INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
TOP TECH LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr McHenry
Worker Member: Mr. Somers
1. 1. Introduction of Pension Scheme.
2. Improvements to Sick Pay Scheme.
2. The Company is a wholly owned subsidiary of the Fitzwilton Group and has been in operation since 1989. It provides a number of services for the engineering and electronics industry and employs a workforce of approximately 104 staff, of whom approximately 17 are permanent.
In 1991, the Union sought the introduction of a Pension Scheme and a Sick Pay Scheme. The Company agreed to introduce a life insurance scheme which provided one year's salary in the event of death in service. It also introduced a sick pay scheme which provided ten working days' benefit in any twelve consecutive months.
As part of a review of the Company/Union Agreement in 1999, the Union again sought the introduction of a pension scheme and improvements to the existing sick pay scheme. Management rejected the claims on financial grounds. The claims were the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 17th of February, 2000. However, agreement was not possible and the matter was referred to the Labour Court on the 15th of March, 2000 in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 28th of April, 2000.
3. 1. Introduction of Pension Scheme: Any pension scheme would be service based and would initially apply to approximately 17 people. The Company has made no attempt to examine the basis of the claim or the costings involved. Most modern progressive companies provide as a minimum a pension scheme for employees with service qualifications for entry.
2. A survey undertaken in 1998 by the Irish Pension Trust found that 84% of employees in pension plans are members of defined benefit schemes, while a mere 16% are covered by defined contribution schemes. The Union initially sought the introduction of a contributory defined benefit scheme but would not object to a defined contribution scheme.
3. Rennicks Ireland Limited bought Top Tech in 1997 and both are now part of the Fitzwilton Group. It is proposed to introduce a defined contribution scheme in Rennicks to which employees will contribute 4% and the employer will contribute 4%. The death in service benefit will be one year's basic pay for single people or three years' basic pay for married people. Employees must be aged between 25 and 65 and have completed at least two years' service. The Union is seeking the extension of the provisions of the Rennicks scheme to Top Tech employees.
4. Improvements to Sick Pay Scheme: 75% of Irish workers are covered by company sick pay schemes. The existing cover provided by the Top Tech scheme is niggardly and the Union's claim for 16 weeks' sick benefit after one year's service is modest viewed against the norm.
5. It is reasonable to assume that a high percentage of absenteeism emanates from the temporary employees who are not covered by any sick pay benefit. Only 17 of the existing production employees would qualify for the sick pay scheme. As permanent employees are only a small proportion of the total workforce, improvements to the scheme would not, therefore, have any adverse effect on absenteeism levels.
4. 1. Introduction of Pension Scheme: The Company acknowledges that the Union is not precluded under the terms of the National Wage Agreements from seeking the introduction of a pension scheme.
2. The Company's financial position prohibits the introduction of a pension scheme at this time. However, the Company has given a commitment to the Union that it will review its financial position early next year with a view to introducing a pension scheme. This is the best that can be offered in the circumstances.
3. Improvements to Sick Pay Scheme: Since the commencement of this year absentee levels have ranged from 8% to 12% (excluding two long-term absentees). When all absences of permanent staff are included, absentee levels range from 17% to 24%.
4. The unacceptably high level of absenteeism, coupled with the current skills/labour shortage, has considerably diminished the day to day production capacity of the Company. As a result, production lines have had to be stopped.
5. It is well established that in any enterprise where sick pay schemes are introduced or improved, absenteeism levels rise. Should this occur, the Company's commercial viability would be placed in serious jeopardy.
The Court having considered the written and oral submissions made by the parties finds as follows on the issues in dispute.
The Court is conscious of the Company concern in relation to high absenteeism and the view that an improvement in benefits may result in a further deterioration. The Court believes it should be possible for the parties to enter into discussion to explore means of reaching an agreement in relation to improving the sick pay scheme but in the context of addressing the Company requirements in this area. The Court recommends that the parties commence such discussions immediately.
The Court recommends that a pension scheme be put in position for these employees.
However, taking into account the financial position outlined, the Court recommends that this be put on hold and reviewed by the parties in January, 2001. If at that time the parties fail to reach agreement the matter can be referred back to the Court.
Signed on behalf of the Labour Court
19th May, 2000______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.