FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AN POST - AND - COMMUNICATIONS WORKERS UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr McHenry Worker Member: Ms Ni Mhurchu |
1. Introduction of Annualised Hours at the Dublin Mails Centre.
BACKGROUND:
2. The dispute relates to the introduction of Annualised Hours at the Dublin Mails Centre (DMC) where approximately 600 workers are employed. Negotiations under the auspices of the Labour Relations Commission, on a comprehensive procedural agreement are nearing completion. The issues still in dispute are as follows:-
1. Salary; The Union's claim is for a salary of £31,500 for the 47 hours. The Company has offered £27,000.
2. Pension; The Unions claim is for 95% of the gross salary to be reckonable. The Company is willing to have £21,246 of the amount made pensionable.
3. Lead in Payment; The Union's claim is for a lead in payment of £ 1,500. The Company rejected the claim.
4. The Union seeks compensation for loss of earnings. The Company rejected the claim.
The dispute was referred to the Labour Relations Commission. Conciliation conferences
were held in October, November December, 2000 and February, 2001. Agreement was
not reached. The dispute was referred to the Labour Court by the Labour Relations
Commission on the 8th February 2001. Court hearings were held on the 21st and 28th
of February, 2001.
Claim 1- Salary;
UNION'S ARGUMENTS
3. 1. The Union constructed its pay model on the following basis, which in terms of current earnings capability, extensive changes in working standards, procedures and rosters required, the automation impact linked to complete flexibility and higher productivity is regarded as being reasonable and fair. The pay model is based on the pay level of the Postal Sorter Grade prior to 1st February, 2001 (first payment of 5.5% under PPF due). The composite salary sought (pre 1st February 2001) is £ 33,006.68, calculated as follows;
Postal Sorter Annual Pay (pre 1st February, 2001 £16,379.823
Shift Allowance of 33 1/3% £ 5,454.481
Annual Hours Allowance 20% £ 3,275.965
On Call Allowance 4% £ 655.192
9.5 Hours x 52.18 weeks x 1.72 hourly rate
(includes holiday average) £ 7,137.234
Service Pay of £104 paid on a personal basis £ 104.000
2. The Company's offer of £27,000 was rejected by the Union negotiating committee as being derisory. In an attempt to broker a deal which the Union felt it could persuade workers at DMC to accept ,the Union reduced the salary requirement to £31,500 (pre 1st February,2001). The pro rata rate for the 47 hour contract is required for the 40 hour, 26 hour and 23 hour contracts.
COMPANY'S ARGUMENTS:
4. 1. The following table shows the Stable Earnings level which results from the application of the current pay and allowances regulations and applied to the proposed attendance regime for a 47 hour contract- at the top of the Basic Pay Postal Sorter Grade in the DMC.
Basic Pay £16,380.00
Overtime and allowances £ 8994.00
Annual Hours Allowance £ 1,600.00
£26,974.00
2. The Company regards this Stable Earning Level guarantee as the reward for change in the DMC. The Union has departed from the current agreed pay and allowances regulations when attempting to justify the £31,500 pay claim. It has applied a higher multiple to the allowances than applies company-wide at present.
3. In relation to the claim for pro-rata for 40 and 26 hour contracts, the Union, in making this claim is undermining the basic premise of constructing a Stable Earnings Level by not crediting each of the individual 47,40, and 26 hours contracts with the allowances for the level of attendance, overtime, night duty etc., appropriate to the contract.
Claim 2 -Pensions
UNION'S ARGUMENTS:
5. 1. One of the key features of the Annualised Hours Agreement is the full pensionability of the salary.
COMPANY'S ARGUMENTS:
6. 1. Under the current pension schemes basic pay and a number of designated allowances are reckonable for pension purposes. An analysis over the past 3 years of the last six retirements of full time Postal Sorters in the DMC shows an average pensionable pay at £21,145. This compares with £20,921 calculated from the Company's proposed plan using a 47 hour contract and the existing pension scheme rules. The Company is prepared to designate £500 of the new Annual Hours Allowance as being pensionable for future service only.
Claim 3-Lead in Payment
UNION'S ARGUMENTS:
7. 1. A lead in payment of £1500 is required to assist staff to financially adjust to the changed working arrangements and to commit to the level of flexibility needed to implement the Annualised Working Arrangements. This payment should be made on the pay day prior to the commencement of Annualised Hours working in the DMC. In addition a satisfaction bonus payment of £500 is sought 6 months after the implementation of Annualised Hours working.
COMPANY'S ARGUMENTS:
8. 1. Under the terms of the Transformation Through Partnership in An Post (TTP) agreement each worker received a special lump sum payment of £1500 "in settlement of any residual issues arising from the implementation of various administrative and operational measures.........". In addition the TPP provided for "work standards will be developed and implemented for all work activities on mail operations including all mails processing, and staff will co-operate with change to duties where staffing levels are identified as inappropriate. Changes which impact on staff will be negotiated."
2. The payment of £1500 meets any obligation the Company may have had to a lead-in payment.
Claim 4- Loss of Earnings
UNION'S ARGUMENTS:
9. 1. A considerable number of new staff will suffer a reduction in income on transferring to Annualised Hours working. It is necessary to provide income protection for this group to allow a smooth transition to pay under Annualised Hours working. The base year for comparing gross earnings prior to the Annualised Hours should be the 52 week period immediately prior to the commencement date for Annualised Hours working in the DMC. The following formula should apply for the first three years; 100% payment of the shortfall between the Annualised Hours salary and the gross earnings of the individual worker for the 52 weeks prior to the Annualised Hours working.
COMPANY'S ARGUMENTS:
10. 1. The working time directive actually restricts the amount of time an individual can spend at work to an average of 48 hours per week. The Organisation of Working Time Act 1997 will cap the maximum hours each worker can work, constraining the ability to resort to overtime. The principle of compensation for loss of earnings arising from the introduction of any new reward system is capped at the maximum earnings allowable under the 1997 Act. A full-time sorter will receive £27,000 p.a. under the Stable Earnings guarantee. In these circumstances having regard to the cap no loss of earnings issue arises.
RECOMMENDATION:
This dispute came before the Court against the background of protracted negotiation between the parties on major changes in work organisation at the Dublin Mails Centre. Substantial agreement has been reached in these discussions on alternative organisational arrangements at the DMC and on associated revised attendance patterns. The process of change is further supported by an agreement concluded between the parties in May 2000, entitled“Transformation through Partnership in An Post”(TTP)
That agreement commits the parties to the development of an alternative strategy, which replaces the dependency on the provision of overtime to meet service demands, with a new approach which can support stable remuneration levels having regard to established earnings patterns. In that agreement the parties also acknowledged the impact which National and European Legislation will have in curtailing the level of overtime that can be worked and the effect of that curtailment on individual earnings if the present arrangements remain unaltered.
In the context of those understandings, the parties have agreed to the introduction of annualised hours contracts, whereby staff will be provided with a stable earnings package in return for a defined attendance liability. As part of the TTP approach the parties have also agreed on an Employee Share Option Plan, which will be linked to the achievement of an identified level of cost savings.
Substantial progress was made in local negotiations and at conciliation toward achieving those objectives. It was not possible, however, to conclude a final agreement on the introduction of annualised hours because of outstanding differences between the parties on a number of key elements of the proposed agreement. Those disputed elements are the subject of the recommendations which follow.
In formulating this Recommendation the Court has taken full account of the submissions made by the parties in the course of the hearing as well as the objectives, which they themselves identified, as set out in the TTP Agreement.
Level of stable earnings and the composition of the pay model.
The Court recommends that he Company should offer contracts based on average attendance liabilities of 48 hours, 40 hours and 26 hours per week. In the case of 48 hour contracts the level of stable earnings should be set at £29,300, in pre PPF terms. In the case of 40 and 26 hour contracts, a pro-rata level of stable earnings should apply. The manner in which the pay model proposed should be adjusted to reflect these amounts should be agreed between the parties.
Stable Earnings Reckonable for Pension Purposes.
Whilst the main An Post pension schemes were established following the formation of the company as a commercial enterprise, the rules and benefits of the schemes are modelled on the public service superanunation scheme. Under these rules the elements of pay which can be reckonable for pension purposes are limited to basic pay and allowances in the nature of pay. It is clear, therefore, that certain components of the pay model proposed to make up the stable earnings package could not, within the current rules, be designated as pensionable. The Company have also pointed out that the designation of additional elements of reckonable pay would have prohibitive cost implications.
It is self evident that at the time of thescheme's inception the type of pay structure now proposed could not have been contemplated. The Court believes that in view of these and other changes which will result from the proposed new form of work organisation, it is desirable that the parties conduct an in-depth review of the current pension arrangements. That review, which should be conducted with expert assistance, should look at all aspects of the scheme including its funding and benefits. The process should commence as soon as possible and should be concluded within a period of two years.
In the interim the Court believes that the Company's offer on pensionability should be further improved. The Court recommends that the reckonable elements of the proposed stable earnings of those on 48 hour contracts should amount to £24,000 p.a. in pre PPF terms. Pro rata arrangements should apply to those on other contracts.
The adjustment necessary in the pensionable elements of the new pay structure should be agreed between the parties.
The level of reckonable pay recommended above is intended to apply in respect of those currently serving in the DMC only. It is based on the exceptional earnings pattern which has become a feature of that centre and the resultant expectations as to pensionability amongst staff employed there. Further, it is intended as an interim arrangement to cover the period up to the completion of the recommended review and the putting in place of any agreed changes in the pension scheme arising from that review.
The amount recommended should not be regarded as establishing a standard for any other groupings within the company and should not be relied upon or quoted for that purpose.
Lead in Payments.
The Court does not recommend concession of this claim.
Compensation for loss of Earnings
The Court does not recommend concession of this claim.
Savings.
The Court is conscious that the implementation of this recommendation may make it more difficult for the Company to achieve the level of saving, within the time scale envisaged, on which the ESOP proposal was predicated. The Court believes, however, that the implementation of the restructuring which will become possible, on acceptance and implementation of this Recommendation, will bring considerable benefits to the company in terms of greater efficiency, cost savings and quality of service. Nonetheless, in view of the commitment contained in the TTP agreement to the achievement of specific levels of overall cost savings, the Court recommends that the Union should co-operate fully with the Company in such measures as are necessary to ensure that the targeted cost savings are achieved.
This recommendation is intended to bring finality to what has been a long and difficult negotiation process for all the parties involved. It should be accepted in its entirety and implemented as such.
Signed on behalf of the Labour Court
Kevin Duffy
12th April, 2001______________________
TOD/CCDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.