimed that the Company should offer him alternative employment or the terms of the voluntary severance package which was available to other staff. The terms of the package incorporate "added years" to age 65 for pension purposes.
The Association referred the issue to a Rights Commissioner for investigation and recommendation. Her recommendation issued on the 19th of August, 1999, as follows:-
"Based on the evidence presented at the hearing I recommend the following by way of a full and final settlement of the worker's claim in respect of a severance package:
A. The worker's rate of pay should be adjusted to reflect the "national" pay awards due from July, 1997 to May, 1999, from the due dates.
B. Based on the revised salary, a severance payment of 5/3rds should be made, calculated in the usual way.
C. Based on the revised salary and in accordance with the terms of the pension scheme, the formula for calculating the pension entitlement should be that claimed by the worker.
D. The added years claim should not be conceded.
This recommendation is based on the somewhat unusual circumstances surrounding this case and I consider that it is a balanced compromise between the two positions presented, taking account of those circumstances. The recommendation if accepted, should not be used by TSSA or CIE as a precedent in future cases of retirement/severance."
(The worker was named in the Rights Commissioner's recommendation)
On the 30th of August, 1999, the Association appealed the recommendation to the Labour Court in accordance with Section 13 (9) of the Industrial Relations Act, 1969. The Court heard the appeal on the 28th of September, 1999.
ASSOCIATION'S ARGUMENTS:
3. 1. The Group Chief Executive is on record as advising the trade unions that compulsory redundancy would not occur as a consequence of changes being introduced. All redundancies to date have been on a voluntary basis only. Compulsory redundancy would be contrary to the agreements with the trade unions.
2. Full voluntary severance terms have been applied in the past to salaried staff at the same level of seniority as the claimant (examples given to the Court). These senior executives retired by agreement with the Company before their normal retirement dates.
3. In February, 1998, the claimant was given a copy of a memo which had been requested by the Group Chief Executive outlining the options for dealing with his proposed redundancy. Option 3 states that if he remained with the Company until mid-March, 1999, it "would bring him into the category of those retiring under the voluntary severance with a pension". It further states that his "superannuation would be based on 19.05 (years)".
4. The Court is asked to recommend that the agreed formula on voluntary severance payments incorporating the "added years" concept is as applicable in the claimant's case as it is in any other instance.
COMPANY'S ARGUMENTS:
4. 1. It was agreed with the claimant in 1998 to defer his termination until March, 1999, at which time he would have ten years' reckonable service, which would make him eligible for immediate pension benefit. The issue of "added years" was not raised until March, 1999. It was also agreed that there would be no increase in his salary for the remainder of his employment and that salary paid after the 1st of May, 1998, would be deducted from the agreed 5/3rds severance payment.
2. As the claimant had reneged on the agreement and was in dispute with the Company, it was decided that pension payments would be paid to him exactly in accordance with the rules of the Scheme, which is a Statutory one. This included a discounting of his pension by 19.55%. The cost of providing a non-discounted pension is £47,216. The Rights Commissioner recommended that no discount should apply.
3. The issue of "added years" did not form any part of the agreement reached in 1998. This applies to staff with long service who are no longer required by the Company and is covered by Statutory Instrument. It applies to clerical and executive grades up to a certain level. It does not apply to persons at the claimant's level, particularly with such short service. At the time the claimant did not have ten years' pensionable service. The cost of providing the pension package sought is £217,000.
4. The claimant is not being singled out for special adverse treatment. A number of senior managers were asked to leave the Organisation and were not given "added years". The Company tried to facilitate the claimant to provide him with an income stream while he built up a career in the consultancy business, in which he had worked before. The Court is asked not to recommend any improvement over the Rights Commissioner's recommendation and to clarify the amount of salary deduction to be made from the lump sum.
DECISION:
The Court has considered the appeal and having examined all the arguments put forward by both sides is satisfied that the Rights Commissioner's recommendation should be hereby amended as follows:
- due to the unique circumstances surrounding this case, and the lack of a written agreement when the appellant's employment was extended, the Company should concede the added years of service for pension purposes,
and - the lump sum should be reduced by the amount of salary paid between the 1st of May, 1998, and the 30th of April, 1999.
The Rights Commissioner's recommendation is accordingly amended.
The Court so decides.
Signed on behalf of the Labour Court
Caroline Jenkinson
19th October, 1999______________________
DG/BCDeputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Dympna Greene, Court Secretary.