The Labour Court has rejected a claim by 11 maintenance workers at Irish Distillers that an error by the employer with regard to its pension contributions for them should be maintained or compensation paid for the right calculation being applied.
The company told the court, after an effort to resolve the dispute through conciliation at the Workplace Relations Commission had failed, that it had overpaid the employer pensions contributions by €171,615 over a period of time.
Overpayments in respect of individual workers ranged from €6,452 to €23,338.
The issue, the company said, was the result of a miscalculation of the pensionable pay rates as defined under a 2011 collective agreement. The definition of pay of the maintenance team for pension purposes was clear but a mistake was made on its part.
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Because it was responsible, it was not seeking to recover the overpayments but was aiming to adjust the pension contributions it made in the future to the properly agreed rates.
It had not sought to do this until agreement was reached with the union but this proved elusive.
In its newly published recommendation arising out of a meeting between the various parties on February 12th, the court said the union acknowledged the overpayment error but said the payment of the higher rates, based on full rather than basic pay, had become standard practice
Connect, the union representing the craft workers involved, said the error had been discovered by management in 2018 – the company is recorded as disputing this, saying it was 2021 – but that no changes were implemented.
“A shop steward’s record of a meeting from that time notes that a member of management told members to forget about the issue, which led employees to believe that the matter was resolved.
“Since then, new recruits receive pension contributions based on their full salary calculations. The established practice applied by the company is that pension contributions are based on full pay. This is now embedded through custom and practice,” the union argued.
The union sought a commitment to red circle the additional payments for those who were benefiting from them or the payment of significant compensation if the contributions were reduced.
In its decision, however, the court said the correct basis for calculating the contributions was contained in a collective agreement and “the long-standing position of the Labour Court is to uphold collective agreements in place between parties, unless requested by both parties to do otherwise”.
It said the workers had benefited from the error over a prolonged period. The company should be permitted to adopt the correct rates but that it should not do so until June 30th of this year.
