FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SIEMENS HEALTHCARE (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - UNITE THE UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Cryan Worker Member: Ms Ni Mhurchu |
1. Changes to the pension scheme.
BACKGROUND:
2. This case concerns the Company's decision to freeze its non-contributory defined benefit pension scheme, and replace it with a new defined contribution pension scheme. As agreement was not reached, the dispute was referred to the Labour Court on the 31st August, 2010, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 8th December, 2010, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. A fully-funded defined benefit pension scheme has always been a condition of employment for the Workers.
2. The Company imposed unilateral changes to this pension scheme without meaningful prior discussion with the Workers or their Union.
3.The Union believes that the Workers should be compensated accordingly.
COMPANY'S ARGUMENTS:
4. 1. The Company had fully briefed the Workers and the Union about the difficulties with thenon-contributory defined benefit pension scheme.
2. The Company decided that the most prudent course of action would be totransfer the accrued benefits into a new defined benefit pension scheme where the benefit would be prserved but frozen and then to introduce a new direct contribution pension scheme.
3.The Company's decision to make changes to the pension scheme - which was made at considerable cost to the Company - was made in the Workers' best interests.
RECOMMENDATION:
The Court had considered the submissions made by the parties to this dispute. It is noted that in the course of the hearing the Union confirmed that its claim was for a change in the funding arrangements of the new pension scheme. In effect the claim is for an arangment whereby the employer/employee contribution to the scheme would be on a ratio of 2:1. In particular the Union rely on Labour Court Recommendation LCR19851 (Maxol Ltd v SIPTU) in which the Court recommended a minimum funding of 10% by the employer and 5% by the employee. The employer contends that the Union had never previously advanced this claim. This is denied by the Union.
There is an absence of clarity on whether or not this claim was ever previously tabled. In that regard there is no record of such a claim having been formally served in he normal sense nor was it ever the subject of negotiation between the parties. There is no information before the Court on how this proposal could apply in practice or on what its effect might be on the benefits or structure of the scheme. In these circumstances the Court is unable to evaluate the validity or merits of this proposal. While the Court has considered remitting the matter to conciliation, having regard to the disposition of the parties at this stage the Court is satisfied that further discussions are unlikely to advance the resolution of the dispute.
Having regards to all the circumstances of this case, and the fact that the majority of affected employees have already opted to join the new scheme, the Court is of the view that the proposal put forward by the Company should be implemented in its present form.
However a full review of the scheme should be undertaken after it has been in operation for a period of four years. This review should be undertaken jointly by the parties using such expert advice as they consider appropriate.
Signed on behalf of the Labour Court
Kevin Duffy
16th December, 2010______________________
JMcCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jonathan McCabe, Court Secretary.