FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : UNITED BEVERAGES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Flood Employer Member: Mr McHenry Worker Member: Mr. Somers |
1. Increase in remuneration package/salary review.
BACKGROUND:
2. The Company manufactures and distributes its own brand of soft drinks and distributes a wide range of beers, spirits and wines to both the licensed and retail trades.
The dispute concerns ten sales representatives who have a basic salary of approximately £12,000 per annum and a commission scheme which in some cases can make up to 50% or more. The combined salary range therefore, runs from £17,000 to £23,000 p.a. Two of the ten workers are long serving employees and are on higher earnings.
The Union's claim is for a basic salary for the ten workers of £20,000 p.a. The Company proposed restructuring the existing package by increasing the basic salary to £17,500 while reducing the commission amounts payable on home products (details of the Company's proposal supplied to the Court). The salary increase proposed by the Company was rejected by the Union.
The dispute was referred to the Labour Relations Commission. Conciliation conferences were held in September, 1999 and January, 2000 at which no agreement was reached. The dispute was referred to the Labour Court by the Labour Relations Commission on the 28th of February, 2000. A Court hearing was held on the 23rd of May, 2000. At the hearing the Company put forward a revised set of proposals for salary and bonus and the hearing was adjourned to enable the parties to engage in further discussions. Subsequently the Union rejected the proposals. A resumed hearing was held on the 2nd of August 2000.
UNION'S ARGUMENTS:
3. 1. The workers concerned are seeking £20,000 p.a. as an annual salary. In return they will agree to a 50% reduction in commission on home products. All other commission payments to remain as they are at present. The value of the increase should be applied pro-rata to the two long service representatives currently on a salary of £19,000.
2. Wage increases under National Agreements are applied to the basic salary only. Therefore, currently the % payments due are applied to basic salaries under £12,000 - this has amounted to very small movement through the national agreements.
3. The salary structure should change to the level proposed by the Union. The diversity in each area does not give the sales representatives equality of opportunity. To leave the basic salary at a low level is therefore inherently discriminatory.
4. The salary range of the workers, based on their experience and the Company portfolio fall below those comparator companies in the trade.
5. The Union seeks retrospection to the date of the claim - May, 1999.
COMPANY'S ARGUMENTS:
4. 1. The Company has approximately 5% market share of a very highly competitive business. In common with many other distribution operations its margins are eroded due to increasing competition The Company expects a substantial reduction in its profit in the course of this year by comparison with last year.
2. The Company recognises the difficulties that the current low level of basic guaranteed earnings creates for the sales representatives concerned and has sought to recognise this by increasing the basic pay from £12,000 to £17,500 p.a. The Company's proposal on salary and commission (details supplied to the Court) does not apply to the two workers who are on a red circled stand alone basis.
3. The difficulties which are created for the sales representatives by the 50/50 split on their earnings between basic and commission are addressed in the Company's offer. The comparators quoted by the Union are not fair in that both of those companies enjoy very prominent market positions in their respective fields and niches of soft drinks, while United Beverages must deal not only with soft drinks but also with beer, spirits and wine sales.
4. The Union's claim for a substantial increase in remuneration is precluded under the terms of Partnership 2000. The Company's proposal in respect of increasing basic salaries, whilst its affect is cost-neutral, is fair and reasonable.
RECOMMENDATION:
The Court having considered the written and oral submissions made by the parties finds no basis to recommend concession of the Union's claim.
Signed on behalf of the Labour Court
Finbarr Flood
3rd August, 2000______________________
TOD/BCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.