Labour Court Database __________________________________________________________________________________ File Number: CD95635 Case Number: LCR15047 Section / Act: S26(1) Parties: FBD INSURANCE (Represented by THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION) - and - FBD FIELD STAFF ASSOCIATION |
Change in commission structure.
Recommendation:
The Court having considered the submissions made by the parties
accepts that the system of payment of commission arrangements for
some business requires updating, to meet the current business
requirements. The Court in doing so is conscious of the concerns
expressed by the employees in relation to consequential loss of
earnings, despite the Company reassurances on this issue.
The Court having considered all the issues involved makes the
following recommendation:-
1. The parties to have further discussions concerning option 2
of the Company's proposals in order to address the issue
above. Those discussions to be completed within 1 month of
this recommendation.
2. If the parties fail to reach agreement then the Court will
make a recommendation around option 2.
Division: Mr Flood Mr Pierce Mr Rorke
Text of Document__________________________________________________________________
CD95635 RECOMMENDATION NO. LCR15047
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
FBD INSURANCE
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
FBD FIELD STAFF ASSOCIATION
SUBJECT:
1. Change in commission structure.
BACKGROUND:
2. FBD Insurance was established in 1970. It employs 350
workers. Approximately 150 workers are employed at head
office in Dublin and the remainder at local offices
throughout the Country. Sales/service/distribution is via
these local offices.
Traditionally the Company's business base was the farming
sector. In recent years it has been targeting the
non-farming sector.
The workers concerned (field staff, approximately 42) are
employed by the Company as area managers and area
representatives. The primary role of the field staff is to
procure new business and service existing business.
Field staff report to the sales manager, who is based in
Dublin. The sales manager is assisted by a deputy sales
manager and two inspectors who provide sales support to the
field staff.
The dispute before the Court concerns the Company's proposals
to alter its commission arrangements in respect of certain
types of Company business. The Company argues that the
current commission arrangements are not appropriate to the
newer lines of business which the Company has been targeting.
Commission is paid to the field staff on all non-motor new
business (referred to by the Company as multi-peril business)
and on revision sales credited to his/her office in excess of
Minimum Acceptable Sales (MAS) level per annum.
The matter was referred to the Labour Relations Commission.
A conciliation conference held on 23rd January, 1995 was
adjourned to allow for further local discussions. Local
discussions took place following which the Company proposed 3
options (details supplied to the Court). The Company's
proposal was rejected by the workers.
At a resumed conciliation conference on 20th October, 1995
the Union indicated that it would explore the Company's
request in the context of option 2 of the proposals on the
basis that it was the "least unattractive" option. No
progress could be made and the dispute was referred to the
Labour Court on 7th November, 1995 under Section 26(1) of the
Industrial Relations Act, 1990. A Labour Court hearing took
place on 4th December, 1995.
ASSOCIATION'S ARGUMENTS:
3. 1. Any proposal which reduces the earnings of the workers
concerned is not acceptable. The Company's proposals
are unfair, penalising the better performers. The
payment package of the workers concerned is considered
modest within the insurance industry.
2. The Company has not implemented the terms of the
Programme for Competitiveness and Work (PCW) in full.
It has attempted to claw-back some of this small
increase by increasing the MAS by the amount of the PCW,
effectively reducing commission earnings. It is now
attempting to further erode the workers' earnings.
3. The Company's approach to negotiations has been cynical.
Its rush to get the matter to a full hearing of the
Labour Court typifies its approach.
4. The Association has indicated its readiness to consider
a re-structuring of the payment system as long as the
earnings of its members are protected.
5. The Company has recorded annual profits of £13 million
and executive directors have awarded themselves
increases of 18% in salaries and pensions. In the
circumstances its proposals concerning the workers are
inequitable and unfair.
COMPANY'S ARGUMENTS:
4. 1. Commission is being paid to field staff in situations
where a large amount of the work and effort involved,
both in identifying potential sales and follow up, is
done by office based staff.
2. The Association's claim that the Company is taking money
out of the pockets of the area managers/area
representatives is not justified. Currently they are
not earning the levels of commission on the particular
fronts at issue. There have been instances where
inspectors have written up single cases which have been
credited at 10% commission to the local area
manager/representative in the range of £20,000 -
£40,000. In such circumstances the workers achieve
their MAS level in one transaction.
3. The Company needs to structure its business on a proper
input/cost/reward basis. It is being exposed
increasingly on a cost front by the influx of direct
selling companies. FBD must ensure that it is in a
position to compete with lower cost distribution
insurers in an increasingly competitive market.
RECOMMENDATION:
The Court having considered the submissions made by the parties
accepts that the system of payment of commission arrangements for
some business requires updating, to meet the current business
requirements. The Court in doing so is conscious of the concerns
expressed by the employees in relation to consequential loss of
earnings, despite the Company reassurances on this issue.
The Court having considered all the issues involved makes the
following recommendation:-
1. The parties to have further discussions concerning option 2
of the Company's proposals in order to address the issue
above. Those discussions to be completed within 1 month of
this recommendation.
2. If the parties fail to reach agreement then the Court will
make a recommendation around option 2.
~
Signed on behalf of the Labour Court
21st December, 1995 Finbarr Flood
F.B./D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.