INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
LIEBHERR CONTAINER CRANES
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
TECHNICAL, ENGINEERING AND ELECTRICAL UNION
Chairman: Mr Flood
Employer Member: Mr Keogh
Worker Member: Mr O'Neill
1. Interpretation of a clause in pension scheme.
2. Liebherr Container Cranes Limited was established in Killarney in 1958. It currently employs 425 employees. The Company's core business activity is the construction and installation of container and harbour cranes. The cranes are sold to Port Authorities, Shipping Companies and to Railway/Freight terminals.
Liebherr Container Cranes Limited operates in a highly competitive international tender market, with more than forty competitors world-wide, particularly from low cost economies such as China, Korea and Eastern Europe.
In 1969, the Company introduced a defined benefit pension scheme for its employees. Employees who joined the scheme commenced contributions on 1st April, 1969 at the rate of 5% of pensionable earnings at that time. It was agreed that employees and the Company would split the contributions to the pension scheme on an equal basis.
This dispute centres on a difference of interpretation between the parties on the duration of the employee's contributions. The Union believes that members who have 40 years service and who were members of the Pension Scheme since its inception in 1969 should not pay any further contributions for the remaining years of their service. The Company continue to make the deductions.
Discussions took place locally but agreement was not reached. The matter was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 26th of January, 2001.
As no agreement could be reached, the matter was referred to the Labour Court on the 22nd of April, 2002, under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 10th of December, 2002 in Kerry.
4. 1. Following a request by SIPTU to have a number of improvements made to the company pension scheme, discussions took place with Union representatives over a series of meeting to discuss these improvements. Four main changes to the Pension Scheme were negotiated with SIPTU culminating in an agreement between the parties in 1999.
2. The employer put over €1.27 million into the fund over a five year period.
3. The Company is currently experiencing difficulties in securing new business in a much depressed market for its products. Competitive pressure from competitors with much lower costs has never been more intense. The Company is suffering extreme competition from companies in China who have now captured upwards of 80% of the market.
4. One of the provisions of an agreement reached with the trade unions in the Company in May 2001 is that there will be no further cost increasing claims of any nature served against the Company for the duration of the PPF with the exceptions of the revisions to the PPF.
3. 1. Negotiations were concluded and put to ballot in December, 1999.
2. The Union are satisfied by their actions in the first five weeks of the amended agreement, the Company in not deducting pension contributions from those most senior members of the staff, were at one with them.
3. The manner in which the Company introduced deductions, without even an explanation or apology, was totally unacceptable.
The Court considered the written and oral submissions made by the parties and the imput from the pension scheme advisor.
There is a difference of interpretation of the 1996 changes to the pension scheme, in relation to member's contributions.
The Company argue that the clause in the agreement means that members only qualify to cease paying contributions when they have made 40 years contributions.
The Union argue that the 40 years should include the years credited for service prior to 1969, resulting in employees ceasing contributions after 40 years of service.
It would appear that the Union believed that the Company had financed these credited years but management are adamant that this was never the intention.
The Court, having examined the documents and particularly the ballot paper voted on, is satisfied that the intention was that contributions would only cease after 40 years of contributions having been made to the scheme.
As it is clear that 40 years contributions have not been made to the scheme for the reasons outlined above, the Court cannot recommend concession of the Union claim in this case.
Signed on behalf of the Labour Court
10th January, 2003______________________
Enquiries concerning this Recommendation should be addressed to Helena McDermott, Court Secretary.