Labour Court Database __________________________________________________________________________________ File Number: CD95433 Case Number: LCR14911 Section / Act: S26(1) Parties: FIRST NATIONAL BUILDING SOCIETY (IBEC) - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim for payment of Clause 3 of PESP.
Recommendation:
The Court having considered all of the views expressed by the
parties in their oral and written submissions finds that
notwithstanding the terms of the 1990 Agreement it was appropriate
for the Union to make a claim under the provisions of Clause 3 of
the PESP. Clause 3 of the Agreement calls on the parties to take
full account of the implications for competitiveness, the need for
flexibility and change and the contribution to be made by
employees to such change.
The Court considers the parties should have meaningful
negotiations on the Union's claim, the parties to such
negotiations taking full account of the above criteria.
The Court so recommends.
Division: Mr McGrath Mr Pierce Mr Walsh
Text of Document__________________________________________________________________
CD95433 RECOMMENDATION NO. LCR14911
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
FIRST NATIONAL BUILDING SOCIETY
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim for payment of Clause 3 of PESP.
BACKGROUND:
2. 1. First National Building Society (Society) employs 760
staff. In 1990, it negotiated with the Union, two
"Development Programmes" (agreements), one for managers
and one for staff. The agreements arose out of the
Building Societies Act, 1989 which increased the range
of services which building societies could offer. The
agreements provided for a 12% increase in pay and
additional increments in respect of managers, and 12%
increase in pay plus #250 in respect of staff. The
increases were spread over 4/5 year period. The
increases were in addition to any national pay awards
still outstanding. The payments were in return for full
co-operation with the implementation of all new
technology and all new customer services.
2. The Union submitted a claim for a 3% increase in basic
pay for managers and clerical/administrative staff as
provided for under Clause 3 of the Programme for
Economic and Social Progress (PESP). The claim is
based on the increased workload/responsibility which
followed the Society's merger with Irish Life Building
Society (I.L.B.S.).
3. Management rejected the claim on the basis that the 1990
agreement on technology/work practice covered all
changes envisaged under the new Building Societies
legislation. The Society's rates of pay are better than
those paid by many of its competitors and it will not
entertain any further pay increases.
4. As no agreement could be reached between the parties,
the dispute was referred to the Labour Relations
Commission and a conciliation conference was held on
27th June, 1995. No agreement was possible during
conciliation. The dispute was referred to the Labour
Court on the 24th July, 1995 in accordance with Section
26(1) of the Industrial Relations Act, 1990. The Court
investigated the dispute on the 11th September, 1995.
(The earliest date suitable to both parties).
UNION'S ARGUMENTS:
3. 1. The Society has shown a 15% increase in pre-tax profits
for the first half of 1995. Its net surplus is up by
more than 24%. Our members have contributed
significantly to the success of the Society. The 3%
increase claimed under Clause 3 of PESP is sustainable
and should be conceded by the employer.
2. The Society offered the 3% increase under Clause 3 of
PESP in 1991 in return for longer opening hours and
certain other changes in work practices. The members
rejected the offer.
3. Over 80% of companies have paid the 3% under Clause 3 of
PESP. In the 'financial services' area the figure is in
excess of 95%. All good employers have conceded this
payment in 1992/1993.
4. The promotional prospects of our members has suffered as
a result of the merger between the Society and I.L.B.S.
The staff are now required to promote/sell insurance
products from most insurance companies which was not
part of the previous agreement.
COMPANY'S ARGUMENTS:
4. 1. The Company has paid up to 18% in additional increases
over and above the normal increases during the period
1990/1995 under the terms of its "Development
Programmes". There is no justification, therefore, for
an additional payment of 3% to managers and staff.
2. The existing levels of salaries and benefits in the
Society are in the top 10% of salaries and benefits in
the financial sector. In the five year period, January,
1990 to December, 1994 the Company paid salary increases
to managers and staff in excess of 50% which includes
annual increments, pay awards under national agreements,
and increases under the "Development Programmes". The
Consumer Price Index (C.P.I.) for the same period rose
by only 13%. These payments more than adequately
compensated managers and staff for the changes arising
from increased competition and the new services provided
for under the Building Societies Act, 1989.
3. Any further increase in costs will undermine the
competitive position of the Society. Margins in the
Society's core business are falling because of stiff
competition. The Society's cost income ratio of 60% is
the highest in the industry.
4. The Society refutes the allegations that promotion
prospects for staff have diminished following the merger
with Irish Life Building Society. There were eighty
nine promotions since the merger - eighty three
promotions went to the Society's staff and six went to
Irish Life Building Society staff. Some of the
promotions were a direct result of the merger which
increased business and added about 10% to the assets of
the Society.
RECOMMENDATION:
The Court having considered all of the views expressed by the
parties in their oral and written submissions finds that
notwithstanding the terms of the 1990 Agreement it was appropriate
for the Union to make a claim under the provisions of Clause 3 of
the PESP. Clause 3 of the Agreement calls on the parties to take
full account of the implications for competitiveness, the need for
flexibility and change and the contribution to be made by
employees to such change.
The Court considers the parties should have meaningful
negotiations on the Union's claim, the parties to such
negotiations taking full account of the above criteria.
The Court so recommends.
~
Signed on behalf of the Labour Court
27th September, 1995 Tom McGrath
L.W./D.T. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Larry Wisely, Court Secretary.