Labour Court Database __________________________________________________________________________________ File Number: CD95240 Case Number: LCR14794 Section / Act: S26(1) Parties: IRISH LIFE - and - MANUFACTURING SCIENCE FINANCE |
Interpretation of an agreement.
Recommendation:
The Court considered the written and oral submissions of both
parties.
There is no doubt but that major differences exist between the
parties in relation to the interpretation on how the guarantee of
earnings should be applied.
Having considered all the issues involved the Court makes the
following Recommendation:-
1. For year 1994 the Union interpretation be applied and
the 5 individuals concerned be given the guarantee.
2. For 1995 the Company interpretation be applied. This
would mean that the guarantee would apply where:-
(a) A P.F.A. who had a very high level of sales was
transferred to another team.
(b) A P.F.A. was promoted out of the team in the
reorganisation.
(c) The S.D.M. in the area had made a very small
contribution to sales in 1993.
Division: Mr Flood Mr Keogh Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD95240 RECOMMENDATION NO. LCR14794
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
IRISH LIFE
AND
MANUFACTURING SCIENCE FINANCE
SUBJECT:
1. Interpretation of an agreement.
BACKGROUND:
2. In February, 1994, the parties concluded an agreement on the
Company's new business plan, Building Business Advantage,
(B.B.A.). The dispute concerns the interpretation of Clause
4 of the agreement, which is as follows:-
"Guarantee of earnings to former Area Sales Managers
(A.S.M's).
The A.S.M. will get a team to reflect his 1993 earnings.
However, a guarantee of earnings for two years at 1993
levels will be provided to any Sales Manager whose
earnings in 1994 and 1995 are directly affected by the
implementation of the new team structure under B.B.A.".
Part of the B.B.A. programme was the Company's decision to
reorganise the sales team structure. The reorganisation
involved the amalgamation of Sales Development Managers
(S.D.M's) and Area Sales Managers (A.S.M's) into one grade of
Sales Managers (S.M's). Each S.M. would work with one
specific team of Personal Financial Advisors (P.F.A's).
Previously, the A.S.M.'s and S.D.M's worked with 4 teams of
P.F.A's in each sales area. The new structure divided the
P.F.A's in each area into 5 teams, each led by an S.M.
There were 16 S.M.'s who earned less in 1994 than in 1993. 7
of the S.M's were paid under the guarantee. The remaining 9
S.M's were not paid. 6 of the 9 S.M's are represented by the
Union. 5 of the 6 Union members applied for the guarantee
but did not receive it.
The dispute was referred to the Labour Relations Commission
and a conciliation conference took place on 24th March, 1995.
No agreement was reached and the dispute was referred to the
Labour Court on 6th April, 1995, under Section 26(1) of the
Industrial Relations Act, 1990. A Labour Court hearing took
place on 19th May, 1995 (earliest date suitable to the
parties).
UNION'S ARGUMENTS:
3. 1. The Company agreed to the guarantee to obtain the
changes in working practices it required. The Company
is now trying to minimise the cost by refusing the
guarantee to the 5 workers involved.
2. All S.M.'s have less P.F.A's than before the agreement.
In some cases they have more newly appointed P.F.A's to
train. The Company had promised to bring the number of
P.F.A's in each team up to 8/9. This has not happened.
This will have the effect of reducing the earnings of
each S.M.
3. As only a total of 9 out of 70 S.M's need the guarantee
for 1994 the cost to the Company would be very little.
It is expected that more S.M's will need the guarantee
in 1995.
COMPANY'S ARGUMENTS:
4. 1. The circumstances in which the Company envisaged the
guarantee applying to S.M's are as follows:-
(a) A P.F.A. who had a very high level of sales being
transferred to another team.
(b) A P.F.A. being promoted out of the team in the
organisation.
(c) The S.D.M in the area had made a very small
contribution to sales in 1993.
None of these circumstances exist in the case of the 5
workers who applied for the guarantee.
2. If the Company had applied the guarantee to all S.M.'s
according to the Union's interpretation, there would
have been no incentive for S.M's to increase their
sales, as their earnings would already be guaranteed.
3. Clause 4 of the agreement states that an "S.M. will get
a team to reflect his 1993 earnings". It does not state
that the S.M. will "continue to have a team to reflect
his 1993 earnings".
RECOMMENDATION:
The Court considered the written and oral submissions of both
parties.
There is no doubt but that major differences exist between the
parties in relation to the interpretation on how the guarantee of
earnings should be applied.
Having considered all the issues involved the Court makes the
following Recommendation:-
1. For year 1994 the Union interpretation be applied and
the 5 individuals concerned be given the guarantee.
2. For 1995 the Company interpretation be applied. This
would mean that the guarantee would apply where:-
(a) A P.F.A. who had a very high level of sales was
transferred to another team.
(b) A P.F.A. was promoted out of the team in the
reorganisation.
(c) The S.D.M. in the area had made a very small
contribution to sales in 1993.
~
Signed on behalf of the Labour Court
7th June, 1995 Finbarr Flood
C.O'N./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.