FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : JOHN CRANE IRELAND LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Cryan Worker Member: Ms Tanham |
1. Company decision to cease contributions to defined benefit and cash balance pension scheme from 31st December, 2012 and proposal to introduce defined contribution arrangement instead.
BACKGROUND:
2. This dispute concerns the Company’s decision to cease contributions to the Defined Benefit Pension scheme and to introduce a Defined Contribution Plan from 1st January, 2013. This dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 8th November, 2012, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 3rd January, 2013.
UNION’S ARGUMENTS:
3. 1. The Company made a unilateral decision to cease contributing to the pension scheme in direct contravention of the Company/Union Agreement.
2. The Company referred the issue to the Labour Relations Commission but were not prepared to negotiate at the conciliation.
3. This is a direct attack on the Terms and Conditions of Employment of the Union’s members.
EMPLOYER'S ARGUMENTS:
4. 1. Defined Benefit Pension schemes have come under increasing pressure in recent years as the cost of maintaining these pension schemes continues to increase.
2. The original Defined Benefit scheme was established in 1980, when the Defined Benefit model was used for most companies setting up pension schemes.
3. Despite enormous increases in contributions (both Company and Member) the solvency position of the scheme has continued to deteriorate, while the cost of maintaining the scheme has continued to increase and has now reached a level that cannot be supported.
RECOMMENDATION:
It appears clear to the Court that there has been no meaningful engagement between the parties on either the need to close the defined benefit scheme or on the structure of replacement arrangements. It is neither helpful nor desirable to seek to apportion blame for this failure at this stage. Rather, the priority of both sides should now be to engage in that exercise as a matter of urgency.
The Court recommends that the Union, with the assistance of its own expert advisors should meet with the Company and its advisors to review the reasons underpinning the decision to close the DB scheme. The parties should also negotiate with a view to identifying alternative arrangements that can be put in place which provide the optimum level of benefits having regard to available resources. This engagement should commence immediately and should conclude by 31stJanuary 2013.
In the interim the Company should underwrite death-in-service benefits.
Signed on behalf of the Labour Court
Kevin Duffy
CR______________________
7th January, 2013Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran Roche, Court Secretary.