Labour Court Database __________________________________________________________________________________ File Number: CD95304 Case Number: LCR14915 Section / Act: S20(1) Parties: DELPHI PACKARD ELECTRIC SYSTEMS (IRELAND) LTD. (THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - and - MANUFACTURING, SCIENCE, FINANCE |
Dispute concerning the Company's Incentive Scheme.
Recommendation:
The Court noted that no negotiations took place between the
parties on the operation of an incentive scheme as agreed, as
outlined in LCR13957.
The Court recommends that the parties discuss the options for
operating the incentive scheme for this group or, alternatively,
an agreement for its discontinuance, discussions to be completed
within one month.
If the parties fail to reach agreement, the Court will, if
requested, make a Recommendation.
Division: Mr Flood Mr Pierce Mr Rorke
Text of Document__________________________________________________________________
CD95304 RECOMMENDATION NO. LCR14915
INDUSTRIAL RELATIONS ACTS, 1969 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969
PARTIES:
DELPHI PACKARD ELECTRIC SYSTEMS (IRELAND) LTD.
(Represented by the Irish Business and Employers' Confederation)
AND
MANUFACTURING, SCIENCE, FINANCE
SUBJECT:
Dispute concerning the Company's Incentive Scheme.
BACKGROUND:
The Company, which is part of the General Motors Corporation,
produces wiring harnesses for the automotive industry,
employing a workforce of 400. The dispute concerns the
payment of incentive bonus to approximately 50 salaried
staff.
In 1990, the incentive scheme, which had been set up for
general operatives, was extended to salaried staff who were
to have been individually assessed against certain criteria
and, accordingly, were to receive a percentage payment
depending on performance. The appraisal system was not
operated, however, and all workers including the salaried
staff were paid a bonus of 7%, paid six-monthly, based on the
average incentive paid to production employees.
Subsequently, due to accumulating losses, the Company
informed the Union of its inability to pay the bonus to
salaried staff, for the period June - December, 1992. The
matter was the subject of a Labour Court Hearing following
which it was recommended that the 7% be paid, with
discussions to take place between the parties on the future
operation of the incentive scheme (LCR13957). No such
discussions took place. The Company advised the Union that
due to continuing losses, the bonus would not be paid for
1994. A compromise was reached between the parties that the
salaried staff would forego the incentive payments, in return
for a Company guarantee of no lay-offs during the period July
1994 - July 1995.
In 1995, the Company again indicated that due to its
financial circumstances, it was not in a position to pay the
incentive. On the 15th of May, 1995, the matter was referred
to the Labour Court by the Union, in accordance with Section
20(1) of the Industrial Relations Act, 1969, for
investigation and recommendation. The Court carried out its
investigation on the 30th of August, 1995, the earliest date
convenient to both parties.
UNION'S ARGUMENTS:
1. The case before the Court is no different from the issue
which has previously been recommended upon and, accordingly,
the bonus should be paid.
2. It is unfair that cutbacks should be applied only to a small
group of staff. It is unreasonable that the incentive is
paid to the vast majority of workers whilst being withheld
from the 50 salaried staff.
3. The salaried staff here played a big role in the achieving of
the bonus for the production staff. They have taken on
greatly increased responsibilities, far out-weighing the
additional allowance paid to them.
4. The performance of more than 50% of the salaried staff is
easily measurable - there is no justification for non-payment
on grounds that the appraisal is difficult to operate.
5. The monies in question have already been earned by the
workers and are simply being withheld by the Company.
COMPANY'S ARGUMENTS:
1. A wide range of cost-cutting measures have been implemented
across all sections of the plant. These have affected both
general workers and salaried staff. Due to accumulated
losses in the plant (details supplied), the Company is not in
a position financially to pay incentive bonuses which would
cost approximately #49,000 for the first six months of this
year.
2. The Company is under severe competitive pressure from other
plants in the group, a number of which have a lower cost base
than the Tallaght plant. It is imperative that the Company
demonstrates a clear resolve, willingness and success in
controlling costs.
3. The situation for general workers (who receive the bonus) is
different insofar as the scheme is designed to reward the
Company and employees for extra contribution from those
employees. Some extra productivity may be gained from
general workers but this is not the case from salaried staff,
who merely get an average payment from the scheme, whilst not
adding to the Company's productivity.
4. Salaried staff are on incremental scales whereas general
workers are not. Therefore, in terms of "additions" to
salary, general workers receive basic pay plus incentive
scheme. Salaried staff have an additional payment to their
base salary which general workers do not have.
RECOMMENDATION:
The Court noted that no negotiations took place between the
parties on the operation of an incentive scheme as agreed, as
outlined in LCR13957.
The Court recommends that the parties discuss the options for
operating the incentive scheme for this group or, alternatively,
an agreement for its discontinuance, discussions to be completed
within one month.
If the parties fail to reach agreement, the Court will, if
requested, make a Recommendation.
~
Signed on behalf of the Labour Court
2nd October, 1995 Finbarr Flood
M.K./A.K. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.