LCR15501

FULL RECOMMENDATION CD/96/593 RECOMMENDATIONNO.LCR15501 (CC95/1086) INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : KILKENNY TEXTILE MILLS (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr Keogh Worker Member: Ms Ni Mhurchu

SUBJECT:
1. Pension scheme.


BACKGROUND:

2. The Company is engaged in the production of spun yarn and employs 84 workers.

In 1994/1995 discussions took place between the parties under the terms of the Programme for Competitiveness and Work concerning the introduction of a Company pension scheme. Agreement was reached and the scheme was introduced in March, 1995 on the basis of an equal employer/employee funding contribution of £5 per week.

The dispute before the Court concerns the Union's claim on behalf of 5 workers who had made personal pension arrangements prior to the introduction of the Company's scheme. The Union is seeking that the Company makes a contribution of £5 per week into the workers' schemes.

The Company rejected the claim and the matter was referred to the Labour Relations Commission. A conciliation conference was held on the 31st October, 1995. As agreement could not be reached the dispute was referred to the Labour Court on the 14th November, 1996 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 25th March, 1997, the first available date suitable to both parties.


UNION'S ARGUMENTS:

3. 1. The workers concerned would be placed at a considerable financial disadvantage if they abandoned their private schemes to join the Company's scheme.

2. Concession of the Union's claim would involve no additional cost to the Company.

3. The Company's concern regarding the possible knock-on effects of conceding the Union's claim is not justified.

4. Attempts by the Union to negotiate the introduction of a pension scheme prior to 1993 proved fruitless. In the circumstances it is unfair to penalise those workers who had the foresight to make private pension arrangements.


COMPANY'S ARGUMENTS:

4. 1. The Company introduced an occupational pension scheme by agreement with the Unions in the plant and has fulfilled its obligations under the PESP.

2. The pension broker chosen by the Union is opposed to the concession of this claim.

3. Concession of the claim will undermine the Company scheme, and has important implications for the operation of pension schemes in general. The Company has been unable to find any employer operating a group scheme who makes contributions to external schemes.

4. Concession of the claim leaves open the possibility that the Company would have to bear the cost and burden of administering contributions to 26 or indeed 72 different schemes. This scenario cannot be contemplated.

RECOMMENDATION:

The Court having considered the written and oral submission does not recommend payment be made to personnel who had private pension schemes prior to the introduction of a Company scheme.

However, the Court would recommend that the parties work together to find a means of integrating the schemes into the Company scheme.



Signed on behalf of the Labour Court



Finbarr Flood
18th April, 1997______________________
F.B./D.T.Deputy Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.