Labour Court Database __________________________________________________________________________________ File Number: CD9346 Case Number: LCR13957 Section / Act: S26(1) Parties: PACKARD ELECTRIC IRELAND LIMITED - and - MANUFACTURING SCIENCE FINANCE |
Dispute concerning payment of an incentive bonus.
Recommendation:
5. Having considered the submissions from the parties and noting
that the claimants had reasonable expectations to receive an
incentive bonus in December, 1992, the Court recommends that the
Company amend its offer and pay the 7% in relation to the period
June/December, 1992.
The Court further recommends that the operation of an incentive
payment scheme as agreed between the parties be the subject of
further negotiations within the context of the scheduled talks in
relation to the future development of the Company.
Division: Ms Owens Mr Keogh Mr O'Murchu
Text of Document__________________________________________________________________
CD9346 RECOMMENDATION NO. LCR13957
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: PACKARD ELECTRIC IRELAND LIMITED
and
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Dispute concerning payment of an incentive bonus.
BACKGROUND:
2. In 1991 the Company agreed to implement an incentive scheme
for its salaried staff. (Such a Scheme was already in force for
general operatives but they were paid on a weekly basis). Under
the scheme, which would be based on individual performance payment
would be made twice yearly, in June and December. The payments
ranged from 10% to 2% of basic salary. The Scheme was to operate
from June, 1992. No assessments were carried out in June, 1992
and following discussions between the parties salaried staff
received 7% which reflected the average bonus paid to shop floor
workers. In December, 1992 due to a poor trading and financial
performance the Company sought to eliminate the bonus scheme for
salaried staff. Subsequently the Company offered 4%. The Union
estimated the bonus at 9% and claimed that it should be paid in
full. Management rejected the claim. The issue was referred to
the Labour Relations Commission in December, 1992. A conciliation
conference was held on the 9th December, 1992 but no agreement was
reached. The dispute was referred to the Labour Court by the
Labour Relations Commission on the 15th January, 1993. A Court
hearing was held on the 8th February, 1993.
UNION'S ARGUMENTS:
3. 1. If the Company was suffering financial difficulties and
cutbacks were needed then Management should have implemented
an equitable distribution amongst all the workforce. The
Union finds difficulty in accepting that 100 workers could not
be paid their bonus whilst 1,000 others continued to be paid.
The payment due to the workers concerned was bonus earned and
should be paid in full. Management should then enter
discussions with all Unions in 1993 to resolve any problems.
2. The Company's offer of 4% plus a loan equivalent to 3%
payable over 52 weeks is unreasonable and not acceptable to
the Union. The Company is effectively trying to negotiate a
cut in payments retrospective to June, 1992 for 10% of the
workforce. The Union requests the Court to recommend the full
entitlement of 9% paid across the board and that the Company
negotiate changes for the future with the Union.
COMPANY'S ARGUMENTS:
4. 1. The Company has been forced to institute a wide range of
cost cutting measures including redundancies across all
Sections of the plant. To concede the payment would mean
similar claims from other groups.
2. The Company cannot afford to pay the bonus as it currently
operates. During 1992 the Company sustained substantial
losses and its European plants (with much lower cost bases
than Tallaght) have shed a substantial number of jobs.
3. In an effort to compromise the Company proposed to pay 4%
of the bonus and a further 3% by means of a loan over a 52
week period. Management contends that, given the Company's
financial difficulties, this is a fair compromise.
RECOMMENDATION:
5. Having considered the submissions from the parties and noting
that the claimants had reasonable expectations to receive an
incentive bonus in December, 1992, the Court recommends that the
Company amend its offer and pay the 7% in relation to the period
June/December, 1992.
The Court further recommends that the operation of an incentive
payment scheme as agreed between the parties be the subject of
further negotiations within the context of the scheduled talks in
relation to the future development of the Company.
~
Signed on behalf of the Labour Court
Evelyn Owens
____________________
18th February, 1993. Deputy Chairman
T.O'D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.