INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Murphy
Worker Member: Mr Nash
1. Dispute concerning the status of the pension scheme, the continuation of the voluntary severance package (severance package and the voluntary early retirement scheme), the proposal to buy out the Share Option Scheme, the staffing requirements as a result of the repatriation of functions.
2. The dispute was referred to the Labour Relations Commission. A Conciliation Conference was held but agreement was not reached. The dispute was referred to the Labour Court on the 19th September, 2005 in accordance with Section 26(1) of the Industrial Relations Act, 1990. Court hearings were held on the 4th and 17th November, 2005.
The parties requested the Court to adjudicate on a number of issues arising on foot of the pending sale of the shares in Irish Shell Limited by the Shell Group to Topaz Energy Limited.
The issues in dispute are as follows:-
•The status of the pension scheme;
•The continuation of the voluntary severance package (severance package and the voluntary early retirement scheme);
•The proposal to buy out the Share Option Scheme
Central to this dispute is the issue of whether or not there is a change of employer as a result of the sale of the shares. The share sale process is due to be completed on 30th November 2005. The Company stated to the Court that it was not possible to extend this date for legal/contractual reasons. However, it stated to the Court that the sale of shares does not come within the terms of the Transfer of Undertakings Regulations 2003 and, therefore, that there is no change of employer. The Union acknowledged this position and sought confirmation of it in writing from the Company.
The Union expressed concern regarding the short time scale prior to the date of the share sale and stated that it does not have sufficient time to assess and evaluate the potential impact, if any, arising from the share sale which of itself may trigger irreversible changes to pension benefits for the future. Therefore, it sought an extension of the 30th November 2005 date.
To allay the concerns of the Union, the Company was willing to guarantee that the terms and conditions of employment would remain unchanged (with the exception of the Share Option Scheme) until 31st March 2006. In addition, it proposed immediately to provide the Union and its members with current pension data from its actuaries and to provide for independent expert financial/pension advice to each member of staff. The Company was willing to pay for such advice up to a total estimated cost of €42,000.00.
The Court notes that following the share sale, as the Company will no longer be a part of the Shell Group and consequently no longer have access to a stock exchange listing, the existing Share Option Scheme cannot remain in place and therefore, the Court recommends that negotiations should commence on payment for the value of the Share Option Scheme for all of 2005 and on a compensation payment for the buy out of the Scheme.
The Court recommends that two issues should be addressed before the Company’s 30th November 2005 deadline; (i) identification of any possible implications triggered by the share sale itself for the Irish Shell Defined Benefit Contributory Pension Scheme, with the assistance of the relevant independent expertise and (ii) negotiations and settlement of Union’s claim concerning the Share Option Scheme.
The Court endorses the Company’s proposal that terms and conditions of employment at the Company will remain unchanged (with the exception of the Share Option Scheme) until 31st March 2006. Specifically this means that:
oEmployees will continue to have access to the Irish Shell Defined Benefit Contributory Pension Scheme and accrue benefits until 31st March 2006.
oThe deadline for making decisions regarding the Enhanced Transfer Values will be extended to 31st March 2006.
oNo compulsory redundancies will take place before 31st March 2006.
In the context of the share sale going ahead on 30th November 2005 the Court recommends that immediate action, as proposed by the Company, must take place including every effort being made to provide as much detail as is required by the Union and its members as soon as possible to allow time for meaningful negotiations to take place in relation to the future structure and status of the Pension Scheme. Such negotiations must be completed prior to the 31st March 2006 deadline.
The Court further recommends that the parties should enter into immediate and meaningful negotiations under the auspices of the Labour Relations Commission with a view to formalising agreement on all remaining issues in dispute. Negotiated compensation payments should be agreed in full and final settlement of all of the issues in dispute with both Irish Shell and Topaz Energy Limited.
The Court notes that Shell shall be observing the process to its conclusion and accordingly recommends that the person appointed by Shell to ensure overall compliance with the commercial agreement with the Topaz Group should act as an observer to assist with the implementation of the negotiating process as provided under the Company/Union agreement to conclusion and to ensure that Shell’s reputation and brand value are protected.
The Court recommends that both sides must co-operate with the agreed Company/Union procedures and fully abide by the terms of the Company/Union agreement.
The Court so recommends.
Signed on behalf of the Labour Court
21st November, 2005______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.