FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : ODLUM GROUP LIMITED (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' GROUP) - AND - A WORKER (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Mr Duffy Employer Member: Mr Murphy Worker Member: Ms Ni Mhurchu |
1. Appeal of a Rights Commissioner Recommendation R-051329-Ir-07/Jt.
BACKGROUND:
2. This claim concerns a decision by the Company to change the Worker's conditions of employment. The Worker had been a member of a non-contributory defined benefit pension scheme since the 19th October 1981. In January 2005 the Company began to deduct pension contributions without the Worker's consent. The matter was referred to a Rights Commissioner for investigation and recommendation. On the 26th February, 2008 the Rights Commissioner issued his Recommendation, as follows:-
- “I have considered the written submission and arguments made by both parties. In a strict legal interpretation the claimant has a right to object to the deductions from her salary under the Payment of Wages Act 1991 with the exception of tax. Nor did the respondent and the claimant alter the claimant’s contract of employment to facilitate these deductions. However it appears from the arguments put forward that the claimant is the only person who has objected to this.
In considering this particular case I am taking into account the state of the current pension scheme and the restructuring approved by the pensions board. This would not have been done without good reason and it is not unusual in this day and age for pension schemes to run into deficits. I have therefore decided that if the claimant insist on a refund of the deductions then it should be given to her but I must seriously warn the claimant that this will have serious implications on whether she can remain a member of the pension scheme. I would advise the claimant to consider this matter very carefully because this will have long-term implications for her pensionable income for the future.”.
On the 4th March, 2008, the Union, on behalf of the Worker, appealed the Rights Commissioner's Recommendation to the Labour Court in accordance with Section 13(9) of the Industrial Relations Act, 1969.
A Labour Court hearing took place on the 2nd May, 2008.- “I have considered the written submission and arguments made by both parties. In a strict legal interpretation the claimant has a right to object to the deductions from her salary under the Payment of Wages Act 1991 with the exception of tax. Nor did the respondent and the claimant alter the claimant’s contract of employment to facilitate these deductions. However it appears from the arguments put forward that the claimant is the only person who has objected to this.
3. 1. In making its unilateral decision to change the pension scheme, the Company changed the Worker's conditions of employment.
2.The Worker did not consent to these deductions being made from her salary.
3.While there is a funding issue to be addressed with regard to the pension scheme, it cannot be done without the agreement of the Workers.
COMPANY'S ARGUMENTS:
4. 1. The decision to require the Workers to contribute to the Company pension scheme was taken due to the actuarial valuation revealing that it was in deficit. All Workers were adequately informed prior to the introduction of these changes to the pension scheme.
2. The Company continues to contribute in excess of 74% of the cost of the pension scheme andthere have been no changes to the benefits offered by this defined benefit pension scheme.
3.The Company is ensuring that the pension fund is financially viable for all the Workers. The concession of the Claimant's claim could have serious repercussions for the future of the pension scheme.
DECISION:
The Court has considered the submissions of the parties and has carefully examined the Recommendation of the Rights Commissioner.
It appears to the Court that in the circumstances of this case the conclusions reached by the Rights Commissioner are appropriate having regard to the facts of the case. In that regard the Rights Commissioner's observations concerning the consequences of the Claimant insisting on a refund of the pension contributions already made are particularly apt.
In the Court's view the approach adopted by the Rights Commissioner was correct. Accordingly, the Recommendation is affirmed and the appeal is disallowed.
Signed on behalf of the Labour Court
Kevin Duffy
12th May, 2008.______________________
JMcC.Chairman
NOTE
Enquiries concerning this Decision should be addressed to Jonathan McCabe, Court Secretary.