FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : MUSGRAVE LTD - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Hayes Employer Member: Ms Connolly Worker Member: Ms O'Donnell |
1. Company Decision to Close Musgrave Ltd Pension Scheme to Future Accrual from 31 December 2016
BACKGROUND:
2. This dispute involves a claim regarding the Company's decision to close the pension scheme to future service accrual. 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 17th December, 2011, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 14th March, 2017.
UNION'S ARGUMENTS:
3.1. The closing of the pension scheme to future service accrual is a unilateral change to the Worker's terms and conditions. The Company refused to genuinely engage in negotiations on the change.
2. Pensions are deferred wages and our members expect to receive the benefits associated with their scheme as part of their deferred wages.
3. The transfer from a defined benefit scheme to a defined contribution scheme involves the transfer of risk from the employer to the employee.
COMPANY'S ARGUMENTS:
41. If the Scheme's liabilities were to grow to the levels predicted, this would threaten the Company's ability to develop and grow its business, to protect the livelihood's of its employees and to ensure that Scheme members' accrued entitlements are appropriately funded over time such that pensions are paid to members when they fall due.
2. The Company has engaged with all stakeholders, the Trustees, the Members and the Union in a thorough and timely fashion.
3. The new pension arrangements and provision of a defined contribution scheme, which are market leading, ensures that members' pension expectations are the same or better than if no changes were to be made to the Scheme.
RECOMMENDATION:
The Union should acknowledge that the Company is not prepared to support the current defined benefit pension scheme beyond 31 December 2016 and accept its closure for the accrual of future service after that date on the terms outlined to the Court.
However the Court further finds that the parties should engage in intensive discussions over a six week period to agree the terms of a replacement scheme that will provide the affected staff with a comparable level of pension cover going forward.
Should the parties fail to agree on a replacement scheme before 28 April 2017 the Court will issue a definitive recommendation on the substantive matter in dispute between the parties.
The Court so recommends.
Signed on behalf of the Labour Court
Brendan Hayes
27th March 2017______________________
JKDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jason Kennedy, Court Secretary.