FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 S2(1), INDUSTRIAL RELATIONS (AMENDMENT) ACT, 2001, AS AMENDED BY THE INDUSTRIAL RELATIONS(MISCELLANEOUS PROVISIONS) ACT, 2004 PARTIES : KARDEX SYSTEMS IRELAND LIMITED - AND - AMICUS DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Grier Worker Member: Mr Nash |
1. Referral from the Labour Relations Commission under the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004.
BACKGROUND:
2. The dispute concerns two workers represented by the Union and is in relation to a pension issue. One of the workers (Worker A) has 39 years' service and is due to retire on 1st July, 2007. The second worker (Worker B) has 29 years' service and is due to retire on 16th of October, 2023.
The Union's case is that both workers have been members of the Company's Defined Benefit Scheme from the date of their employment. In 2005, the workers were told that the pension scheme was being closed in deficit to the sum of €150,000 (the figure in March, 2007 was €140,000) and that the deficit would not be funded. Following a number of meetings between the parties and the Irish Pensions Trust the deficit impact on Worker A's portion of the pension fund in August, 2006, was estimated at between €179,200 and €234,800. There were no figures available for Worker B.
The case was referred to the Advisory Service of the Labour Relations Commission. As the dispute could not be settled it was agreed to refer it to the Court in accordance with Section 2(1) of the Industrial Relations (Miscellaneous Provisions) Act, 2004, and Section 2 of the Industrial Relations (Amendment) Act, 2001. A Labour Court hearing took place on the 2nd of May, 2007.
UNION'S ARGUMENTS:
3. 1. The workers have been in employment for 39 years and 29 years respectively. Whilst Company ownership changed a number of occasions the workers received written guarantees on each occasion that their defined benefit scheme would remain in place.
2. At one point the Company proposed making a contribution of €50,000 to address part of the pension deficit. The offer was withdrawn after the Union scheduled a meeting with the Trustees in February, 2007.
3. If the Company proceeds to wind up the pension fund in deficit the impact on Worker A will be a drop in pension entitlements of €10,000 per annum when he retires in July, 2007.The Union is agreeable to the pension scheme being closed and replaced by a proposed defined contribution scheme subject to the deficit being eliminated by funding before the scheme is closed.
COMPANY'S ARGUMENTS:
4. 1.Whilst the Company sympathises with the workers' situation it is not making sufficient profit to fund the pension scheme.
2.The Company offered to pay €50,000 into the fund which would have reduced the the workers' pension loss.
RECOMMENDATION:
The dispute came before the Court pursuant to Section 2 of the Industrial Relations (Amendment) Act, 2001, as amended by the Industrial Relations (Miscellaneous Provisions) Act, 2004 (the Acts). Both sides confirmed for the Court that the requirements specified by Section 2(1) of the Act have been met, therefore, the Court is satisfied that it has jurisdiction to investigate the dispute.
Pension Benefits
The Union made the following claim on behalf of its two named members:
-retention of the Company's Defined Benefit Pension Scheme until the end of the current pension year ( May, 2007) with elimination of the deficit and appropriate funding of the scheme as at May, 2007.
The Union stated to the Court that it would have no objection to the Company replacing the Defined Benefit Scheme with a defined contribution scheme from May, 2007.
The Court has considered the submissions of the parties. A memo was submitted at the hearing outlining the Company's trading position. When viewed overall with the accumulated level of reserves before transfers and the dividend payments made to the parent company, the Court recommends that the Company should transfer sufficient funds into the pension funds to ensure that it can fulfil its obligations to the two members and comply with the terms and conditions of employment concerning their position benefits.
The Court recommends that the claimants' pension entitlements, in accordance with the rules of The Kardex Systems Limited Pension Plan, are not altered in any way and that the scheme remains open for the purposes of meeting its current commitments under the scheme.
The Court recommends that written guarantees to this effect should be given to the claimants by not later than 1st June, 2007.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
21st May, 2007______________________
CON/MC.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.