FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 2004 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : GOLDEN PAGES (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Mr McGee Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Changes To Terms & Conditions (Bonus Schemes, Etc)
BACKGROUND:
2. The dispute before the Court concerns sales targets introduced by the Company. It is the Union's claim that the significant target increase has resulted in a substantial deduction of the total earning potential of its members which was previously held. The Union argue that the changes were made without any prior consultation and agreement and this is not consistent with the spirit of Towards 2016. The Company rejects the Union's claim on the basis that it is not in a position to change the sales targets it has set having regard to the needs of the business. Historically, sales targets have varied and earnings in excess of on target earnings are not guaranteed, they are discretionary. The Union are seeking a return to the targets and objectives that were in place for 2006 and compensation for the loss of earnings as a result of the implementation of the 2007 targets and objectives.
The dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Labour Relations Commission. As agreement could not be reached, the dispute was referred to the Labour Court on the 31st July, 2007 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 31st October, 2007.
UNION'S ARGUMENTS:
3. 1 The Union have repeatedly requested meaningful and inclusive discussions prior to any implementation of yearly targets. Sales Representatives are better placed to know what is achievable and realistic from their vast wealth of experience. Last years targets took a massive leap that is unacceptable.
2 The Union believe that the Company had a look at what the top sales Performers had achieved last year and applied this as a base line. Talks with the Company have resulted in the recognition that an issue of compensation has arisen. The figures quoted have been unrealistic and do not address the issue at hand.
3 A report prepared by a Consultancy firm identifies that the Company did increase their targets while lowering their commission rate. This had the effect that those who managed to achieve their targets and objectives have earned substantially less than they would have earned for the same figures last year.
4 Staff wishing to reach the set targets have to work day and night and this has an effect on their quality of life. This also has Health and Safety ramifications. The changes that have taken place within this employment have led to an increased number of staff leaving their positions with the Company.
COMPANY'S ARGUMENTS:
4. 1 The Company believes that the targets set for 2007 were fair and an accurate reflection of the prevailing market conditions. Historical data indicated that the targets could be achieved and exceeded and commission rates were set at a level that made on target earnings more than achievable.
2 The targets set in 2006/7 are comparable with 2001/2 targets adjusted for price increase, GDP growth, advertising market growth and national wage agreements. It was in 2001/2 that the Company last targeted and sold products in the same manner as 2006/7. The fact that the targets and earnings structure was acceptable in 2002/1, the Company does not accept that the 2006/7 package is unreasonable.
3 The Company has made every effort to support the introduction of the targets set for 2006/7 including allowing for more selling days. The Company has invested heavily in personnel, technology and support processes as part of a total capital investment package of €36 million.
4 The Company has also offered as a gesture of goodwill to make a once off payment reflecting the reduction in 2007 new business targets of 15%, re-calculation of bonuses on new business at the lower target level, overrides that kick in at the lower target level and incremental commission payments based on recalculated targets
RECOMMENDATION:
The Court has carefully considered the various aspects of this complex dispute as submitted to it by the parties.
It is agreed by the Union that the targets have historically increased year-on-year and that the norms were deviated from between 2004 and 2006.
It is similarly accepted by the Company that the increase in targets in 2007 substantially altered the balance between earnings and turnover to the detriment of the sales personnel, in the short term, thus creating a level of disadvantage, in respect of which the Company has made an offer of an element of compensation.
The Court recommends that the parties should re-engage, with the assistance of the LRC if necessary, in order to dispose of:
(i) The question of an element of compensation in respect of relative losses of earnings in 2007 and
(ii) The setting of targets for 2008 and going forward.
These two items should be simultaneously dealt with.
Signed on behalf of the Labour Court
Raymond McGee
22nd November, 2007______________________
DNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to David P Noonan, Court Secretary.