Labour Court Database __________________________________________________________________________________ File Number: CD88725 Case Number: LCR12098 Section / Act: S67 Parties: BANK OF IRELAND FINANCE - and - IRISH BANK OFFICIALS ASSOCIATION |
Claims by the Union (a) for a wage increase under the 27th pay round AND, (b) for compensation for staff co-operation with a new computer assisted collection system (C.A.C.S.), and with a voluntary parting scheme.
Recommendation:
7. Having considered the submissions made by the parties the
Court is satisfied that neither the Company's rationalisation and
voluntary severance scheme, nor the introduction of the Computer
Assisted Collection System, are such changes as would warrant
special consideration over and above the terms of the Programme
for National Recovery. The Court therefore recommends that the
Company's offer be accepted.
Division: Mr O'Connell Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD88725 RECOMMENDATION NO. LCR12098
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BANK OF IRELAND FINANCE
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
IRISH BANK OFFICIALS ASSOCIATION
SUBJECT:
1. Claims by the Union
(a) for a wage increase under the 27th pay round
AND,
(b) for compensation for staff co-operation with a new
computer assisted collection system (C.A.C.S.), and with
a voluntary parting scheme.
BACKGROUND:
2. The 26th wage round expired in the Company on 31st March,
1988. The Company offered a twelve month agreement which was
consistent with the programme for national recovery (P.N.R.). The
Union, on behalf of the workers in the Company sought what it
described as a "realistic" increase under the 27th wage round,
plus compensation for the workers co-operation with C.A.C.S. which
it is proposed to introduce into the branch network. The Union
also wants compensation for its co-operation with the Company's
voluntary parting programme, which has resulted in 53 people
leaving the Company in 1983, with another 35 being due to leave
shortly. According to the Union, this has increased the workload
and level of responsibility of the remaining staff, for which they
have not been compensated. Agreement could not be reached on the
issue at local level, and on 27th June, 1988, the matter was
referred to the conciliation service of the Labour Court. A
conciliation conference took place on 27th July, 1988. No
agreement was reached and on 21st September, 1988, the matter was
referred to the Labour Court for investigation and recommendation.
A Court hearing took place in Dublin on 7th October, 1988.
UNION'S ARGUMENTS
CLAIM A: Wage increase under the 27th wage round.
3. 1. The Union was not party to the P.N.R. therefore the
workers do not feel in any way obliged to accept its pay
proposals. The Company's proposals in respect of pay have
been balloted on by the workers and unanimously rejected. The
Company's suggestion during negotiations that it must confine
itself to the terms of the national plan is totally rejected
and there is nothing within the plan which precludes employers
and unions agreeing wage settlements in excess of the national
norm. There is no obligation as suggested by the Company to
pay only the terms of the national plan and if it wishes to
secure an agreement on other issues the Company will have to
discharge its social and moral responsibility to its own staff
rather than hiding behind the social partners. The Court
should be aware that other more responsible firms have
exceeded the terms of the national plan (details supplied to
the Court).
2. In determining any company's situation account must be
taken of its financial position. The Company is very
profitable and there is no reason why it should refuse to
negotiate with the Union on a compensatory package to reward
its remaining staff for their increased productivity and
support (details supplied to the Court). Other companies and
unions, all of whom participated in the national plan, have
managed through the process of collective bargaining to
finalise acceptable agreements (details supplied to the
Court). The Company must realise that if it does not
negotiate on these issues, the workers will have no
alternative but to step up its present position of non
co-operation which will eventually reverse the Company's
significant development. If this becomes the case, Management
in the Company must take full responsibility.
3. Even if the comparison is made with other smaller less
profitable companies within the finance industry, it is clear
that there are still some jobs within the Company which do not
reflect the market rate. Examples would be representatives,
senior clerks and officer positions.
4. The Company has insisted that their present offer on the
wage round should be contingent on the Union's agreement to
the computer system and voluntary parting scheme, and no
further cost increasing claims. The Union's position is that
in the context of an overall agreement it could make provision
for such clauses but only if outstanding issues were
finalised, and certainly not conditional on the terms for the
national plan.
COMPANY'S ARGUMENTS:
4. 1. In making its pay offer to the Union, the Company took the
following factors into account:
(a) The terms of the Programme for National Recovery for the
three year period to end 1990.
(b) The private sector agreement between the Irish Congress
of Trade Unions, the Federated Union of Employers and the
Confederation of Irish Industry (details supplied to the
Court).
The terms of the Company's offer is fully in accordance with
current norms, and should be accepted by the Union.
2. The Company's business base has reduced by 25% in real
terms in the past six years, while overheads have increased by
22% in real terms in the same period. The Company's estimated
profit in the financial year 1988/89 will be only marginally
in excess of its estimated overheads.
3. Staff salaries in the six year period 1982 to end 1987
increased by 79.5% (excluding salary scale incremental
adjustments of between 3% to 4% annually) while inflation in
the same period was 45.1%.
4. The Company's salary structure and benefits which include
a non contributory pension scheme, loans at preferential rates
and other allowances are competitive within the Finance House
market and this fact was accepted by the Labour Court in a
previous recommendation (details supplied to the Court).
CLAIM B: Compensation for co-operation with C.A.C.S. and the
voluntary parting scheme
UNION'S ARGUMENTS:
5. 1. In 1987 the Company decided to introduce a C.A.C.S. into
the branch network. This system is highly innovative and will
rationalise collection operations at the branches. It will
produce considerable cost savings to the Company when fully
operational, and increase efficiency. At present there are at
least two, but in some cases three people working on
collections which is being reduced to one in each branch.
Against this background of savings in salary, there will
without doubt be extra work for staff. In addition to their
collection duties, the staff who remain in this area will
retain their other responsibilities, e.g. customer queries,
telephone calls, cash etc. Against this background staff are
not prepared to take on the extra duties unless compensation
is paid.
5. 2. Compensation for new technology is clearly recognised as a
feature of industrial relations in the Bank of Ireland Group.
The Bank of Ireland itself compensated staff for the
introduction of new technology in 1982, similar to that
presently proposed. This reflected itself in an ongoing
payment of 2.50% over a number of years. Last year the Bank
staff got a 7% increase for 18 months, with a 2.50% lump sum
payment for their co-operation in the future. Staff in Bank
of Ireland Finance have never received any payment for new
technology and now is an ideal opportunity for this situation
to be redressed.
3. With regard to the voluntary parting scheme in the
Company, the situation is that approximately 53 people left
the organisation in 1983 and were not replaced. This resulted
in many problems for the remaining workers who had to contend
with the re-organisation of work and carrying out of extra
duties. The Company now proposes to allow another 35 people,
or approximately 14% of the workforce to leave employment
voluntarily with compensatory payments, while the rest of the
staff do the work of those leaving as well as their own
without any compensatory payment. The Company, who will
benefit considerably from the ongoing savings, are prepared to
pay considerable sums of money to those leaving. Yet the
remaining staff are expected to do the additional work which
will inevitably arise without any form of remuneration. The
Company's previous record in this matter shows that provided
an individual fills the vacancy if one should arise, it feels
its responsibility has been met without considering the
training aspects, suitability etc. Furthermore, although some
areas require only a reduction of one the Company has agreed
more than that figure which will cause many immediate problems
for all concerned. The result will be:
(a) Greater flexibility and productivity from all staff to
cope with the new changes.
(b) More senior members of staff will be required to "carry"
those learning new tasks.
(c) There will be increased pressure on everyone to meet and
cope with the Company's expansion.
4. The Company is engaging in this exercise at a time when
the group chief executive appears more than happy with the
present cost structure as evidenced in the last annual report.
The Company has a responsibility to share with staff
additional savings secured with their co-operation.
It is normal in industrial relations when savings of this
nature are made that some form of compensatory package is put
to remaining staff.
5. 5. The Company is extremely successful, and is very
profitable (details supplied to the Court). This has been
brought about by astute management coupled with the total
commitment and support of the staff. Despite a depressed
market, the Company continues to grow in strength, all
achieved as a result of staff loyalty and hard work. The
Union considers its claims to be reasonable and fully
justified, and asks the Court to recommend in its favour.
COMPANY'S ARGUMENTS:
6. 1. To ensure that its arrears control systems and procedures
are effective the Company introduced and implemented CACS in
its head office collection department in 1987. The Company
will extend this system to each of its thirteen branches.
CACS is designed to protect the Company's assets by enabling
collection staff to manage arrears accounts more effectively
and thereby reduce the cost of bad debts, which has reached
unacceptable levels in recent years.
2. To ensure that the core activities which are essential to
the Company's ongoing business are adequately funded and that
savings are made in areas of low added value to the Company, a
review of its Head Office activities was carried out by its
Department Managers, with a view to reducing/eliminating non
essential and unproductive activities and concentrating on key
business issues. Approved plans are currently being
implemented and a guarantee of no forced redundancies arising
from this review has been given to head office staff. The
Company is seeking the most effective and efficient ways of
delivering its products to its customers, in tune with market
needs. A number of the Company's competitors have carried out
such reviews during the past year and others are currently
conducting similar exercises.
3. To facilitate these developments the Company introduced a
voluntary parting scheme for staff this year, the result of
which will enable the Company to achieve its required manning
levels without resort to forced redundancies. There is
therefore no threat to staff arising from these developments
and staff have been given assurances in this regard.
Operating in a market in which competition has intensified, as
a result of which margins on the basic business have been
eroded, the overall Company approach as outlined is essential
to the Company's ongoing viability in rapidly changing market
conditions and, in consequence, to the future job security of
its staff. There can be no justifiable argument for an
enhanced pay settlement in respect of the Company's proposed
approach.