FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SHANNONSIDE CO - OP (REPRESENTED BY IBEC) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Tanham |
1. Access to Defined Benefit Pension Scheme
BACKGROUND:
2. BACKGROUND:
The Defined Benefit Pension Scheme has been in place since March 1st, 1973. The Company made a decision to close the Aurivo Dairy Ingredients Defined Benefit Pension Scheme in 2009 but the Union stated that employees only became aware of this following Union/Company correspondences in July 2011. This 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 the23rd September 2013, in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 24thApril, 2014.
UNION'S ARGUMENTS:
3. 1.When the six members commenced employment in 2008, an integral part of their terms and conditions was that they were eligible to join the Aurivo Dairy Ingredients Defined Benefit Pension Scheme, not the inferior Aurivo Dairy Ingredients Defined Contribution Scheme.
2.The Company made a decision to close the Defined Benefit Pension Scheme to employees in 2009 but employees only became aware of it following correspondence in July 2011.
3. The change of Pension Schemes will significantly reduce the benefits to the 6 named employees and future employees.
COMPANY'S ARGUMENTS:
4. 1. The Company says that the Defined Benefit Pension Scheme has been closed to new members for the past five years approximately and admission of new members to this Scheme is not sustainable and could lead to the total demise of the Scheme.
2. The IAPF (Irish Association of Pension Funds) say that 80% of Defined Benefit Schemes which have closed have been replaced with a Defined Contribution Scheme.
RECOMMENDATION:
The Union’s claim is for six named employees to be included in a defined benefit scheme, which the Company claims was closed in 2009. The Union is also claiming that the defined benefit scheme should remain open to new entrants.
In relation to the first claim, the Court notes that the named individuals were employed by the company, albeit in a fixed-term casual capacity, before the scheme closed. On that basis the Court believes that there is a cogent basis for the Union’s claim.
In the circumstances of this case the Court recommends that the six named individuals be entered in the defined benefit scheme from the date on which they were entered in the new defined contribution scheme. This recommendation is made having regard to the particular circumstances of the six individuals associated with the claim and it is not intended to have any wider application.
With regard to the second claim, the Court notes that the union was first informed that the defined benefit scheme was closed by letter dated 27thJuly 2011. In that letter the Company informed the Union that the scheme had closed some two years earlier. The Court believes that the manner in which this matter was dealt with by the Company is not consistent with normal good practice. At a minimum the Company should have engaged with the union before the decision to close the scheme was implemented.
However, the Court does not believe that there is any practical basis upon which it could recommend the reopening of the scheme at this stage. According the Court does not recommend concession of the Union’s second claim.
Signed on behalf of the Labour Court
Kevin Duffy
CC______________________
07/05/2014Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ceola Cronin, Court Secretary.