Labour Court Database __________________________________________________________________________________ File Number: CD90380 Case Number: LCR12962 Section / Act: S67 Parties: GALLAHER (DUBLIN) LIMITED - and - MARINE PORT AND GENERAL WORKERS UNION |
Claim by the Union on behalf of the salesforce for pay parity with the salesforce in the Carroll Tobacco Company.
Recommendation:
5. The Court, having considered the submissions in this case,
does not find any grounds for the concession of the claim and
accordingly, recommends its rejection.
Division: Ms Owens Mr Collins Mr Devine
Text of Document__________________________________________________________________
CD90380 RECOMMENDATION NO. LCR12962
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: GALLAHER (DUBLIN) LIMITED
AND
MARINE PORT AND GENERAL WORKERS UNION
SUBJECT:
1. Claim by the Union on behalf of the salesforce for pay parity
with the salesforce in the Carroll Tobacco Company.
BACKGROUND:
2. The Union has claimed on behalf of the salesforce in the
Company, i.e. sales representatives, sales development/relief
representatives and merchandisers pay parity with the salesforce
in the Carroll Tobacco Company. On 3rd October, 1989 the matter
was referred to the conciliation service of the Labour Court. A
conciliation conference was held on 1st November, 1989 arising out
of which it was agreed that the Union would consider the use of
the Hay MSL Job Evaluation based on the Gallaher system standards.
However, this proposal was rejected by the salesforce and on 1st
July, 1990 the matter was referred to the Labour Court for
investigation and recommendation. The Court investigated the
dispute on 20th July, 1990.
UNION'S ARGUMENTS:
3. 1. The claim for parity for the salesforce has been raised in
negotiations for many years and management has consistently
rejected the claim on the grounds that the Company's market
position did not justify concession of the Union's claim.
However, in the last three to five years the workers have
co-operated and accepted changed work practices which have
included the carrying of car stock and swop stock which is not
done by Carrolls and many other systems. This has resulted in
a situation where this Company has moved from the bottom of
the league to a position where it is satisfied that within the
next couple of years the Company will be market leaders in the
Irish market. Three years ago Carroll's market share was 52%
but is now only 45%, in contrast in the same period this
Company's market share has increased from 25% to 32% and
further increases are forecast.
3. 2. A comparison of the current salary range for the workers
involved in this claim compared with the salary package of
sales staff in the Carroll Tobacco Company shows a
considerable shortfall (details supplied to the Court). The
salaries of sales representatives in Carrolls range from a
lowest point of #16,803 (Relief Representative) to a top point
of #24,206 and for merchandisers from #13,298 to #18,805 and
both scales are due for further adjustment in the near future.
In contrast the salary scales for workers in this Company
range from #13,607 to #19,923 for sales representatives,
#11,929 to #18,128 for sales development/relief and #9,636 to
#15,670 for merchandisers. In addition, other groups in this
Company have parity with Carrolls and have had this parity for
years. The achievements and improved profitability of this
Company are due to the co-operation of the salesforce in
accepting changes sought by the Company and in the carrying
out of functions not done by Carrolls' representatives. The
consultant for Hay MSL stated that involvement in that system
would not resolve this matter. In all the circumstances, the
claim for parity is justified and should be conceded.
COMPANY'S ARGUMENTS:
4. 1. The Company rejects emphatically the notion of parity not
only for this group but also for any other group or worker in
the Company, as the Company operates as an independent Company
with its own structures, cost burdens and operational
considerations. No group within the three companies of
Gallaher, Carrolls or John Players has succeeded in obtaining
the notion of parity between any of the three companies. The
companies operate in the increasingly competitive and
declining tobacco industry, they are separate and distinct
with their own structures, business operations and internal
pay relativities. In such a situation to introduce the notion
of parity is not in the long term interest of any group of
employees within the tobacco industry as it would effectively
introduce a restrictive practice in the highly sensitive and
delicate area of pay policy. This would seriously erode
management's ability to control labour costs and could be
detrimental to long term job prospects.
2. While there is no pressure on the salesforce to enter Hay
all other negotiating groups have had Hay MSL Job Evaluation
for four to ten years. Any unilateral rise given to the
salesforce outside Hay Job Evaluation would have an effect on
internal relativities and lead to knock on effects. The
Company has operated very successfully in recent years on the
basis of payment by results, which manifests itself through
significant increases in pay generated by the Company profit
based bonus paid twice a year (details supplied to the Court).
As part of the third round of the Programme for National
Recovery (PNR) the Company has negotiated a further 2.6%
increase, which has been accepted by 80% of the workforce,
therefore any unilateral increase would be in conflict with
that policy. The Company has also in accordance with the PNR
given some of the short term success of the Company to its
employees by consolidation of 5% of the bonus payment, giving
them longer term rewards in future earnings and pensions. An
analysis of the FIE 1989 survey of salesforces within
manufacturing shows that this Company's salesforce is in the
higher end of the upper quartile. Concession of the principle
of parity would have a catastrophic effect and a major
repercussive effect on Company pay policy, not only in the
short term but in the long term as well. In all the
circumstances the claim should be rejected.
RECOMMENDATION:
5. The Court, having considered the submissions in this case,
does not find any grounds for the concession of the claim and
accordingly, recommends its rejection.
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Signed on behalf of the Labour Court,
Evelyn Owens
___30th___July,____1990. ___________________
U. M. / M. F. Deputy Chairman