FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SCHERING PLOUGH (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Mr O'Neill |
1. Change to Pension Scheme
BACKGROUND:
2. The dispute concerns the Company's proposal to introduce a change in its pension scheme from its present Defined Benefit Scheme (DB Scheme) to a Career Average Defined Pension (CADB). The Company has three sites in Ireland, Brinny in Cork, Bray in Wicklow and Swords in Dublin. The dispute concerns Brinny. The other two sites have accepted the Company's proposal. The Unions' case is that the CADB will mean less benefits for the workers in Brinny (although it was an improvement on the scheme operating in Bray). They also felt that they were not included sufficiently in discussions about the new scheme. The Company claims that the key elements of the CADB scheme are as follows:
Defined Benefit Career Average section to provide retirement pension
Defined Contribution section with employer matching contributions
Shift premium included in pension for future
Improved death-in-service benefits and children's' pensions now included
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 8th May, 2008, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 4th November, 2009, in Cork, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The CADB is a dilution of the workers' benefits and conditions whilst removing administrative liability form the Company. The Unions believe that this cost-saving was the Company's main priority.
2. The Unions proposed red-circling existing employees on the DB scheme and introducing a Defined Contribution scheme for new entrants. They believed that this would financially benefit the Company over time but the management rejected the proposal and refused to negotiate.
COMPANY'S ARGUMENTS:
4. 1. The new scheme is very cost-effective and competitive and it provides greater predictability as to pension costs in the future (details supplied to the Court). Maintaining the DB element is critical.
2. The CADB has been accepted in Bray and Swords. The Company looked at a range of options to find what was best for both parties and consulted with the Unions.
RECOMMENDATION:
The Court has carefully considered all of the issues arising in this case.
It is noted that the new scheme is predicated on certain assumptions which, if correct, will result in no material worsening in benefits to the average member of the scheme.
The Court recommends that the unions accept the new arrangements but that the Company agree to a five yearly review of the scheme, against the assumptions upon which it is based. Any variations in the assumptions, which would significantly affect the projected level of benefits, should be addressed between the parties.
Signed on behalf of the Labour Court
Kevin Duffy
17th November, 2009______________________
CONChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.