Labour Court Database __________________________________________________________________________________ File Number: CD89279 Case Number: LCR12443 Section / Act: S67 Parties: BOWMAKER BANK - and - IRISH BANK OFFICIALS' ASSOCIATION |
Claim by the Union for structured salary scale.
Recommendation:
5. Having considered the submissions made by the parties, the
Court is of the view that managements proposals are not
unreasonable and should be accepted subject to an increase of 4%
being paid instead of 3.33% for a satisfactory performance rating.
These increases to be paid with effect from the date of
implementation of the next salary review. The Court considers
that managements proposals in relation to promotion are fair and
reasonable.
Division: Mr McHenry Mr Devine
Text of Document__________________________________________________________________
CD89279 RECOMMENDATION NO. LCR12443
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BOWMAKER BANK
and
IRISH BANK OFFICIALS' ASSOCIATION
SUBJECT:
1. Claim by the Union for structured salary scale.
BACKGROUND:
2. Bowmaker Bank Limited is a consumer finance organisation. Its
head office is in Dublin, and it has eight branch offices
throughout the country. At the moment the employees are on
individual rates of pay, which are subject to annual review. In
December, 1988 as part of discussions concerning a revision of
salaries due to take place with effect from 1st January, 1989 the
Union on behalf of the workers sought the introduction of a 12
point salary scale for each category of worker with automatic
progression. The Company was not prepared to concede the Union's
claim. There exists in the Company a series of salary bands which
range from grade A (low scale) to grade F (high scale). The rate
of progress through the bands is determined by an assessment of
the performance of each staff member. In order to address the
Union's concerns, the Company proposed that the annual merit award
would be within the band 0-5% of personal salary. Each worker
would be informed of the size of his/her increase, and the reasons
for it. The Union would also be informed, and any grievances
dealt with by agreed mechanisms. Agreement could not be reached
at local level, and on 14th February, 1989 the matter was referred
to the conciliation service of the Labour Court. A conciliation
conference took place on 23rd February, 1989 and again on 14th
March, 1989. At the resumed conference the Union's position was:-
(1) Progression between the salary bands (up to C) should be
automatic, subject to satisfactory performance (details
supplied to the Court).
(2) In the context of merit pay, the following percentage
increases to apply:
0% unsatisfactory performance
2.50% less than satisfactory performance
5% satisfactory performance
7.50% more than satisfactory performance
9% exceptional performance.
(3) Assimilation to the scales to be in the assumption of all
past service to be satisfactory and the staff receive
minimum of appropriate scale + (5% x years of service).
Scales to operate from 1st January, 1989.
The Company rejected the proposals and agreement could not be
reached. On 20th April, 1989 the matter was referred to the
Labour Court for investigation and recommendation. A Court
hearing took place in Dublin on 19th May, 1989.
UNION'S ARGUMENTS:
3. 1. The Union initially sought the implementation of a defined
pay scale with automatic annual increments, as is the norm.
It is prepared to go along with the Banks "merit payment"
system, but some benefit must accrue to the workers from the
adoption of this method. Merit increments will give the bank
a significant advantage in the market place and it should be
prepared to pay for it. The Bank is part of an extremely
successful group and is itself a very profitable company. The
success is due in no small way to the commitment and support
of the staff. In particular, the staff's positive
co-operation with recent wide-ranging changes in work
practices is worthy of note and reward (details supplied to
the Court).
2. Staff in the bank have been at a disadvantage in the past
in respect of salaries, compared to other companies in the
sector. Many senior staff, who in other companies would have
reached the top of their scales, are far removed from the
maximum points. The Union has in the context of its
proposals agreed to maximum and minimum points proposed by the
Company. However the Union contends that the anomalies in the
rates of pay of individuals doing the same job in the Company
should be eradicated. The introduction of a formalised pay
structure is an ideal opportunity to eliminate these
anomalies.
3. The Union believes that its proposals on movement between
grades are fair and reasonable. It is normal within the
industry that workers should be one year only as "juniors."
In many cases the junior grade has been replaced with a
starting salary which is paid for one year following which the
worker goes straight onto the appropriate scale. Staff within
the Bank who have long periods of service are technically
deemed junior clerk typists and V.D.U. operators. The Union
believes that it is more than reasonable that all staff in
this category should be qualified and have the necessary basic
skills to do the job in question after one year. The Union
believes that movement between grade B and grade C should be
capable of being effected within one year and certainly 7
years is most unacceptable.
4. The Company's proposal on the range of merit pay is
unacceptable as is the payment of 3.3% for satisfactory
performance. There must be a set of thresholds whereby staff
being assessed can receive adequate reward, and these must
provide incentives for staff to exceed a satisfactory level.
To this end the Union has proposed a structure which clarifies
the percentage increase staff would receive, ranging from
unsatisfactory to exceptional. The Union's proposal of a 5%
increment for satisfactory performance is marginally higher
than that paid automatically to other staff in the industry.
This is only reasonable, given the competitive advantage which
a merit pay system confers on the Company.
COMPANY'S ARGUMENTS:
4. 1. The Union is seeking to change a culture which has existed
in the Bank throughout its 50 year history. The performance
related salary review system operated by the Bank is a more
just method of remunerating staff than by automatic
incremental increases. Remuneration systems based on
automatic scale movements result in all but a tiny minority of
staff receiving a standard incremental step each year. Only
abnormally poor performance or abnormally high performance
result in an increase which differs from a predetermined
single step movement on the salary scale. This system acts to
demotivate the committed and positive performer and results in
mediocre performance determining the level of salary award for
virtually all staff.
2. By clearly specifying the level of increase which attaches
to satisfactory performance and the merit band of 0 - 5% which
applies to different performance levels, the Bank demonstrates
that the performance related merit award system is not
designed to reduce costs, but to reward effort. Coupled with
the offer to the I.B.O.A. to make available a breakdown of the
merit awards made to its members, the annual cost of the
system can be readily identified.
3. Any mystique which may have surrounded the salary review
system in the past has now been removed by the Bank's
clarification of the manner in which the system will operate.
With a performance appraisal interview taking place 4 or 5
months prior to the salary review date, the level of merit
award granted will be far more predictable than in previous
years. This allows identification of areas where performance
is below par and provides an opportunity for improvement in
these areas to take place. A satisfactory performance rating
of 3.33% is fully in line with normal incremental steps
provided in the Economy where incremental scales exist
(details supplied to the Court). Experience within the
Woodchester Group shows that performance related merit awards
cost the employer more than a standard incremental scale.
RECOMMENDATION:
5. Having considered the submissions made by the parties, the
Court is of the view that managements proposals are not
unreasonable and should be accepted subject to an increase of 4%
being paid instead of 3.33% for a satisfactory performance rating.
These increases to be paid with effect from the date of
implementation of the next salary review. The Court considers
that managements proposals in relation to promotion are fair and
reasonable.
~
Signed on behalf of the Labour Court
Kevin Heffernan
________________________
P.P. Nicholas Fitzgerald
23rd June, 1989. Deputy Chairman
P.F./J.C.