Labour Court Database __________________________________________________________________________________ File Number: CD87338 Case Number: LCR11210 Section / Act: S67 Parties: KENILWORTH MOTORS - and - UMTTIE |
Dispute involving 16 garage workers, concerning the buy-out of workshop bonus scheme.
Recommendation:
6. The Court notes that the primary objective of both parties is
the maintenance of the Company as a going concern providing
continued employment. Insofar as the current bonus scheme is an
obstacle to that purpose the Court takes the view that it should
therefore be ended on the terms proposed by the Employer, and so
recommends.
In the longer term however the Court is of the opinion that ending
of an incentive which tends towards greater operating efficiency
must be seen as a retrograde step and recommends that before
implementing the above recommendation that the parties agree to
seek outside expert opinion to ascertain how the scheme might be
amended to eliminate the danger it presently constitutes to the
Company's continued existence.
In this respect the Court suggests that the parties consider the
assistance provided by the I.P.C.
Division: Mr O'Connell Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD87338 THE LABOUR COURT LCR11210
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR11210
Parties: KENNILWORTH MOTORS
and
UNION OF MOTOR TRADE, TECHNICAL & INDUSTRIAL EMPLOYEES
Subject:
1. Dispute involving 16 garage workers, concerning the buy-out of
workshop bonus scheme.
Background:
2. The Company is a branch of Motor Services Limited which
operates seven retail garages. It has operated a workshop bonus
scheme for the past fifteen years. The scheme is comprised of two
elements:
(a) An "earned" bonus which arises when the Workshop
efficiency exceeds 75% in a particular week.
(b) A guaranteed bonus which is paid when there is no bonus
"earned" in the week, or when the "earned" bonus is
less that the guaranteed amount. The guaranteed bonus
amounts to #7.20 for a qualified Mechanic and pro-rata
for other staff.
In March, 1987 the Company informed the Union that it intended to
buy out the bonus scheme on the following basis:
(a) The guaranteed bonus (7.20 for a qualified Mechanic and
pro-rata for other staff) would be incorporated into
basic pay, with a consequent increase in service pay
which is a percentage of basic pay. The increase in
service pay would be 50p per week for a qualified
Mechanic.
(b) The Company would pay a lump sum of 1.25 times the bonus
"earned", over and above the guaranteed bonus, in the
preceding twelve months. This would amount to #254.56
for a qualified Mechanic and pro-rata for other staff.
The workers concerned, rejected the Company's offer.
3. No agreement was reached through local negotiations and on
24th March, 1987 the matter was referred to the conciliation
service of the Labour Court. A conciliation conference was held
on 30th March, 1987, at which the Company agreed to increase the
amount payable by specifying 1986 as the year on which calculation
of the lump sum amount should be made. The workers rejected this
offer and no agreement was reached. On 30th April, 1987 the case
was referred to the Court for investigation and recommendation. A
Labour Court hearing was held on 4th May, 1987.
Union's arguments:
4. (i) In the present economic climate the workers can ill
afford any reduction in their earning potential as they
find it virtually impossible to survive on the existing
levels of take home pay.
(ii) If the bonus scheme was removed it would eliminate the
necessary incentive required if productivity is to be
maintained and the Company is to remain viable.
(iii) The Company, having recently reduced the level of
personnel within the garage, expects the remaining
workers to maintain the same level of productivity,
consequently it is unreasonable and impracticable of it
to remove the bonus scheme.
Company's arguments:
5. (a) The Company has been incurring substantial losses for
several years. The survival of the business is now in
jeopardy.
(b) The volume of available workshop business has declined
dramatically in recent years and this trend will
continue in the future.
(c) The workshop bonus scheme, which was introduced in a
completely different business climate, is now totally
irrelevant in the present situation.
(d) The settlement terms offered by the Company are
reasonable in the circumstances.
(e) The bonus scheme has already been eliminated, by
agreement with the Union, in another branch of Motor
Services Limited in February, 1987. Failure to accept
the Company's offer will put the survival of the
business at serious risk.
RECOMMENDATION:
6. The Court notes that the primary objective of both parties is
the maintenance of the Company as a going concern providing
continued employment. Insofar as the current bonus scheme is an
obstacle to that purpose the Court takes the view that it should
therefore be ended on the terms proposed by the Employer, and so
recommends.
In the longer term however the Court is of the opinion that ending
of an incentive which tends towards greater operating efficiency
must be seen as a retrograde step and recommends that before
implementing the above recommendation that the parties agree to
seek outside expert opinion to ascertain how the scheme might be
amended to eliminate the danger it presently constitutes to the
Company's continued existence.
In this respect the Court suggests that the parties consider the
assistance provided by the I.P.C.
~
Signed on behalf of the Labour Court
John O'Connell
___________________________
Deputy Chairman.
25th May, 1987.
T.O'M./J.C.