FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : PERMANENT TSB - AND - MANDATE AMALGAMATED TRANSPORT AND GENERAL WORKERS' UNION SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr Duffy Employer Member: Mr Keogh Worker Member: Mr. Somers |
1. Harmonisation of the terms and conditions of employment of former TSB staff with former Irish Life & Permanent Staff.
BACKGROUND:
2. T.S.B. Bank was formed in 1992 following the Merger of Cork & Limerick Savings Bank and Dublin and Waterford Savings Bank. An agreement covering terms and conditions of employment was concluded. This agreement covers all categories of staff from manager to the newest recruit and contains procedures for dealing with proposals and ballots of staff. A number of changes have been negotiated since 1992 and the staff voted on these proposals.
In 2000, an Employee Share Option Scheme was negotiated and this provided that the staff would be entitled to 14.9% of the TSB Bank in the event of the Bank being sold. Irish Life & Permanent PLC purchased TSB Bank in 2000, and formally took over the Bank on 21st April 2001. The bank then changed its name toPermanent tsb.The group of unions requested meetings with management of Permanent tsb to discuss terms and conditions.
The matter was the subject of several conciliation conferences over a period of 6-7 months under the auspices of the Labour Relations Commission.
As no agreement could be reached, the matter was referred to the Labour Court on the 30th of October, 2002, under Section 26(1) of the Industrial Relations Act 1990. A Labour Court hearing took place on the 26th of November, 2002.
UNION'S ARGUMENTS:
3. 1. Staff members, after a lifetime of service to the former TSB Bank and having applied for the voluntary severance package were let go at the agreed date of termination but before the package was agreed.
2. Management planned to hold separate negotiations with the former Irish Permanent and TSB Staffs.
3. The staff from the former TSB were existing employees as and from the 21st April 2001 and the service given to TSB Bank is recognised by Law both in Ireland and under the European Directive Number 187. When Irish Life and Permanent purchased the Former TSB Bank, they were legally bound to maintain this service.
4. With the increased responsibility passed onto Branches, Grade 3 have taken greater responsibility in the new organisation. The fact that Management have done away with the post of Deputy Assistant Manager means promotional opportunities have been reduced.
5. The group of unions believe this Proposal is justified on the following basis;
- The limited number of promotional opportunities that have been available to Assistant Managers over the past number of years.
The years of service profile of Assistant Managers taking into consideration both the number of staff that have already reached the top of the salary number of staff that are due to reach this threshold in the next few years.
The loss of promotional opportunities as a consequence of the Branch Integration Programme undertaken following the merger which has resulted in a current surplus of Managers in Permanent TSB.
- The increased competition for the limited number of promotional positions that may arise in the future with the automatic promotion of all Deputy Assistant Managers to the Grade of Assistant Manager.
6. Management produced interim proposals with the intention of bringing forward a new remuneration structure of payment for Managers which would be based on pay related performance. This is a complete departure from custom and practice, where Management wanted to separate Managers from the general staff, which is contrary to the 1992 agreement.
7. Managers targets, which they have no direct input into were changed without warning.
8. Management are attempting to reduce the number of ranked positions in branches.
9. Staffing levels have been cut by Management of the Permanent tsb to such an extent that absenteeism and stress levels amongst staff is at an all time high.
10. The Rota Day system has been in existence for almost 8 years and as anestablishedagreement staff have over the years adapted their lifestyles and entered into commitments based on its operation.
11. As a consequence of the elimination of the Rota Day Staff will be obliged to work an additional 23 days per year notwithstanding the fact that the proposed attendance hours increase from 70 to 72.5 hours per fortnight.
12. The day off per fortnight has afforded Staff opportunities to spend more time with their family and to pursue personal interests, sport, educational, hobbies, etc.
13. There are also serious implications for staff in terms of the additional cost and inconvenience of adjusting family and child minding arrangement and other costs associated with working the extra days.
14. There are a total of 17 Deputy Managers in the Bank, they are paid in accordance with Managers salary scale without any of the "perks" attached to Managers remuneration.
15. The Staff of the Former TSB Bank have cooperated beyond the call of duty and have done everything possible to ensure the success of integration between both organisations.
- The limited number of promotional opportunities that have been available to Assistant Managers over the past number of years.
COMPANY'S ARGUMENTS:
4. 1. The proposals to harmonise terms and conditions were put forward within the contest of a Flexibility Agreement which was concluded with former TSB staff prior to the acquisition, in return for which they received 5% of the sale value of the Bank in the form of shares.
2. Staff were compensated in advance for the disruption that would inevitably arise from the integration process (€20,000 per staff member).
3. The Unions recommended the proposals and were therefore satisfied with them.
4. Processes are currently in train to address the staffing issue. This involves leaving an additional 50 staff in place over and above the identified requirements which are to be achieved by 31st December, 2002.
5. The Company strategy in harmonising the conditions and terms is to trade off different aspects to achieve standardisation in some cases certain existing benefits were traded off against new benefits of equal value. The overall objective was to achieve harmonisation without loss of staff.
6. Unions have not identified any loss to staff and used a firm of accountants, paid for by the Company, to assist them with this aspect.
7. Arising from the acquisition former TSB staff now have access to a Revenue approved Group Profit Sharing Scheme which makes additional bonus payments available to staff over and above that provided for in the conditions and terms which for the current year will be a total of €1.3m - an average of €1000 per person.
8. The Company, as a goodwill gesture to staff, made available a grant of share options to staff of 50% of their annual salary which was part of the recommendation.
9. The proposals put forward have been arrived at following exhaustive and lengthy negotiations, with the assistance of the LRC, show no loss to staff and are appropriate to allowPermanent tsbto move forward on a common terms and conditions platform. The Company has taken steps to address the reasons for rejection, which many recognise had little to do with the package itself.
10. The proposed new terms and conditions do not involve loss by any staff member in terms of overall remuneration package. The Company is making a significant investment in the context of this harmonisation process and its income ration as a result will remain above 74%.
11. Any alteration in the cost of this settlement which involves increased cost to the business will undermine the competitive position at a critical time in the development of the bank.
12. It is the Company's clear view that the proposals from the Labour Relations Commission constituted an equitable and fair solution to this complex set of issues. The fact that the reasons for rejection were not connected directly with the package, and the narrowness of the rejection, must be taken into serious account.
RECOMMENDATION:
This dispute came before the Court arising from the amalgamation of two major employers and is one of the largest such merger in the financial services sector in recent times. Of its nature the process involved a multiplicity of complex and difficult issues affecting staff. The Court is impressed at the degree to which representatives of the unions and the employer have addressed those issues in depth. All available industrial relations machinery, both internal and external, has been fully utilised before the outstanding matters were referred to the Court.
The Court has taken full account of the very careful and comprehensive submissions made by the parties. It has also examined the proposals which emerged from the Labour Relations Commission. Unfortunately those proposals did not lead to a final agreement. Nonetheless, the Court is convinced that they represent a fair and reasonable response to the diverse issues which the parties were seeking to address.
The Court notes in particular that the proposals as formulated at the LRC would not result in any loss to current employees and in practically all cases significant benefits would accrue. It is further noted that red-circling has been used to deal with apparent anomalies where different benefits packages apply to staff whose functions will be integrated. This is in line with normal good practice deployed in similar situations in other company mergers.
Notwithstanding its view that the proposals which emerged from the LRC are fair and reasonable, the Court recommends that in the interest of bringing finality to this process they should be modified in a number of respects as follows:
Rota Days
It is noted that the proposals on rota days represent a redistribution of working hours rather than an elimination of time off. However, the Court accepts that there is a change in the structure of time off and recommends that each employee affected by the change should receive an addition lump sum of €600, over and above the lump sum formula provided for in the LRC proposals.
Grade 2 Scales.
In mergers such as this it is often necessary to deal with separate benefit packages available to staff who will be performing the same or similar roles in the merged enterprise. As noted above red-circling is a normal and acceptable means of allowing such differences to be corrected over time. The salaries payable to former Irish Permanent staff come within that category. Likewise, there are certain conditions available to former TSB staff which are not applicable to former Irish Permanent staff.
The Court does, however, recommend that the top of the former TSB Grade 2 salary scale, as proposed at the LRC, should be further improved by the addition of two additional increments of €500.
Issues Relating to Management and T&C’s
It noted that a number of issues have been raised which are specific to management and T&C’s. It is recommended that in so far as those issues are separate from the generality of issues common to all staff in the proposed agreement, they should be dealt with separately in local negotiations. These negotiations should commence immediately on acceptance of this recommendation and should continue for a period of not more than 10 weeks. Any issues on which agreement cannot be reached should be referred back to the Court.
Conclusion.
Subject to the modifications referred to above the Court recommends that the proposals which were negotiated at the LRC be accepted by all parties as a fair and reasonable package having regard to all the circumstances.
Signed on behalf of the Labour Court
Kevin Duffy
10th January, 2003______________________
HMCD/MBDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Helena McDermott, Court Secretary.