Labour Court Database __________________________________________________________________________________ File Number: CD95495 Case Number: LCR14907 Section / Act: S26(1) Parties: IRISH LIFE PLC - and - MANUFACTURING, SCIENCE, FINANCE |
Company's policy initiative.
Recommendation:
The Court, taking into account all the information before it,
makes the following Recommendations:-
(A) the Company proposals to be accepted by the Unions.
(B) the Company offer on remuneration to be altered in the case
of decision fees from #1,500 to #1,600.
The Court will undertake to review the effect of the Company
proposals on the earnings of Personal Financial Advisors after the
scheme is operating for 2 years.
The Court is concerned at the atmosphere that prevails between the
parties and would urge both sides to work towards improving the
situation.
Division: Mr Flood Mr McHenry Mr Walsh
Text of Document__________________________________________________________________
CD95495 RECOMMENDATION NO. LCR14907
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
IRISH LIFE PLC
AND
MANUFACTURING, SCIENCE, FINANCE
SUBJECT:
Company's policy initiative.
BACKGROUND:
The dispute concerns the Company's proposals to amend its
"Lifesaver Policy" with the "Policy Values Initiative". The
proposals will affect approximately 310 Personal Financial
Advisers (PFA's).
The "Initiative" will take place in two phases - phase 1 in
October 1995 and phase 2 in 1996. It will provide the option
of guaranteed returns on approximately 90,000 policies and
the benefit of waiving charges for indexing these policies.
Clients will be given a choice of:
(A) a figure with indexation
(B) a figure without indexation
(C) to remain as it is at present.
The Company will pay a guaranteed #1,500 commission to the
PFA's. This is approximately #15 in respect of each decision
secured from a customer on whether to transfer to the
guaranteed fund or remain in the present fund. Each PFA has
an average of 100 "Lifesavers". The #1,500 commission is to
compensate for the loss of commission to the PFA's on two
items. The first is loss of commission due to customers no
longer bearing any charge on indexation. The second is "top-
ups". A premium can be topped-up at any time by a client to
a minimum of #10 per month. A PFA would be paid commission
on the top-up. The Company is to replace the "top-ups" with
a new policy, resulting in the PFA's losing commission.
The Union claims that many PFA's will lose money because of
the new policies. It is seeking a guarantee of earnings for
the next 3 years for the PFA's.
The dispute was referred to the Labour Relations Commission
and conciliation conferences took place on 25th July, 1995
and 10th August, 1995. No agreement was reached and the
dispute was referred to the Labour Court on 29th August,
1995, under Section 26(1), Industrial Relations Act, 1990. A
Labour Court hearing took place on 13th September, 1995.
UNION'S ARGUMENTS:
1. There was no consultation with the Union prior to the Company
arranging details of the "Initiative". While there will be
positive benefits to clients, the PFA's will sustain a loss.
Previously, on a #100 premium, an indexation would pay a PFA
#27 commission. PFA's were also paid commission on
"top-ups". Both of these commissions have been lost to the
PFA's due to the Company's new "Initiative". The highest
producers in indexation and "top-ups" will lose a
considerable amount of money.
2. Since 1988, three restructuring plans have been launched by
the Company. None have achieved their objective. This has
put more pressure on the PFA's who have little confidence in
management.
COMPANY'S ARGUMENTS:
1. The policy values initiative was developed in response to a
high incidence of surrender of policies. It is necessary to
waive charges on indexation and "top-ups" in order to give
customers better value. The guaranteed #1,500 to each PFA
will more than compensate for the loss of commission on the
charges. A "live test" on a number of customers with the new
"Initiative" has received a very favourable response.
2. The average income of PFA's is #24,500 per annum. The
Company will continue paying commission on indexations
effected before October, 1995 (phase 1) until that indexation
period ends. Commission will also be paid for up to a year
beyond the corresponding cut off date under phase 2.
RECOMMENDATION:
The Court, taking into account all the information before it,
makes the following Recommendations:-
(A) the Company proposals to be accepted by the Unions.
(B) the Company offer on remuneration to be altered in the case
of decision fees from #1,500 to #1,600.
The Court will undertake to review the effect of the Company
proposals on the earnings of Personal Financial Advisors after the
scheme is operating for 2 years.
The Court is concerned at the atmosphere that prevails between the
parties and would urge both sides to work towards improving the
situation.
~
Signed on behalf of the Labour Court
29th September, 1995 Finbarr Flood
C.O.N./A.K. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Ciaran O'Neill, Court Secretary.