Subjects
Annual Updates Subcategories
Anti-Bribery & Compliance
Anti-Trust & Competition
Data Protection & Privacy Subcategories
Disputes and Grievances
Employment Law
Employment Status Subcategories
Equality, Diversity and Equal Rights Subcategories
Industrial & Workplace Relations Subcategories
International Mobility Subcategories
Pensions & Benefits
Protection of Business Interests Subcategories
Recruitment, Termination of Employment Subcategories
Remuneration Subcategories
Social Security Contributions
Terminations Subcategories
Working Hours & Pay Subcategories
Workplace Culture Subcategories
Workplace Investigations
Jurisdictions
Americas Subcategories
APAC Subcategories
Cross Border
EMEA Subcategories
Global

Ireland: Pensions – Immediate Termination of Employer Contributions

By - - Employment Law, Pensions & Benefits, Social Security Contributions

The Irish Commercial Court has helpfully confirmed in a recent judgement its reluctance to interpret a clause in a Pension Scheme document other than as its meaning would be understood by a reasonable person who is not involved in the dispute.

The question arose around the interpretation of a clause in a corporate defined benefits pension scheme Deed which allowed, or appeared to allow, the Employer to terminate its contributions to the Scheme fund with immediate effect, without giving any notice period.

On this basis, the Employer had given notice of immediate termination of its contributions.  The Scheme Trustee argued that a notice period should have been given as, immediate termination would undermine the operation of the scheme.

The court chose to focus on the precise wording of the termination clause and concluded there was nothing in the Deed that required for a notice period and nothing that set out any steps to be taken between a termination notice and its effective date. The parties therefore had not envisaged any such requirement when the Deed was signed and there was no reason for the court to interpret the clause otherwise.

Meanwhile, the Trustee asked the court to imply a term into the Deed requiring a notice period for termination of contributions.

The court considered the established tests for implying terms into contracts:

  • The implied term should be reasonable and equitable.
  • The term is necessary to give business efficacy to the contract or
  • The term satisfies the obviousness test – “it goes without saying” . 
  • The reasonableness of the proposed term should be demonstrable to the court.
  • The term should not contradict any express term in the contract. 

The court held that the proposed implied term did not satisfy the established tests.

The decision makes clear the need for precise and clear language in legal documents and gives Trustees some clarity on how the court will consider attempts to move away from the clearly stated intentions of the parties at signature.  

This is a high level general update only. Legal advice should be obtained on specific circumstances.
Scroll to Top