Labour Court Database __________________________________________________________________________________ File Number: CD95221 Case Number: LCR14819 Section / Act: S26(1) Parties: BROOKS THOMAS LIMITED - and - SALES MARKETING AND ADMINISTRATIVE UNION OF IRELAND |
Dispute concerning an incentive scheme for sales representatives.
Recommendation:
The Court having considered all of the views of the parties
recommends the following as a basis for resolving the dispute:
1. Basic salary #16,000.
2. .75% commission to apply to sales over #15 million.
3. Commission on cash collection on a scale from 2.8 months
(0.2%) to 2.5 months (0.5%).
With regard to (3) above the Court recognises that this can only
be effective where the employee is able to influence the early
payment of outstanding accounts.
Accordingly the Company and the Union should put in place such in
house arrangements as are necessary to ensure the above objective
can be achieved.
Division: Mr McGrath Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95221 RECOMMENDATION NO. LCR14819
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
BROOKS THOMAS LIMITED
AND
SALES MARKETING AND ADMINISTRATIVE UNION OF IRELAND
SUBJECT:
1. Dispute concerning an incentive scheme for sales
representatives.
BACKGROUND:
2. 1. The Union represents 12 sales representatives employed
by the Company in Dublin, Cork and Sligo. The workers
are paid #17,500 per annum. In July, 1994, the Union
submitted a claim for an increase in the workers'
salaries. The claim was rejected by the Company as it
breached the terms of the Programme for Competitiveness
and Work (PCW).
2. The parties agreed to negotiate on the introduction of
an incentive scheme for the workers. The Company
proposed an individual incentive as follows:-
A. Salary, then #17,500 per annum, to be reduced to
#14,000 per annum.
B. Sales representatives to be paid a half of one
percent for sales in excess of 1.5 million pounds.
C. Sales representatives to be paid a further half
percent of this figure for achievement of `age of
debt of 2.5 months'.
The Union counter-proposed the following "team" bonus
scheme.
(1) Basic salary #17,000.
(2) .75% commission to apply to total sales over #15
million.
(3) .50% commission for cash collection of 3.0 months.
(4) Payment of #2,500 for 1994.
3. The dispute was referred to the Labour Relations
Commission and a conciliation conference was held on 6th
March, 1995. It was not possible to make progress on
the claim at conciliation. On 30th March, 1995, the
claim was referred to the Labour Court under Section
26(1) of the Industrial Relations Act, 1990. The Court
investigated the dispute on 12th May, 1995.
UNION'S ARGUMENTS:
3. 1. The Company's proposal could result in a loss of income
for the workers. The Union's proposal recognises that
extra productivity can be generated by the workers'
efforts and rewards them accordingly. The proposal
accepts the principle of the claim not being
cost-increasing and therefore it is acceptable under the
terms of the PCW.
2. The Union believes that a team approach is the most
appropriate as the workers have a different mix of
customers with different sales volumes. An individual
sales incentive could not reflect the workers' real
contribution.
3. The Union is prepared to accept an agreed target based
on last year's sales. The Company should withdraw any
question of a salary reduction. The workers have no
control over the Company's credit policy. In those
circumstances, it is unreasonable for the Company to
make the workers responsible for its `age of debt'
(details supplied).
COMPANY'S ARGUMENTS:
4. 1. The Company's pay scales are on par with the industry's
norms. In addition the workers benefit from the best
pension, sick pay and life assurance cover in the
industry.
2. The Union's claim must be self financing and must not
lead to knock-on claims from other workers. The Union's
proposal has no benefits for the Company and would cost
#45,000 in 1995. Some workers would achieve less than
the 1994 sales figures.
3. All of the workers have received the PCW increases. The
Union's proposal is cost-increasing and therefore is in
breach of the PCW.
RECOMMENDATION:
The Court having considered all of the views of the parties
recommends the following as a basis for resolving the dispute:
1. Basic salary #16,000.
2. .75% commission to apply to sales over #15 million.
3. Commission on cash collection on a scale from 2.8 months
(0.2%) to 2.5 months (0.5%).
With regard to (3) above the Court recognises that this can only
be effective where the employee is able to influence the early
payment of outstanding accounts.
Accordingly the Company and the Union should put in place such in
house arrangements as are necessary to ensure the above objective
can be achieved.
~
Signed on behalf of the Labour Court
10th June, 1995 Tom McGrath
J.F/D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.