FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH ASSOCIATION OF COMMUNITY TRAINING ORGANISATIONS (IACTO) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr McGee Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Claim for improvements in pension scheme.
BACKGROUND:
2. The Union is in dispute with the Irish Association of Community Training Organisation (IACTO) in relation to a claim for improvements in their pension scheme. IACTO is an umbrella organization for a range of community training organizations funded by FÁS. There are about 250 instructors and 43 managers covered by the claim.
- The Union claims that the current pension scheme was a defined contribution scheme, introduced in 1992. The contribution rate is 10%, of which 6.5% is the employer’s contribution and 3.5% the employee’s contribution. There is ongoing dissatisfaction among the workers about the scheme. The Union claims that Actuarial assessments showed that to yield a reasonable pension on retirement an overall contribution of the order of 20% plus was required. At least 50% of the workers have about 20 years service and the age profile was skewed towards the higher end.
On the 26th March, 2004, IACTO received a claim under clause 4.1 of Sustaining Progress. The Union's position was that the Community Training Centres (CTC) defined contribution scheme was out of line with the FÁS 'C' scheme, a defined benefit scheme and or that employer contributions were too low.- IACTO claim that the scheme had been introduced by agreement with the Union in 1992. In common with many of the schemes introduced across a range of employments since 1990 it was a defined contribution scheme. There is no question of moving now from a defined contribution to a defined benefit scheme. The rates of contribution were as agreed at the time and are in line with those in 90% of such schemes.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 9th December, 2004 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 10th March, 2005.
- IACTO claim that the scheme had been introduced by agreement with the Union in 1992. In common with many of the schemes introduced across a range of employments since 1990 it was a defined contribution scheme. There is no question of moving now from a defined contribution to a defined benefit scheme. The rates of contribution were as agreed at the time and are in line with those in 90% of such schemes.
UNION'S ARGUMENTS:
3.1 The claim, which is brought under the relevant provisions of Sustaining Progress, seeks to secure improvements by the introduction of the provisions of the FÁS. 'C' pension and superannuation scheme, which is a defined benefit scheme, albeit with an increased employees contribution.
2. Sustaining Progress provides for pension improvements under clause 4.1, 17.4 and 17.5.
3. All staff scales and conditions are related to the relevant FÁS scales and conditions (including benchmarking) with the exception of pension provisions.
4. The 1992 scheme was regarded then and remains regarded as inadequate in terms of its overall funding and in terms of its targeted provisions. This is a minimal scheme with no guaranteed benefits other than death in service and the contribution protection in the event of long term disability.
COMPANY'S ARGUMENTS:
4.1 The clause under which this claim is being processed (4.1 of Sustaining Progress) refers specifically to the Private Sector Pay and related issues, it is the Company's contention therefore that the FÁS. 'C' scheme is not the "appropriate standard". As with all other private sector employers, IACTO's pension scheme is not underwritten by the exchequer.
2. To move from a defined contribution to a defined benefit scheme as suggested would be illogical in view of general trends, and financially imprudent.
3. The employer contribution of 6.5% is fair and reasonable. The employee contribution of 3.5% is below the norm.
4. The Company suggest that when compared to other defined contribution schemes, which according to the IAPF survey, 90% of all schemes set up since 1990 are defined contribution, this Company compares favourably.
5. There is a general perception that because CTC's are publicly funded, increases are funded from the bottomless pit of the exchequer's pocket. This is not the case. The Department of Finance did not make additional funds available to fund the €2.4 million necessary for approximately 294 staff.
6. In view of the recent substantial salary increases, management does not have the capacity to absorb further increases to staffing costs.
RECOMMENDATION:
Having taken into account the oral and written submissions of the parties, the Court does not find grounds for concession of the Union's claim as presented.
The Court, however, feels that the employer's offer to further examine the current scheme with a view to improvement should be accepted by the Union. Such examination should not exclude consideration of increased employee contributions, as this has not been ruled out by the Trade Union.
The Court so recommends.
Signed on behalf of the Labour Court
Raymond McGee
15th_March, 2005______________________
JBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.