ADJUDICATION OFFICER RECOMMENDATION
Adjudication Reference: ADJ-00008777
| Worker | Employer |
Anonymised Parties | A Nurse | Medical Service Provider |
Representatives | INMO | IBEC |
Complaint(s):
Act | Complaint/Dispute Reference No. | Date of Receipt |
Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969 |
CA-00011247-001 | 11/05/2017 |
Date of Adjudication Hearing: 26/09/2017
Workplace Relations Commission Adjudication Officer: Ewa Sobanska
Procedure:
In accordance with Section 13 of the Industrial Relations Acts 1969 following the referral of the dispute to me by the Director General, I inquired into the dispute and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the dispute.
Background:
The Worker commenced her employment with the Employer as a staff nurse on 24th August 2015. She was entered into an Income Protection Scheme (hereinafter ‘IPS’) by the Employer. The Scheme requires a deduction of 0.8% of the Worker’s earning on each pay cycle. The Worker seeks to have her removed from the scheme with full retrospective payments returned. |
Preliminary issue:
IBEC on behalf of the Employer submits that the Adjudicator is precluded from hearing this complaint under S. 13(2) of the Industrial Relations Act, 1969 which states: “Subject to the provisions of this section, where a trade dispute (other than a dispute connected with rates of pay of, hours or times of work of, or annual holidays of, a body of workers) exists or is apprehended and involves workers within the meaning of Part VI of the Principal Act, a party to the dispute may refer it to a rights commissioner”. The Company’s Pension Scheme, which was set up in 1963, is a funded public service scheme. The Death in Service Scheme and IPS are intrinsically linked to the Company Pension Scheme Trust Deed. The Trade Unions worked in tandem with the Employer to include IPS as part of the Pension benefit package in or around 1988. Following receipt of the Worker’s complaint the Employer wrote to the Trade Union on 21st December 2016. The Company explained that the IPS applies to all employees of the Employer and is deemed mandatory. The Company expressed its surprise at the Union’s suggestion that the benefit was not mandatory. Mr R., the Head of HR offered the Union the opportunity to enter into consultation process in relation to this benefit if their position on the Pension benefits package had now changed. To date the Union have remained silent on the matter. IBEC submits that the reason why Trade Union has not raised his matter through the normal collective negotiation process is because the rest of their membership believe the IPS form an inherent part of their terms and conditions of employment and as such, could not be removed or altered without a proper collective industrial relations consultation/ negotiations process. This complaint, if succeeded would affect directly 599 employees excluding the Worker. Therefore, this is a collective complaint. See Shannon Airport Authority v A Worker AD83 to 89/2013. |
Summary of Complainant’s Case:
The Trade Union on behalf of the Worker submits that, on commencement of employment, the Worker signed a contract of employment and attended a three day Corporate Orientation Programme but at no stage was she made aware of the IPS. Nowhere in her contract was it specified that she would become a part of a mandatory IPS and therefore no authorisation was given for such deduction. In contrast, a pension deduction is specified in the contract. The Worker noticed a deduction from her salary, described as “Salary Protection”. She initially inquired through her line manager. She was advised to source further information through the contents of the Employer’s Policies and Procedures. The only reference to IPS she found stated “Please contact Human resources for information on Income Protection”. In contrast there is detailed description of the Pension Scheme in the document. The document also states in respect of the Pension Scheme that “membership of the scheme is a condition of employment for eligible employees”. In the Employer’s Sick leave Policy reference is made to the IPS as follows: “Employees who are paying into [the Employer’s] Pension Scheme and Salary Protection Scheme may be entitled to Disability Payment through the insurers, [named]. Employees should refer to the Income Protection Policy for further information which is available on the intranet…” This statement implies that it is applicable to staff who may be paying into the scheme and suggests it is not mandatory requirement. There no attempt to explain the scheme or an employee’s contribution toward it. The Employer’s Policy and Procedures document makes reference to deductions from pay. It states “As well as statutory deductions from pay, there are voluntary deductions which you can choose to have made from your fortnightly pay”. The document lists union contributions, certain banks, Credit Unions, additional voluntary contributions, VHI, PRSA, Travel Pass Scheme and “certain Insurance Companies - [named]”. The Employer provided IPS through a named insurance provider which is referenced as a voluntary deduction. The Worker made formal enquires regarding this matter in September 2016. She contacted by way of email a named person in HR on 21st September 2016 inquiring how she could exit the scheme as she did not wish to have this insurance. No response was received and she emailed the Director of HR, Mr R. seeking the same information. Mr R. responded on 13th October 2016 advising that “there is no opt out arrangement in place for this insurance”. He offered no reason for this, and then outlined the benefits of the scheme. The Worker responded to Mr R. on 15th November, following consultation with her Trade Union. She identified to him that she has not consented to any deductions being made from her salary for such scheme and there is no mention of the scheme in her contract of employment. Her Trade Union wrote to Mr R. on the same date articulating that no contractual obligation exists for the Worker to pay into a scheme she has not consented to and seeking rationale for the Employer’s position. Mr R. responded on 21st December 2016 stating that IPS “applied to all Workers” and that “it is deemed mandatory for all new Workers”. He further stated his surprise that the Trade Union would not see this scheme as mandatory but noted “if the unions wish to enter into a consultation process in relation to the benefit which we as an employer see as mandatory we will fully engage in that process”. The Union replied on 4th January 2017 and reiterated its position that there was no contractual obligation on the Worker to pay IPS and seeking that she has her contributions returned and therefore her exit from the IPS. In May 2017, the Worker was offered a Clinical Nurse Manager Grade 2 Specific Purpose Contract. This contract contained the following: “you will join the [IPS], which operates within the [Employer] as a cost of 0.8% of your salary. Your contributions will be made by way of salary deductions.” This statement was not contained in the original staff nurse contract and was an effort by the Employer to identify and seek authorisation, in contract, a deduction from the Worker’s salary for the IPS. The Worker signed the contract but identified to HR, in e-mail, her ongoing disagreement with the IPS payment and the impeding WRC process. The Trade Union on behalf of the Worker submits that the Employer has failed to produce, at any stage, evidence of this matter being a mandatory term and condition of employment. There is no agreement with staff representatives for such a scheme. This is a scheme, which is voluntary and like all IPS in the public sector, there is no obligation on any employee to undertake such a policy. |
Summary of Respondent’s Case:
The Employer would argue in the strongest possible terms that there is no foundation to the Worker’s complaint. IBEC on behalf of the Employer submits that the Employer operates an IPS along with a Death in Service Benefit as part of the Company’s Superannuation Fund benefit package. All employees are automatically enrolled for these benefits. The three benefits are reticulate and are provided as a homogeneous tripartite benefit plan for all staff. The Company’s Pension Scheme, which was set up in 1963, is a funded public service scheme. The Death in Service Scheme arising from this pension scheme was set up by a [named] insurance policy which was intrinsically linked to the pension scheme. Approximately 25 years later the IPS was put in place for all permanent employees and was also intrinsically linked to the Company Pension Scheme Trust Deed. An employee’s pension contribution was increased by 0.8% to pay for this additional cover which was agreed with the employees and their representatives at that time. The Employer pays the remaining cost of the policy and as such bares the full risk in terms of the fluctuating cost of the policy. In 2004, when it was discovered that the 0.8% contribution was not entitled to the same tax relief as the pension contribution itself, the contribution was set up on payroll as a separate deduction but remained covered by the [named insurer’s] policy set up in earlier years and renewed annually. The renewal of these policies is the 1st May of each year. The 1st May is also the date members join the pension scheme each year (unless transferring in from a public service scheme that has a reciprocity arrangement with the Employer). The Worker is paid fortnightly and receives payslips which itemise both her salary payment and the deductions from salary. The IPS deduction is clearly itemised on the payslips. The Worker waited just over a year to bring her complaint to the attention of her employer. In line with the Worker’s contract of employment, all staff are required to join the Company’s Superannuation Fund (which comprises of Pension Fund, Death in Service scheme and IPS). Staff are required to contribute 5% of their salary towards the cost of their pension. Staff are also required to contribute 0.8% of their salary towards IPS. There are 600 staff in the scheme. The current cost of IPS for the Company is €1.2m. Allowing staff to opt-in/ opt-out would only serve to jeopardise the scheme. It is likely that given the choice the younger members of staff would opt-out while the older members of staff would opt-in. The net effect of which would increase the premium and make it unaffordable. The current cost of the scheme is a considerable burden to the Employer. Any increase in cost would make the scheme unviable and would endanger an excellent benefit for all the employees. The Trade Unions worked in tandem with the Employer to include IPS as part of the pension benefit package and the Employer is aghast that the Union is bringing the claim to the WRC. |
Findings and Conclusions:
I note the Worker’s concerns in relation to the deductions in respect of the IPS, which she has not authorised or approved of. I accept that any deduction and/or participation in scheme such as IPS must be clearly outlined in terms and conditions of employment to avoid any ambiguity. Workers must be made aware by the Employer on both the cost and the benefits of any scheme they enter, whether is mandatory or not. I note that the Employer has since amended the terms and conditions of employment to add clarity to the matter of the IPS. I note also that, following the changes in the public sector sick pay arrangements the Worker’s Trade Union engaged with the Employer to address the gaps created by these arrangements. Both Parties have met to negotiate the improvements to the IPS; the latest meeting took place in February 2017. This was after the Worker has brought the matter of the mandatory participation in the Scheme and deductions associated with the Scheme to the Union’s attention. However, the matter was not formally raised by the Trade Union at the meeting.
Having considered the issues before me I find as follows:- Section 13(2) of the Industrial Relations Act 1969 provides a statutory restriction on the types of cases Adjudicators may hear. They may not investigate disputes connected with rates of pay, hours or times of work or annual holidays of a body of workers. Section 13 (2) of the Act provides:-
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Decision:
Section 13 of the Industrial Relations Acts, 1969 requires that I make a recommendation in relation to the dispute.
In all the circumstances of this case I am satisfied that the dispute before me involves issues related to concerns of a body of workers. It is a claim which, if conceded, could potentially have broader implications for others. I note that the current procedure in relation to the IPS is under discussion between the Employer and Trade Union. I would therefore recommend that the Union engage with the Employer on any amendments they consider appropriate. |
Dated: 20 November 2017
Workplace Relations Commission Adjudication Officer: Ewa Sobanska
Key Words:
Income protection, unauthorised deductions, |