FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SHANNON AEROSPACE LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Doyle Worker Member: Mr McCarthy |
1. Payment of 50% of Private Health Insurance.
BACKGROUND:
2. This dispute concerns the changes made to the Company's contribution to private health insurance. 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 7th January 2015, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 5th March 2015.
UNION’S ARGUMENTS:
3. 1. As part of the contract of employment Shannon Aerospace Ltd. (SAL)/Lufthansa Technik Shannon Ltd (LTSL), under the VHI heading it states that,"Membership of our VHI Group Scheme is optional but available to all employees. Should you join the VHI the Company will contribute 50% of the employee contribution for Plan B".
2. The Union sought the agreed level of 50% contribution of VHI Plan B (Healthplus Extra) at €1,048 for 2014 and €1,125 for 2015.
3.Lufthansais a profitable company and can afford this contractual obligation.
EMPLOYER'S ARGUMENTS:
4. 1. The Employer is not seeking to withdraw or reduce the benefit payable to employees. It is merely seeking a new, more reasonable, benchmark against which to determine future employer contributions.
2. The Employer contends that its current contribution to private health insurance is highly competitive and should not be increased further at this time.
3. The Employer already makes a sizeable contribution to this benefit and wants to ensure that this can continue in a sustainable and affordable manner. The current benchmark is no longer relevant, the increases in the cost of private health insurance of recent years are not sustainable and cannot continue to be supported by the Company.
RECOMMENDATION:
The matter in dispute before the Court concerns the changes made to the Company’s contribution to private health insurance.
Included in the terms and conditions of employment for employees is the provision on a voluntary basis of a payment by the Company of 50% of employees individual contribution to VHI Plan B, or alternative from other private health insurance schemes. Due to the difficult economic environment facing the Company coupled with the significant escalating costs of private health insurance cover in recent years, it decided to enter discussions in 2010 with the Union to amend the level of contribution provided to employees. When these discussions failed to yield results the Company capped the contribution in 2014 at 2013 levels.
The Union sought restoration of the shortfall in Company contributions for 2014 and 2015 before it would agree to engage with the Company on the issue.
Having considered the submissions of both parties the Court recommends that on acceptance of this Recommendation by both parties the Company should reinstate the shortfall in contribution payments for 2014 and 2015, (valued at a total shortfall of €259). This payment should be offset against employee private health insurance contribution costs in 2016. In return, the Court recommends that both parties should commit to meaningful discussions on the Company’s proposals in the context of acknowledged substantial increasing costs in the provision of private health insurance cover. The Court recommends that these discussions should be completed by no later than the end of June 2015, in the event that the parties do not reach agreement on the issue, the matter may be referred back to the Court for a definitive Recommendation.
The Court so Recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
CO'R______________________
30th March 2015Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Clodagh O'Reilly, Court Secretary.