FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 13(9), INDUSTRIAL RELATIONS ACT, 1969 PARTIES : IRISH LIFE ASSURANCE - AND - MANUFACTURING, SCIENCE, FINANCE DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr Rorke |
1. Appeal against Rights Commissioner recommendation No. 179/98.
BACKGROUND:
2. The appeal concerns a worker who is a qualified chartered accountant. In the early 1990's he moved to a role outside accounting in the Company and accepted a post as Team Manager in one of the business units. This move occurred as a result of a major restructuring of the Company's business which involved significant staff reductions and redundancies. The Union claimed that the worker had not received the appropriate national pay awards and benefits since 1994. It claimed that he should receive these increases together with any future increases under the National Programmes. The Company in rejecting the claim stated that the worker's salary had been red-circled and was far in excess of the maximum for his new role as Team Manager. The dispute was referred to a Rights Commissioner for investigation on the 29th July, 1998.
The Rights Commissioner issued his recommendation as follows:
"I recommend that the worker and the Union accept the decision of the Company in this instance."
(The worker was named in the Rights Commissioner's recommendation.)
On the 3rd of September, 1998, the Union appealed the Rights Commissioner's recommendation to the Labour Court. The Court heard the appeal on the 16th of October, 1998. A letter recommendation was issued on the 7th December, 1998.
UNION'S ARGUMENTS:
1. The worker moved to the administration role long before the 1993/94 restructuring. He changed responsibility many times within the Company as is normal for many management group workers seeking to broaden their experience. The worker was very successful at his new post and was complimented on his performance by his superior. The position of the worker at the restructuring stage was no different to any other administration management group member.
2. The Company is in breach of Partnership 2000, and the Programme for Competitiveness and Work by not paying the worker the Agreements' terms. In reviewing off-scale salaries in the Company, workers are routinely informed that national pay awards are taken into account.
3. The worker is a qualified chartered accountant. The Institute of Chartered Accountants in Ireland salary survey clearly shows that this salary is low compared to other chartered accountants. The worker should be in receipt of pay awards based on the IMI survey of annual salary increases. His normal pay and benefits would have been around the IMI levels up to and including the December, 1994 pay increase.
4. The worker has not been treated fairly. In January, 1997, he was informed by his executive manager that "his salary was under the microscope" and that his team manager responsibilities were being taken on by another worker. Mention was also made of salary reduction or redundancy. While redundancy details were quoted the offer was subsequently withdrawn.
5. The Company's representation of the position as a choice between redundancy and a lower paid post is not correct. In the restructuring process of 1993 redundancy was a voluntary option. Most management workers remaining were given defined slots, including the worker. There was no general or individual mention of the worker getting a lower rate for the job. In December, 1994 he was again given a normal pay increase review. The Board of the Company gave a commitment to managers which confirmed that "they will retain their pay and benefits" and specifically stated redundancies would be voluntary. The worker did not at any stage contract for a lower paid job.
6. While the Company claims that it does not negotiate for those on individual salaries it is policy to take account of pay rises for workers on individual salaries. The Company has a responsibility to ensure there is a reasonable match between the worker's skills and experience and the work he is assigned. In such a situation there would be no problem with his salary level and pay awards.
7. The worker wishes to continue in the Company provided it honours pay awards and existing firm agreements made by the Board and operates in a manner consistent with natural justice. Alternatively, the worker seeks a "current" redundancy package based on his correct salary.
COMPANY'S ARGUMENTS:
1. Under the terms of the worker's contract his remuneration is reviewed annually on an individual basis as part of the Company's annual salary review process for staff in the category. Under this process individual salaries are reviewed annually taking account of a number of factors including the market rate for the job, the position of the individual within the salary range, the individual's performance and internal activities where appropriate. In this context the Company tracks the market rate for all job categories and movements in this rate reflect wage inflation amongst other factors. Staff in this category do not automatically receive cost of living increases.
2. The Company does not negotiate with MSF in relation to the remuneration of staff in this category nor does the Company apply salary increases negotiated with MSF either locally or nationally, to this category of staff.
3. In reviewing the claimant's salary as Team Manager, the Company has adopted the approach of "red circling" his salary because it is significantly greater than the maximum for his current role. This is a legacy of his time as an Accounting Manager. It is an equitable and widely used methodology throughout the industry to address situations where a worker is significantly overpaid for his current responsibilities. The claimant's salary has been maintained at this level since 1st January, 1995. It is the Company's intention to continue to do so until such time as the maximum rate for his role reaches this level. This is a fair, and reasonable approach and the Company is willing to bear the additional cost in order to allow the worker to remain with Irish Life. The alternative option which was available to the worker at the time of the reorganisation in 1994 would have been to avail of the voluntary severance arrangements at that time.
4. The Company has paid a performance related bonus to the claimant in each of the last three years (details to the Court). It is not normal practice to pay individual performance bonuses each year to staff at this level. However, it was decided to reward the claimant's performance through bonus rather than through salary increments because of the situation described above.
5. The Company has effectively maintained the claimant's remuneration at a level which is approximately 30% greater than the maximum rate for his current job and in addition has paid him significant discretionary performance related bonuses since 1996. He has been treated in a fair and equitable manner.
DECISION:
The Court has taken into consideration the written and oral submissions presented at the hearing, and the submissions presented to the Rights Commissioner hearing. The Court is satisfied that the claimant's position ofredcirclingwas not communicated to him by management and that he was not aware that it would entail maintaining his salary at the level it was at 1st January, 1995 until such time as the maximum rate for his role reached his level.
Based on assurances given at the time of the restructuring in 1993 and on subsequent actions taken by the company (salary increases given in 1994 and 1995), the Court is satisfied that the claimant should have received pay awards for the years 1996, 1997 and 1998.
Therefore, the Court recommends that the claimant should now receive retrospective pay awards in line with PCW and Partnership 2000 since January, 1996. All future pay awards should similarly apply as a minimum salary increase.
The performance pay bonuses in 1996, 1997 and 1998 should be treated as once off situations, as it is recognised that such performance bonuses do not normally apply to this category.
The appeal is therefore upheld in line with the above recommendation.
Signed on behalf of the Labour Court
December, 1998.______________________
TOD/BCCaroline Jenkinson
Deputy Chairman
NOTE
Enquiries concerning this Decision should be addressed to Tom O'Dea, Court Secretary.