Labour Court Database __________________________________________________________________________________ File Number: CD88721 Case Number: LCR12137 Section / Act: S67 Parties: INTERNATIONAL FACTORS (IRELAND) LIMITED - and - IRISH BANK OFFICIALS' ASSOCIATION |
Claims by the Association under the 27th wage round for: (a) An increase greater than the terms of the Programme for National Reovery (P.N.R.). (b) Increase for pensions on the the maximum of salary scales. (c) Salary scales to be applied to grades F and G. (d) That single people should be treated the same as married applicants in respect of house loans. (e) A deputising allowance.
Recommendation:
16. The Court, having considered the submissions made by the
parties recommends that the Employers offer as detailed in the
letter of the 12th August, 1988 from the F.U.E. should be accepted
in full settlement of the Association's claim.
Division: Mr O'Connell Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD88721 RECOMMENDATION NO. LCR12137
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: INTERNATIONAL FACTORS (IRELAND) LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH BANK OFFICIALS' ASSOCIATION
SUBJECT:
1. Claims by the Association under the 27th wage round for:
(a) An increase greater than the terms of the Programme for
National Reovery (P.N.R.).
(b) Increase for pensions on the the maximum of salary
scales.
(c) Salary scales to be applied to grades F and G.
(d) That single people should be treated the same as married
applicants in respect of house loans.
(e) A deputising allowance.
BACKGROUND:
2. The Company is a subsidiary of the Bank of Ireland Finance
(B.I.F.), and a part of the Bank of Ireland Group (B.O.I.). It is
essentially involved in the sale and purchase of debts.
GENERAL BACKGROUND:
The 26th wage round expired in the Company on 31st December, 1987.
The Association on behalf of the workers concerned served the
above mentioned claims on the Company. The Company offered a
package which was confirmed in writing on 12th August and is given
at appendix "A". The Association rejected the offer and no
agreement could be reached on the matters at local level. On 2nd
May, 1988 they were referred to the conciliation service of the
Labour Court. A conciliation conference took place on 18th July,
1988. On 12th August, 1988, following the conciliation
conference the Federated Union of Employers wrote to the Union on
behalf of the Company, and reiterated the offer of a wage increase
in accordance with the National Plan and made a number of points
regarding the other matters (see Appendix A). No agreement was
reached, and on 20th September, 1988, the matter was referred to
the Labour Court for investigation and recommendation. A Court
hearing took place in Dublin on 27th October, 1988.
CLAIM A: For a wage increase greater than the terms of the
national plan.
BACKGROUND:
The Association is claiming an 8% increase over a 12 month period.
The Company offered the terms of the Programme for National
Recovery (P.N.R.) which was rejected by the Association.
ASSOCIATION'S ARGUMENTS:
3. 1. The Company forms a significant part of the B.O.I. Group.
Between 1983 - 1988 BOI Group profitability increased by 116%.
B.I.F. profitability increased by 129%. The Company has
historically made its own contribution both directly and
indirectly to this remarkable performance. It is not
unreasonable therefore to expect the Company to pay the
workers a reasonable increase in salary in excess of the terms
of the National Plan for a 12 month duration.
2. The Association was not party to the Programme for
National Recovery (P.N.R.). The workers do not in any way
feel obliged to accept its pay proposals. The terms already
proposed by the Company have been rejected and unless improved
upon by the Labour Court could become the focus point of an
industrial dispute. The Company's position throughout
negotiations on the issues have been that they are restricted
to the terms of the P.N.R.. This is totally rejected by the
Association since there is nothing within the plan which
precludes employers and unions agreeing wage settlements in
excess of the P.N.R.. This has happened quite successfully in
other organisations. The Association believes that the Court
should direct the Company to enter into negotiations and not
to use the P.N.R. as a means of frustrating staff.
3. The Association believes that the workers are quite
justified in seeking an increase in excess of the terms of the
P.N.R. for the following reasons:
(1) Rates of pay are among the worst in the whole financial
services Industry (details supplied to the Court).
(2) Over the last number of years there has been a reduction
in staff of approximately 14%, none of which were
replaced. All of this resulted in a re-structuring of
jobs, extra responsibilities and increased productivity.
Over the last 12 months, 10 people have left the Company
and only 3 have been replaced.
(3) Unlike many of the other companies in the financial
services industry, the workers in the Company have
co-operated fully with the introduction of new technology
and enhanced systems, all without compensation.
(4) In terms of flexibility, the workers are probably the
most flexible in the financial services industry. Staff
do not engage in demarcation or any restrictive practices
and have co-operated fully with the new re-structured
packages and changed work practices. In view of the
above, it is fair and reasonable that members should be
given an increase in excess of the terms of the P.N.R..
COMPANY'S ARGUMENTS:
4. 1. The Company made a loss in 1986 and had a very marginal
profit in 1987. The budget for 1988 is based on the
achievement of very high targets, that if attained, would
result in a marginal profit of #25,000 after tax. To-date in
1988 the volume of business in terms of utilisation of funds
is far behind budget. The loss for the year to date is
however on budget due to the windfall benefit of falling
interest rates. Even if the budgeted profit for the year is
achieved it will reflect a very poor return both for the
investment in the Company and the time and effort devoted to
it. Competition in the market place is very tough with
approximately twenty two other institutions competing for the
same type of business. For a Company in such a situation
payment of anything over and above the terms of the P.N.R.
would be foolhardy and irresponsible. If the Company is
to survive it must achieve a significantly better return and
be seen to have a committed and realistic workforce.
Insistence on unrealistic claims could seriously damage the
credibility of the Company both in its own marketplace and in
the B.O.I. Group.
2. The P.N.R. has been agreed and implemented by all the
major social partners. The aim of the Plan is to achieve
economic growth which is essential for the Company as its
business depends on this.
3. The Company's offer is more than fair and reasonable in
all the circumstances. With inflation running at
approximately 2% the offer is already in excess of this. In
addition all staff who are entitled to a salary increment with
effect from 1st October, 1988 will receive it. The increments
combined with the offer will increase salaries by an overall
5% to 6%. Staff salaries and costs rose from 20% of gross
income in 1980 to 29% in 1987 and are currently running at 38%
inclusive of the offer made to staff at the beginning of the
year. They represented 50% of total overheads in 1980 as
compared with 60% at present. The increase occurred despite
the fact that there was a significant investment in updating
computer systems during the period.
4. Given the above, there can be no justification for any
deviation from the terms of the P.N.R. which has been
implemented and accepted by most employers and employees. The
Company requests the Court to uphold its position.
CLAIM B: Increase for persons on the maximum of the salary scales
BACKGROUND:
There are a number of workers in the Company who are either
presently at the maximum of their existing scales, or likely to be
so over the next couple of years. The Association claims that a
mechanism should be provided which would give scope for
improvement. The Company's offer of a bonus was rejected by the
Association.
ASSOCIATION'S ARGUMENTS:
5. 1. Other workers in the B.O.I. Group receive overscale
payments or increments on a biennial/three yearly basis.
There is no reason why workers in the Company should be
treated any less favourably.
2. The Company has proposed that staff who have reached the
top of the scales could receive bonuses based on performance
and merit. This indicates some flexibility on the Company's
side but requires further clarification and detail to warrant
consideration. As a general principle, the Association has no
objection to this approach provided:
(1) Performance is objectively assessed.
(2) Bonuses are pensionable.
(3) Criteria are established which can evaluate the
achievement to warrant bonus payment.
(4) An appeals mechanism applies.
COMPANY'S ARGUMENTS:
6. 1. When an individual reaches the top of the scale, he/she is
not entitled to any further increment. The scale will be
adjusted in the normal way by general increases. However, the
Company is prepared at its sole discretion to consider
granting bonuses to individuals who have reached the maximum
point of their respective scales based on performance and
merit.
CLAIM C: That salary scales be applied to grades F.
BACKGROUND:
7. The F posts in the Company represent senior positions. The
Union has sought an incremental scale for grade F staff, which it
contends the previous Managing Director had promised. The Company
has recently proposed a scale ranging from #15000 to #21000.
ASSOCIATION'S ARGUMENTS:
8. 1. The Association has no fundamental objection to the
minimum and maximum point of the proposed Company scale but
believes that what is required is a formalised incremental
structure with a series of incremental points. The reasons
for this view are as follows:
(1) All other members in the Company have a formalised
incremental structure where increments/double increments
are given on an annual basis. Staff are fully aware of
their progression. Grade F staff, who are supposedly in
a more responsible position are given no such structure
and depend every year on the whim of the Managing
Director, who believes there is no commitment for an
annual increase. It is not fair or reasonable that grade
F staff should be treated less favourably than the rest
of the staff.
(2) The Company is part of B.O.I. who themselves have a
formalised salary scales structure for all managerial
levels within the organisation. Similarly in the BOI
there exists a formalised salary scale structure where
staff have a clear understanding of their progression on
an annual basis. There is no reason whatsoever that the
Company should treat its managers any differently from
other managers in the group.
(3) When a comparison is made with other companies involved
in the financial services industry, the vast majority of
them have formalised incremental structures. There is no
good reason why this Company should be an exception.
COMPANY'S ARGUMENTS:
9. 1. The Company intends introducing a band for this grade.
Individuals will then be placed between the upper and lower
limits based on performance and merit. A band of #15,000 to
#21,000 is proposed.
CLAIM D: That single people should be treated the same as married
applicants in respect of house loans
BACKGROUND:
10. The Company operates a preferential house loan scheme for its
employees. At present married employees who are over 23 and who
have 1 year's service with the Company are eligible to apply.
Single applicants must have completed 15 years' service under the
current regulations. The Association's contends that this is
unfair and discriminatory, and claims that single applicants
should be treated on an equal basis with married applicants.
ASSOCIATION'S ARGUMENTS:
11. 1. The present scheme as operated in the Company blatantly
discriminates against single people and is nothing short of
disgraceful. Many employments, which previously discriminated
against single employees have changed their policies,
accepting that marital status should not be the basis of
preventing a fundamental and very beneficial condition of
employment. The Association's proposal is most reasonable and
should be accepted by the Company. The cost of conceding the
claim will be minimal in that there are very few employees in
this category who would be interested in availing of the
facility.
COMPANY'S ARGUMENTS:
12. 1. A significant improvement has been offered by the Company
in offering to reduce the service requirement from 15 years
down to 12 years for single employees on grades B to D. This
is fair and reasonable and should be accepted.
CLAIM E: Claim for a deputising allowance
BACKGROUND:
13. The Association has requested that the Company consider a
deputising allowance to all staff who deputise for an individual
in a higher grade and that this should be paid on a weekly basis,
with individual days being used as a basis for the calculation.
The Company proposed a payment of #30 per day for a grade F
deputising for grade G and #20 per day for a grade E deputising
for a grade F provided the period of absence is in excess of one
month, other than for annual leave. The Company's offer was not
acceptable to the Union.
ASSOCIATION'S ARGUMENTS:
14. 1. The Company appears to accept the need for a deputising
allowance but blatantly discriminates against grades lower
than E when a job of higher responsibility is being carried
out. If it is accepted that people take on extra
work/responsibility when deputising for other members of
staff, than surely they should be given similar treatment.
2. It is accepted generally in industry that if a worker
deputises for somebody in a higher grade regardless of what
the grade is some form of additional payment is made. To
propose that the period in question would be in excess of a
month exclusive of annual holidays makes any proposal
practically meaningless. IBOA's proposal of a weekly payment
inclusive of holidays is far more reasonable and in line with
the spirit of the principle.
COMPANY'S ARGUMENTS:
15. 1. The Company has made a generous offer in respect of the
grades concerned and it is not proposed to introduce
allowances for other grades where there would effectively be
little or no change in supervisory responsibility.
RECOMMENDATION:
16. The Court, having considered the submissions made by the
parties recommends that the Employers offer as detailed in the
letter of the 12th August, 1988 from the F.U.E. should be accepted
in full settlement of the Association's claim.
~
Signed on behalf of the Labour Court
John O'Connell
________________________
25th November, 1988. Deputy Chairman
P.F./J.C.
APPENDIX A
COMPANY'S OFFER
1. Pay
The Company is prepared to implement the terms of the
"National Programme for Recovery" with effect from the date of
termination of its last agreement.
Therefore, with effect from 1.1.1988 there will be a 3%
increase on the first #6,240 of basic pay and a 2% increase on
the balance over and above this amount. With effect from
1.1.1989 there will be a 3% increase on the first #6,240 of
basic pay and a 2% increase on the balance over and above this
amount. With effect from 1.1.1990 there will be a 3% increase
on the first #6,240 of basic pay and a 2% increae on the
balance over and above this amount. The agreement shall
expire on 31.12.1990.
2. Maximum points on salary scale
When an individual reaches the top of the scale he/she is not
entitled to any further increment. The scale will be adjusted
in the normal way by general increases. However, the Company
is prepared, at its sole discretion, to consider granting
bonuses to individuals who have reached the maximum point of
their respective scales based on performance and merit.
3. Salary scale for Grade "F"
As was stated at the conference, the Company intends
introducing a band for this grade. Individuals will then be
placed between the upper and lower limits based on performance
and merit. A band of #15,000 to #21,000 is proposed.
4. Productivity
The Company has the impression that you are seeking some form
of a Voluntary Parting Scheme for people who wish to leave the
Company. There is no desire at present to encourage people to
leave and it would be quite inappropirate to introduce such a
scheme at a time when the future strategy for the Company is
just being assessed. At this time therefore the Company does
not see any justification whatsoever for such a claim.
5. House loans
A significant improvement has been offered by the Company by
offering to reduce the service requirement from 15 years donw
to 12 years for single employees in Grades B to D. This is
fair and reasonable and should be accepted.
6. Deputising allowance
The Company has offered #30 per day for Grade 'F' deputising
for 'G' and #20 per day for 'E' deputising for 'F' providing
the period of absence is in excess of one month other than for
annual leave. These are considered generous offers in respect
of the grades concerned and it is not proposed to introduce
allowances for other grades where there would effectively be
little or no change in supervisory responsibility.