FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : CEMEX IRELAND LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Introduction of defined contribution pension scheme for new entrants
BACKGROUND:
2. The Company, formally known as Readymix, is part of the group of companies owned and operated by Cemex Plc. The dispute concerns the Company's decision to introduce a Defined Contribution Pension Scheme (DC Scheme) for all new employees from 1st January, 2004, instead of the Defined Benefit Pension Scheme (DB Scheme) that existed. The Union objected to the proposal, stating that there had been no consultation between the parties. A number of meetings took place in the following couple of years but no progress was made and in August, 2006, the dispute was referred to the Labour Relations Commission. At a conciliation conference the Union proposed either the re-instatement of the DB Scheme or negotiate on an acceptable alternative. In December, 2007, the Union proposed a "hybrid" scheme (details supplied to the Court) but this was rejected by the Company. The case was then referred to the Labour Court on the 18th June, 2008, in accordance with Section 26(1) of t he Industrial Relations Act, 1990. A Labour Court hearing took place on the 5th August, 2008.
UNION'S ARGUMENTS:
3. 1. The Company did not adhere to good industrial relations practices and discontinued the DB Scheme without consultation or discussion with the Union.
2. The proposed DC Scheme is unacceptable as it will not meet the needs of new employees going forward. Stopping an income stream into the DB Scheme will ultimately damage the Scheme and lead to increases in contributions or loss of benefits for existing employees.
3. A hybrid scheme is cheaper for the Company and has fewer liabilities to the Scheme.
COMPANY'S ARGUMENTS:
4. 1. The decision to close the DB Scheme to new members was financially sound at the time and remains so today.
2. The DC Scheme in place is a good scheme and well supported by the Company. Management has indicated its willingness to negotiate some improvements in the DC Scheme.
3. Changes such as those demanded by the Union are unsustainable by the Company in the current economic climate.
RECOMMENDATION:
The Court notes that conditions of employment within the Company are regulated by a collective agreement. By implication at least, pension entitlements are covered by that agreement. In this case no agreement has been reached to alter the pension entitlements applicable to any group of employees.
In all of the circumstances of this case the Court does not recommend the re-opening of the Defined Benefit Scheme. However, the Court does recommend that the parties enter into negotiations on a mutually acceptable alternative arrangement.
If the parties do not reach agreement within six months the matter may be referred back to the Court for a definitive recommendation.
Signed on behalf of the Labour Court
Kevin Duffy
21st August, 2008______________________
CONChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.