FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DEPARTMENT OF FINANCE - AND - ICTU GROUP OF UNIONS DIVISION : Chairman: Mr Flood Employer Member: Mr Carberry Worker Member: Mr O'Neill |
1. Pension entitlements for General Operatives in Government Departments.
BACKGROUND:
2. Prior to 1990, all State Industrial Employees had an established pay relationship with comparable grades in the Construction Industry. In 1991, following a review of the grading and pay structures of General Operatives in Government Departments it was agreed that the pay structures would be brought into line with Clerical Officers in the Civil Service. All State Industrial Employees have a non-contributory pension arrangement, whilst Clerical Officers in the Civil Service have a contributory pension arrangement.
In 1993, an agreement was concluded between the Unions and the Department for a new rate of pay for the workers concerned which was 98% of the Clerical Officer's rate of pay.
The issue before the Court is that all State Industrial Employees only receive a pension on retirement based on 98% on retirement instead of 100%. The Unions' want the anomaly corrected. The Department argues that all pensions are calculated based on actual salary.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement could not be reached, the dispute was referred to the Labour Court on the 13th of November, 2002, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 21st of January, 2003, the earliest date suitable to the parties.
UNIONS' ARGUMENTS:
3. 1. When the rate of 98% was established it was accepted on the basis that it would have no impact on matters other than pay.
2. State Industrial Employees pension should be based on 100% of the Clerical Officer rate and not 98%. The anomaly must be corrected.
COMPANY'S ARGUMENTS:
4. 1. Pensions are calculated on the basis of salary paid. It is not acceptable to calculate pension on the basis of a final salary higher than what was actually paid.
2. Concession of the claim would have major implications for the entire public service pension scheme.
RECOMMENDATION:
In 1993, an agreement was concluded that resulted in the claimants receiving 98% of the Clerical Officer rate of pay. The dispute now before the Court centres on the fact that when individuals in this Group go on pension, their pension entitlement is calculated on this 98% rather than a 100%, as the Unions believe it should be calculated.
The Unions' position is that at the time of the negotiation they believed that for all purposes other than pay 100% would apply.
Management is adamant that the Unions were fully aware of the implications of the 2% salary differential in relation to future pension calculations when the agreement was negotiated. It argues that it cannot calculate an Employee's pension entitlements on a
notional salary.
Both sides refer to the 1993 Agreement, the Unions quoting clause 4 to support their interpretation of the Agreement, Management quoting clause 12 to support its case.
Faced with conflicting views on what was agreed or intended in the 1993 Agreement the Court has considered the Agreement as written.
It is the Court's view that at that time, the agreement, while not meeting all demands, was a significant improvement.
The Court having considered the written and oral submissions made by the parties is satisfied that the 98% figure is the correct one for pension calculations.
The Court is not satisfied that it was intended that a notional figure of 100% would apply in the calculation of pension, otherwise, the Court is of the view that a clause to this effect would have appeared in the Agreement.
The Court, therefore, does not recommend concession of the Unions' claim.
Signed on behalf of the Labour Court
Finbarr Flood
3rd February, 2003______________________
GB/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Gerardine Buckley, Court Secretary.