FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : NEW IRELAND ASSURANCE COMPANY - AND - MANUFACTURING, SCIENCE, FINANCE SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr. Somers |
1. New pay structure.
BACKGROUND:
2. Bank of Ireland Assurance Business established Lifetime Assurance Company in September, 1987, and acquired New Ireland Assurance Company in December, 1997. The two businesses were run separately until the Company announced a new structure in August, 2000. The Company announced the creation of an integrated business support team with harmonised terms and conditions called Bank of Ireland Assurance Services (BOIAS). This area would employ approximately 650 staff working in Customer Services, IT, Finance, Marketing, Actuarial and Human Resources. Staff who had previously worked in Lifetime worked a 35 hour week, were on a performance related pay system and were not unionised. Many of the staff previously working in New Ireland were union members, they worked a 32.5 hour week and were paid in accordance with incremental scales based on service. In July, 2001, the Company put forward a voluntary package to harmonise conditions of employment, which emphasised performance related arrangements (details to the Court). Many employees opted for the new package, but the Unions, who had not been involved in the construction of the package, did not agree with certain elements of it and commenced negotiations with management.
The issue was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 22nd of August, 2001. Agreement was not reached and both parties requested referral to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 15th of February, 2002, the earliest date suitable to the parties.
UNIONS’ ARGUMENTS:
3. 1. Increase in working time: Staff in New Ireland work a 32.5 hour week. The Company proposes to increase their working week by 7.6%, but is only offering a 3.5% pay increase. The Company’s proposal would have the effect of lowering the hourly rate of pay or would require staff to work an extra 1.5 hours for zero pay. In contrast, the ICS Building Society, which is also a subsidiary of the Bank of Ireland Group, paid a 9% increase to staff when it increased its hours from 32 hours to 35 hours per week. Staff in the Mortgage Store received a 17% increase when their hours increased to 37.5 hours.
2. Salary bands: Under the proposed new salary bands, the maximum point for new entrants on salary Scale A would be reduced by €6,826.11, which is unfair and unwarranted. The present maximum should be retained. The maximum point of the new Scale B should be increased from €40,631.62 to €45,710.57 in recognition of the greater workload and responsibility which they will carry.
3. Monetary recognition: In order to recognise Union co-operation, the Company should pay a lump sum of €2,539.48 to each Union member upon acceptance of the proposal. It is a feature of radical change programmes that a lump sum is paid to all full-time permanent staff (and pro-rata to others). New Ireland staff, who have been asked to undertake greater change than Lifetime staff, should receive a lump sum of €5,078.95.
4. Retention of flexitime benefit and paid overtime: The Company proposal is that staff who are promoted from Grade B to Grade C will lose the benefits of flexitime and paid overtime. This is unfair, as staff who are ‘mapped’ across to the C Grade will retain these benefits. This will result in Grade C staff operating to two different employment contracts. The Company’s offer of a 5% increase when promoted is derisory.
5. Equality of treatment for staff who remain on incremental pay: The Company proposes to exclude staff who remain on incremental pay from additional fringe benefits such as mortgage subsidy, free banking, enhanced maternity benefit and educational grants. This is discriminatory and makes a nonsense of the Company’s claim that people who do not opt into the new BOIAS system will not be adversely affected.
6. Abolition of NIA profit share scheme: In 2000, the Company withdrew the profit share scheme and replaced it with a Group share scheme. It stated that no employee would lose out as a result of the changeover. The Unions request that the transitional arrangements, which applied in 2000, should be extended to 2001, as lower paid staff would not earn enough to maintain the previous benefit. They should be compensated for this.
EMPLOYER'S ARGUMENTS:
4. 1. The proposed package, which was completed after months of research and analysis, is extremely attractive and competitive, and many employees have already accepted it. However, the package is offered on a voluntary basis, and the Company respects each individual’s personal circumstances and preferences. If employees choose to remain on their present terms and conditions, it will not affect their career opportunities for the future.
2. The key features of the BOIAS package are broad based salary bands, market related salary ranges, performance management system, performance related pay, annual merit and cost of living increases, a bonus scheme, an extended range of benefits, changes in working arrangements and compensation for increased working hours. The package should not be viewed as a set of separate elements, but should be considered in its entirety.
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3. In recognition of the move to a performance management based reward structure and a standard 35 hour working week, average earnings will increase by approximately 16% in year one. Furthermore, an enhanced range of benefits to the value of 5% and a once off lump sum of €2,539 gross will be paid to each employee who chooses to enter into the new terms and conditions.
4. Performance related pay is now the norm in the private sector and the levels of remuneration reflected in the total integrated package are amongst the best available in Ireland. There is no justifiable basis for further improvement at this time. The package was not designed with an agenda of cutting costs or jobs and all staff who move to the new terms will be significantly better off. Those who remain on their current terms will continue to enjoy very competitive terms and conditions.
5. The package was put together to achieve a relative fairness to each group of employees. The package will cost the Company a once off payment of €2.5 million and an annual cost of €1 million. Any increases above those proposed, will impact upon other groups of staff and could lead to knock-on claims.
RECOMMENDATION:
The Court has given consideration to the very comprehensive submissions of both sides. It is evident to the Court that the harmonising of pay and conditions of employment for all staff employed in the newly formed Bank of Ireland Assurance Services (BOIAS) is a very desirable objective for all parties. The Court notes the voluntary approach adopted by the Company to introduce a new set of terms and conditions. The Court respects the Company's right to put forward such a voluntary offer to staff with the assurance of no change in the status quo for those who do not wish to avail of the offer. At the same time, the Court believes that a more consultative approach with the Unions directly involved would have helped to avoid many of the difficulties, which have now arisen.
The Court sees a distinction between the current terms and conditions of those staff employed by Lifetime and those employed by New Ireland, and is of the view that the implications are different for both.
The Court recommends that the 3.5% offered on acceptance of the package should be paid in all instances from 1st September, 2001.
In further recognition of the difficulties which staff will have when required to move from working a 32.5 hour week to a 35 hour week, the Court recommends that the Company's package on offer should be increased by an additional €2,500 compensation for those staff making this change.
So as to ensure that no employee is disadvantaged in their career progression, the Court recommends that the enhanced educational grant included in the terms of the offer should be available to all employees, regardless of their acceptance or otherwise. The Court notes that, other than the enhanced mortgage benefit, all other benefits will apply equally to all employees.
The Company should endeavour to facilitate those with family responsibilities who would, as a result of taking up the Company's option, lose flexitime working.
In relation to the abolition of the New Ireland Assurance Profit Share Scheme, the Court recommends that the transition payment, as claimed by the Union, should apply for the year 2001.
The Court recommends that the proposals should be amended by the above recommendations of the Court, and the Unions should put them forward for ballot with a recommendation for acceptance.
Signed on behalf of the Labour Court
Caroline Jenkinson
15th March, 2002______________________
D.G/MBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.