FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : FBD INSURANCE PLC - AND - FBD FIELD STAFF ASSOCIATION DIVISION : Chairman: Mr Duffy Employer Member: Mr Keogh Worker Member: Mr. Somers |
1. (i) An increase in basic salary, (ii) A shortening of the incremental scales, (iii) An improvement in the pension plan.
BACKGROUND:
2. FBD Field Staff Association has submitted a claim for (i) an increase in basic pay, (ii) a shortening of the incremental scales, (iii) an improvement in the pension plan. The claim is based on a Benchmarking Report by Inbucon Ireland Ltd which was commissioned on behalf of the Association. The Association represents fifty-six sales staff employed by the Company.
Management rejected the claim on the basis that it could not accept the validity of the Inbucon Report. It claims that the Report is fundamentally flawed and significantly invalidated as a result of factual errors and statistical inaccuracies.
As no agreement was possible between the parties the dispute was referred to the Labour Relations Commission. A conciliation conference was held on the 20th of February, 2002, but agreement was not reached. The dispute was referred to the Labour Court on the 7th June, 2002 in accordance with Section 26 (1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 28th of August, 2002.
Salary Increase
ASSOCIATION'S ARGUMENTS:
3. 1. The Inbucon survey has shown that the salaries of sales staff have fallen significantly out of line with their counterparts in other insurance companies.
2. The sales staff have not received any pay increase since 1991. The only pay increase received was in July, 1997, in return for productivity increases, and under the various national agreements.
COMPANY'S ARGUMENTS:
4. 1. It was agreed by both sides in 1991 that a market review would not be undertaken for nine years.
2. Management has conducted extensive research on remuneration and all other benefits with appropriate competitor companies. This has shown that our rates of pay are ahead of competitor packages.
Incremental Scales
ASSOCIATION'S ARGUMENTS:
5. 1. It can take members of the sales staff up to 21 years to reach the maximum of the scale. This is out of line with modern practice where employees reach full proficiency after five years.
2. The incremental scales should be reduced from twenty-one points to twelve points.
COMPANY'S ARGUMENTS:
6. 1. The Company has put forward a proposal on incremental scales which will reduce the progression to top of the scale from the current twenty-one years to sixteen years. The maximum of the scale is normally reached after sixteen years or less.
Pension Scheme.
ASSOCIATION'S ARGUMENTS:
7. 1. The current provisions of the pension scheme provide for 2/3 of final basic salary less one and a half times the state pension. This was standard for many private sector employments, however, this is no longer the case.
2. The Inbucon survey reveals that 83% of companies do not include a reduction for the state pension. This in an onerous position for members as a substantial amount of their earnings are commission based which are not pensionable.
3. The Association asks the Court to recommend that the current pension plan be amended to provide for a pension based on two thirds of final salary, including average commission payments for the last three years and excluding any reduction for the state pension.
COMPANY'S ARGUMENTS:
8. 1. The consolidation of commission for pension purposes would be an enormous cost that the Company could not bear, particularly in the light of the generous non-contributory scheme currently in place.
2. The Company is not prepared to alter the pension scheme because (a) the current scheme is very attractive by comparison with other schemes and (b) to change it for one particular group of staff within the scheme would not be equitable or practical.
3. The Company made a substantial employer PRSI contribution to the state occupational pension fund over the period of employment. In this way the Company is contributing to a full two thirds pension and the Association's request, if met, would amount to a double payment for this element of the retirement benefit.
RECOMMENDATION:
The Court does not consider it reasonable to expect the Company to implement the job comparison report which was unilaterally commissioned by the staff association and into which the management had no input. The Court recommends that the current dispute be resolved on the following basis:-
- The full terms of PPF should be applied with the first phase taking effect from 1st October, 2000.
- An additional increase of 5% in line with that recommended by the Court for other staff in LCR17002 should be paid with effect from 1st July, 2001.
- At the expiry of PPF a full salary review should be carried out. In the interim the parties should agree the methodology for the review including the list of comparators to be used. If agreement has not been reached on these issues by March 2003, the matter may be referred back to the Court.
- The salary scale should be reduced from 21 points to 16 points. The current arrangements for accelerated progression should be retained. The details of the new scale should be the subject of further discussions between the parties.
- The Court is not satisfied that the current pension scheme is out of line with appropriate standards in comparable employments. Accordingly, the Court does not recommend concession of the Association's claim for improvements in the scheme.
Signed on behalf of the Labour Court
Kevin Duffy
6th September, 2002______________________
LW/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.