INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
INDEPENDENT NEWSPAPERS LIMITED
- AND -
DUBLIN PRINT GROUP OF UNIONS
Chairman: Ms Owens
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. Pension indexation.
2. On the 28th of May, 1997, the Group of Unions submitted a claim to the Company for the indexation of pensions and the introduction of a profit sharing and/or an employee share options scheme. The Unions' claim is on behalf of 650 staff members, 318 pensioners and 47 deferred pensioners, who are due to receive pensions from the age of 65. The present pension scheme, which was introduced in 1959, is a defined benefit scheme which is not integrated with a state pension. The employees contribute 5% while the employer contributes 8.1%.
A number of meetings were held at local level to discuss the claims. As no agreement was reached a conciliation conference was held at the Labour Relations Commission on the 7th of April, 1998. As agreement was not possible the issue of pension indexation was referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Group of Unions reserved their position on the issue of profit sharing/employee share options scheme. The Labour Court investigated the claim on the 2nd of June, 1998.
3. 1. A survey, which was carried out in 1997 by the Irish Association of Pension Funds, shows that 41% of schemes had in-built indexation while a further 44% gave adjustment at the discretion of the Trustees. This employer is, therefore, out of line with the majority of employers.
2. Senior Management receive basic salaries of £150,000, pension contributions of 20% plus bonus and share options. There is no indication that Management contribute to their own pensions. In 1991 thirty five executives separated from the main pension scheme which implies that they have been offered better terms than those which apply in the main scheme.
3. The Company is a highly successful and profitable Irish multi-national whose success has been contributed to by present and past employees. It is not unreasonable that staff who have given 40 years' service to the Company should have their pensions protected by 5% or by the cost of living, whichever is the lower.
4. The Company's contribution of 8.1% is modest in comparison with the majority of schemes where employers contribute 12% to 15%. An increase by the Company of 2% to 3% in contributions and a phased arrangement for back-funding would be well within the financial capacity of the Company.
4. 1. It has been agreed that the Unions' claim is being developed under the terms of the Partnership 2000 agreement. The claim is not appropriate under Clause 4 of the agreement as the Company's pension scheme has the most generous and favourable terms among its competitors (details supplied to the Court). It is, therefore, not "substantially out of line with appropriate standards in comparable employments".
2. The cost of the Unions' claim is prohibitive. It amounts to £30.988 million in the first five years and a further £0.757 million per year thereafter. The Company cannot absorb the cost of the claim as it would undermine its competitive position, thereby undermining the security of employment, pay and conditions currently enjoyed by staff.
3. Clause 7 and Chapter 9 of the Partnership 2000 agreement provide for voluntary and non-confrontational negotiations on productivity measures which may offset the cost of the claim. The parties should enter into meaningful negotiations on the establishment of 'INTERNATIONAL BEST PRACTICE' which may be to the mutual advantage of all parties.
The Court, having considered the comprehensive submissions of the parties, together with the responses made at the hearing, believes that there is merit in the claim as set out by the Unions.
The Court believes that the claim falls to be considered under Chapter 9 of Partnership 2000. The Court, therefore, recommends that the parties meet to negotiate a settlement within the context of Chapter 9.
Signed on behalf of the Labour Court
29th June, 1998______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.