FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ROADSTONE - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION AUTOMOBILE, GENERAL ENGINEERING AND MECHANCIAL OPERATIVES UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Keogh Worker Member: Ms Ni Mhurchu |
1. 1. Profit share 2. Definition of pensionable pay 3. Payment of average wages for annual leave 4. Pay pause
BACKGROUND:
2. The Unions have submitted a claim as outlined above on the Roadstone Group of Companies ie. Roadstone Dublin; Roadstone Provinces and J.A. Woods. It involves 700 members in the craft and general operative grades employed by these companies. The Roadstone companies have operations in over 50 locations around the country.
The Unions claim that the companies are part of the CRH group which have traded very successfully in recent times. The Unions state that this success has been achieved despite a reduction in the workforce from 3,500 to approximately 900.
The Company claims that it operates in a very competitive market place. It must keep costs down or it will lose competitive advantage. It is not in a position to meet this claim.
As no agreement was possible between the parties the dispute was referred to the Labour Relations Commission. Conciliation conferences were held on the 21st October, 1999, 9th November, 1999 and 2nd December, 1999, but no agreement was reached. The dispute was referred to the Labour Court on the 3rd February, 2000 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 14th March, 2000 (the earliest date suitable to the parties).
PROFIT SHARE
UNIONS' ARGUMENTS:
3. 1. The Roadstone group of companies have traded very successfully over the past number of years. The workers concerned should share the benefits of this success.
2. Senior management in the group of companies has received exceptional bonuses based on the success of the enterprises. The workers should also be rewarded accordingly.
3. The past twelve years of centralised pay bargaining has made a substantial contribution to the profitability of the companies. Employees should also benefit from this success by way of a profit sharing scheme.
COMPANY'S ARGUMENTS:
4. 1. The company operates in a very competitive market. It must keep costs down or it will lose market share to its competitors.
2. The Company has operated financial involvement mechanisms since 1990. The scheme allows permanent employees to purchase shares in the Company each year, which has substantially benefited the workers.
3. Clause 6 of Partnership 2000 precludes any cost increasing claims.
PENSIONABLE PAY
UNIONS' ARGUMENTS:
5. 1. All earnings should be included when calculating for pension purposes ie. shift allowance and rostered overtime.
2. It is unjust to relegate an employee to a notional basic of £13,500 per annum when his actual earnings are £25,000 when bonuses and overtime are taken into account.
3. A high percentage of employees in the scheme are staff members who have all their salary or earnings included for pension purposes.
COMPANY'S ARGUMENTS:
6. 1. The Company operates a defined benefit pension scheme for its employees. The scheme has a full actuarial valuation every three years. After each valuation improvements have been made to the scheme.
2. In January, 1999, the Company made a significant improvement to the scheme. The definition of scheme salary was changed from basic pay less 1.5 times Social Welfare to basic pay less 1 times Social Welfare.
3. The claim for further improvements is inappropriate particularly when account is taken of the the improvements that have been made as a result of actuarial valuations and the improvements in relation to the scheme salary.
HOLIDAY PAY
UNIONS' ARGUMENTS:
7. 1. Management should use an employee's average earnings and not basic pay when computing holiday pay for workers.
2. The workers earn bonuses and work overtime all year round but for holiday purposes pay is only calculated on basic earnings.
COMPANY'S ARGUMENTS:
8. 1. Under the organisation of Working Time Regulations, 1997, the normal weekly rate of an employee's pay excludes any pay for overtime in relation to holidays.
2. The claim for payment of average wages for annual leave is not the norm within the industry.
3. Concession of the claim would have a significant increase in payroll costs for the Company.
PAY PAUSE
UNIONS' ARGUMENTS:
9. 1. In 1982, the Unions agreed to a "pay pause" of six months because of trading difficulties which the Company experienced at that time. The Unions now want this six months pay pause restored by way of early payment of the next pay award.
2. The increases under Partnership 2000 are very modest and it is unreasonable that their implementation should be delayed by virtue of an interim agreement made in 1982.
3. The Company has had the benefit of the six months concession for the past eighteen years which should now be restored to the workforce as soon as possible.
COMPANY'S ARGUMENTS:
10. 1. Any attempt to roll back an agreement which both sides signed up to is totally unacceptable.
2. A lump sum payment was made to workers for acceptance of the "pay pause" in 1982.
3. The claim by the Unions is cost increasing and is therefore precluded by the terms of Partnership 2000.
RECOMMENDATION:
The Court has fully considered the submissions made by the parties, and the additional information provided subsequent to the hearing. It recommends as follows in relation to each of the issues in dispute:
Profit share
It is noted that this claim is made pursuant to Chapter 9 of Partnership 2000. Clause 9.16 of that Agreement provides that discussions under the chapter will be conducted in a non-adversarial manner, and are subject to Clause 6 (stabilisation) of the Agreement on pay.
The Company has in place a share option scheme, which is a form of financial involvement recognised by Chapter 9 of Partnership 2000. The Court does not consider that the Company is obliged by the Agreement to introduce a type of profit sharing scheme claimed by the Unions. The parties might consider further improvements in the existing scheme, within the terms of Partnership 2000, particularly with regard to the upper limit on the value of shares annually available to employees.
Pensionable earnings
The Court does not consider that the pension scheme presently operated by the Company is substantially out of line with appropriate standards in comparable employments, within the meaning of Clause 4 of the Pay Agreement associated with Partnership 2000. In these circumstances, the claim is precluded by Clause 6 of the Agreement.
It is noted that an actuarial review of the scheme is now due. On completion of that review the parties should consider if there is further scope for improving benefits to the scheme members.
Payment of average earnings during holidays
In line with the previous practice of the Court, it is recommended that where overtime is regular and rostered, it should be reflected in holiday pay.
Having regard to the high level of overtime earnings relative to basic pay, the Court recommends that in the case of regular non-rostered overtime, 40% of the average earned for the time worked in the thirteen weeks preceding the holiday should be included in holiday pay.
Pay Pause
The Court does not recommend concession of this claim.
Signed on behalf of the Labour Court
Kevin Duffy
8th May, 2000______________________
LW/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.