Labour Court Database __________________________________________________________________________________ File Number: CD87300 Case Number: LCR11237 Section / Act: S67 Parties: BANK OF IRELAND FINANCE - and - IBOA |
Claim on behalf of approximately two hundred and fifty workers for a pay increase under the 26th wage round.
Recommendation:
5. In light of the submissions made by the parties the Court
recommends that the Company concede an increase of 6% with effect
from 1st January, 1987 in respect of an agreement to last until
31st March, 1988.
Division: Mr O'Connell Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD87300 THE LABOUR COURT LCR11237
CC87319 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11237
Parties: BANK OF IRELAND FINANCE LIMITED
(Represented by the Federated Union of Employers)
and
IRISH BANK OFFICIALS' ASSOCIATION
Subject:
Claim on behalf of approximately two hundred and fifty workers for
a pay increase under the 26th wage round.
Background:
2. The terms of the 25th wage round which was of twelve months
duration and provided for a 7% increase expired for the workers on
31st December, 1986. In January, 1987 the Union on behalf of the
workers served a claim on the Company in respect of the 26th wage
round for a 10% increase in basic rates of pay for a twelve month
period from 1st January, 1987 and a claim for a revised salary
structure. (It was later agreed that the claim for a revised
salary structure would be pursued seperately). At local level
meetings held in February, 1987 the Company made an offer of 3.25%
for a twelve month period from 1st January, 1987. This was
unacceptable to the Union and the matter was referred on 23rd
February, 1987 to the conciliation service of the Labour Court.
Conciliation conferences took place on 26th March, 1987 and 3rd
April, 1987 at which no agreement could be reached and on 3rd
April, 1987 the matter was referred to the Labour Court for
investigation and recommendation. The Court investigated the
dispute on 8th May, 1987.
Union's arguments:
3. (i) The Company belongs to a group which made approximately
#88m profits in the last financial year and the Company
itself is also very successful and made significant
profits for 1986. Although the Company is the most
successful Finance House in this industry it does not
have the most beneficial terms and conditions of
employment and this imbalance should be corrected in
the 26th wage round.
(ii) The erosion in living standards in the past and
projected inflation for the relevant period should be
taken into account in reaching an agreement. The
Company's offer of 3.25% is totally unrealistic and
successful companies like this one have a
responsibility to increase the workers real standards
of living at a time of relatively low inflation.
(iii) There is a major discrepancy in the Company's offer
under the 26th wage round compared to relevant
settlements in other companies under the 26th wage
round (details supplied to the Court). In the 26th
wage round generally over 600 settlements have been
concluded giving an average increase of 6.8% over 13.6
months or 6% annualised. Also, Labour Court
recommendations for comparable companies (details
supplied to the Court) show that this Company has not
negotiated realistically with the Union on this matter.
(iv) As part of a major group operation the Company has been
required to re-organise its structures. Workers in the
Company have fully co-operated with these changes. The
Company's offer is substantially less than that agreed
in other Finance Houses which are much less profitable.
In recent years, due to the Company's profitability and
in recognition of the contribution and dedication of
workers the Company has paid increases in excess of the
norm.
Company's arguments:
4. (a) The Company must take into account the general economic
climate and inflation rates. In the financial market
within which the Company operates, it has itself,
become increasingly competitive in recent years. There
has been no growth in real terms in the Finance House
industry or in the Company's business base for several
years. Past profit levels have allowed the Company to
consolidate its position and to ensure that substantial
employment levels are maintained. The level of future
profits must be adequate to maintain this position.
The Company is an independent subsidiary of a Bank and
in this position must depend on its own performance for
its continued survival and cannot rely on financial
support from its parent company.
(b) Labour costs represent a significant proportion (60%)
of the Company's total operating costs. In 1986 the
labour cost increase was 11% while the Company's growth
rate was - 1.8%. If this trend were to continue it
would have ramifications for the future viability of
the Company. In the period 1982 to 1986 salaries in
the Company increased by 69.4% compared to an increase
in inflation of 43.1% in the same period. Salary scale
incremental adjustments cost on average an additional
3-4% per annum.
(d) The Company pays competitive market rates and is of the
view that its proposal for a 3.25% increase is
realistic in terms of the overall context of the
Company's circumstances.
RECOMMENDATION:
5. In light of the submissions made by the parties the Court
recommends that the Company concede an increase of 6% with effect
from 1st January, 1987 in respect of an agreement to last until
31st March, 1988.
~
Signed on behalf of the Labour Court
John O'Connell
_________________________
Deputy Chairman.
10th June, 1987.
U.M./U.S.