FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : THE SHOE STUDIO GROUP LIMITED (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MANDATE DIVISION : Chairman: Ms Jenkinson Employer Member: Mr McHenry Worker Member: Ms Ni Mhurchu |
1. Introduction of pension scheme.
BACKGROUND:
2. The Union submitted a claim for the introduction of a pension scheme. It states that the shoe shops in question were taken over by Nine West Limited - a multinational company. The employees concerned had previously worked for British Shoe Corporation (known in Ireland as Saxone) and under their contract of employment had a defined benefit pension scheme.
The acquisation was covered by the Transfer of Undertakings legislation, however, there is no provision for the continuation of pension schemes under these regulations. It claims that the Company should provide a pension scheme as provided for under Partnership 2000.
Management stated that following a review of employees' terms and conditions of employment changes were made to the remuneration package which enhanced workers' earnings. However, it claims that it is not in a position to provide a pension scheme for its employees.
As no agreement was possible between the parties the dispute was referred to the Labour Relations Commission. Conciliation conferences were held on the 12th of March, 1998, the 3rd April, 1998 and the 10th September, 1999 but no agreement was reached. The dispute was referred to the Labour Court on the 17th of September, 1999 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 18th of November, 1999.
UNION'S ARGUMENTS:
3. 1. The withdrawal of the pension benefit will have serious repercussions for the workers concerned. They will be unable to secure their retirement income to the same extent as they would have done under their former employer.
2. The Company is part of a multi-national corporation and can well afford to meet this claim.
3. The Union does not accept management's argument that there would be a knock-on effect if a pension plan was put in place for this Company.
4. Over 90% of the retail sector is covered by an occupation pension scheme. There is no justification, therefore, in the stance being taken by the Company in not providing a pension plan.
5. Under Clause 4 of Partnership 2000 the Union is entitled to pursue claims for the introduction/improvement in pension schemes.
COMPANY'S ARGUMENTS:
4. 1. Management is not in a position to introduce a pension scheme into the Company on the basis of equity as its employees in other countries do not have pension schemes.
2. The pay rates in the Company are in excess of those provided for under the Registered Employment Agreement. However, no pension scheme is provided under this agreement.
3. The Company is similar to smaller indigenous Irish retailers, who in turn do not operate pension schemes.
4. Partnership 2000 also states that "having regard to the cost and other implications, negotiation on pension schemes shall be governed by the capacity of the enterprise to absorb the cost involved".
5. The Company cannot afford to introduce a pension scheme. If the claim was to be conceded, the Company would have to re-evaluate the viability of its trading position within Ireland.
RECOMMENDATION:
This claim arose from the change of business and the loss of a pension scheme for staff who under the previous ownership had a pension scheme. In accordance with the provisions of Clause 4 of Partnership 2000, the Union are now pursuing a claim for the introduction of a pension scheme for all staff.
The Court is concerned at the discontinuation of the pension scheme, albeit, not prohibited by legislation in a takeover situation. However, employment legislation and employment practices in Ireland are different to those that apply in the parent company and every effort should be made to comply with the Irish terms.
While Clause 4 of Partnership 2000 does not prohibit claims for the introduction of a pension scheme where none exist, the clause states that the viability of the Company to pay for such a scheme should be considered. Based on the information supplied at the hearing, the Court is of the view that this Company is not in a position at the moment to introduce such a scheme.
The Court recommends that the situation should be reviewed in January 2001, in the light of the financial circumstances prevailing at the time. At that time the Company and Union should jointly undertake a cost analysis of introducing such a scheme.
Signed on behalf of the Labour Court
Caroline Jenkinson
4th February, 2000______________________
L.W./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.