FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : THE FLINT GROUP (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Pension Scheme
BACKGROUND:
2. In December, 2004, BASF Printing Systems Ireland Ltd was bought by XSYS Print Solutions and a further merger occurred , which resulted in a new enlarged Company, now called the Flint Group. The dispute before the Court concerns a claim by the Union on behalf of its seven members, formerly of BASF, in relation to a Pension Scheme. Up until the merger the seven employees had been members of the BASF Ireland Pension Scheme, which was a Defined Benefit Pension Scheme (DB Scheme), and now the Company wishes to change to a Defined Contribution Pension Scheme (DC Scheme). The Union contends that it had sought assurances on the protection of terms and conditions of employment for its members but it was unaware that the replacement of the DB Scheme with a DC Scheme was a condition of the sale.
- The Company contends that the decision was made to set up a DC Scheme as it was more cost effective for the Company, given the small number of employees in Ireland, and much easier to set up. The new scheme would offer the same terms as the DB Scheme currently provides. The Union rejects the Company's assertion that the new scheme would deliver the same pension entitlements on the bases that it removed a very important guarantee for its members.
- 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 4th January, 2006, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 30th March, 2006.
3. 1. The Company was acting unilaterally and is in breach of agreed grievance procedures. The Company has unilaterally withdrawn a very important security and guarantee for its members, a decision that could adversely affect their retirements.
2. The members had a benefit, which for no good reason was taken away. The Company, part of a very profitable corporation, will in no way suffer by continuing to provide defined benefit entitlements to this small group of people. If the decision is not reversed, the members could suffer the effects for a very long time. The Court is requested to recommend restoration of defined benefit entitlements so that there is no loss of benefit or service.
COMPANY'S ARGUMENTS:
4. 1. The Company's only option was to close down the DB Scheme as the employees were no longer a part of the BASF Group. The Company has been fair to its employees and has made every effort to ensure that they are not financially disadvantaged by the change.
2. The Company has demonstrated this by the level of their contributions to the scheme, ranging from 16.3% of pensionable salary to 26.1% of pensionable salary, which includes an additional 0.5% to allow for administrative charges. These contributions are relative to comparable schemes in the market. The average employer contribution is 5.9%
RECOMMENDATION:
Due to the sale of the Company by the previous employer and the wind up of the BASF Printing Systems Ireland Limited Defined Benefit Pension Scheme, the current employer The Flint Group, offered to introduce a Defined Contribution Scheme for the transferred employees. The Union objected and sought the introduction of a defined benefit scheme with the same benefits as the previous scheme.
In order to address the Union's claim, the employer offered to introduce the Defined Contribution Scheme with employer contributions levels based on individual actuarial calculations, aimed at replicating the benefits under the Defined Benefit Scheme. These contribution levels vary from 16.3% up to 26/1% plus an employee contribution of 5%. The Company indicated to the Court that these levels of personalised contributions would continue for the period the individual employee is employed with the Company.
The Court notes that the accumulated benefits under the BASF Defined Scheme are preserved within that Scheme Fund and will be revaluated in line with statutory provisions.
Having considered the views of the parties expressed in their oral and written submissions, the Court is of the view that the Company's offer is fair and reasonable in the circumstances and recommends that it should be accepted by the Union.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
13th April, 2006______________________
JO'CDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Joanne O'Connor, Court Secretary.