FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MEDITE IRELAND LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Marie Worker Member: Ms O'Donnell |
1. Pension Scheme Issues
BACKGROUND:
2. This dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Workplace Relations Commission. As agreement was not reached the dispute was referred to the Labour Court on 12 July 2016, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 28 October 2016.
UNION'S ARGUMENTS:
3. 1. That the 2.5% deducted from the Union’s members in the period between January 2011 and July 2015 be reimbursed, as agreement on a funding proposal was not reached until a ballot on LCR 20949 in 2015.
2. That clarification of the timing of the pension scheme funding proposal and clarification that all elements of the funding proposal will be revisited at the conclusion of the funding proposal be forwarded by the Company.
COMPANY'S ARGUMENTS:
4. 1. LCR 20949 recommended that the 2.5% increase should now be paid to all employees encompassed by LCR 20106 with effect from the date of acceptance of the recommendation.
2. SIPTU confirmed the date of acceptance to be 21 July 2015 and that monies due to employees under LCR 20106 should be paid from this date. The Company proceeded on this basis. The Company accepted and implemented the terms of the Recommendation in good faith and has incurred significant costs in doing so.
RECOMMENDATION:
The issue before the Court concerns two issues:-
- (i)Payment of 2.5% for the period from January 2011 to 20thJuly 2015
- (ii)Clarification on the timing of the Company’s pension deficit funding proposal and clarification that all elements of it will be revisited at the conclusion of the funding proposals
In 2011 the Court recommended in favour of the 2.5% increase retrospective to 1stApril 2009. However, this was not implemented at the time as the Company had to deal with a significant deficit in its pension scheme. In November 2011, following discussions between the parties on how to deal with the deficit, the following was agreed:-
- a)a payment of the 2.5% increase due to be paid to employees for the period 1stApril 2009 to 31stDecember 2010
b)payment of the monetary value of the 2.5% increase from 1stJanuary 2011 to be paid to fund the deficit in the Company’s pension scheme
While the latter issue should have been addressed within a period of two months, by early 2015 as the issue of the deficit in the Company pension scheme continued without resolution, the matter was referred to the Court. The Court in LCR 20949 recommended as follows:-
- 1)the 2.5% increase should be paid to all employees encompassed by LCR20106 from the date of acceptance of the recommendation (the Recommendation was accepted with effect from 21stJuly 2015),
- 2)with effect from the same date the mandatory member’s contribution should be increased from 5% to 7.5% of pensionable pay.
Having given careful consideration to the positions of both sides, the Court is of the view that LCR 20949 dealt with the issue of the outstanding element of the 2.5% pay increase between January 2011 and July 2015. Moreover, the Court notes that the Company’s funding proposal of the deficit in the pension scheme included a sum of 2.5% of total payroll costs from 1stJanuary 2011. The funding proposal agreed with the Pensions Authority covers the period up to 2023.
The Court notes that prior to the hearing, there was a certain lack of clarity regarding the level of funding which was included to fund the deficit in the pension scheme. The Company has committed to provide information to the Unions to demonstrate that 2.5% of total payroll costs (as distinct from 2.5% of pensionable pay) has been paid in to fund the pension deficit and confirmation that the current proposal will run until 2023. The Court recommends that this information should be supplied to the Unions without delay.
On the basis of the clarity given to the Court, it is satisfied that LCR 20949 has been implemented in accordance with its terms and therefore does not find merit in the Unions claim for payment 2.5% retrospective to January 2011.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
1 November 2016______________________
MNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Neville, Court Secretary.