FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : WILLIAM TODD AND COMPANY LIMITED (LIMERICK) (REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MANDATE DIVISION : Chairman: Mr Flood Employer Member: Mr McHenry Worker Member: Mr O'Neill |
1. Dispute concerning loss of earnings to full-time staff arising from part-time staff being placed on the "commission rate".
BACKGROUND:
2. The Company is a long-established department store which was purchased by Brown Thomas from the Switzer Group in 1991. It employs 150 (made up of cosmetic company and concession shop employees, as well as direct employees of Todds) of whom 130 are members of the Union. The dispute concerns 25 full-time members of the sales staff.
Prior to October, 1996, part-time staff did not receive any commission, but their basic rate was higher than that of permanent staff, who receive a commission of 1.25% on sales. In October, 1996, the part-time staff were placed on the same rate/commission as full-time staff. The Company claims that the change was made with the intention of having a fair and equitable situation for all staff, both full-time and part-time, who are, effectively, involved in selling. The Union is concerned that the change will result in a substantial loss for its full-time members, due to the fact that a static pool of commission has to be divided amongst a greater number of staff. Additionally, as the Company is saving money ( up to £9,000 ) by paying the part-time staff a lower basic rate, the Union claims that the full-time staff should be compensated in the form of a lump sum. The Company's view is that poor trading has been the main factor in reduced commission and that, in the long term, commission earnings will increase.
The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission, at which agreement was not reached. The dispute was referred to the Labour Court, on the 4th of April, 1997, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court carried out its investigation, in Limerick, on the 2nd of October, 1997.
UNION'S ARGUMENTS:
3. 1. A detailed analysis of the loss in earnings suffered by full-time staff in the 6 departments where there are part-time staff on the commission rate shows losses ranging, on average, from £9.57 to £17.07 per week, over a period of approximately 44 weeks.
2. In a recent Labour Court Appeal decision concerning the Company (AD9717), the Court decided that a payment of £950 should be paid for loss of earnings arising from a transfer from a department with higher commission earnings to a department with lower commission earnings. In that case, the Court stated that it was difficult to establish the actual loss suffered. In this dispute, the loss of earnings is clearly established.
3. In a similar dispute between Aer Rianta/Dublin Airport and Mandate, in 1995, agreement was reached on a payment of £60,000 to be shared by permanent staff by way of compensation for losses suffered arising from casual staff going on the commission rate.
4. When part-time staff were introduced to this Company, it was accepted by both parties that they would provide cover during busy periods, lunch times, and during sales or at Christmas time. It was never envisaged that they would adversely affect the earnings of full-time staff. Full-time staff have to perform more preparatory work, e.g., preparing stock and merchandising. Part-time staff are usually engaged in selling because of the demand to provide a service to customers at the times during which they are employed.
5. The full-time staff should be paid compensation for their loss of earnings. An appropriate amount would be 2 years' loss of earnings, for each member of staff affected, based on the average losses suffered (details supplied).
COMPANY'S ARGUMENTS:
4. 1. Equitable Treatment of Part-timers:
The inclusion of part-time staff in commission earnings is based on the fundamental principle of creating a fair and equitable employment situation for all staff, irrespective of status. The Company is concerned at the attitude behind the Union objection, as it is clear that if additional full-time staff had been employed and shared in the pool, no objection would have been raised. It is essential that the historical view that part-time employees are somewhat "lesser" in terms of experience, knowledge and commitment must be eliminated. The Company is committed to pro rata terms and conditions for regular part-time staff and must bring the arrangements for such staff in the Company into line. As such, their inclusion in commission is entirely necessary from a fairness perspective.
2. European Agreement on Part-time work:
The Company's position is consistent with the recently concluded agreement between ETUC and UNICE under the Social Dialogue. The agreement expressly provides for the "removal of discrimination against part-time workers" and that they "shall not be treated in a less favourable manner than comparable full-time workers solely because they work part-time unless different treatment is justified on objective grounds".
3. Commission as an Incentive:
Commission is clearly an incentive to staff to generate sales and should be available to all sales staff who, by definition, generates sales, regardless of the hours they work. It is entirely unfair that they are excluded from benefiting from the commission which their selling effort generates. Providing this incentive encourages part-time staff to sell more, thereby benefiting all staff in the pool.
4. Commission and Staffing Levels:
Commission, by definition, as it is a percentage, is a variable earning with no guaranteed level. Varying factors influence the level of sales within and between departments from time to time. This variation in commission is clearly part of its terms and conditions. Additional employees can be recruited in any department at a particular time, thereby influencing the share-out from the pool. The real effect of the Union's argument is that if any additional takers from the pool are introduced, the remaining people should be compensated. This is untenable. Furthermore, when part-time staffing levels in the Company are considered the unacceptable nature of the claim for compensation is clear. When part-time staff were introduced in 1990, there were 43 full-time staff in receipt of commission. Today there are 32 full-time staff plus 14 part-time staff in receipt of commission, which equates to a full time equivalent of 39 - overall 4 less than 1990. Staff today are, therefore, in a position to earn more commission, as there are fewer people sharing in the overall pool.
RECOMMENDATION:
The Court notes that the nett effect of the change in procedures, however well-intentioned, is that the full-time staff suffer loss of earnings, while the Company saves £9,000 per year.
While there was discussion with individual part-time employees, no discussion took place with the personnel affected by the change, i.e., the full-time staff.
Taking into account all aspects of the case, the Court recommends that the Company pay a once-off lump sum of £15,000 to the 25 employees affected, the money to be split between them on an agreed basis.
Signed on behalf of the Labour Court
Finbarr Flood
28th of October, 1997______________________
M.K./S.G.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.