INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
FRUITFIELD FOODS LIMITED
- AND -
Chairman: Ms Jenkinson
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. New Pension Scheme.
2. The Company employs 142 workers. It was established in July 2002 following a Management buy out of the former Nestle manufacturing business in Tallaght. All staff employed by Nestle had access to Defined Benefit Pension Scheme at the time of purchase. The new owners agreed to make that scheme available to the existing Nestle pension scheme members for one year by which time the Company would establish a replica scheme for them in July, 2003. The Company introduced a Defined Contribution Scheme from 1st January, 2003. This is the scheme that is available to all employees of the Company who have been made permanent in July, 2002 and those who join the Company in the future. The Union objects in principle to the introduction of a Defined Contribution Scheme. The dispute was referred to the Labour Relations Commission. A conciliation conference was held but agreement was not reached. In February, 2003 the dispute was referred to the Labour Court by the Labour Relations Commission, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 2nd April, 2003.
3. 1. The imposition of a Defined Contribution Schemes represents a very serious and dramatic change in workers' pension entitlements. The scheme transfers the burden of risk from the employer to the employee and provides less certainty and security for workers.
2. The operation of two different pension schemes in the Company will be divisive. The Union seeks to have the same pension entitlements applied to new workers as those which are already in existence for current staff.
4. 1. The Company has honoured its commitments to former Nestle workers but is not in a position to make a Defined Benefit Scheme available to new employees.
2. The Company is currently in a loss making situation. The extension of a Defined Benefit Scheme to new employees has the potential to seriously impact on the Company's finances, and as a start up business the Company cannot put itself in that position.
3. The Company's Defined Contribution Scheme has levels of contribution that are very generous relative to comparable schemes in the market.
4. The Company does not accept that the existence of two pension schemes will cause a great division between new and existing staff. It is not unusual for business to have two schemes.
The Court has considered the submissions of both parties. The Company is under new ownership following a management buy out. The Union object to the Company introducing a defined contribution pension scheme for those employees who have been made permanent since the new employers took over and seek to retain the existing defined benefit scheme for all employees past, present and future.
The Court has examined the benefits of the proposed scheme for the claimants and is of the view that it is not out of line with pension schemes in new Companies and therefore, endorses the Company's proposal.
The Court so recommends.
Signed on behalf of the Labour Court
9th April, 2003______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.