FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : BALLYFERMOT JOBS INITIATIVE - AND - A WORKER (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Mr Haugh Employer Member: Ms Doyle Worker Member: Ms O'Donnell |
1. Appeal of Adjudication Officer Recommendation No r-159363-ir-15/RG
BACKGROUND:
2. This dispute concerns the Worker's pension, which the Employer has stopped making contributions towards. This dispute was referred to a Rights Commissioner for investigation and recommendation. On the 8th February, 2016 the Adjudication Officer issued the following Recommendation:-
- "I do not have jurisdiction to issue a recommendation as the Department of Social Protection are not the Respondent for the purposes of the Industrial Relations Act but are the funder of the scheme."
On the 15th March, 2016 the Employee appealed the Adjudication Officer's Recommendation to the Labour Court in accordance with Section 13(9) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 3rd May, 2016.
UNION'S ARGUMENTS:
3.1. The pension contributions are a contractual right.
EMPLOYER'S ARGUMENTS:
4.1. The pension was funded by the Department of Social Protection, who gave instruction to cease the payments.
2. The Department of Social Protection should be the Respondent to the claim.
DECISION:
This matter came before the Court by way of an appeal brought by the Worker against a Recommendation of an Adjudication Officer. That Recommendation is dated 9 February 2016 and the notice of appeal was received by the Court on 15 March 2016. The Court heard the appeal on 3 May 2016.
There was no disagreement between the parties in relation to the relevant facts which can be summarised as follows. The Job Initiative (JI) is a labour market programme that supports long-term unemployed persons who are seeking to return to the workplace through the use of three-year community placements. The Respondent currently has 22 employees who are availing of the JI scheme. It also employs 2 team leaders, of whom the Worker is one. The scheme originally operated under the aegis of FÁS but came under the remit of the Department of Social Protection sometime in 2012.
The Worker commenced her employment with the Respondent on 9 July 2001. Her contract of employment did not make provision in relation an occupational pension arrangement at that time. However, because a fellow team leader/supervisor transferred into the scheme and the latter’s remuneration package include an occupational pension benefit, the Respondent successfully sought approval from FÁS in or around February 2003 to initiate an occupational pension arrangement for the Worker. The agreed arrangement was equivalent to the terms applied in the former Area Development Management (now Pobal) pension scheme, where the employer’s contribution is 10% of basic salary and the employee’s contribution is 5%. It appears that FÁS advised at the time that the employer’s contribution to the Worker’s occupational pension arrangement could be funded under a non-payroll subhead.
Although the Department of Social Protection conducted a due diligence exercise in 2012 when it assumed responsibility for the scheme administered by the Respondent, the aforementioned arrangement in relation to the Worker’s pension and the manner of its funding were not adverted to. However, in June 2015 it appears that officials from the Department requested clarification from the Respondent in relation to the funding arrangements the latter had in place in relation to the Worker’s pension contributions. Ultimately, the Department directed that the payment of the employer’s contribution should cease as it was not government policy to fund pension contributions for JI scheme employees. A letter dated 16 June 2015 from the Department to the Respondent, containing the following passage, was opened to the Court:
- “Clarification was also provided on the Department’s position regarding the additional payment currently being paid to one of the Job Initiative supervisors which is being funded from the Job Initiative ‘materials’ subhead. As outlined additional salary payments over the standard Job Initiative supervisor salary scale can no longer be sustained and the funding of a salary cost from a non-salary subhead does not comply with public financial procedures. The Department will sanction the May drawdown and thereafter will cease to sanction any further such payments.”
Determination
The Court has taken particular note of the fact that the Worker’s pension arrangement came into being as a consequence of an initiative taken by the Respondent in 2003 whereby it sought and was granted approval by its then funder, FÁS, to apply funds for that specific purpose. No new pension arrangements were initiated by the Respondent from 2003 to date. The Court is of the view that the Worker’s pension arrangement became a term and condition of her contract of employment and that it is red-circled as such.
The Court recommends that the Respondent, therefore, re-instate the Worker’s pension arrangement in full, backdated to the date of cessation of the employer’s contributions in June 2015.
The Court so recommends.
Signed on behalf of the Labour Court
Alan Haugh
12th May 2016______________________
JKDeputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Jason Kennedy, Court Secretary.