Labour Court Database __________________________________________________________________________________ File Number: CD92632 Case Number: LCR13920 Section / Act: S26(1) Parties: TEAM AER LINGUS - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION;IRISH AVIATION EXECUTIVE STAFF ASSOCIATION |
A dispute concerning the transfer of off-scale bonus payments to scale for Executive Managers (Superintendents).
Recommendation:
5. The Court has given careful consideration to all the points
made by the parties to this dispute. Whilst the Court would
normally be disposed to accept, as a general principle, that bonus
payments should, in view of their incentive context, be treated as
off-scale, the Court is of the view that it could not ignore the
manner in which the Company dealt with other employees and
accordingly recommends concession of the Union's claim that 7.5%
of the off-scale bonus be assimilated into basic salary.
In light of the opinion expressed above on the normal treatment of
bonus the Court recommends that the parties meet to discuss the
manner in which it should be dealt with in the future.
Division: Ms Owens Mr Brennan Mr Rorke
Text of Document__________________________________________________________________
CD92632 RECOMMENDATION NO. LCR13920
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1) INDUSTRIAL RELATIONS ACT, 1990
PARTIES: TEAM AER LINGUS
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
IRISH AVIATION EXECUTIVE STAFF ASSOCIATION
SUBJECT:
1. A dispute concerning the transfer of off-scale bonus payments
to scale for Executive Managers (Superintendents).
BACKGROUND:
2. 1. In 1990, the Union expressed concern to the Management
of Team Aer Lingus regarding the erosion of the value of
Superintendents' (now called Executive Managers) earnings
relative to the grades supervised. Discussions followed and
agreement was reached on a number of issues except the
treatment of bonus payments.
2. Prior to the formation of Team Aer Lingus,
Superintendents received an off-scale bonus while other grades
including Technical Supervisors received no bonus. However,
in 1990, the Company introduced a productivity bonus scheme
for craftworkers and later extended this to Technical
Supervisors. The Union claimed that this was eroding the
earnings differential between the Superintendents and the
Technical Supervisors and sought the extension of the scheme
to Superintendents. The Company was not agreeable to this and
entered negotiations with the Union to formulate a new bonus
scheme.
3. A general outline for a new bonus scheme was agreed but
the issue of the transfer of off-scale bonus earnings to scale
for Superintendents could not be resolved. The bonus scheme
for the Craft Technical Supervisors and Clerical Workers
provided for the transfer of a percentage of off-scale bonus
earnings to scale and the Union sought agreement to a transfer
mechanism which would maintain the basic pay relationship with
Technical Supervisors.
2. 4. The dispute was referred to the Labour Relations
Commission on the 14th July, 1992. A conciliation conference
took place on the 14th August, 1992 but agreement could not be
reached. The issue was referred by the Labour Relations
Commission to the Labour Court on the 12th October, 1992 and
the Court investigated the matter on the 14th December, 1992.
UNION'S ARGUMENTS:
3. 1. The pensionable earnings of Superintendents (Executive
Managers) will decline relative to the grades managed by them.
2. The transfer of Superintendent bonus to scale in the
same proportion as that accorded to Technical Supervisors and
others has very little cost implications.
3. If the present situation continues it will be the source
of endless industrial relations difficulties.
COMPANY'S ARGUMENTS:
4. 1. The current slump in the market makes cash flow
management extremely critical.
2. The Superintendents have received significant pay
increases since the establishment of Team Aer Lingus.
3. Increases in fixed payroll costs could not be sustained
by present levels of business or availability of cash.
4. The bonus scheme for Superintendents has the potential
for much higher returns than that applying to Technical
Supervisors.
RECOMMENDATION:
5. The Court has given careful consideration to all the points
made by the parties to this dispute. Whilst the Court would
normally be disposed to accept, as a general principle, that bonus
payments should, in view of their incentive context, be treated as
off-scale, the Court is of the view that it could not ignore the
manner in which the Company dealt with other employees and
accordingly recommends concession of the Union's claim that 7.5%
of the off-scale bonus be assimilated into basic salary.
In light of the opinion expressed above on the normal treatment of
bonus the Court recommends that the parties meet to discuss the
manner in which it should be dealt with in the future.
~
Signed on behalf of the Labour Court
Evelyn Owens
14th January, 1993 -------------
P O'C/U.S. Deputy Chairman
ENQUIRIES CONCERNING THIS RECOMMENDATION SHOULD BE ADDRESSED TO
MR PAUL O'CONNOR, COURT SECRETARY.