Tara Mines has won a Supreme Court order allowing it to exclude up to 80 disabled former miners with the company from certain substantial pension benefits made available to existing employees.
A three judge Supreme Court today allowed the appeal by Boliden Tara Mines Ltd against a High Court ruling that former workers in receipt of benefits under the Income Continuance Plan of the company were also entitled to certain pension benefits sanctioned for the Tara Mines Pension Plan in 1999.
The High Court decision meant disabled workers receiving income continuance payments (the ICP group) would, in common with existing employees, not be subject to substantial deductions from their pensions.
The High Court had noted the ICP, closed to new entrants from 2002, was of particular importance because of the physical demands of mining work. An employee accepted into the ICP due to disability would receive an income benefit which, subject to periodic medical assessment, continued until the age of 65.
An ICP beneficiary also remained an active member of the pension plan and the years where a person received ICP benefit were considered years of service with the company for pension purposes.
The Tara pension plan was established and operated under trust and rules declared by the company. From 1996 it was governed by a deed of amendment between the company and the Irish Pensions Trust which defined pensionable salary as a member's annual rate of basic salary less an amount to be decided by the employer not exceeding one and a half times the annual State Old Age Pension.
The OAP deduction provided for in the 1996 deed was known as integration. A proviso in a further deed of amendment in 1999 removed integration and this change represented a significant benefit for members, especially lower paid workers.
The High Court found the proviso in the 1999 amendment applied to the ICP group - persons in receipt of benefits under the ICP of the company from February 20th 1998 - and the central issue in the appeal was Boliden's claim it is entitled to ``rectification'' of the proviso in the 1999 deed so as to exclude the ICP group.
Boliden, the principal employer of the Tara pension plan, argued the 1999 amendment did not properly reflect the intentions of the parties to exclude the ICP group. It claimed the cost of extending the benefits to the ICP group was substantial and would have serious implications for the pension fund.
Giving the Supreme Court ruling yesterday, Mr Justice Adrian Hardiman noted the 1999 deed of amendment occurred against a background of worsening circumstances for the company which asked workers to implement a new scheme of work organisation.
Proposals concerning the pension plan approved by employees and the company in early 1998 included the elimination of "integration", he noted.
After issues emerged with a particular pensioner, the company took legal advice and said its view was the rules of the pension scheme did not reflect what was intended in 1999. It then sought rectification from the High Court which in 2007 refused the application.
Mr Justice Hardiman said the evidence from both parties involved in the 1999 deed of amendment was to the same effect - the deed did not reflect the intention of either Tara Mines or the IPT to exclude members in receipt of ICP benefit from the entitlement to be excluded from "integration".
There was also ample evidence the company and pension trustees behaved at all times towards pensioners on the basis the true position was as they intended it to be, he said. There was a detailed and unchallenged explanation from the in-house lawyer in IPT who drafted the 1999 deed, with others, as to how an error occurred in that drafting which gave rise to the situation where the deed did not reflect the parties’ intentions.
The in-house lawyer had said she considered there was no need to expressly state the ICP group were excluded as she considered they were already excluded as they were no longer employees of the company, the judge noted. It was now agreed express language should have been used to exclude the ICP beneficiaries, he added.
Mr Justice Hardiman also found the High Court had demanded an "unnecessarily exacting" standard of evidence was required to support the claim for rectification.
There was no dispute the 1999 amendment was executed by the company and cogent evidence of the intention of both sides, he said. There was "ample and unchallenged" evidence as to the intention of the company and of the trustees which established the 1999 deed did not reflect that intention. The company was entitled to the rectification sought, he ruled.
