FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 2(1), INDUSTRIAL RELATIONS (AMENDMENT) ACT, 2001 PARTIES : BANK OF IRELAND - AND - IRISH BANK OFFICIALS' ASSOCIATION DIVISION : Chairman: Mr Duffy Employer Member: Mr Carberry Worker Member: Mr. Somers |
1. Union application under the Industrial Relations (Amendment) Act, 2001.
BACKGROUND:
2. The issue before the Court arises from the introduction by the Bank in June, 2002, of a revised Performance Management and Remuneration System for Managers (PMRS). This system replaced the existing Managerial Remuneration System known as EOS (Enhanced Over-scale System) for Managers which had been in place since 1988. The Bank advised the Union of the introduction of PMRS. It provided a general presentation on the scheme, but did not invite negotiations with the Union on the contents or pay elements of the package. The Bank maintains that this approach is in keeping with Bank Policy in relation to Managerial Pay which it regards, now and since 1988, as being between the Bank and its Managers and not for negotiation with IBOA or any other union. The Union maintains that the Bank introduced the new system without proper discussion, negotiations or agreement with the Union. It claims that the Bank's decision fundamentally changed existing contractual arrangements for managerial staff and has serious implications for all staffs' promotional opportunities. Subsequently the Union referred the issue to the Labour Relations Commission under the terms of the Code of Practice on Voluntary Dispute Resolution (S.I. No.145 of 2000).The Bank declined an invitation from the LRC Advisory Service to engage under the Voluntary Code. On the 14th February, 2003 the Union made an application to the Labour Court for an investigation of the dispute under the Industrial Relations (Amendment) Act, 2001. Court hearings were held in May and November, 2003.
RECOMMENDATION:
This dispute came before the Court by way of an application by IBOA (The Union) pursuant to Section 2(1) of the Industrial Relations (Amendment)Act, 2001.
The Section under which the dispute was referred prescribes a number of conditions which must be fulfilled before the Court can embark upon an investigation of the dispute. Whilst the employer in this case did not raise any issue as to the fulfilment of those conditions, the Court is of the view that there are matters arising in that regard upon which it is appropriate to comment.
The first condition precedent to an investigation is set out in Section 2(1)(a) as follows:
- “It is not the practice of the employer to engage in collective bargaining negotiations and the internal disputes resolution procedures (if any) normally used by the parties concerned have failed to resolve the dispute.”
On a literal reading of section 2(1) the Court may only conduct an investigation where it is satisfied that it in not the practice of the employer to engage in collective bargaining negotiations, simplicitor. This may not be in accord with the legislative intent. However it appears to the Court that to read the section as permitting an investigation where it is not the practice of an employer to engage in collective bargaining negotiations with or on behalf of the applicant group, would involve interpreting the section by importing words which it does not contain. On the normal cannons of construction, as they are understood by the Court, such an approach to interpretation is not permissible.
Since this matter was not raised by the employer and was not fully argued at the hearing the Court does not make any finding on this point and wishes to reserve its position to another case in which the point may be relied upon and be fully argued.
With regard to the second limb of paragraph (a) it is noted that Bank of Ireland do have in place a grievance procedure which appears to conform to the provisions of the Code of Practice on Disciplinary and Grievance Procedures (S.I. No. 146 of 2000). There is no evidence that any of the matters now before the Court were processed through that grievance procedure. However, again, this matter was not raised by way of an objection to the Court proceeding with the investigation and the Court merely notes the point at this stage.
Conclusions and Recommendations:
The Court has taken account of the written and oral submissions made by the parties and the additional information received from them following the Court hearing.
In addition to the matters referred to above, this case differs from the generality of cases investigated by the Court under the Act of 2001 in a number of respects. Historically managers employed by the bank were covered by collective bargaining arrangements. This changed on or about 1988 when the Bank introduced new arrangements which involved a form of individual assessment. These arrangements appear to have been accepted by the managers generally. The Union continued to be recognised by the Bank as the representative of its members in management grades in all matters other than in relation to collective bargaining. When a new system of Performance Management and Remuneration System for Managers was introduced the Union were briefed on the new system but were not offered a role in its negotiation.
Thus, this is not a case where an employer is refusing to recognise a trade union per se. Rather, it is the Bank's position that in keeping with its own policy since 1988 (and the position within the financial services sector generally), the remuneration of its managers is not determined by collective bargaining.
Section 5 of the Act provides that where the Court has investigated a trade dispute under Section 2 it may make a recommendation giving its opinion in the matter and, where appropriate its view as to the action that should be taken having regard to the terms and conditions of employment and to dispute resolution and disciplinary procedures, in the employment concerned. This provision may be contrasted with Section 68 of the Industrial Relations Act 1946, which is the statutory provision under which the Court normally issues recommendations. That section simply provides that the Court may make a recommendation setting forth its opinion on the merits of the dispute and the terms on which it should be settled. It seems clear from the wording of Section 5 that the Court should only deal with the substantive issues raised in the referral under the Act of 2001 where it is satisfied that the circumstances of the case make it appropriate to do so. What those circumstances are must depend on the facts of each case.
Legislative History:
As is well known the Act was enacted to give effect to the report of the High Level Group established under paragraph 9.22 of Partnership 2000 to consider the detailed proposal submitted by ICTU on the recognition of Unions and the right to bargain and the IBEC position on the impact of these proposals. This report reaffirmed the commitment of the Social Partners to the preferred voluntary approach to disputes resolution. Nonetheless the report went on to recommend what it described as an exceptional procedure which could apply where voluntary arrangements are not followed. These procedures are now given statutory effect by the Act of 2001.
The powers which are given to the Court by the Act are a far reaching departure from the normal approach to the resolution of industrial relations disputes. They provided, in effect, that the Court may arbitrate in a dispute on the unilateral application of one party and in circumstances where the other party may not consent to the process. It seems to the Court that, having regard to the voluntary nature of our industrial relations system, such an intervention is only appropriate where it is necessary in order to provide protection to workers whose terms and conditions of employment, when viewed in their totality, are significantly out of line with appropriate standards.
Comparison With other Employments.
It is agreed between the parties that the method by which Bank of Ireland Group determines the remuneration of managers is similar to that used by all other financial institutions in the case of comparable grades. In that respect this case can be distinguished from other cases dealt with under the provisions of the 2001 Act in which collective bargaining was either the norm or commonplace in similar employments. In such cases it was considered appropriate for the Court to have regard to rates of pay and other conditions of employment which were determined through collective bargaining within the sector. Such an approach is neither practical nor appropriate in this case. It is, however, noteworthy that the pay movement of the applicant grades over the past number of years has been broadly in line with that of employees of the Bank who are covered by collective bargaining arrangements.
In support of its contention that rates of pay are out of line, the Union have relied upon the salaries paid to managers in one other bank which, they claim, is Bank of Ireland’s closest competitor. For its part the Bank does not accept that the comparisons drawn with that bank are valid. Regardless of the position in that respect the Court is not satisfied that it could reasonably conclude that the remuneration package of the applicant group is out of line with those applicable to comparable grades within the sector generally on the basis of comparison with just one employment. In these circumstances the Court is not satisfied that it is appropriate to make recommendations in relation to the rates of pay of the mangers concerned.
A variety of other issues have been raised by the Union in this referral. Again, unlike other cases investigated by the Court under the 2001 Act, in this case a mechanism exists within the employment itself by which those issues may be addressed by the individuals concerned and they may be represented by their Union in so doing. As earlier observed, the Bank has in place a grievance procedure which conforms to the provisions of the Code of Practice on Disciplinary and Grievance Procedures made pursuant to Section 42 of the Industrial Relations Act, 1990. The Bank have pointed out to the Court that this procedure provides that where a grievance is not resolved during the internal stages an external appeals lies to an independent person. It goes on to point out that in the normal course of events the appeal to an independent person is conducted by a Rights Commissioner acting in a private capacity. It appears that this procedure is in line with the existing agreement between the Union and the employer. It also seems to the Court that all of the issues raised in this referral are capable of being processed through this grievance procedure.
Having regard to all of the circumstances of this case the Court does not consider that a basis exists upon which it could be concluded that the conditions of employment of managers employed by Bank of Ireland Group, taken as a whole, are significantly out of line with appropriate standards. Consequently the Court is does not consider it appropriate to recommend any action in respect of the matters raised by the Union in this referral. It does, however, recommend that where individual grievances exist they should be processed through the appropriate procedures.
Signed on behalf of the Labour Court
Kevin Duffy
28th January, 2004______________________
TOD/BRChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.