FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : IRISH RED CROSS - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr McCarthy |
1. Pension Scheme terms.
BACKGROUND:
2. This dispute concerns the Pension Scheme terms for eight members of staff of the Irish Red Cross. The dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on 18th of February 2019 under section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 10th of April 2019.
UNION’S ARGUMENTS:
3. 1. The Union stated that it had agreed to transfer from a Defined Benefit Scheme to a Defined Contribution Scheme in 2017, however, this was on the basis that a core contribution rate would not be affected. There was no suggestion at that time that the Employer would reduce its contribution rate to 5%.
2. The Union argued that the reduction to 5% was unjustified particularly given that some of the staff have up to 35 years service.
EMPLOYER'S ARGUMENTS:
4. 1. The Employer stated that the organisation is in significant financial difficulties and it can no longer afford to pay a contribution at an annual cost of €54,800.
2. Management said that the reduction to 5% would reduce this cost to €17,600 which is more sustainable for the organisation.
RECOMMENDATION:
The matter before the Court concerns Management’s proposal to reduce its contributions to the Defined Contribution Pension Scheme applicable to eight members of staff, five of whom are in the Group A Scheme (non-integrated Scheme) and three of whom are in the Group B Scheme (integrated Scheme).
A Defined Benefit Pension Scheme had been in operation for the eight members involved until November 2016 when, due to the risks associated with such a scheme and its financial circumstances, it was closed and replaced by the Defined Contribution Scheme. At the time and since, the employer’s pension contributions continued at the same level as had previously applied under the Defined Benefit Scheme.
Due to its precarious financial situation in January 2018, Management sought to substantially reduce those contributions, thereby seeking to make savings of €37,046 per annum.
The Union objected to the reductions in the employer’s contributions and expressed a willingness to engage with Management to seek to achieve savings elsewhere.
Having considered the submissions of both parties, the Court recommends that both the employer and employee pension contributions to the Defined Contribution Scheme should be retained at the rates they have been at since the closure of the Defined Benefit Scheme, in respect of the eight identified employees involved in this claim.
Furthermore, the Court recommends that both parties should jointly approach the organisation’s public funders to make up any shortfall in the required finances to fund these historic employer pension contributions as recommended by the Court.
The Court so Recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
CH______________________
18th April 2019Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Carol Hennessy, Court Secretary.