FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : NATIONAL IRISH BANK - AND - IRISH BANK OFFICIALS ASSOCIATION DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Cryan Worker Member: Ms Ni Mhurchu |
1. Changes to Pension Scheme
BACKGROUND:
2. The case before the Court concerns a claim by the Union on behalf of its members employed in National Irish Bank in relation to changes made to the Employer's Defined Benefit Pension Scheme. In 2008 the Employer and the Union carried out a review of the Pension Scheme and the decision was made to close the existing Scheme to new entrants alongside the introduction of a new Hybrid Pension plan for new employees. With the inherent risks associated with the Defined Benefit Pension Scheme continuing to increase and with the Employer continuing to fund any financial shortfall, the apparent need for a further pension review arose. In 2009 the Employer sought a further review with the Union, which continued into 2010 and with no agreement being reached within the parties. On the 11th November 2010 theUnionreferred the issue to the Labour Court, in accordance with Section 20(1) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 18th February, 2011.
The Employer advised the Court by letter that they would not attend the Hearing.The Union agreed to be bound by the recommendation of the Court.
UNION'S ARGUMENTS:
3. 1.The Employer has rejected the Union's proposals related to the cost and risks associated with the Defined Benefit Pension Scheme.
2. The Employer is in breach of the terms of existing negotiating procedures and has breached agreements on the carrying out of Industrial Relations practices and procedures.
3. The Union contends that the Employer forced Employees to make significant decisions and to complete documentation concerning their pensions without full information being provided to them.
4. The Union further contends that the Employer lured Employees into the scheme with a 5% advanced lump sum payment being paid before the Christmas period.
RECOMMENDATION:
The matter referred to the Court by the Union under Section 20(i) of The Industrial Relations Act, 1969 concerns changes to the Company’s Defined Benefit pension scheme, which has been operational since 1st January 2011.
The Court finds it regrettable that the employer failed to attend the hearing to investigate the Union’s claim. The employer did furnish the Court with a letter setting out its position.
The Union submitted to the Court that the Company had unilaterally closed the Defined Benefit Pension Scheme in 2010 to future accrual having refused to utilise the agreed negotiating procedures. The Union claimed that the closure of the Defined Benefit Pension Scheme was a fundamental breach of an agreement concluded in 2007 on the introduction of a Hybrid Pension scheme for new staff.
Having considered the matter, the Court notes that it is acknowledged that 97% of staff have accepted the new scheme since 31st October 2010, when the Company made an offer to staff to sign up to the Hybrid Scheme in exchange for a 5% of salary lump sum payment. The Company now consider the matter closed.
The Union submitted to the Court that the Company’s actions were in breach of agreed procedures and seek to re-engage with it to reach an agreement on pension changes.
Due to the importance of this matter to both staff and the Company the Court is of the view that it is now imperative given the level of sign up to the Hybrid Scheme that it becomes operational throughout the entire workforce, however, there are clearly outstanding matters which must be resolved to deal with the Union’s concerns, including an assurance that the accrued benefits under the Defined Benefit Pension Scheme are fully protected going forward. Consequently, the Court recommends that the parties should re-engage with a view to finalising all matters.
Furthermore, given that there appears to be some ambiguity around the industrial relations procedures, the Court recommends that the procedures should be clarified for the future.
The Court so recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
25th February 2011______________________
SCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Sharon Cahill, Court Secretary.