FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2001 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : EIRCOM - AND - IRISH MUNICIPAL, PUBLIC AND CIVIL TRADE UNION DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Carberry Worker Member: Ms Ni Mhurchu |
1. Service agreement contracts.
BACKGROUND:
2. In 1996/1997, service agreement contracts were introduced in the Company. The purpose was to move managers from graded pay scales to performance related pay (PRP). Managers were to be rated on a scale of 1 to 6, with 1 being the highest rating, although in practice the ratings go from 1 to 5.
The Union's case is that it understood that base pay might not be increased only in situations where an individual manager's performance was very poor. i.e. a rating of 5 could mean a manager's base pay being frozen for that year. However, it was not envisaged that a manager's base pay would not increase if he/she received a rating of 1 to 4. There were no problems with the system until 2001 when the Company decided not to increase the base pay of some managers who received a rating of 1 to 4. The reason given was that the rate of pay for these individuals was in excess of the market rate for the work performed. Following lengthy negotiations, the Company agreed to retrospectively pay the individuals concerned 50% of the median increases awarded generally to colleagues with the same performance rating.
The Union claims that it was agreed this would be a one-off occurrence. However, in 2002 the same thing occurred and this is the cause of the current dispute which involves four workers. The Company's case is that the package introduced in 1996/1997 has benefited a significant number of workers and that no guarantees were given in regard to pay.
The dispute was referred to the Labour Relations Commission and a conciliation conference took place. As the parties did not reach agreement, the dispute was referred to the Labour Court on the 9th of January, 2004, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 18th of February, 2004, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. People who have the same level of performance should get the appropriate pay. The Company repeated the 2001 exercise in 2002 without forewarning either the Union or the managers concerned.
2. The Union accepts that the concept of "market limitation" of pay has validity. This, however, can only take place in the context of 'published' pay bands, and the Union does not know what comparison the Company is using.
COMPANY'S ARGUMENTS:
4. 1. While there was a commitment made that employees who moved to PRP would fare better than if they remained on graded pay scales, there was no guarantee given other than undertakings regarding the possibility of acceleration through the relevant pay band for equivalent performance.
2. It was known by all that there was a "pay pot" which was determined by the Board and that there would be a distribution of this based on performance.
RECOMMENDATION:
The Union referred a claim to the Court concerning the application of an interim formula devised in 2001, to the performance related pay review of four managers again in 2002. The Union took the view that such a formula should not have had to be applied, as the managers concerned should have received their performance rating increase in like manner with all other managers covered by the scheme. The Company explained that in the case of the four managers concerned, such increases were not warranted under the scheme when pay rates in the market were taken into consideration.
At the Court, the Union sought full payment of the median awards appropriate to the performance rating for the four managers involved, with effect from 1st June, 2002.
The Court recommends concession of the Union's claim and notes that the Company is committed to providing details of the pay bands to the Union in March/April this year. The Court is of the view that the lack of transparency on the detail of the scheme has lead to certain ambiguity and recommends that this should be rectified.
Signed on behalf of the Labour Court
Caroline Jenkinson
29th February, 2004______________________
CON/MB.Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.