Labour Court Database __________________________________________________________________________________ File Number: CD89262 Case Number: LCR12411 Section / Act: S67 Parties: EOLAS - and - MANUFACTURING SCIENCE AND FINANCE |
Dispute concerning mileage rates for private cars.
Recommendation:
5. The Court recommends that the Civil Service rates should be
accepted. The Court notes that negotiation has not taken place on
compensatory measures for this alteration in rates and also notes
that the employer indicated a willingness to examine the position
of those whose cars were subjected to exceptional conditions.
The Court recommends that the parties immediately enter into
negotiation on these matters.
Division: Ms Owens Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD89262 RECOMMENDATION NO. LCR12411
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: EOLAS
and
MANUFACTURING SCIENCE AND FINANCE
SUBJECT:
1. Dispute concerning mileage rates for private cars.
BACKGROUND:
2. In 1980, the Institute for Industrial Research and Standards
(IIRS) (now part of Eolas) reached agreement with the unions to
pay mileage rates above the Civil Service norms by widening the
band structure to 4,000 mile steps and paying the average of the
first two Civil Service rates for the first 8,000 miles. It was
also agreed that "Management had no further proposals or changes
in mind for as present circumstances prevail". In January, 1987
Management sought to pay Civil Service rates only in respect of
mileage commencing for 1986. The Union disputed this and the
agreed amounts were paid for 1986. Civil Service rates were paid
for 1987 and 1988 and an agreement reached in October, 1988
provided compensation for those two years (details supplied to the
Court). Further local discussions on arrangements for 1989 broke
down and on the 20th march, 1989, Management referred the dispute
to the conciliation service of the Labour Court. A conciliation
conference on the 7th April failed to resolve the issue and the
matter was referred to the Labour Court for investigation and
recommendation. A Court hearing was held on the 8th May, 1989.
MANAGEMENT'S ARGUMENTS:
3. 1. The mileage rates under the 1980 agreement are out of
line with what is paid in comparable organisations. Both
groups involved have pay relativities with comparable grades
in Teagasc. The mileage rates in Teagasc are strictly Civil
Service rates. On 1st January, 1988, the IIRS and National
Board of Science and Technology (NBST) were merged to form
Eolas and a further anomaly exists as a result as ex NBST
staff have always been paid Civil Service rates. No other
non-commercial state body pays mileage in excess of the Civil
Service rates. The additional cost of the enhanced rates in
respect of 1987 mileage would be #54,000, of which #23,000
would have been due to staff and #31,000 due to the Revenue
Commissioners as the excess is a taxable emolument.
3. 2. Since the original agreement in 1980, major changes have
occurred in the Agency's finances. Up to the end of 1988 an
accumulated deficit which required a special supplementary
estimate of #1.8 million to clear had accrued. The estimated
outurn in 1989 again shows a small deficit which would be
increased by approximately #50,000 if the rate of mileage paid
exceeds the Civil Service rate.
3. It is Government policy to curtail public expenditure
especially in areas where savings can be made without
affecting the quality of services. In these circumstances
there is no justification for a continuation of mileage rates
which are out of line with Civil Service rates. To incur such
additional cost would simply increase the Agency's deficit and
this would not, in Management's view, be a responsible way to
act. The Civil Service rates are adequate, and Management
cannot accept that there is now any case for paying higher
rates.
4. A detailed analysis of 1987 mileage shows that of a
total of 349 claimants for mileage in that year that the
breakdown of average benefit between Civil Service rates and
the enhanced IIRS rates are as follows:-
Annual Mileage No. affected Average Gross Benefit Average Nett
Benefit
0 - 2000 190 #15.62 #6.56
2001 - 4000 65 #29.15 #12.24
4001 - 6000 51 #205.22 #86.19
6001 - 8000 28 #747.61 #314.00
8001 - 12000 14 #1167.50 #490.35
Over 12000 1 #1421.00 #601.02
Since 1984, the Inspector of Taxes has determined that all
amounts paid over and above the Civil Service rates
constituted a profit element and was liable to income tax.
This has reduced the benefit to individuals but would not
affect the overall liability of the Agency where 58% of the
total would be paid to the Revenue Commissioners. It can be
seen that, in nett terms, of the 349 claimants, 255 lose less
than #20 per annum, a further 51 lose less than #100, while
only 43 lose more than #100. There are also a further 234 who
have no mileage claims and therefore no benefit.
3. 5. Most of the annual costs of Eolas are staff related -
pay, subsistence, mileage. In the present serious financial
position of the Agency every avenue must be explored to
achieve cost reductions where possible. The nature of the
work of many Eolas staff requires that they travel outside
Eolas premises - to visit clients, other Government Agencies,
and so on. Eolas, like any employer, must provide travel
facilities for its staff for this purpose, but like any
employer, it can only be expected to do so to the extent of
ensuring that employees suffer no loss as a result and that
any legitimate expenses incurred are repaid to them. That is
the basic principle that should apply. More economic
arrangements can be made which would be in accordance with
this principle and which can also achieve worthwhile cost
reduction, firstly by reverting to Civil Service rates and so
removing the profit element identified by the Inspector of
Taxes. The second way in which saving can be made is through
the use of hired or contract cars in certain specified
instances (details supplied to the Court).
6. It is Management's view that it must be in a position to
ensure that the most cost effective travel arrangements are
applied while taking into account staff motivation and other
factors. The total amounts spent on mileage is close to
#500,000 per annum, indeed in 1986 it was #571,247 and it is
clear that this is one of the few areas of expenditure where
saving is possible. The desire is not to worsen employment
conditions but to ensure the most cost effective expenditure
of public monies.
UNION'S ARGUMENTS:
4. 1. It has been argued by Eolas that the Civil Service rates
are the only rates of reimbursement which represent fair
compensation for travel and that a refusal to accept these
rates is unreasonable. The Union accepts the principle of
fair compensation for travel but the agreed fair compensation
for travel arrangement was arrived at after extensive analysis
and negotiation in the past. Nothing has changed in the
interim to substantially reduce the cost of motor travel,
therefore the fair rate of compensation should remain
substantially the same.
2. The situation is that for many years an agreed scheme
for the use of private cars has served Eolas well and has been
perceived by the claimants as providing fair compensation for
the provision by them of this facility. The scheme is similar
to other schemes in use in the Public Service.
4. 3. The Civil Service Scheme, the Local Authority Scheme,
and the Eolas Scheme, each have mileage rates which vary
somewhat from each other. The different rates reflect the
differences in the circumstances which arise for officers in
the use of their cars. The justification for paying slightly
higher rates compared with the Civil Service is well
established. Eolas rates provide compensation which, after
tax, is almost the same as that provided by the Local
Authority Scheme.
4. Two aspects of the value of the use of a car for the
employer's business are apparent. These are the time for
which the car is made available, and the mileage driven. The
value of the time element is related to the annual fixed costs
of the car (purchase, depreciation and insurance), whilst the
mileage driven incurs a proportion of running cost made up
largely of fuel, servicing and general wear and tear. If the
employer's requirement for a car can be organised with
consideration to the employee's domestic car requirement, the
time cost can readily be allowed for in the mileage cost.
However, where the availability of a car might be a
requirement at short notice (which is largely the case at
Eolas), there may be a frequent recourse to making the car
available where it is not ultimately required. This not not
readily quantifiable in terms of reimbursement based on
mileage covered only.
5. If an employee has a reasonable expectation that he
might be required to use his car on any working day, without
prior notice, his car might logically be expected to be made
available to his employer on every working day. This case
would be normally true of those officers of the Agency who
cover the higher annual mileages, such as the staff of the
Environmental Programme. Should the employee's family have
domestic needs for a car, then it would appear that a second
family car, with its consequent costs, would thus be required.
Considerations such as these, related to a rapid response
consultancy service, would not be expected to apply to the
majority of Civil Service car users, and therefore their rates
would not be expected to take account of them. The Eolas
rates were designed as precisely as is possible given the
above factors, to reflect the factors identified above.
4. 6. Clause 3.3.(a) of the Programme for National Recovery
states that "It shall not be contrary to this Agreement for
the Government as employer and the unions to negotiate the
settlement of minor claims which are particular to an
individual employment and which do not involve basic pay or
require external comparisons". Management is seeking to
invoke a comparison with other semi-state and Civil Service
bodies and therefore is not entitled to use this clause.
Clause 5 states that "trade unions undertake not to enter into
a strike or promote or encourage any other form of industrial
action calculated to bring pressure to bear on an employer to
concede an increase in pay or improvement in conditions in
excess of the terms of Clauses 2 and 3 of this Agreement".
The Union is not seeking an increase or improvement, but a
retention of the status quo.
7. The PNR makes no reference to any deterioration in
conditions of service of staff and since there is no indicated
provision for such a deterioration, then such a change is not
permissible during the currency of the PNR.
RECOMMENDATION:
5. The Court recommends that the Civil Service rates should be
accepted. The Court notes that negotiation has not taken place on
compensatory measures for this alteration in rates and also notes
that the employer indicated a willingness to examine the position
of those whose cars were subjected to exceptional conditions.
The Court recommends that the parties immediately enter into
negotiation on these matters.
~
Signed on behalf of the Labour Court
Evelyn Owens
23rd May, 1989 ----------------
D.H./U.S. Deputy Chairman