INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
DIAGEO IRELAND LIMITED
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr Doherty
Worker Member: Mr Nash
1. Meal Allowance ' Pensionability'.
2. The Guinness Ireland Group Pension Scheme is a Defined Benefit Scheme and provides for Death in Service benefit, Child Benefit, AVC options and early retirement options for those over 50 years of age. The Pension Scheme defines pay as basic salary. No other allowances are included in pensionable pay unless they are specifically authorised by the Company.
Implications of the changes in the Finance Act of 2003 meant that unless drivers’ routes were in excess of 5 miles and over 5 hours away from their work base, there were no exemptions from tax of any of the meal allowances payable to drivers. The Company informed their Dublin-based drivers and their representatives that the meal allowances in their entirety were subject to taxation, while Provincial drivers, whose journeys exceeded the 5 hours/5 miles threshold would receive a tax-free entitlement for the amount of the allowance that was less than the revenue cut off point of €16.95 per day (as stipulated in the Revenue published IT54 document).
Following this the Drivers put forward a claim that the allowance be included in basic pay for the purposes of pension calculations, which would amount to an increase in pensionable pay of approximately €6,000 per annum per employee.
The dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 3rd April, 2006 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 27th July, 2006.
3. 1.The allowance is paid for all contracted hours in the annual hours contract and is also paid during annual leave.
2. Theallowance is subject to the full rigours of the revenue rules i.e. full taxation code and PRSI code.
3. The Union claim that the allowance should be treated as other allowances and be consolidated as salary. It has been transformed in time through IR negotiations and has no resemblance to what it previously yielded.
4. 1.The claim is cost -increasing and precluded under Section 1.5 of the Sustaining Progress Agreement.
2. The rules of the pension scheme are clear in that only amounts authorised by the Company can be included in pay for pension purposes and the Company sees no merit in the argument advanced by the Union in this case.
3. The Company cannot be held responsible for making up the shortfall resulting from changes in taxation arrangements.
The case before the Court concerns the Union's claim for the inclusion of a meal allowance into basic pay for the purposes of defining pensionable pay under the Company's defined benefit scheme. The Union submitted that the allowance should be included as pensionable pay on the basis that it is a taxable payment, is paid during periods of annual leave and is paid in respect of contracted annualised hours.
Having considered the matter, the Court sees no grounds to include meal allowances in pensionable pay and accordingly, rejects the Union's claim.
The Court so recommends.
Signed on behalf of the Labour Court
1st August, 2006______________________
Enquiries concerning this Recommendation should be addressed to Madelon Geoghegan, Court Secretary.