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 O'Neill
1. Pension improvement.
2. Kingspan Limited is a multi-national company engaged in the manufacturing of prefabricated cladding for commercial buildings. The Union’s dispute before the Court is that the Pension Scheme is out of line with similar companies and it is seeking an increase in the level of contributions from 5% to 7.5% if matched on an individual voluntary basis by employees. The Pension Scheme that currently operates is a Defined Contribution Pension Scheme of 5% contribution from both the employees and the Company. The Company does not agree that its pensions scheme is out of line. The Company did, however, offer to increase the contribution to 5.75% subject to changes in work practices. The Union regard the offer of a 0.75% increase as completely inadequate.
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 16th December, 2005, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 26th July, 2006.
3.1 The Union contends that the workers Pension Scheme is deferred wages paid upon retirement and it believes that it is incumbent upon an employer to ensure that employees retire with adequate earnings to protect them in their retirement. A defined contribution pension capped at 5.75% will not achieve this objective. The 0.75% increase is conditional upon workers accepting substantial alterations to their terms and conditions of employment.
2. The Company is an extremely profitable company and according to the Annual Report, profits increased by 40%.
3. A survey by the Irish Association of Pension Funds shows that in 2002, 46% of Pension Schemes were funded by employers to an extent greater than 5%.
4.1The Company's existing pension arrangements cannot be considered to be substantially out of line. The Company is satisfied that the various elements of the pension package (including death-in service benefit and permanent health insurance) exceeds or substantially exceeds those arrangements applying in comparable employments. Also, the Company's total remuneration package, comprising,inter alia, basic pay, shift pay and profit share arrangements is among the very best in the North East region.
2. In the light of the already very competitive existing arrangements, the Company's proposed increase in the contribution rate to 5.75% conditional upon achieving specific work practice changes, is more than reasonable in the circumstances and should be accepted by the Union.
3. The cost of the Union's claim is excessive and cannot be conceded. The Company is operating under difficult commercial circumstances with regard to its cost base. The Company cannot countenance any additional cost increases in these circumstances.
4. The Union has acknowledged that elements of the Company's pension package are above the norm in comparison to other organisations.
The claim before the Court concerns the Union's claim in respect of operative and staff employees for an improvement in the Company's Pension Scheme. It held that the Scheme was out of line and sought an increase in the employer's contribution from 5% to 7.5%. The Union stated that members of the scheme are prepared to increase their levels of contributions to match the employer's contribution.
In response, the Company made an offer to increase its contribution from 5% to 5.75%. However, the offer was conditional on achieving specific work practice changes, outlined in a letter to the Union, dated 6th May, 2005. Both parties agree that a number of these work practice changes have been resolved in the meantime and some require further discussions. The Court notes that the Union has agreed in principle to discuss the required changes in return for increases in pension contributions.
Having considered the matter and reflecting the position of both parties, the Court is of the view that further discussions are necessary and recommends that the parties should discuss these outstanding matters and agree on work practice changes in return for increases in pension contributions. The Court recommends that these discussions should be finalised within a period of three months.
The Court so recommends.
Signed on behalf of the Labour Court
3rd August, 2006______________________
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.