Labour Court Database __________________________________________________________________________________ File Number: CD90102 Case Number: LCR12919 Section / Act: S67 Parties: L.M. ERICSSON (LMI) LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union on behalf of 150 designers concerning an anomaly between the rates for trainees and those of designers/senior designers.
Recommendation:
5. Having fully considered the submissions of the parties, the
Court is of the view that the operation of the Company's pay -
ranges is not unfair to any of the groups of claimants. The Court
accepts that cognisance of the going-rate for qualified trainees
is essential to the acquisition by the Company of suitable talent.
The fact that from time to time this rate may increase within the
agreed pay-range does not automatically confer a right for pay
alignment on other grades.
In the same way, the response of the Company, in the annual pay
review, to the market position of these other grades does not
confer on the trainees a right to identical treatment. It is the
view of the Court therefore that within the agreed min-max ranges
agreed by the parties, and as adjusted by general rounds, the
establishment of a relativity between grades based on the
application of disparate market rates is not appropriate.
Accordingly the Court does not uphold the Unions claim.
Division: CHAIRMAN Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD90102 RECOMMENDATION NO. LCR12919
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: L.M. ERICSSON (LMI) LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union on behalf of 150 designers concerning an
anomaly between the rates for trainees and those of
designers/senior designers.
BACKGROUND:
2. The Company's Athlone operation includes a Software Design
Division. The Division employes 200 staff of whom approximately
150 are designers writing software packages for the Company's
telecommunications equipment. There are three grades of software
designer staff, trainee designer, designer and senior designer.
The Union claims that since 1983, the trainee rate has been
increasing without corresponding increases for designers and
senior designers. As a result the designer and senior designer
rates have fallen out of line by an estimated 24%. The Union is
seeking an adjustment to bring the rates back into line. The
Company rejected the Union's claim and on 31st October, 1989, the
matter was referred to the conciliation service of the Labour
Court. No agreement was reached at a conciliation conference held
on 1st February, 1990, and the matter was referred on 6th
February, 1990, to the Labour Court for investigation and
recommendation. The Court investigated the dispute on 30th May,
1990.
UNION'S ARGUMENTS:
3. 1. When the salary structure was first agreed in 1983, the
minimum point for a trainee was #7,000. Had this been
adjusted by the subsequent wage rounds, as were the other two
scales, then it would have been #9,444 in 1989. However,
because the Company have been giving additional adjustments to
the trainee scale, the 1989 minimum actually stood at #11,750
or 24% higher than it would otherwise be.
3. 2. The starting salary for a trainee is a determining
factor in the assimilation to and progression on the designer
scales. Depending on the time of year one started in the
Company relative to the time of year the trainee scale was
adjusted, some staff could find themselves on the same or
lower point than a later recruit. Depending on the date of
commencement between 1983 and now the percentage anomaly will
range from 24% down.
3. The net result of the adjustments to the trainee scale
is a situation where the minimum of the trainee scale is #631
higher than the minimum of the designer scale. This has
knock-on effects on the maximum of the designer scale and the
minimum and maximum of the senior designer scale.
4. The Company have said that in order to attract the right
calibre of staff it was necessary to adjust the recruitment
minimum by more than the wage round adjustments. The Union
believes that to retain the same staff a similar upward
movement in salaries is necessary. In normal circumstances
one would expect to find greater emphasis on retaining staff
than on attracting recruits.
5. In 1982 an agreement was reached, enshrining the
original three tier structure, whereby no unilateral change
would take place without either using the agreed machinery or
appropriate notice of termination of the agreement.
Management have not advised the Union of the various
adjustments to the trainee scale since 1983.
6. The Company under the various wage rounds have resisted
claims for anything above the norm for a particular round but
think nothing of upsetting the agreed and long standing
relativities between the three designer grades. The result of
the Company's actions has been that the differentials between
the minima of the three grades have been totally distorted.
7. A 1982 recruit, given an average performance appraisal,
would take three to four years to achieve a 24% progression in
salary (aside from cost of living increases). A 1988 recruit
would start on the salary that the 1982 recruit could only
achieve after three to four years.
COMPANY'S ARGUMENTS:
4. 1. The salary structure for the Division is based on
overlapping salary bands for the different categories adjusted
annually by a basic increase in line with the Company's salary
policy and according to each individuals performance
appraisal. The Company has applied this system fairly and
consistently since its inception and no individual has been
disadvantaged by the implementation of this agreed structure.
2. While there is a salary band for trainees established
each year the actual entry rate is established separately. In
determining this rate the Company must take into account
trends in the market place; the number and type of graduates
available; the quality and type of candidates sought, the
salary levels on offer by other companies and the salary
levels of existing employees within the Division. The Company
must be reasonably competitive with other companies in other
to get recruits of the right calibre, therefore, it is vital
to have continued monitoring of the trainee entry rate.
3. The salary bands for the different categories of
designer are agreed with the Union and implemented on an
annual basis. Other than the recruitment rate all salaries
are reviewed under the same evaluation system. The salaries
and other conditions of employment of the designers compare
favourably with similar employees in comparable employments.
There is no evidence that the Company's actions with regard to
trainees has in anyway disadvantaged other employees.
4. The Company operates in a very competitive market and
must maintain its competitiveness in order to survive and
grow. As a result of the Company's ability to compete it has
been able to provide additional jobs each year since 1980.
Concession of the Union's claim could reduce or eliminate the
Company's future growth potential.
5. The Company believes that the claim is contrary to
Clause 4 of the Programme for National Recovery, as the claim
is of a cost increasing nature.
RECOMMENDATION:
5. Having fully considered the submissions of the parties, the
Court is of the view that the operation of the Company's pay -
ranges is not unfair to any of the groups of claimants. The Court
accepts that cognisance of the going-rate for qualified trainees
is essential to the acquisition by the Company of suitable talent.
The fact that from time to time this rate may increase within the
agreed pay-range does not automatically confer a right for pay
alignment on other grades.
In the same way, the response of the Company, in the annual pay
review, to the market position of these other grades does not
confer on the trainees a right to identical treatment. It is the
view of the Court therefore that within the agreed min-max ranges
agreed by the parties, and as adjusted by general rounds, the
establishment of a relativity between grades based on the
application of disparate market rates is not appropriate.
Accordingly the Court does not uphold the Unions claim.
~
Signed on behalf of the Labour Court
Kevin Heffernan
18th June, 1990 ---------------
B O'N/U.S. Chairman