FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : DAIRYGOLD CO-OPERATIVE SOCIETY LIMITED - AND - SIPTU MANUFACTURING DIVISION DIVISION : Chairman: Mr Hayes Employer Member: Mr Murphy Worker Member: Mr McCarthy |
1. Introduction of a Defined Contribution Pension Scheme in September 2010 without agreement.
BACKGROUND:
2. This dispute concerns the Company’s decision to introduce a Defined Contribution Pension Scheme without agreement in September 2010. 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 29th October 2014, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 26th February 2015.
UNION’S ARGUMENTS:
3. 1. In May 2013 the Union was notified by a new employee that joining a Defined Contribution Pension Scheme was a condition of employment.
2. The Union asked Management why new entrants were not being entered into the Defined Benefit Pension Scheme and were told that all new entrants were placed in the Defined Contribution Pension Scheme since September 2010.
3. The Union said there is no agreement in place for new entrants to be entered into the Defined Contribution Pension Scheme and are requesting the immediate reinstatement of the Defined Benefit Pension Scheme for new entrants.
EMPLOYER'S ARGUMENTS:
4. 1. Prior to September 2010, the Employer had four individual Defined Benefit Pension Schemes, with a combined membership of 2,700. The schemes were underfunded and required a substantial capital injection.
2. Following receipt of actuarial advice from its Pension Advisors, the pension arrangements were judged to be unsustainable. The Employer was obliged to devise a Pension Strategy to protect both the existing members of the Defined Benefit Pension Schemes and the Company.
3. The Employer embarked upon an extensive consultation process with employees and their representative Trade Unions to outline the totality of the Pension Strategy it proposed for both existing and new employees.
RECOMMENDATION:
Having given careful consideration to the extensive submissions of both parties to this dispute the Court notes that the Company did not conclude a formal agreement with the Trade Union regarding the closure of the Defined Benefit Pension Scheme or on the structure and composition of the Defined Contribution Pension Scheme that replaced it. The Court is equally of the view that the discussions regarding the Company’s willingness to make up the funding shortfall in the Defined Benefit Pension Scheme took place in the context of its need to close that Scheme to new employees.
In that context the Court recommends that, in the context of industry standards, the parties engage on the structure and composition of the pension arrangements that apply to employees that have not been given access to the Defined Benefit Pension Scheme. Such discussions should be concluded within 26 weeks of the date of this Recommendation at which time any outstanding issues should be referred back to the Court for a definitive Recommendation.
The Court so recommends.
Signed on behalf of the Labour Court
Brendan Hayes
CR______________________
11th March, 2015.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran Roche, Court Secretary.