FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FMC INTERNATIONAL (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION UNITE DIVISION : Chairman: Mr Duffy Employer Member: Ms Cryan Worker Member: Mr Shanahan |
1. Defined Benefit Pension Scheme.
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Unions in relation to proposed changes to the Employer’s Defined Benefit Pension Scheme. The dispute refers specifically to approximately forty one Workers currently employed in the Company’s chemical manufacturing and distribution plant located in Cork. The Employer currently operates a Defined Benefit Pension Scheme however due to a culmination of several significant factors including increased operation costs amongst others; the Employer took the decision to cease its Defined Benefit Pension Scheme and to replace the scheme with a Defined Contribution scheme. The Employer strongly asserts that the Defined Benefit scheme is currently operating at a major loss and in order to ensure the future viability of the Company, the Employer has no alternative other than to close the scheme with immediate effect. The Unions refute the Employer’s position arguing that the Company remains profitable and furthermore the Employer is in a financial position to continue to fund the Defined Benefit Scheme. Agreement could not be reached at local level and the dispute was the subject of a Conciliation Conference held under the auspices of the Labour Relations Commission. Following Conciliation, a set of proposals were put forward to the Unions however these were rejected at the outset.
On the 9thJuly, 2012 the matter was referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing was held on 20thJuly, 2012.
UNIONS' ARGUMENTS:
3.1.The Employer is unilaterally closing the Defined Benefit Pension Scheme without prior negotiations with the Unions as to how it may be sustained.
2.The Unions are of the view that the Employer is in a position to fund the Scheme’s current deficit and to continue to fund the Scheme going forward.
EMPLOYER'S ARGUMENTS:
4.1.The Defined Benefit Pension Scheme is operating at a significant deficit and its future viability is no longer sustainable.
2.The Employer is not in a financial position to fund the Defined Benefit Scheme going forward and has made every effort to ensure that current members of the Scheme have been informed of the consequences of its closure and the alternatives available to them.
RECOMMENDATION:
Having considered the submissions of the parties the Court recommends that the proposals which emanated from Conciliation be modified as follows:-
Where an employee chooses to contribute 4% the Company will contribute 8%
Where an employee chooses to contribute 5% the Company will contribute 9%
Where an employee chooses to contribute 6% the Company will contribute 11%
The Court further recommends that in consideration of final agreement of all outstanding issues concerning the changes in the pension entitlement of those workers the employer should make a once-off contribution to the scheme of €1,500 per affected employee.
Signed on behalf of the Labour Court
Kevin Duffy
2nd August 2012______________________
SCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.