Complainant

Respondent

Anonymised Parties

A Craft Worker

A Drinks Company

Representatives

SIPTU

IBEC

Act

Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

CA-00042197-001

28/01/2021

The complainant commenced employment with the respondent on 8th November 1976. He is employed as a ‘Leading Hand Painter’.

The dispute concerns the application of an agreement at the point of retirement.

A restructuring took place within the company in 1996.

Part of the agreement at that time dealt with entitlements upon retirement and this is the element in dispute.

Under the restructuring, the complainant’s group sought to have its role upgraded from Grade B to Grade C by means of a job evaluation process, but this was unsuccessful.

It was acknowledged at the time that, in the future, it was unlikely that the painters’ role would change sufficiently to meet the criteria for that upgrade (to grade C).

It was therefore agreed that if that happened, the remaining members of the painter’s group would be awarded a 4% increase of pensionable pay upon retirement.  

All other named employees received this, the last of whom retired in 2008.

Management insists that the complainant effectively got the Craft C rate and that this precludes him from receiving the 4% upon retirement but this calculation is based on an incorrect interpretation of the Agreement.

Throughout the period of his employment the complainant ’s earnings have increased in line with national/local pay increases etc.

In 2012, the Crafts Group agreed to join the company’s scheme which determined performance pay and an annual cash bonus.

However, the company did not include the complainant in the agreement as the painter’s role was not deemed to be a “front-line / core” role. Since then, the complainant (the only employee on site not included in the agreement) has received an average of any annual pay increase agreed on site (but no cash bonus to date).

Management has not applied nor recorded any subsequent wage increases notionally to the Craft B or C rates. This distorts the picture.

Had such increases been notionally applied to the Craft rates it would be clear that the complainant remains at Craft Grade B.

The Agreement was an acknowledgement that the painters could not and would not reach the Craft C rate. The increases in pay achieved over time should have been notionally applied to the Craft Grades B and C which would confirm that the complainant has not achieved Grade C.

The complainant ’s memo shows that he was promised Grade C (4%) on retirement.

The company argues that the complainant has achieved Grade C through the cumulative effect of national and local pay increases, yet it is clear that the only way a role can upgrade from B to C is through the company’s job evaluation process.

(The respondent recited the background to the complaint which is as set out in the complainant’s statement).

The complainant believes that the Agreement entitles him to receive a further 4% increase on reaching retirement. The Company disagrees and is of the view that he would only receive the pension benefit of “C” rate (4% on basic pay) on retirement if he had not received this in his own right before then.

This is evidenced by the communication to the company’s payroll department from the Respondent’s then HR business partner in August 2001, (Attached to the submission).

The other painters referred to in this agreement who retired in 2004 and 2007 respectively, did not receive a 4% increase to their pay on retirement as they had already reached the “C” rate in their own right.

Their pay on retirement was substantially less than that of the Complainant.

The craft rates were last updated in 2010.

Painters are a B grade. The complainant’s base pay is €61,479 which not only exceeds the maximum Craft C rate of €49,477.48 on basic pay alone but he is also exceeding the Leading Craft C rate of €54,427.88.

In 2017 following a referral to the Labour Court, a new entrant basic craft rate of €47,342 was implemented. This has subsequently been increased to €48,645 in line with pay increases.

The Respondent therefore does not believe the agreement entitles him to a further increase on reaching retirement as he has already far exceeded the ‘C’ rate.

It is the Respondent’s position that the complainant is not entitled to receive the pension benefit of ‘C’ rate on retirement as he has received this in his own right before then and has far exceeded not only the Craft C rate but the Leading Craft C rate on basic pay alone.

This was an interesting case in that there was considerable merit in each party’s submission.

The complainant relied on the 2001 agreement.

In a memorandum from the HR Manager in August 2001 it was confirmed that the complainant was.

‘To receive the pension benefit of C Rate (4% on basic pay) if he does not receive it in his own right on retirement.

The union has submitted that this established a qualifying criterion of the complainant actually being re-graded to Grade C, something generally considered to be unlikely in 2001 when the agreement was made, and if he had not been formally re-graded the entitlement to the current claim is triggered.

Thus, the purpose of the agreement was to ensure that he was not disadvantaged in his pension as a result of the aftermath of the re-structuring and re-organisation.

This is not an unreasonable rendering of the terms of that letter.

The respondent on the other hand says that, as a result of general pay movements the obligation foreseen by the agreement to the complainant has been met and exceeded and that the terms of the 2001 agreement have been overtaken by events.

Thus, the matter for decision is whether the 2001 agreement required formal assimilation to the higher grade, (as the union claims) or the simple attainment of the rate applicable to that grade (or better). I note the respondent’s submission that previous retirees who fell into the same category as the complainant did not receive the 4% and for the same reason as it argues here.

It might be possible to decide this on the basis of a quasi-legal interpretation of the correct meaning to be attributed to the 2001 texts. Industrial relations practitioners are no strangers to battles on the true meaning of this or that provision in an agreement.

However, this was not an agreement written and carefully scrutinised by the parties for textual precision. The key document was a letter written by the HR Manager in good faith, little thinking, one suspects, that it would become the subject of an employment tribunal hearing twenty years later.

For that reason, perhaps, the text is ambiguous. It refers to the ‘C rate’. The complainant’s position is that a person cannot be on the C rate unless they are formally graded as a C grade worker. There is merit in that argument.

However, in general, industrial relations agreements, unlike statutes, should be accorded a wider meaning than that to be simply derived from a narrow construction of words written as part of a regular communication by a HR Manager.

In my view, the clear intention was that the complainant would not be disadvantaged over a Grade C worker and that has turned out to be the case, even if it has come about by accident rather than design.

The central pillar of the agreement was an equitable one.

Looked at a different way, applying the complainant’s interpretation would actually leave him much better off that the hypothetical Grade C (I understand there is no-one in that grade.) That would not be an equitable outcome, even in theory, and therefore it would breach both the spirit and the intention of the 2001 agreement

Accordingly, while I do not uphold the complainant’s specific claim, I recognise that it has some merit.

There has been an element of expectation created by the ambiguity and I make my recommendation accordingly.

I do not uphold the complainant’s claim for payment of a further 4% pensionable increase.

However, for the reasons set out above I recommend he be paid €2,500.00 in final settlement of the matter.

Pension, Grading, Interpretation of agreement