Labour Court Database __________________________________________________________________________________ File Number: CD89711 Case Number: LCR12743 Section / Act: S67 Parties: BANK OF IRELAND FINANCE - and - IRISH BANK OFFICIALS' ASSOCIATION |
Dispute concerning the 28th wage round.
Recommendation:
7. The Court has fully considered the submissions of the parties
both oral and written.
It is the view of the Court that in drawing up the Programme for
National Recovery the parties to the programme recognised that an
appropriate pattern of pay developments had an essential part to
play.
The social partners decided as part of the programme the manner in
which increases in pay should be provided.
The Court is committed to uphold the pay provisions of the
programme freely entered into by the social partners and has made
a statement to this effect.
In giving this commitment the Court expects employers and trade
unions to ensure their actions are consistent with the spirit and
intent of the agreement and are conducive to promoting and
maintaining good industrial relations.
The Court are not convinced the Company actions in this case meet
the above criteria. Whilst offering the staff concerned in this
case the terms of the pay provisions of the Programme for National
Recovery the Company have made a settlement, with other staff
previously party to the collective bargaining arrangements with
the IBOA, which are perceived by the staff concerned in this case
to be inequitable, relative to the proposals for settlement being
made to the claimants.
The Court considers there is some merit in the view held by the
staff.
Accordingly whilst not conceding the claim of the I.B.O.A. the
Court considers that a situation created by management remains to
be resolved.
The Court takes the view that the parties should have early
discussions with a view to arrangements regarding pay being put in
place acceptable to both parties and in conformity with the
provisions of the Programme for National Recovery.
The Court so recommends.
Division: MrMcGrath Mr Brennan Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD89711 RECOMMENDATION NO. LCR12743
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BANK OF IRELAND FINANCE
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
IRISH BANK OFFICIALS' ASSOCIATION
SUBJECT:
1. Dispute concerning the 28th wage round.
BACKGROUND:
2. The Company is an independent finance house subsidiary of the
Bank of Ireland. Its main activities range from sterling deposit
taking, car loans, home improvement loans through to leasing.
3. On the 1st November, 1988 the Labour Court issued a
Recommendation in respect of the Association's 27th wage round
claim (L.C.R. No. 12098 refers). The Court recommended that the
Association accept the terms of the Company's offer i.e. the
application of increases under the Programme for National Recovery
(P.N.R.) for a period of 3 years up to the end of 1990. The
Association rejected the recommendation.
4. Following prolonged negotiations at local level the
Association accepted an amended offer from the Company which
provided for a 12 month agreement (1st April, 1988 to 31st March,
1989); increase of 3% on first #6,240 of basic salary and 2% on
any amount over that; clarification by the Company on specific
areas of co-operation required from staff; commitment to full
discussions on any major changes which would have an impact on
staff and the Company extended its commitment on no compulsory
redundancies to 31st March, 1991.
5. On the 10th May, 1989 the Company wrote to the Association
proposing a two year agreement in line with the terms of the
P.N.R. The Association rejected the offer, as at that time the
Company entered into individual agreements with the majority of
its managers. These agreements known as enhanced remuneration
system provided for a general salary increase of 3%, revised
salary scales, merit payments and other fringe benefits (details
supplied to the Court).
6. In August, the Association lodged a claim for an increase of
5%. This was rejected by the Company and following failure to
reach agreement at local level the matter was referred to the
conciliation service of the Labour Court on 10th August, 1989. A
conciliation conference was held on 10th October, 1989. As no
agreement was reached the matter was referred to the Labour Court
for investigation and recommendation. A Court hearing was held on
the 29th November, 1989.
ASSOCIATION'S ARGUMENTS:
7. 1. Historically in this Company salary negotiations have
always exceeded the rate of inflation, even when the Company
was not as profitable as it is now. The Association's claim
should be conceded as it does not place any pressure on the
Company and ensures that historical precedents are maintained.
2. The Company, and indeed the Group, has had an outstanding
performance for the period ending 31st March, 1989 (details
supplied to the Court). The recent interim 6 monthly results
for September, 1989 show a 31% increase in after tax profits
for the Group which has resulted in share earnings increasing
by 20%. The Association considers that this performance and
profitability must play a significant part when considering
salary increases. Based on these profits the Associations
claim of 5% is reasonable.
3. The Company has argued that it is restricted by the terms
of the P.N.R. However there is nothing in the P.N.R. which
restricts unions and companies exceeding its monetary terms.
In fact companies have entered into such deals where
Management have shown a willingness to recognise staff
aspirations. Many of these companies would not have had the
profitability of B.I.F. In addition, as this Association is
not party to the P.N.R., concession of the claim would not be
in breach of it.
4. Even though this Company is the most successful and
profitable in the Finance Industry its staff are not the best
paid. The Company has argued that it pays good market rates.
However it should not compare itself to the smaller and less
competitive companies but to its main rival which pays much
higher rates (details supplied to the Court).
5. The Company has created a major anomaly among internal
relativities by entering into individual agreements with the
managers. The Company has paid these staff minimum general
increases of 3% plus merit payments based on individual
performances. These increases are over and above the terms of
the P.N.R. Therefore if Management's action is taken
literally then it is itself in breach of the P.N.R. The
Association considers that in the interests of fairness and
equity its claim for an increase of 5% should be conceded.
After all the general staff have contributed as much, if not
more, to the Company's performance by their loyalty and
co-operation. The selective and preferential treatment of
certain grades is divisive and has caused resentment.
COMPANY'S ARGUMENTS:
8. 1. The Company is operating in a business environment where
its lending margins are under severe and increasing pressure
in the intensely rate-competitive Finance House market.
2. As part of the last Agreement the Company gave a
commitment that there would be no involuntary redundancies
over a three year period to 31st March, 1991, arising from
either the extension of a Computer Assisted Collection System
to its Branches or any ongoing developments. Also, that no
staff member would be reduced in rank as a result of any
change in that period.
3. The vast majority of unions have already accepted the full
three phases of the Programme for National Recovery. The
Association's members have benefited from the increase in PAYE
tax allowance relating to the Programme for National Recovery
in this year's National Budget and will benefit from any
further tax concessions that the Government will make during
the currency of the Programme.
4. Staff salaries in the four year period 1985 to end 1988
have increased by 24.6% (excluding salary scale incremental
adjustments of 3 - 4% annually) while inflation in the same
period was 13.9%.
5. The Association's argument regarding Managers' conditions
is not sustainable for the following reasons:
- Managers' pay system is merit based. Managers earlier
this year were offered individually the choice of
remaining on their existing remuneration system or
opting for an alternative performance related system.
- Managers' salary range and merit increases are decided
at the Company's absolute discretion. It is not a
collective bargaining situation.
- The timing and level of managers' salary range reviews
will not coincide with collectively negotiated
increases agreed with the Association.
- The workers concerned individually receive a salary
scale incremental increase worth 3 - 4% annually
(subject to their salaries being within scale) on top
of collectively negotiated general increases.
6. The Company in making its offer, took cognisance of the
terms of the P.N.R. which has been accepted by the main
Employer organisations and the Unions in the Country. It is
the Company's view that its offer is fair and realistic and
asks the Court to recommend accordingly.
RECOMMENDATION:
7. The Court has fully considered the submissions of the parties
both oral and written.
It is the view of the Court that in drawing up the Programme for
National Recovery the parties to the programme recognised that an
appropriate pattern of pay developments had an essential part to
play.
The social partners decided as part of the programme the manner in
which increases in pay should be provided.
The Court is committed to uphold the pay provisions of the
programme freely entered into by the social partners and has made
a statement to this effect.
In giving this commitment the Court expects employers and trade
unions to ensure their actions are consistent with the spirit and
intent of the agreement and are conducive to promoting and
maintaining good industrial relations.
The Court are not convinced the Company actions in this case meet
the above criteria. Whilst offering the staff concerned in this
case the terms of the pay provisions of the Programme for National
Recovery the Company have made a settlement, with other staff
previously party to the collective bargaining arrangements with
the IBOA, which are perceived by the staff concerned in this case
to be inequitable, relative to the proposals for settlement being
made to the claimants.
The Court considers there is some merit in the view held by the
staff.
Accordingly whilst not conceding the claim of the I.B.O.A. the
Court considers that a situation created by management remains to
be resolved.
The Court takes the view that the parties should have early
discussions with a view to arrangements regarding pay being put in
place acceptable to both parties and in conformity with the
provisions of the Programme for National Recovery.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
________________________
7th February, 1990. Deputy Chairman
M.D./J.C.