FULL RECOMMENDATION
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : IRISH LIFE GROUP LIMITED - AND - UNITE THE UNION DIVISION : Chairman: Mr Haugh Employer Member: Ms Doyle Worker Member: Ms Treacy |
1. Closure of DB Final Salary Pension Scheme and New DC Pension Arrangements.
BACKGROUND:
2. The case before the Court concerns a dispute between the Employer and the Union in relation to pension arrangements. The dispute relates specifically to the Union's claim for enhanced terms and conditions in the Employer's Defined Contribution pension arrangements following the closure of its Defined Benefit Final Salary Pension Scheme.
On the 15th April, 2019 the Union on behalf of its members referred the issue to the Labour Court, in accordance with Section 20(1) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 20th June, 2019.
The Union agreed to be bound by the Court’s Recommendation.
RECOMMENDATION:
Background to the Dispute
The first element of this dispute arises from a series of decisions taken by the relevant trustees of a two defined benefit (DB) pensions schemes to close those schemes to future accruals with effect from 30 June 2018. Irish Life Group Limited (‘the Company’) then proceeded to put in place defined contribution (DC) arrangements for the employees affected by the trustees’ decisions. The new DC arrangements commenced on 1 July 2018.
A dispute was referred to the Workplace Relations Commission (‘the WRC’) arising from the above changes. A comprehensive proposal issued from the WRC on 26 October 2018 that set out a range of employee contributions (4% to 9%) with corresponding employer contributions (18% to 21%). The WRC proposal also recommended the payment of three lump sums of 5% each in 2018, 2023 and 2028, respectively. This entire proposal was accepted and is being implemented by the Company. It was, however, rejected in a ballot of the Union’s members. The Union is seeking a recommendation from the Court for the following alternative range of contributions: employee contributions – 4% to 7%; employer contributions – 20% to 23%. The Union is also seeking payment of four additional lump sums of €8,000.00 each to be paid in July 2019, July 2020, July 2021 and July 2022.
In addition, in or about the same time, the Company took the decision to replace a hybrid DB/DC scheme (with 81 active members) with a new DC scheme. Those who had been in membership of the hybrid scheme were offered an enhanced transfer value (‘ETV’) for their accrued DB benefits in that scheme. 70% of the members accepted the ETV. The Union is seeking that the remaining twenty-four members (i.e. those who did not accept the ETV) be treated in like manner to their colleagues who had been members of the Irish Life Staff Benefits Scheme (one of the two DB schemes referred to in the first paragraph above). Specifically, the Union is seeking an employer contribution of 20% to match an employee contribution of 4% for the group of twenty-four workers concerned.
A further discrete issue concerning Direct Sales Staff (previously members of the Irish Life Staff Benefits Scheme) only also forms part of the dispute referred by the Union to the Court. There are approximately twenty employees in this group. A large element of their earnings is variable and consists of commission and bonus. At present 80% of their variable earnings are calculable for pension purposes. The Union is seeking a recommendation that 100% of the earnings of Direct Sales Staff be calculable for pension purposes.
The Company submits it has accepted and is implementing the WRC proposals in the full and that the new resulting new DC arrangements in their entirety are the best in class. It further submits that no employee has chosen to opt out of those arrangements. The Company is not agreeable to concede any of the further enhancements to those arrangements being sought by the Union.
Recommendation
Both Parties furnished the Court with extensive and detailed submissions in relation to all aspects of the within dispute. Having given very careful consideration to the Parties’ written submissions and oral presentation to it, the Court finds that the new DC arrangements that are now in place in the Company are indeed ‘best in class’. Accordingly, the Court finds that the claims advanced by the Union have not been made out. Therefore, the Court recommends against concession of those claims.
The Court so recommends.
Signed on behalf of the Labour Court
Alan Haugh
18th July 2019______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.