LCR13451

Subject:
Claim by the Union on behalf of 16 administrative and supervisory workers for the payment of Phase 1 of the Programme for Economic and Social Progress (P.E.S.P.) and incremental increases.

Recommendation:
5. Having considered the submissions in this case the Court,
whilst acknowledging the serious financial situation in which the
Society finds itself, is of the opinion that pending action on
future developmental changes, the long term interests of all are
best served by the payment of phase 1 of the P.E.S.P. terms.

The Court also recommends that increments due to staff should also
be paid as it does not consider the withholding of such increments
appropriate in the present circumstances.


However, it is also the opinion of the Court that the Society is
entitled to the full co-operation of the staff concerned in the
introduction of other measures to reduce ongoing costs and achieve
viability.

This course the Court recommends.

Division: Mr O'Connell Mr McHenry Mr Devine

Text of Document__________________________________________________________________

CD91341 RECOMMENDATION NO. LCR13451

INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990


PARTIES: ROYAL DUBLIN SOCIETY
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)

and

SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION

SUBJECT:
1. Claim by the Union on behalf of 16 administrative and
supervisory workers for the payment of Phase 1 of the Programme
for Economic and Social Progress (P.E.S.P.) and incremental
increases.

BACKGROUND:
2. In late 1990, the Society advised the Union that its budget
for 1991 did not allow for the payment of either annual
increments, due on 1st January, 1991, or any cost of living
increase. The Society indicated that it was not in a position to
pay any increases because of difficult economic and commercial
circumstances. This was not acceptable to the Union and on 18th
April, 1991, the matter was referred to the Labour Relations
Commission. No agreement could be reached at a conciliation
conference held 12th June, 1991, and on 3rd July, 1991, the
Commission in accordance with Section 26(1) of the Industrial
Relations Act, 1990, referred the matter to the Labour Court for
investigation and recommendation. The Court investigated the
dispute on 25th July, 1991.

UNION'S ARGUMENTS:
3. 1. Fourteen of the sixteen workers hereconcerned are affected
by the Society's decision not to honour the incremental
awards. The Court, has in the past acknowledged that even
where an employer pleads inability to pay a cost of living
increase, annual increments should still be honoured. The
employer and employee have a contract that an annual increment
will be paid, subject only to the performance of the latter.
No other criteria should be introduced.


2. The withholding of an increment is discriminatory between
staff who have a scale and staff on a flat rate. It is also
discriminatory between staff at different levels on the scale,
in that staff on the maximum lose nothing whilst staff on the
bottom of the scale stand to lose the benefit of an increment
for as many years as they are removed from the maximum e.g. 10
years off the maximum and the loss is £300 increment x 10
years = £3,000. The Union maintains that the payment of an
increment should not have any precondition attached to it
other than the individual employee's performance, therefore,
the increment should be paid from the due date, 1st January,
1991.

3. When the P.E.S.P. was agreed, the social partners
acknowledged that some employers would have difficulty in
meeting its terms. The Society pleads inability to pay the
first phase of the P.E.S.P. The difficulties being
experienced by the Society are due to the refusal of
successive executive committees to put in place any long term
viability plan. The Society's assets have been underutilised.
The result of years of conservative management, or as some
would see it years of neglect, is that staff are being asked
to subsidise the Society. The Society's failure is solely
responsible for the current situation. This is against the
background of modest increases granted under the P.N.R. An
employer who is actively promoting business and who runs into
temporary difficulty outside his control may deserve some
consideration when it comes to facing the liability for a cost
of living increase, however, in the Society's case, no such
extenuating circumstances exist.

4. Staff have always tried hard to have the Society succeed
but without a full and effective input from the executive
committee, their efforts could not avoid the current
situation. The staff have to exist at this year's price
levels and that cannot be reasonably done at last year's wage
levels. The Society should therefore pay the P.E.S.P.
increase due from 1st April, 1991.

SOCIETY'S ARGUMENTS:
4. 1. The Society has experienced severe financial difficulties
in recent years. In the period 1976 to 1990, the Society has
sustained operating losses in all but two years and now has a
resultant deficit of over £3m. If the Society is to survive
and develop financial stability for the future, the budget
deficit situation must be addressed and turned around.

2. The Society's 1991 Budget (details provided) imposes
cost cutting measures right across the board on both payroll
and non-payroll items in an effort to break even. On the
payroll side, the required savings cannot realistically be
achieved through redundancies alone. A pay freeze is required
on all staff and management salaries if budget targets are to
be attained as an intrinsic element of a viability plan.


3. Since the early 1980's competition has increased
substantially within the principle sectors that the Society
operates. The Society has also been unable to turn around the
level of attendance at the financially crucial two major shows
- the Spring Show and the Horse Show. The Society is not in a
position to pass on extra wage costs to the customer and in
view of the weak financial position the Society cannot absorb
these extra costs.

4. The Society is currently exploring all avenues of
potential for its survival and development with the assistance
of consultants. An interim report of findings and proposals
is due shortly.

5. All staff enjoy favourable terms and conditions of
employment and salary rates are competitive. Administrative
staff work a 32.5 hour week. They have a minimum of 20 days
annual leave, rising to 28 days after 15 years. In addition
they have a non-contributory pension plan and valuable
death-in-service benefits. During the Society's shows, meals
are provided on the premises and no deduction in working hours
is made for staff who are "on-call" and considered to be on
duty on those occasions. Staff working late are also provided
with meals.

6. The Society acknowledges the aspirations of its staff in
relation to wage increases. However, staff must recognise the
Society's extremely difficult financial situation. The
reality is that the Society does not have the finances to pay
phase 1 of the P.E.S.P. at the present time. The process of
rationalisation at the Society is absolutely necessary for
survival. No cost cutting measure has been taken lightly.

RECOMMENDATION:
5. Having considered the submissions in this case the Court,
whilst acknowledging the serious financial situation in which the
Society finds itself, is of the opinion that pending action on
future developmental changes, the long term interests of all are
best served by the payment of phase 1 of the P.E.S.P. terms.

The Court also recommends that increments due to staff should also
be paid as it does not consider the withholding of such increments
appropriate in the present circumstances.


However, it is also the opinion of the Court that the Society is
entitled to the full co-operation of the staff concerned in the
introduction of other measures to reduce ongoing costs and achieve
viability.

This course the Court recommends.
~

Signed on behalf of the Labour Court

John O'Connell
__________________
18th October, 1991. Deputy Chairman
B.O'N./J.C.