Labour Court Database __________________________________________________________________________________ File Number: CD89186 Case Number: LCR12314 Section / Act: S67 Parties: AN POST - and - POSTAL AND TELECOMMUNICATIONS WORKERS' UNION |
Measurement of growth under the "Partnership for Progress" Agreement.
Recommendation:
8. The Court, having regard to the wording of the Agreement,
finds that the management's interpretation is correct and in
particular concurs with the view that the purpose of paragraph 6
of Appendix 2 is to introduce the requirement that the BJMC should
approve any adjustment to the baselines other than those allowed
for in the preceding paragraph.
The question of any difference between the level of productivity
paid for under the Agreement and the level of productivity
improvement shown by reference to the growth in business
nationally is one of the relevant factors which may be taken into
account in discussions on the level of general wage round
increases just as they are in all firms (though not of course in
periods when general increases are determined under national pay
agreements).
Division: CHAIRMAN Mr Shiel Mr Walsh
Text of Document__________________________________________________________________
CD89186 RECOMMENDATION NO. LCR12314
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: AN POST
and
POSTAL AND TELECOMMUNICATIONS WORKERS' UNION
SUBJECT:
1. Measurement of growth under the "Partnership for Progress"
Agreement.
BACKGROUND:
2. In 1987 the PTWU and An Post negotiated a productivity
agreement entitled "Partnership for Progress - Development of the
Postal Service 1987 - 1992. The agreement, is to operate in three
phases or "modules" with an 8% reduction in effective working
hours in each phase. The savings involved are distributed to the
staff and the Company on a 70/30 basis. The Company's share is to
be used to freeze prices while the staff share goes to fund a #10
per week pay increase in each phase.
3. Considerable difficulty has arisen in the implementation of
the agreement. A serious dispute situation arose in late 1988 and
a national postal strike was averted by the intervention of the
Employer/Labour Conference and subsequently the Chairman of the
Labour Court. The Chairman of the Court drew up settlement
proposals dated 1st December, 1988. The Agreement provides for a
review of the first module and the Chairman's settlement terms
stated, inter alia:-
"6 The review of the first module provided for in para
5.3 of the agreement should proceed immediately. The
Union and the Company hereby give notice that without
prejudice to their position regarding their rights
under the agreement as presently worded they will raise
the following matters at the review.
(a) where it has not been possible to achieve a
reduction in staff corresponding to the
reduction in staff hours the cost of carrying
the surplus staff should be offset against the
savings.
(b) savings should be calculated on the basis of
actual cost and not current hourly basic rates
(c) growth as measured on a national basis should
be allowed for in the calculation of baselines
Both parties are free to raise additional items under
the terms of the review. The Review should be chaired
by an Industrial Relations Officer of the Labour Court
and if agreement is not reached, the parties should
agree as an exceptional and once off measure that any
issue not resolved before mid January should be
referred to the Labour Court for a recommendation."
This review has been in progress for some time. An issue which
has given rise to particular difficulty is item (c), the method of
determining growth for the second module.
4. The Agreement provides for "catchment areas". A catchment
area consists of the members of a given grade in a defined
geographical area. Productivity is measured as the difference
between current hours worked by such a Group and the baseline
hours worked by the same group i.e. the 1986/87 tax year. This
matter is dealt with in Appendix 2 to the Agreement which states:-
APPENDIX 2
Calculation of savings from reduction in staff hours.
"1. There will be discussions between management and recognised
staff representatives locally, aimed at agreeing, within the
National Guidelines for Revisions set out in Appendix 4
revised duties which will result in a measured reduction in
staff costs while maintaining or improving standard of
existing services.
2. Savings achieved will be measured for each catchment area
separately, as set out in Appendix 3.
3. Following each division of the duties the savings achieved
will be measured on the basis of the effective work hours
used weekly after the revisions compared with the effective
work hours used in the "baseline period". The value of these
savings will be calculated by applying to the hours saved the
current average hourly basic pay rate of that grade; viz:
1 July 1986 rates
Postman/Patrolman
Postal Sorter
Post Office Clerk
Cleaner
4. The "baseline period" will be the average effective work
hours used each week during the 1986/87 tax year as recorded
on forms MP917, MP923, MP924, MP924A, MP924B. Where
necessary adjustments will be made to reflect the effect of
such factors as changes in traffic, work or business
circumstances and correction of clerical errors following
audit.
5. Adjustments to reflect the correction of clerical errors, and
on an actual cost basis the cessation of business
(principally Telecom Eireann agency work) may be agreed
locally between Management and recognized union
representatives.
6. It shall be open to either party to request adjustment to
reflect other factors such as business growth. In these
cases the BJMC* will consider whether any such request should
be accepted. The views of both parties as to to the
appropriate level of adjustment will be taken into
consideration.
7. Any significant change in non staff costs (+or - #26 pa per
man) must be taken into account. The value will be
determined by local agreement in each case, and the BJMC will
be available in case of disagreement."
*Business Joint Monitoring Committee
In the course of the review which has been taking place under the
chairmanship of an Industrial Relations Officer of the Labour
Court, it has not been possible to reach agreement on the matter
of measurement of growth. The Union contends that the parties
should agree on a national figure by which baselines should be
adjusted across the board. The Company, on the other hand, argues
that baselines should be adjusted depending on local movement and
savings for each catchment area separately. As no agreement could
be reached on the issue, the parties agreed to refer the matter to
the Labour Court for a recommendation "as an exceptional and once
off measure", in accordance with Point 6 of the settlement terms
of 1st December, 1988. The matter was referred to the Court on
2nd March, 1988 and a Court hearing took place on 3rd March, 1988.
UNION'S ARGUMENTS:
6. 1. Management, in presenting its view of this issue, has
relied on Paragraph 4 of Appendix 2 of the Agreement (see
above). The Union, however considers that Paragraph 6 is the
relevant paragraph. This is the only reference to growth.
The word growth in paragraph 6 is preceded by the word
"business", which, in An Post, places it in a national rather
than a local context. The two paragraphs are not mutually
exclusive. Taken together they support the Union's contention
that there can be a local adjustment for growth provided also
that there is a national reconciliation at the end of the
period when all adjustments are completed.
2. Local adjustments could only reflect that portion of
growth in mails business associated with additional customers
in the area. They would not take account of increases in the
volume of mail per existing customer.
6. 3. There are already some 90 applications for baseline
adjustments before the Business Joint Monitoring Committee.
None of these have been cleared. In practice the Company's
proposal requires arbitrary judgements to be made as to the
appropriate adjustment in an adversarial environment. the
Union's approach would remove this adversarial dimension and
allow local adjustment requests to be cleared quickly. The
fact that there would be a national reconciliation provided
for at the end of the adjustment process would mean that
neither side would lose out.
4. Reliance on local adjustments alone, would, in the
Union's opinion, place local branches of the Union at a
disadvantage, as they would not have the same level of
resources as management has.
5. The existing post testing in operation has limited
application only to the determination of growth (details
supplied).
6. The Union's claim for national reconciliation of all
local baseline growth adjustments is modest having regard to
the wide range of new services and procedures recently
introduced (details supplied).
7. During the course of negotiations on the agreement the
union side was informed that growth at national level would be
offset against the requirements of the Second and Third
Modules. Thus, if there was a 6% growth at national level
between the First and Second Modules, then the savings
required to get the second #10.00 increase would be 10% of the
original baseline and not 16% as would be the case with the
Company's present position. The agreement was sold to the
members on this basis and even then it was accepted only by a
narrow margin.
8. The practical steps which are necessary to take account
of growth are as follows:-
(a) All existing applications for local baseline
adjustments should be considered and cleared by the
Business Joint Monitoring Committee.
(b) The growth in business volume as computed for the
company's annual report should be declared for the
period since 1986/87 (baseline reference year).
(c) The cumulative national baseline working hours
should be adjusted by the percentage determined in
(b) above.
(d) The cumulative value of the local baseline
adjustments as approved by the BJMC should be
deducted from the figure established under (c)
above and the difference, in percentage terms,
distributed uniformally to each catchment area
baseline provided of course that there is anything
to distribute.
This formula is fair to both sides and has the advantage that it
can be done very quickly and it will remove the growth issue as a
contentious matter from the agenda.
COMPANY'S ARGUMENTS:
7. The Company made a comprehensive written submission to the
Court the main points of which were as follows:-
1. There is no reference in the Agreement to
measurement of productivity on a national basis.
The Agreement provides for improvements in
productivity on a local basis i.e. catchment areas.
2. The Agreement provides for each proposed change in
baselines to be considered on its merits by the
BJMC.
3. Automatic, across the board adjustment of baselines
would be inconsistent with the intention behind the
detailed itemisation of baselines provided for in
the Agreement.
4. The achievement of productivity improvements is
through locally agreed duty revisions. The
Agreement provides for the more intensive and
frequent use of this reliable and well established
process to achieve savings in each area.
5. The Agreement recognises that there is not
necessarily any automatic relationship between a
change in work volumes and the need to change a
baseline. The need for baseline adjustment is to
be considered locally on its merits.
6. The Union relies on paragraph 6 of Appendix 2 to
argue that its proposal is grounded in the
provisions of the agreement. The Union's case in
this respect is based on a misreading of Appendix
2. The sole purpose of Appendix 2 is to detail the
methods and procedures for operating local
baselines. Paragraphs 1 to 3 of the Appendix deal
with the process of local discussion, local
revisions and calculation of local savings. They
deal with the steady state situation. Paragraph 4
introduces the principle of adjusting local
baselines in respect of two broad types of factor
viz (i) the effect of traffic changes etc. and (ii)
errors. Paragraphs 5 and 6 deal only with the
procedural aspects of making such adjustments.
Neither paragraph adds a new dimension such as
national indexation or "topping-up" to the scope of
baseline adjustments. Paragraph 5 simply says that
adjustments for cessation of Telecom Eireann work
or for correction of clerical errors can be
disposed of fully at local level (i.e. without
reference to the BJMC). The sole purpose of
paragraph 6 is to introduce a procedural
requirement (i.e. reference to the BJMC), regarding
locally proposed adjustments in respect of the
other kinds of factor (including "growth").
7. The Union initially accepted the measurement of
growth on catchment area basis (details supplied)
in accordance with the intention of the Agreement.
A change in Union policy subsequently took place in
relation to this matter and the Union is now
seeking unwarranted baseline adjustments to
increase payments made.
8. Growth does not occur uniformly as between
catchment areas. Therefore, if it impacted at all,
it could not impact uniformly on the level of staff
resources required in each catchment area i.e.
uniform adjustment of baselines would be
inappropriate.
9. Business volumes are not the sole or even the main
determinants of changes in staffing requirements
and there is no single or automatic relationship
between the two. Therefore a 5% growth in volumes
could not possibly warrant an automatic 5%
adjustment of baselines, either at individual
baseline level or at national level.
10. The Union is essentially arguing that staffing
adjustments should now be greater than would have
been warranted pre-productivity i.e. greater than
merited on the basis of the normal duty revision
process. This is plainly in conflict with the
fundamental objective of the Agreement.
RECOMMENDATION:
8. The Court, having regard to the wording of the Agreement,
finds that the management's interpretation is correct and in
particular concurs with the view that the purpose of paragraph 6
of Appendix 2 is to introduce the requirement that the BJMC should
approve any adjustment to the baselines other than those allowed
for in the preceding paragraph.
The question of any difference between the level of productivity
paid for under the Agreement and the level of productivity
improvement shown by reference to the growth in business
nationally is one of the relevant factors which may be taken into
account in discussions on the level of general wage round
increases just as they are in all firms (though not of course in
periods when general increases are determined under national pay
agreements).
~
Signed on behalf of the Labour Court
John M Horgan
13th March, 1989 --------------
A.K./U.S. Chairman