FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : KRAFT JACOBS SUCHARD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - MARINE, PORT AND GENERAL WORKERS' UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Ms Ni Mhurchu |
1. Dispute concerning the re-introduction of salary scale
BACKGROUND:
2. In 1985 the salary system for the Company's salesforce was changed by agreement from an incremental to a merit based system. Under the incremental system workers eventually reached the maximum of the scale. Under the current system workers reach a certain level which is substantially less that the maximum and increases thereafter can be achieved only by a combination of exceptional performance and service. In October, 1994, the Union wrote to the Company stating that it was seeking the re-introduction of the old incremental salary scale from March, 1995. Management rejected the claim. The dispute was referred to the Labour Relations Commission and conciliation conferences were held in August, September, 1996 and April, 1998. Agreement was not reached and the dispute was referred to the Labour Court by the Labour Relations Commission on 12th June, 1998. A Court hearing was held on the 22nd September, 1998.
UNION'S ARGUMENTS:
1. When the new salary policy was introduced in 1985 it was reviewed and voted upon by the salesforce at the end of a three year period. The group, at the time, agreed to extend the applications of the new policy on a bi-annual basis. The Union does not accept that once the opt-out was not exercised in the first instance, then the agreement would be considered as a continuum.
2. Under the present system a salary of £22,840 is stated to be the mid-point or "rate for the job". It is the rate which experienced workers should achieve. However, only seven sales representatives out of a salesforce of twenty-six have reached or exceeded this rate. Normal incremental movement on a salary scale provides between a 3% and 5% increase annually, exclusive of agreed norms.
3. The Company has reneged upon its commitment given in 1985. Management has not shown a willingness to negotiate the re-introduction of a salary scale despite the fact that it was always part of the agreement that the bi-annual review was the norm.
COMPANY'S ARGUMENTS:
1. The performance related pay system has been in place for the past thirteen years. It was originally introduced for a three year trial period. This was completed without this issue being raised and the system was accepted in the following years. The Company is part of an international corporation (Philip Morris) and the remuneration system throughout the corporation is a performance related one only. 2. The vast majority of the salesforce are happy with the current system which rewards high achievers and ensures that lesser achievers are afforded an increase in line with national agreements. 3. At present there are two workers of the original 1985 salesforce in the Company, all others were recruited on the pay related performance review system. Workers are "better rewarded" under the performance related system that any other. It is a fair and equitable system and should be retained.
RECOMMENDATION:
The Court has taken careful account of the detailed submissions made at the hearing and of the documents subsequently forwarded to the Court.
The Union on behalf of some of the sales representatives, expressed dissatisfaction with the method of annual review used by the Company since the system was changed from a service based salary scale to a performance related merit system as agreed in 1985, and subsequently ratified by the representatives in 1988.
The request to revert to salary scales was first raised in October, 1994 by the Union. At that time revisions were made to individual sales representative's salaries by the Company so as to remove perceived anomalies that had developed as a result of a number of mergers. The system currently being used in the Company is that which applies throughout the Group internationally.
The Union has based its claim to revert to pay scales on an understanding that there was to be a bi-annual review of the new system after 1988. However, this is not borne out in any documentation, nor have such reviews taken place in any year since 1988, and no requests were made for such reviews. It has also been pointed out that only two of the representatives now with the Company ever had the salary scale system pre-1985.
The Court does not consider that there is any basis to recommend that the Company should revert to a service pay scale system of remuneration.
The Company has stated that the mid-point of its pay range is the top point of the scale, all increases above this being dependent on 'exceptional performance'. Taking this into account, while the Court finds that the Company's "top point of the scale" is not in line with the top-of-scale salaries submitted by the Union for comparable companies in this industry, it acknowledges that the actual remuneration earned by its representatives compares well when the merit increases are taken into account.
The Company stated that it reviews its pay ranges every two years by looking at salaries in comparable industries and at market needs and where it is found necessary it aligns the pay ranges to those surveyed. The last review was carried out in 1995/1996.
The Court recommends that such a review be carried out urgently to establish if any further adjustments should be made.
The Union wishes to ensure that its members are paid in line with comparable employees, and to make representations to the Company where it feels that this is not so.
The Court recommends that the Company should take steps to discuss the pay ranges of its representatives with the Union, with a view to reaching an agreement on fair and reasonable pay ranges.
Signed on behalf of the Labour Court
Caroline Jenkinson
27th October, 1998______________________
TOD/BCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.