Labour Court Database __________________________________________________________________________________ File Number: CD92391 Case Number: LCR13746 Section / Act: S26(1) Parties: IRISH SHELL - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning: (i) Superannuation (ii) Anomaly of 2.5% (iii) Temporary workers.
Recommendation:
18. The Court finds that the claims in respect of improvements to
the superannuation scheme and the restoration of the relativity
between the Superintendent Grade 9 and the Administration Grade 9
are cost increasing claims and as such are precluded under the
provisions of the Programme for Economic and Social Progress.
With respect to the issue of temporary employees the Court
considers that the six (6) employees identified should be
appointed to permanent positions in the Company at the appropriate
grade and pay scale. Following this, should the Company so wish,
they may discuss with the Union pay scales which they consider may
assist in maintaining competitiveness and more accurately reflect
the rates of pay in the market place.
The Court so recommends.
Division: MrMcGrath Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD92391 RECOMMENDATION NO. LCR13746
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: IRISH SHELL
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning:
(i) Superannuation
(ii) Anomaly of 2.5%
(iii) Temporary workers.
GENERAL BACKGROUND:
2. The dispute concerns approximately 80 workers who are employed
in the administrative supervisory and sales superintendent grades.
The claims were referred to the Labour Relations Commission on the
6th February, 1992. A conciliation conference was held on the 9th
June, 1992 but no agreement was reached. The issues were referred
to the Labour Court by the Labour Relations Commission on the 6th
July, 1992. The Court investigated the dispute on the 10th
August, 1992.
CLAIM (1) SUPERANNUATION (A) NON-INTEGRATED PENSION SCHEME:
BACKGROUND:
3. In 1977 the parties agreed to integrate the Company pension
with the State pension. Under the scheme a worker received a
pension amounting to two thirds (2/3) of salary made up of the
Shell pension plus the state pension. The Union's claim is for
non-integration i.e. the full two thirds Company pension plus the
State pension.
UNION'S ARGUMENT:
4. 1. Following the integration of the pension schemes the
pension entitlements of the workers concerned were seriously
reduced. Their contributions to the non-integrated scheme up
to that time were 'lost.' The Company benefitted, as its
obligation to underwrite the scheme was reduced by the lower
pension entitlement coupled with the extra funds contributed
to the scheme by workers towards the higher non-integrated
pension. Numbers employed in the Company have been reduced
from 500 to 130. With the significant reduction in staff
numbers in 1988, 1989, and 1990 a severance/early retirement
package was made available which required significant
additional capital injections into the fund. This capital
injection was not made and the Company's contribution was
reduced from 35% to 15%. This implies a significant surplus
in the fund which Management used to underwrite the early
retirement package. The surplus should have been used to fund
improvements for members. The non-integrated scheme should be
restored to existing members.
COMPANY'S ARGUMENTS:
5. 1. The vast majority of pension schemes are integrated with
the State scheme. The fund has over 400 pensioners and their
pensions will be adjusted to take account of state pensions at
age 65. The Company's actuary has stated that the cost of
non-integration for current pensioners would be in excess of
#3 million. The financial strain on the fund in respect of
active members is calculated in excess of #2 million.
2. The claim is precluded as a cost increasing claim under
the Programme for Economic and Social Progress (P.E.S.P.).
(b) Inclusion of Ceiling Merit Bonus (C.M.B.) and productivity
allowance in pensionable salary
BACKGROUND:
6. The Company has separate pension schemes for blue collar and
white collar workers. Both schemes provide similar benefits. In
1988 the Company and its blue collar workers agreed to have an
Unscheduled Delay Allowance (U.D.A.) included in the definition of
pensionable salary. The Union claims that the white collar
workers should have their C.M.B. and productivity allowance
included in pensionable salary.
UNION'S ARGUMENT:
7. 1. The inclusion of C.M.B. and productivity allowance in
pensionable salary would put white collar workers on an even
footing with their operative counterparts. Including the
U.D.A. for operative grades is unfair to other members. This
situation could be rectified if the C.M.B. and the
productivity allowance was included in the pensionable salary
of white collar workers.
COMPANY'S ARGUMENTS:
8. 1. The two pension schemes evolved separately and were
negotiated by different agreements over the years. C.M.B. and
productivity allowance are not included in salary for pension
purposes in other schemes in the industry.
2. The claim is cost increasing and is precluded under the
P.E.S.P.
(c) Improved Indexation:
BACKGROUND:
9. The present indexation of pension benefits is limited to a
maximum of 4%. The Union claims that the ceiling should be
increased to 5%.
UNION'S ARGUMENT:
10. 1. While the existing 4% is adequate to cover the current
level of inflation the extra 1% would provide for any further
increase in inflation.
COMPANY'S ARGUMENTS:
11. 1. The actuarial cost of increasing guaranteed indexation
from 4% to 5% would cost approximately #11 million.
2. The claim is cost increasing and is precluded by the
P.E.S.P.
Claim 2 Anomaly of 2.5%
BACKGROUND:
12. The Company's grading structure is as follows:
Administrative Grade, Sales Superintendent Grade, Operations
Supervisor Grade. In the mid seventies the various groups
concluded separate productivity deals with the Company. The Sales
Superintendent Grade had their C.M.B. (2.5%) consolidated into
basic pay as part of a productivity deal. In 1982 their C.M.B.
was restored following a Labour Court Recommendation (L.C.R. 6953
refers). The Union claims that this has created an anomaly
between the Administrative and Sales staff and is seeking an
increase of 2.5% for the Administrative Grade 9 workers.
UNION'S ARGUMENTS:
13. 1. The Grade 9 - 3 Administrative Group have a long
established relativity with Grade 9 Sales Superintendent and
Grade 9 Operations Supervisor and all enjoyed identical
salaries at one stage. The Administrative Group concluded a
productivity agreement in the mid seventies which gave them an
increase. The Sales Superintendent Grade completed a similar
agreement but because they were unhappy with the monetary
terms the Company offered to consolidate the C.M.B. into their
salaries. The restoration of the C.M.B. following Labour
Court Recommendation 6953 had the effect of distorting the
relationship between the Sales Superintendent Grade 9 and the
Administrative and Operations Grade 9 in terms of the combined
value of their scale maximum and C.M.B. This distortion also
extends to other grades in the 9-3 B negotiation unit.
2. The anomaly arose in 1982 and the claim pre-dates both the
P.N.R. and P.E.S.P. and should not be hindered by the
respective restrictive clauses in the programmes.
COMPANY'S ARGUMENTS:
14. 1. The Union has only raised this issue within the last
twelve months. There were three separate productivity
agreements for the various groups. The Company does not
accept that relativity ever existed between sales and the
clerical/administrative group. Any alleged relativity should
have been established and settled at the time. The salaries
of both the Sales and Administrative group compare favourably
with market rates.
2. The claim is cost-increasing and is precluded under the
P.E.S.P.
Claim 3 Temporary workers:
BACKGROUND:
15. The Company employs a number of temporary/casual staff to
fill vacancies arising from early retirement/redundancy schemes.
The Union has identified 6 temporary posts which should be made
permanent. Management is agreeable but is seeking to make the
positions permanent on a lower wage than the agreed scale. The
Union has rejected this proposal.
UNION'S ARGUMENT:
16. 1. While the Company belatedly acknowledges that the six
posts in question should be made permanent its proposal to
breach the Company/Union agreement by offering salaries and
conditions below the agreed levels is not acceptable to the
Union. The Union has tolerated the recruitment of temporary
workers to fill permanent posts for the past few years. Now
that the posts are about to be filled the workers recruited
must be paid the appropriate salaries pertaining to their
grades.
COMPANY'S ARGUMENT:
17. 1. The existing salary scales for the grades which the
Company intends to make permanent, while comparable to
traditional oil companies, are out of line with the rest of
the market. The Company believes that new scales could be
agreed comparable to those obtaining in other Agencies i.e.
Banks, E.S.B., Aer Lingus etc.
RECOMMENDATION:
18. The Court finds that the claims in respect of improvements to
the superannuation scheme and the restoration of the relativity
between the Superintendent Grade 9 and the Administration Grade 9
are cost increasing claims and as such are precluded under the
provisions of the Programme for Economic and Social Progress.
With respect to the issue of temporary employees the Court
considers that the six (6) employees identified should be
appointed to permanent positions in the Company at the appropriate
grade and pay scale. Following this, should the Company so wish,
they may discuss with the Union pay scales which they consider may
assist in maintaining competitiveness and more accurately reflect
the rates of pay in the market place.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
____________________
1st September, 1992. Deputy Chairman
T.O'D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.