Labour Court Database __________________________________________________________________________________ File Number: CD87361 Case Number: LCR11286 Section / Act: S67 Parties: BANK OF IRELAND FINANCE - and - IBOA |
Claim on behalf of approximately two hundred and forty workers for a revised salary scale structure.
Recommendation:
6. It appears to the Court, having considered the submissions
made by the parties, that the salary structures in this sector of
the financial services industry, have developed largely in
isolation as between one firm and another. In this case the
salaries in Bank of Ireland Finance, whilst out of line with those
paid by its main competitor, compare favourably with those paid by
the other major firms in the market. In the absence of any
established relativity the Court therefore does not recommend
concession of the Union's claim.
Division: Mr O'Connell Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD87361 THE LABOUR COURT LCR11286
CC87473 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11286
Parties: BANK OF IRELAND FINANCE LIMITED
(Represented by the Federated Union of Employers)
and
IRISH BANK OFFICIAL'S ASSOCIATION
Subject:
1. Claim on behalf of approximately two hundred and forty workers
for a revised salary scale structure.
Background:
2. In negotiations under the 25th wage round, which was of twelve
months duration up to 31st December, 1986, it was agreed that a
review of the salary scales in effect in the Company would take
place. This review was not to be undertaken earlier than 1st
July, 1986 and any adjustment in salary scales was not to be
implemented prior to 1st January, 1987. During 1986 the Company
carried out an investigation of the salary scales (a copy of this
was forwarded to the Union on 10th February, 1987).
3. A local level meeting took place on 9th January, 1987 at which
the Union put forward proposals for a new salary scale structure
and served a claim on the Company in respect of the 26th wage
round. (it was later agreed that the latter claim would be
pursued separately). No agreement was reached at this or at a
further local level meeting in February, 1987 and the matter was
referred to the conciliation service of the Labour Court on the
20th March, 1987. A conciliation conference took place on 9th
April, 1987 at which no agreement could be reached and on 4th May,
1987 the matter was referred to the Labour Court for investigation
and recommendation. The Court investigated the dispute on 5th
June, 1987.
Association's arguments:
4. (i) The Company is part of an extremely profitable Group
which in its most recent results showed a pre-tax
profit in excess of #80m. The Company itself is also
very profitable and produced a gross profit in 1986 of
approximately #11.5m which was far in excess of its
competitors. As the most profitable Finance House in
the industry it is more than reasonable to seek a
review of the existing salary scale structure and there
is a major obligation on the Company to do so, in order
to bring the scales into line with that of its major
competitor, Allied Irish Finance.
(ii) A comparison of the existing scales in operation in the
Company and its major competitor (details supplied to
the Court) show the significant difference in rates of
pay between the companies. Further, a comparison of
the salary scales in operation in other companies
within the finance industry (details supplied to the
Court) shows that the workers in this Company are not
being paid good market rates.
(iii) As part of a programme of re-organisation in the
Company in 1983, there were approximately fifty
voluntary redundancies and a commitment was given to
the workers that the salary scale structure would be
reviewed. This has not yet happened and it is even
more urgent now as: approximately 20% of the workers
have reached the maximum of the existing scales; there
are significant anomalies in the existing salary
scales; the scales do not comprehensively cover the
wide range of jobs in the Company; technology and
re-organisation; the major differences between the
scales in this Company and its major competitor.
(iv) The Company is operating in a dynamic environment and
is in a state of ongoing change. In this climate the
salary scale structure which has been in existence for
many years should be reviewed and changed.
Company's arguments:
5. (a) Account must be taken of the general economic climate,
any pay increases must be warranted and in line with
Company and Government policy. Labour costs represent
60% of total operating costs, there was an 11% increase
in labour costs in 1986 compared to a growth rate of
-1.8% and in the period 1982 to 1986 salaries
(excluding incremental adjustments) increased by 69.4%
compared to an increase in inflation of 43.1%.
Excessive labour cost increases will have a detrimental
effect on the Company's operations with consequent
effects for the workers.
(b) The Company's survey among member companies of the
irish finance houses association (details supplied to
the Court) clearly showed that in relative terms there
was no justification for any adjustment being made to
the Company's salary scale structure. The Association
in their proposals (details supplied to the Court) for
a new salary scale structure simply increased pay
within each grade, the basic grading structure was not
contended.
(c) Average salaries of the workers (details supplied to
the Court) range from #7,700 to #25,000 and concession
of the Association's claim would increase the current
salary scale structure significantly (details supplied
to the Court). Account should also be taken of the
fact that fringe benefits in the Company are among the
best in the finance house sector. It is unrealistic
for the Association to seek both a pay round increase
and improvements in the salary scale structure.
Concession of two such claims is exceptional, occurring
only where a substantial shortcoming is identified
which is not the case here.
(d) The claim for a revised salary scale structure is
without foundation . Concession of the claim would
have serious consequences not only for the Company, but
for the Industry itself in a situation where increasing
competitiveness is demanded in the market-place.
RECOMMENDATION:
6. It appears to the Court, having considered the submissions
made by the parties, that the salary structures in this sector of
the financial services industry, have developed largely in
isolation as between one firm and another. In this case the
salaries in Bank of Ireland Finance, whilst out of line with those
paid by its main competitor, compare favourably with those paid by
the other major firms in the market. In the absence of any
established relativity the Court therefore does not recommend
concession of the Union's claim.
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Signed on behalf of the Labour Court
John O'Connell
Deputy Chairman
29th June, 1987
U.M./U.S.