Labour Court Database __________________________________________________________________________________ File Number: CD93366 Case Number: LCR14213 Section / Act: S26(1) Parties: NEW IRELAND ASSURANCE COMPANY PLC - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Holiday pay.
Recommendation:
5. The Court has considered the complexities of the calculations
involved in holiday payments for New-Terms IB/OB and OB
representatives. Having regard to the considerations involved in
the Negotiation of the agreement for the "New Terms"
representatives and having considered the arguments in support of
change now put forward by the Union, the Court recommends the
following adjustments to the holiday-pay formula.
- The minimum figure be raised from #400 to #450.
- The multiplier and divisor to remain as at present for
O.B. representatives.
- The multiplier to remain as at present for IB/OB
representatives but the divisor be altered to "Average
commission of IB/OB group" I.E. including IB/OB reps
only.
Division: Mr Heffernan Mr Brennan Mr Walsh
Text of Document__________________________________________________________________
CD93366 RECOMMENDATION NO. LCR14213
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
INDUSTRIAL RELATIONS ACT, 1990
SECTION 26(1)
PARTIES: NEW IRELAND ASSURANCE COMPANY PLC
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Holiday pay.
BACKGROUND:
2. In 1987 the Company introduced "New Terms" representatives
with different terms and conditions of employment to existing
representatives ("Old Terms"). The "New Terms" representatives'
contracts exist for all IB/OB (Industrial Branch, Ordinary Branch)
and OB direct sales representatives who commenced employment from
October, 1987. At the present time the majority of
representatives are of the "New Terms" category (103 "Old Terms"
141 "New Terms'). For "Old Terms" full income i.e. basic salary
and commission is taken into account in determining holiday
entitlement. These arrangements were agreed between the parties
in 1979. "New Terms" representatives are paid by way of
commission only. The formulae used to calculate holiday pay for
both groups of representatives is as follows:-
1. "Old Terms" Group:
Total Commissions paid to Group in previous calendar year X No. of
weeks' leave entitlement.
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Total Number of representatives in Group X 52.
2. "New Terms" Group:
Initial payment of #400 in year one. Guaranteed minimum payment
of #400 p.a. thereafter.
Subsequent payments:
400 x Individual commissions in previous calendar year
Average commissions for Group in previous calendar year.
(Representatives in both groups must have completed 12 months
service before 1st January in relevant year.)
Under the above scheme the average holiday pay earned in 1992 by
"Old Terms" was approximately #1,000 and for "New Terms"
representatives #500.
The Union's claim is for the application of holiday pay to 'New
Terms" in the same manner and to the same value as it is applied
to the pre-1987 representatives. Management rejected the claim.
The issue was referred to the Labour Relations Commission and a
conciliation conference was held on the 31st March, 1993. As no
agreement could be reached the dispute was referred to the Labour
Court on the 31st March, 1993. A Court hearing was held on the
28th July, 1993.
UNION'S ARGUMENTS:
3. 1. The Holidays Employees Act 1973 makes specific provision
for payment of average normal income (including bonus, shift
pay, allowances etc.). The existing formula used by the
Company leaves "New Terms" representatives with substantially
lower holiday pay than their "Old Terms" colleagues.
2. The Union rejects management's claim that "New Terms"
can earn more holiday pay than "Old Terms" representatives.
The #400 figure has the effect of driving down holiday
entitlement/payments for those affected.
3. The Company's method of calculating holiday pay
entitlements for "New Terms" representatives is at total
variance with the Act. The workers concerned are entitled to
the same treatment as the "Old Terms" representatives.
COMPANY'S ARGUMENTS:
4. 1. "Old Terms" and "New Terms" representatives have
separate contracts and conditions of employment. The Company
introduced the grade of "New Terms" representatives in 1987 at
a time when serious expense and trading difficulties were
experienced. Holiday pay was identified as being well in
excess of industry norms at the time. The holiday formula
introduced then for "New Terms" is still very competitive and
they receive better holiday pay than many comparable companies
(details supplied to Court).
2. The Company has no direct obligation arising from the
Holidays Employees Act 1973. Management is satisfied that the
formula for calculating "New Terms" holiday pay is appropriate
bearing in mind the methodology of commission and collection
payment made to those representatives.
3. The Company cannot introduce the 'Old Terms' holiday pay
formula to 'New Terms' representatives, as it would cost a
minimum of #40,000 and erode profit margins. The Company
underwent major rationalisation in 1992 effecting 40
redundancies. It does not wish to enter into a further
cost- reduction programme if possible.
RECOMMENDATION:
5. The Court has considered the complexities of the calculations
involved in holiday payments for New-Terms IB/OB and OB
representatives. Having regard to the considerations involved in
the Negotiation of the agreement for the "New Terms"
representatives and having considered the arguments in support of
change now put forward by the Union, the Court recommends the
following adjustments to the holiday-pay formula.
- The minimum figure be raised from #400 to #450.
- The multiplier and divisor to remain as at present for
O.B. representatives.
- The multiplier to remain as at present for IB/OB
representatives but the divisor be altered to "Average
commission of IB/OB group" I.E. including IB/OB reps
only.
~
Signed on behalf of the Labour Court
Kevin Heffernan
14th October, 1993 ---------------
T O'D/U.S. Chairman
NOTE:
ENQUIRIES CONCERNING THIS RECOMMENDATION SHOULD BE ADDRESSED TO
MR TOM O'DEA, COURT SECRETARY.