FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ALUSET LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION PRINTING TRADES BRANCH DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Ms Ni Mhurchu |
1. Membership of Industry Pension Fund
BACKGROUND:
2. The case before the Court concerns a dispute between the Union and the Company in relation to changes in the pension scheme applicable to the Printing Industry. The Printing Industry Pension Fund (PIPF) was established in 1972 and provided a Defined Benefit Pension Scheme and a Death in Service Benefit to those who joined. In 2005, the Management Committee, representing Trade Unions and Employers agreed that cost increases in the Defined Benefit Scheme were unsustainable and a new Defined Contribution Scheme was agreed for implementation in the industry from 1st November, 2005. The Union is claiming that the Company has failed to introduce a pension scheme as agreed by the Management Committee, opting instead to introduce a PRSA arrangement for interested employees. The Union is claiming that the PRSA Scheme introduced is inadequate for its members as it includes age related contributions for death in service benefit which in some cases results in almost the total contribution going towards death in service and not towards pension entitlements.
The Company's position is that the Pension Scheme agreed by the Management Committee is voluntary and that it has a right to introduce a PRSA
arrangement.
The dispute was not resolved at local level and was the subject of two conciliation conferences under the auspices of the Labour Relations Commission. As agreement was not reached the matter was referred to the Labour Court on 9th December 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court Hearing took place on the 24th February 2006.
3.UNION'S ARGUMENT'S:
1. The Defined Contribution Scheme was agreed by the Management Committee for implementation. The most important element of this new scheme is the continuation of life cover benefits from the old scheme. The PRSA scheme adopted by the Company does apply life cover although, depending on the age profiles of its members, most of the contributions payable will go towards life cover and not pension entitlements. This will result in a reduction in pension entitlements on retirement.
2. The Defined Contribution Scheme is voluntary but if members wish to join the Scheme, the employer should apply the terms to all interested parties.
4.COMPANY'S ARGUMENTS:
1. The Company met with employees and explained that cost increases in providing a Defined Benefit Scheme was unsustainable and could not be continued. In order to remain viable, the Company would discontinue the Defined Benefit Scheme and would introduce a more sustainable scheme.
2. The rules of the new scheme implemented in November 2005 state that the scheme is voluntary. The Company has fulfilled its statutory obligations with regard to the provision of pension schemes.
RECOMMENDATION:
Due to the unsustainability of continuing with the Printing Industry Pension Fund (defined benefit scheme) which had been in existence since 1972, the Management Committee, representing both the employers and the Trade Unions, agreed to wind up the DB scheme and replace it with a new industry wide defined contribution scheme, to come into effect from 1st November, 2005. The minutes of the meeting of the Committee held on 29th May 2005, concluded that membership of the scheme was to mirror the existing provisions of the PIPF DB scheme.
Up until 29th May, 2005, the Company involved in this case, operated the Printing Industry Defined Benefit Scheme, which was available to those employees who opted to join the scheme. The Company decided to wind up the scheme in May, 2005, and introduce a new pension scheme, with different terms to the newly agreed industry wide defined contribution scheme.
The Union disputed the Company's actions and sought the terms of the newly agreed scheme to apply to its members, with all outstanding arrears being paid back to May 2005.
The Company contended that it had the option not to provide pension benefits under the new scheme, as the scheme was voluntary for both employers and employees.
The new Printing Industry Defined Contribution Pension Scheme states that:-
"membership of the scheme is voluntary".
Having considered this position, the Court is of the view that this provision allows individual employees to decide whether or not to join the scheme, however, once the employee volunteers to join, the employer must apply the terms of the scheme to that employee.
Therefore, having considered the views of the parties expressed in their oral and written submissions, the Court recommends that the Company should apply the terms of the newly agreed replacement scheme to those Union's members who wish to avail of the scheme. The Court understands that the new scheme continues to provide for life cover benefits as per the old scheme, towards which the employee must pay a contribution. (This contribution is in addition to the employer/employee contributions paid to fund pension benefits.)
Furthermore, the Court recommends that in order to ensure continuity of benefits in line with the Printing Industry Schemes, the employer should pay all outstanding employer contribution arrears from 29th May, 2005.
Signed on behalf of the Labour Court
Caroline Jenkinson
16th March, 2006______________________
AH/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.