INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Keogh
Worker Member: Mr Rorke
1. Sick pay scheme and pension scheme.
2. The Company was established in 1987. It manufactures custom-built air handling equipment and employs 64 workers.
In February, 1997, the Union wrote to the Company seeking discussions on the introduction of a defined benefit pension scheme and a sick pay scheme as provided for under Clause 4 of Partnership 2000. The Company replied in March, 1997 stating that it would be interested in discussing the schemes. Further correspondence took place but no agreement was reached and the issue was referred to the Labour Relations Commission. Conciliation conference took place on the 9th and 25th of March, 1998.
At the conciliation conference, the Company put forward the following proposals:-
A non-contributory sick pay scheme with an annual fixed
budgetof £2,000. The scheme would run on a calendar
year basis. No benefit would be payable in respect of the
first 3 days of any period of absence. Sickness benefit
would be paid to supplement social welfare benefit up to
85% of normal net pay.
Death-in-service benefit of twice salary to be introduced.
No further cost-increasing claims to be made during the
currency of Partnership 2000.
Following the conciliation conference, the Union proposed the following:-
A sick pay scheme to cover 3 weeks' sickness in any
one year, with 90% of basic pay less social welfare, no
pay for the first 3 days, and the usual conditions to apply.
On the issue of pensions, the Union indicated that it would not object to a defined contribution benefit scheme.
As the parties did not reach agreement, the dispute was referred to the Labour Court on the 9th of April, 1998, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 12th of June, 1998.
3. 1. The Company's offer of £2,000 for the sick pay scheme is unacceptable. It means that no sick pay benefits would be available in any rolling 12 month period once the £2,000 was used up. Effectively it is a "first come, first served" scenario. The Union's modified claim i.e., 3 weeks' sick pay cover providing for 90% of income in any 12 month period, is a step in the right direction and would indicate the Company's good intention. The cost to the Company would not be great.
2. While the Company's intention of providing a death-in-service benefit based on 2 years' pay is welcome, it has given no commitment to implementing a pension scheme. Clause 4 of Partnership 2000 provides for the introduction of pension/sick pay schemes where none exist. Although the Union originally sought a defined benefit scheme, it would not object to a defined contribution scheme.
4. 1. The Company operates in an extremely competitive market. It competes against multi-nationals and domestic companies, and the result has seen the Company's net profit margins average only 2.6% over the last 5 years.
2. Clause 4 of Partnership 2000 states:-
"Having regard to the cost and other implications of pension
and sick pay schemes, negotiations on these matters shall
be governed by the capacity of the enterprise to absorb the
cost involved and, additionally, in the case of sick pay schemes,
the possible implications for attendance."
The Company is currently not in a position to absorb the cost of both sick pay and pension schemes. It is prepared to introduce a sick pay scheme and death-in-service cover as already outlined, provided its costs-base can be retained at a competitive level. None of the Company's main competitors have sick pay or pension schemes. If the Company were to introduce such schemes, it would put it at a disadvantage.
The Court, having considered the written and oral submissions, recommends as follows:-
(1)Sick Pay Scheme
The Union proposal on sick pay to be implemented for 12 months,
and to be reviewed at the end of this period.
This claim to be reviewed at a future date. In the meantime, the Court notes
and supports the introduction of the death-in-service benefit of twice salary
Signed on behalf of the Labour Court
29th June, 1998______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.