FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : VITA CORTEX LIMITED (CORK) (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Mr Nash |
1. Retention of Defined Benefit Pension Scheme (LCR18982).
BACKGROUND:
2. The dispute concerns the Company's proposed wind-up of the Defined Benefit (DB) Scheme. The case was the subject of a previous Labour Court recommendation (LCR18982) which issued in September, 2007. The Court recommended that the parties re-engage with a view to keeping the DB Scheme open. The Union's case is that the Company made little effort to sort out the issue and that the situation is similar now as it was in September, 2007. The Company states that it offered to replace the DB Scheme with a Defined Contribution (DC) Scheme but that this was rejected by the Union.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement the dispute was referred to the Labour Court on the 14th April, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 20th August, 2009.
UNION'S ARGUMENTS:
3. 1. There are a number of employees that are very near retirement age. They have substantial service and would have expectations of a reasonable salary. If the Company's proposal to wind up the DB Scheme is carried through it will have a serious negative effect on their pensions.
COMPANY'S ARGUMENTS:
4. 1. The Company's financial situation has seriously deteriorated in the last couple of years (details supplied to the Court). It is willing to implement a DC Scheme and is prepared to make a greater contribution that it made in the DB Scheme.
RECOMMENDATION:
The Court has taken full account of the submissions of the parties to this dispute.
Having regard to all the circumstances of the case the Court is not satisfied that the Company has made out a sufficiently compelling case upon which it could recommend the complete wind-up of the defined benefit scheme. However, the Court does believe that some change in the current pension arrangements is warranted.
The Court recommends that the dispute should be resolved on the basis that the current DB scheme will be closed with effect from 1st January 2009. All benefits and entitlements accrued under that scheme up to that date should be preserved for existing members. All service accruing after that date should be pensionable under a defined contribution scheme along the general lines proposed by the Company.
The details of implementing this recommendation should be the subject of further discussions between the parties.
Signed on behalf of the Labour Court
Kevin Duffy
31st August, 2009.______________________
CON.Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.