INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
Chairman: Ms Jenkinson
Employer Member: Mr Grier
Worker Member: Mr Nash
1. Voluntary Redundancies, Voluntary Early Retirement.
2. In January, 2006 the agency launched a Voluntary Leaving Programme comprising of a Voluntary Early Retirement and Voluntary Redundancy Scheme. The issue in dispute concern the terms of the package and the Union's claim for enhanced financial aspects to the package. The agency's offer is summarised as follows:-
- Open to staff with between 3-30 years' service
Preserved Pension and Lump Sum payable at age 60
6 weeks' pay per year of actual service
Total Severance Gratuity cannot exceed 2 years' salary and
Where a worker's service is greater than 17.5 years the Severance
Gratuity cannot exceed 9 weeks' salary per year of potential service to
Voluntary Early Retirement:
- An employee who is at least 50 years of age and has more than 5 years' service may opt to apply for an immediate payment of pension and lump sum with and award of 'redundancy added years' for pension and lump sum award purposes. Pension paid from date of retirement, based on salary at retirement and service up to date of retirement including added years from all sources and a lump sum of up to three times the annual pension at date of retirement.
The pension payable is the individual's salary multiplied by reckonable service years divided by 80. The lump sum is salary multiplied by reckonable service years multiplied by 3 divided by 80
The maximum number of 'redundancy added years' is seven and this will apply to workers with at least twenty years service. For employees with less than 20 years service added years will be calculated on a pro-rata basis.
The Union is seeking the following amendments to the package:-
- 14 weeks pay per year of service
No upper limit
Minimum payment of one year's salary.
Voluntary Early Retirement:
- Scheme to be based on service not age related.
Increase to ten redundancy added years
Increase to 6 weeks pay per year of potential service with no upper limit.
The dispute was referred to the Labour Relations Commission. A number of conciliation conferences were held but agreement was not reached. The dispute was referred to the Labour Court on the 19th July, 2006, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Court hearing was held on the 31st August, 2006.
3. 1. A single VER scheme should be introduced which is not based on age or service and which can be applied in an equal manner to all staff who wish to avail of it. The terms and conditions of both of the above schemes should be enhanced and the complexities and ageism in the application of the schemes should be removed. Any implied or resultant re-organisation, changes to grade terms and conditions or promotional structures etc, should be fully discussed and negotiated with the Union in line with agreements.
2. The Union is seeking the introduction of the original VER Scheme based on the 1987 IIRS Scheme.This scheme is the most equitable and fairest one. A full pension for staff with 30 years service should apply.
3. In relation to the VR scheme the Union seeks, in addition to its claim, that extras be made available to workers availing of the schemes by way of grants for those who want to take up further education in universities or other recognised bodies and or a gratuity of up to €7,000 to enable those workers who undergo training or take on a project abroad that would enable them to update their skills and personal development.
4. There have been various schemes introduced in other semi-state agencies over the years and there are no standard schemes across the semi-state bodies.
5. The Union does not accept that the schemes are voluntary because particular areas and categories of staff are targeted.
4. 1. The terms of the package are standard terms which have applied for many years in the non-commercial state sector. The terms claimed by the Union are arbitrary and without foundation. Any deviation from the standard terms available in the agency would have significant implications across the civil and public sector.
2. The schemes introduced by the agency are entirely voluntary. It is open to workers in qualifying parts of the agency with three years' service to apply under the scheme. Objective criteria were set out at the time of launch. Workers whose applications are accepted will then be given a period of time to decide whether or not to accept the offer to exit the agency. To date a significant number of applications have been received and it is not necessary to enhance the terms of the package to attract additional applicants. As the scheme is entirely voluntary, it does not constitute a term or condition of employment.
3. Local discussions took place on items which were discretionary to the agency and some concessions were made where possible, in line with business requirements.
The claim before the Court concerns the Union’s claim for enhancement to the terms of the organisation’s Voluntary Leaving Programme, which comprises a Voluntary Early Retirement package and a Voluntary Redundancy package. Essentially the Union has difficulty with the fact that the programme was not the subject of negotiations between the parties and requests the Court either to enhance the terms or to refer it back to the parties for negotiations. The enhancement terms sought by the Union were as follows:
Voluntary Redundancy Terms (VR)
-14 weeks pay per year of service
-Removal of the cap of two years' salary
-Minimum payment of 1 years' salary
Voluntary Early Retirement (VER)
-Extension of the scheme to those aged 48 and 50 (this was subsequently changed to a claim for no age restriction)
-Those with 40 years service to be entitled to 6 weeks pay per year of potential service to age 65 with no cap.
-VER to allow for 10 added years
-Full pension for those with over 30 years service
-Grants of €7000 to enable further education
Management explained that in order to address its strategic objectives, it needed to achieve a reduction in staff numbers and to significantly increase the skills base of the organisation. Consequently it sought approval in January 2006 for a Voluntary Leaving Programme - modelled on similar programmes in the non-commercial semi-state sector and on guidelines provided by the Department of Finance. The Department of Finance “agreed in principle” to a Voluntary Redundancy/Early Retirement scheme for Enterprise Ireland, “in line with standard provisions for early retirement/voluntary redundancy established by the Department of Finance”. Approval was granted and management stated that it had no power to negotiate with the Union on the terms of the scheme.
Enterprise Ireland is a non-commercial semi state organisation whose employees benefit from public sector remuneration terms and conditions of employment. The Court is therefore, of the view that the terms of a Voluntary Leaving Programme in Enterprise Ireland based on parameters laid down by the Department of Finance, designed to provide an option to employees to avail of a limited number of opportunities to leave the organisation on a voluntary basis with an early retirement or severance package, may not be subject to negotiation with the Union.
A letter dated 23rd January 2006 from the Department of Enterprise Trade and Employment states that sanction for the scheme is subject to certain conditions, including the following:-
- “The scheme must be based on a model agreed with this Department that would allow for the Voluntary Redundancy and/or Early Retirement of a total of 150 staff and the subsequent recruitment of 50 specialist staff – the precise terms and conditions of which should be in line with VR/VER terms that have been in place for the public service since the late 1980s”.
Having examined the terms of the programme, the Court is satisfied that its terms are not at variance with the above criteria, they are the same terms which applied in Enterprise Ireland in 2001 and reflect similar VR/VER terms introduced in other non-commercial semi-state bodies. Consequently, the Court does not find merit in the Union’s claims for enhancement of the terms, as outlined to the Court.
The Court so recommends.
Signed on behalf of the Labour Court
20th September, 2006______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.