Union demands for €6.6m compensation over Central Remedial Clinic closure 'not realistic' say Labour Court

The Labour Court has dismissed as "not realistic" union demands that the charity, the Central Remedial Clinic (CRC), pay out €6.6m to compensate workers for losses arising from the closure of a pension scheme at the CRC.

Union demands for €6.6m compensation over Central Remedial Clinic closure 'not realistic' say Labour Court

The Labour Court has dismissed as "not realistic" union demands that the charity, the Central Remedial Clinic (CRC), pay out €6.6m to compensate workers for losses arising from the closure of a pension scheme at the CRC.

In a row between unions, FORSA, SIPTU and the CRC over the pension scheme closure, the Labour Court has stated that the unions’ demand for the €6.6m in so-called Bridging Payments’ is not realistic “having regard to the considerable sums previously paid by the CRC into the Defined Benefit Plan and to the CRC’s funding model”.

The unions were seeking the €6.6m payout to compensate for future and accrued losses for active members of the scheme and accrued losses for deferred members of the scheme.

The CRC is a national charity which provides services to 4,000 children and adults with disabilities and in May 2016, the CRC wound up its Defined Benefit Scheme.

The CRC shut down the scheme, which had liabilities of €2m at the time, after a report on the operation of the scheme by consultants Mercer found that despite the extensive efforts that had been made to address the funding of the scheme, it remained in financial difficulty.

The CRC pointed out to the Labour Court that between December 2008 and December 2012, the CRC had made a series of lump sum payments to the DB Plan totalling €6.33m to address the scheme’s ongoing deficit.

The CRC told the Labour Court were it to be put in a position of having to make additional payments to maintain the funding of the Defined Benefit Plan its ability to continue to provide services would have been severely jeopardised.

The CRC pointed out that the charitable funding received by them is intended exclusively for expenditure on capital projects.

It argued that were those funds to be applied other than for the purpose for which they are given by donors, the CRC would be exposed to scrutiny by the Charities Regulator and to the anger of donors.

The CRC stated that it does not have the funds to meet the Union’s requests.

It pointed out that it is primarily dependent on funding from two sources: the Department of Health/the HSE “and both the Department of Health and the HSE have refused to entertain any application for funding in respect of additional pension-related funding”.

The unions represent 44 individuals who were members of the scheme when it was wound up.

In its recommendation, the Labour Court pointed out that as matters transpired, those who were active members of the DB Plan on the wind-up date have been transferred to membership of an excellent State-guaranteed pension scheme which provides comparable pension benefits in many respects with no loss of pension coverage.

The court went on to state that “nevertheless, it is regrettable that the CRC took a decision in May 2016 that undoubtedly had significant implications for everybody associated with the Scheme without first engaging with the Unions”.

The court state that “in that context, the court recommends that the Parties should re-engage in relation to the issues of death-in-service and income continuance.

If they are unable to reach an agreement, the matter may be referred back to the Court for a definitive recommendation.

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