FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : KERRY / DAWN GROUP - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Pierce Worker Member: Ms Ni Mhurchu |
1. Pension improvements.
BACKGROUND:
2. The Company has three pension schemes in existence, in relation to employees involved in this case, in the Republic of Ireland in addition to a staff scheme. These schemes are Employee Benefits Plan, 1,089 members, Denny Contributory Pension Plan, 260 members, and the Creameries Pension Plan (Contributory and Non-Contributory Sections), 62 members. The Union is seeking the creation of one overall scheme. The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission in October, 2001, but no agreement was reached.
The dispute was referred to the Labour Court on the 6th of November, 2001, under Section 26(1)(a)(b) of the Industrial Relations Act, 1990. A Labour Court hearing took place in Limerick on the 23rd of January, 2001.
UNION'S ARGUMENTS:
3. 1. The main difficulties for the parties in the current case is that too big a time gap has been allowed since the last improvements in the scheme, and consequently a great deal more needs to be done than one would normally expect in any one time.
2. The very existence of five schemes in one Company is an anachronism in today's world with its more inclusive agenda and while to reduce from five to two is progress it still implies segregation, two-tier level of benefit and consequently discrimination.
3. By the very nature of the Company, most of its employees in the Republic of Ireland would have more service completed than they have left to complete to age 65 and, therefore, extending the benefit to back service is vital.
4. Standardisation of the members contribution at 5% is understandable but to exceed the 5% universal employee pension contribution is unfair and unrealistic.
5. The Company has been a hugely successful operation due in no small measure to the contribution made by the employees, the management and the farmers.
6. The Group is well capable of addressing the modified aspirations including the back-service and it behoved management to face up to their obligation to their long serving loyal employees.
7. There is no case for the retention of two schemes and less still for denying the members of the Staff Scheme access to the same type of improvements as the members of the other schemes.
COMPANY'S ARGUMENTS:
4. 1. As the Combined Employee Benefit Plan scheme is a defined benefit scheme, the Company takes the risks inherent in fluctuating market returns into the future.
2. The Company must ensure that its management of all costs and risks is prudent in the interests of all its stakeholders.
3. The revised scheme incorporates surprisingly substantial enhancements in relation to future service while acknowledging that the contribution of members has been increased as a contribution to those costs.
4. The Company is prepared to consider the improvements in pension in relation to future service in the context of an employee contribution of 7% of pensionable salary.
5. In the context of endeavouring to arrive at the revised Combined Employee Benefit Plan, a vote of the combined membership of the schemes would be conducted and if a majority of the combined membership voted in favour the members of all schemes would be required to transfer to the revised Combined Employee Benefit Plan.
6. The proposed revised Combined Employee Benefit Plan would be an excellent scheme and in taking its share of the costs associated with funding the revised benefits for future service, the Company has done everything that could be reasonably expected of it.
7. The Company rejects demands for any other 'improvements'.
RECOMMENDATION:
The Court has carefully considered the submissions made by the parties to this dispute.
It is clear to the Court that significant progress has been made in providing substantial improvements in the pension schemes at issue. Having regard to the improvements, both agreed and as proposed by the Company, it is clear that the schemes are generally in line with appropriate standards in comparable employments.
With regard to the specifics of the points raised by the Union, the Court recommends as follows:
(a) One Overall Scheme.
The Court notes that the Company proposes to engage in a review of the Staff Scheme on finalisation of agreement on the CEBP Scheme. In the Court’s view that review should proceed as proposed. In the interim, the Court notes the Company's assurance that any member of the Staff Scheme who wishes to transfer to the revised CEBP scheme is free to do so.
The Court notes that the claim for State integration at 1 x social welfare has been conceded by the Company. The proposal that the actual level of social welfare be taken into account is not out of line with normal practice. The Court does not, therefore, recommend concession of the Union's claim that the reckonable amount be frozen at current values.
It is noted that this claim has been conceded.
- The Company have indicated to the Court that the costs of meeting this claim would be prohibitive. Furthermore, the scheme with which comparison was originally drawn by the Union does not make provision for back funding. In the circumstances, the Court does not recommend concession of this claim. The Court does, however, recommend that the parties examine the possibility of providing some arrangements to reckon some element of back service,as with a normal AVC scheme.
- It is noted that this claim has been conceded by the Company.
- It is noted that this claim has been conceded.
It is noted that this claim has been conceded.
It is noted that this claim has been conceded.
(i) Contribution to be 5%, or Less for Some Existing Scheme Members.
The Court accepts that there is some merit in the Union's claim that the proposed rate of employee contribution is out of line with normal standards. The Court recommends a standard contribution of 5% should apply.
Signed on behalf of the Labour Court
Kevin Duffy
14th February, 2002______________________
HMCD/MBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Helena McDermott, Court Secretary.