FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CHADWICKS LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AMALGAMATED TRANSPORT & GENERAL WORKERS' UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Mr. Somers |
1. 1. Modification to pension scheme 2. Introduction of a profit share scheme
BACKGROUND:
2. The Unions have submitted a claim for improvements in (1) the pension scheme and (2) the introduction of a profit share scheme. The Unions claim that the current pension is out of line with comparable employments and that it needs to be substantially improved. The Unions are also seeking the introduction of a profit share scheme for their members. They claim that the Company has been very successful over the past number of years and that their members should share in the fruits of that success.
The Company rejected the Unions' claims on the basis that (1) its Pension Scheme is broadly in line with comparable employments and (2) that during the currency of Partnership 2000 the Company has introduced a Share Participation Scheme.
As no agreement was possible between the parties the dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 29th of November, 1999 but no agreement was reached. The dispute was referred to the Labour Court on the 1st of December, 1999 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 2nd of February, 2000 (the earliest date suitable to the parties).
UNIONS' ARGUMENTS:
Pension Scheme
3. 1. The Unions are seeking a reduction in the level of intergration with the Company's pension scheme from 1.5 to 1 times the sum of the State's contributory pension.
2. All earnings, including overtime, should be included in the definition of pensionable pay.
3. The current pension scheme recognises only 40% of service prior to 1981. The vast majority of pension schemes provide cover for all service. The Unions want this rectified.
4. There is no provision in the current pension scheme for indexation to keep it in line with inflation. The Unions are seeking a 5% indexation clause to cover any increase in inflation.
5. The Unions are seeking an improvement in "death in service" scheme as follows; (a) a lump sum based on four times annual earnings, and (b) 50% of spouse's pension based on projected service.
Profit Share Scheme
6. The Company has benefitted significantly over the past twelve years in relation to pay restraint. Management should embrace the profit sharing concept with its workforce.
COMPANY'S ARGUMENTS:
Pension Scheme
4. 1. The Company's pension scheme is broadly in line with those operated in comparable employments for the industry. It has no plans to enhance the scheme unilaterally.
2. The Company will only allow basic pay to be used in the calculation of the rate of pension contribution for its employees. It is not prepared to make concessions in this area.
3. Management will not entertain any claims for indexation of the pension scheme, as an actuarial review indicates an excess of £41,000 in contributions by the employer which will adequately fund the scheme.
4. The Company is not prepared to discuss the basis for the calculation of the formula for payment in respect of a "death in service" or the addition of a spouse's pension on foot of the death of a serving employee.
5. The current claims for improvements in the pension plan are not in accordance with the implicit terms in Clause 4 of Partnership 2000.
Profit Share Scheme
6. The Company is unwilling to examine this demand in advance of the conclusion of the present negotiations on a successor to the present Partnership 2000 Agreement.
7. A share participation plan has been established for employees in accordance with Chapter 9 of Partnership 2000 to facilitate share ownership. A sum equivalent to 2% of the Company's profits was distributed to staff to acknowledge their contribution to the success of the Company.
RECOMMENDATION:
Having considered the submissions made by the parties the Court recommends as follows in relation to each of the Union's claims.
Modification to Pension Scheme.
The current pension scheme is relatively new, having been introduced in 1993. It has already been improved by the introduction of a spouses' death in retirement pension, improved death in service benefits and improvements in the back service accrual rate. The scheme cannot be said to be substantially out of line with appropriate standards in comparable employments, in terms of Clause 4 of Partnership 2000.
Like any scheme there may be scope for further improvements over time, as the actuarial position improves. The Court recommends that the parties should keep the position in that regard under review, as the funding position permits, and in any event not later than the next actuarial review.
Introduction of a Profit Share Scheme.
The Court notes that an Employee Share Participation Plan was introduced during 1998, under Chapter 9 of Partnership 2000. For this reason, and having regard to the provisions of paragraph 9.16 of Chapter 9 of Partnership 2000, the Court does not recommend concession of the Unions' claim.
The parties can, however, review the position in the light of any equivalent provision of Chapter 9 in any replacement National Agreement.
Signed on behalf of the Labour Court
Kevin Duffy
10th February, 2000.______________________
LW/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.