FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FORFAS - AND - FIVE SENIOR STAFF DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Ms Ni Mhurchu |
1. Claim by the five employees for (1) the application of a pay range, and (2) the application of a performance related bonus.
BACKGROUND:
2. Forfas, Forbairt and IDA Ireland were founded in 1994 from the merger of Eolas and the IDA. Eolas itself was the product of a 1988 merger of the Institute for Industrial Research and Standards (IIRS) and the National Board for Science and Technology (NBST). The claimants are 5 senior employees, Heads of Divisions, and Directors of Divisions (HOD, DOD) who are ex-Eolas, IIRS and NBST employees. They claim that they are uniquely related to the grade of Assistant Secretary in the Civil Service. Their claim is for the application of a pay range that existed for the period 1st January, 1990 to 31st March, 1994 under 'Gleeson' Report No. 30 and for the application of a performance related bonus since 1st January, 1995 following 'Gleeson' Report No. 35 which was paid to the Assistant Secretary Grade. The claimants seek the retrospective payment of both awards. The employer rejected the claim.
The dispute was referred to the Labour Relations Commission and conciliation conferences were held in October and November, 1997. Agreement was not possible. The dispute was referred to the Labour Court by the Labour Relations Commission on the 2nd of February, 1998. A Court hearing was held on the 26th of March, 1998.
EMPLOYEES' ARGUMENTS:
3. 1. There are three grades in Forfas which are uniquely related to the grade of Assistant Secretary. These grades refer to Management of Divisions of the three former agencies and are Grade 1 (ex-IDA), the Director of Division (DOD) (ex-IIRS), Head of Division (HOD) (ex-NBST). The awards were applied widely to the Assistant Secretary grade but in a restricted and inequitable manner to related grades in the public sector generally. In Forfas these awards have been applied to Grade 1 but not to DOD or HOD staff who were not informed of this change from long standing practice regarding 'Gleeson' reviews.
2. The five staff submitted their claim in 1993 to Eolas (their employer at the time) seeking immediate implementation. They accepted Forfas personnel Department requests to delay pursuance during complex restructuring in 1994 and 1995.
3. DOD, HOD and Grade 1 staff have been and are covered by the 'Gleeson' review system for pay and remuneration. All pay awards made to Assistant Secretary over several decades have also been made to the claimants grades with the exception of the pay range over the period 1990 to 1994 and the performance related bonus introduced in 1995. Since these grades were first created, in the 1960s and 1970s respectively, the relativities to Assistant Secretary have remained unchanged.
4. The implementation of the last two Gleeson reviews by the employer has resulted in arbitrary and less favourable treatment of the claimants within Forfas. This arbitrary treatment is exemplified by the fact that Forfas has implemented the last two Gleeson reviews in full for divisional manager Grade 1 staff but only in part for DOD/HOD staff.
5. All three Division Management grades derive from Assistant Secretary and from no other Civil Service grade and have a simple and unambiguous relationship with that grade. DOD, HOD and Grade 1 were intended to be, and by custom and practice were operated as the Division Management grades in the former and present organisations (i.e in IIRS, NBST, Eolas, IDA and Forfas). All three grades represent similar levels of responsibility, including the management of Grade 2/Principal Scientific Officer and lower staff.
6. The claimants' grades, like Assistant Secretary or Grade 1, have not and do not come under the Conciliation and Arbitration Scheme (C&AS) introduced in 1984 for Civil Service grades below Assistant Secretary level.
7. The claimants have been informed by Forfas that they are excluded from the 3% Local Bargaining Clause of the PCW because they are covered under Gleeson and not under the C&AS. (This clause is currently being implemented as pay increases totalling 7.5% including long service increments). The present claim however, refers only to those elements of Gleeson that have been denied.
8. This claim has the implicit support of the Personnel Department of Forfas. (A letter sent to the Department of Enterprise and Employment of the 24th of October, 1995 refers). (Details supplied to the Court).
9. The claimants have a reasonable expectation of being treated in a fair and equitable manner with regard to the Performance Related Bonus, given that IIRS, NBST, Eolas and Forfas all have/had performance evaluation processes.
10. No reasonable explanation was put forward by the Department of Finance as to why the Range and the Bonus were applied in such a very restricted way outside the related Civil Service grade. The merger of agencies in 1994 and the creation of Forfas as the single employer has demonstrated the unjust and arbitrary treatment of staff with similar responsibilities to Grade 1 but with grades regarded by the Employer as no longer required and intended to be phased out and replaced by Grade 1.
11. One of the five claimants retired in late 1977; his post was then filled by Forfas at Grade 1.
12. The claimants' employer has a responsibility to rationalise what is now an archaic, complex and impractical grade structure which has resulted in an artificial situation unfavourable to the claimants who are thereby excluded from certain benefits awarded to other Divisional Manager colleagues.
13. As in the case of previous Reviews, Gleeson Reports 30 and 35 did not make parity, exact or otherwise, a consideration in their recommendations.
14. Gleeson Report No. 35 criticised the way the pay range of Report No. 30 was applied and recommended that the Performance Related Bonus be applied as widely as possible.
EMPLOYER'S ARGUMENTS:
5. 1. The pay of HODs and DODs has traditionally been linked to the Teagasc grade of Assistant Director, which has a relationship (though not full parity) with the pay scale of Assistant Secretary. This is not a direct relationship with the Assistant Secretary grade. The Assistant Director, Teagasc did not receive the pay range or bonus system of the Assistant Secretary grade. The relationship between the HODs, the DODs and the Assistant Director, Teagasc has at all times been fully maintained over the period in question.
2. Following Report No. 30 of the Review Body, a pay range was introduced for Civil Service Assistant Secretary grade from the 1st of January, 1990 (serving Assistant Secretaries could opt to retain the pay scale rather than be assimilated on to the pay range). For departmental and professional grades at Assistant Secretary level in the Civil Service, full parity with the grade was a minimum requirement for the extension of the salary range arrangements.
3. The position in practice was as follows. Civil Service grades with scales below Assistant Secretary level were not put on the range, even though they might have had relativity with Assistant Secretary. Civil Service grades with scales higher than Assistant Secretary level that had relativities with Assistant Secretary, were not put on the range either.
4. In the case of Civil Service grades that had exact parity of scale with Assistant Secretary, the range was applied in very few cases. The main criterion in such cases being the realistic possibility of setting targets against which performance could be measured. The performance system in use in the former Eolas was deemed unsatisfactory by Forbairt in 1995 and discontinued.
5. As is evident from the table and chart of salary histories (details supplied to the Court), the relationship at the maximum between the DOD, HOD and Assistant Secretary scales is the same now as prior to Gleeson Report No. 30. During the period that an Assistant Secretary scale and range co-existed, the HODs and DODs maintained a linkage with the scale. Under the terms of the application of the range, there could be no guarantees as to whether individual officers could have achieved the maximum of the range.
6. The Assistant Secretary range was extended to only two state body grades. These were IDA Grade 1s and FAS Assistant Directors General. Both grades had parity with and direct links to Assistant Secretary and long established histories of performance measurement.
7. Similarly, the performance related bonus scheme was extended to the two grades in FAS and Forfas who had been on the Assistant Secretary salary range. It was done on the basis of their direct pay parity with Assistant Secretary. This bonus scheme was not extended to any other state body grade. The approach to state body grades mirrored exactly the approach to Assistant Secretary related grades in the Civil Service.
8. In the cases of HODs and DODs and all similar state body grades without, as a minimum, Assistant Secretary parity, the relationship with the Assistant Secretary scale had been maintained. Forfas and Forbairt are satisfied that the relationship with the Assistant Director, Teagasc has been maintained in full. The pay of these grades has attracted the same increases, both general and "special", as similar grades in state bodies and indeed, in the Civil Service. In the absence of exact pay parity with Civil Service Assistant Secretary which was a minimum requirement, there are no grounds for extending the performance related pay scheme to these grades.
RECOMMENDATION:
A central issue arising in this dispute relates to the interpretation and application of recommendations made by the Review Body on Higher Remuneration in the Public Sector ( The Review Body) in reports No.30 and 35. This aspect of the case presents the Court with some difficulty.
The Review Body was established by Government to advise it on the general levels of remuneration appropriate to a range of higher posts in the Public Sector. A feature common to all of these posts is that the pay levels applicable to them are determined by Government without reference to normal collective bargaining or any form of conciliation and arbitration, including the Court. The Review Body process is, in effect, the only appropriate pay determination system for those encompassed by its terms of reference.
Thus, decisions were taken on the application of a pay range and later performance related bonus schemes for the grade of Assistant Secretary in the civil service, which were extended to some analogous grades in the broader public sector. In essence, those associated with this claim contend that they were (and continue to be) unfairly excluded from the scope of those decisions.
In response to the claim it has been pointed out to the Court that a minimum requirement for the application of these arrangements to other posts in the Civil Service and State Bodies is that they have full pay parity with the grade of Assistant Secretary. While the claimants have an established pay relationship with that grade they do not have full pay parity. On that account they are outside the scope of the arrangements as adopted within the Review Body process.
While the resulting situation may appear harsh and anomalous as far as the Claimants are concerned, for the reasons set out above, the Court cannot recommend concession of their claim for the retrospective application of the Pay Range and Performance Related Bonus Scheme introduced in consequence of the relevant Review Body reports.
It is noted, however, that an additional argument made against the claim for the application of a performance related bonus relates to the absence of any approved system of performance measurement for the grades concerned.
The Court believes that, having regard to the nature of the posts in question, considerable benefit could accrue to Forfas from the introduction of a performance related bonus arrangement for the claimants. This would also address the current internal anomaly between the Claimants and Forfas Grade 1 staff. The Court does not see any good reason as to why such a system could not be put in place.
Accordingly, the Court recommends that the parties should immediately commence a process for the design and implementation of an agreed performance related bonus scheme for the posts of Head of Division and Director of Division. Having regard to the circumstances pertaining in this case the scheme should be applied with a retrospective commencement date of 1st January 1997, provided the parameters agreed for the scheme can be equitably applied back to that date.
Signed on behalf of the Labour Court
Kevin Duffy
12th May, 1998______________________
T.O'D./D.T.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.