FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : ACC BANK - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION UNITE DIVISION : Chairman: Mr Duffy Employer Member: Mr Doherty Worker Member: Mr O'Neill |
1. Redundancies
BACKGROUND:
2. This dispute concerns the Company's decision to reduce costs by 30% and the impact this decision has on several items including staffing numbers, the defined benefit pension scheme and redundancy terms.
This 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 was not reached, the dispute was referred to the Labour Court on the 27th July, 2009, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 4th August, 2009, the earliest date suitable to the parties.
UNION'S ARGUMENTS:
3. 1. The Company's serious financial position is due to its imprudent lending policies and the current downturn in the banking and financial services. It has not been caused by the Workers.
2.All exits from the Company must be voluntary in nature and more generous terms, in line with previous internal and external deals, must be offered.
3.The Company is part of a highly-profitable multinational banking group which can afford to be more generous to the Workers.
COMPANY'S ARGUMENTS:
4. 1. Without the present and future support of its parent group the Company would not survive.
2. The parent group has been as generous to the Workers as it can.
3.The cost savings must be achieved so that the future for as many Workers can be guaranteed.
RECOMMENDATION:
The Court notes that extensive facilitated discussions have taken place between the parties on the proposed restructuring of the Bank. These discussions have taken place against the background of profound economic difficulties experienced by the Bank. The restructuring is considered vital if the business, and the employment which it supports, is to have a future.
In formulating the recommendations which follow the Court has sought to balance the need to underpin the viability of the business while seeking to protect, as far as possible, the legitimate expectations of employees who are affected by the changes which have occurred in the financial circumstances of the Bank.
Having regard to the full and extensive submissions made by the parties the Court recommends as follows in relation to each of the issues referred for investigation and recommendation. In formulating its recommendations the Court has had regard to the Bank’s final position set out in the document communicated to the parties by the Chairman of the facilitation process and should be read in conjunction with that document.
The Severance Package
The Company’s final proposal regarding a severance package should be modified as follows: -
• Employees leaving the Bank under the terms of the restructuring scheme (other than by way of voluntary early retirement) should be paid eight weeks pay for each completed year of service (inclusive of statutory terms). This should be subject to a maximum of 156 weeks pay.
• Staff aged 55 years or more should have the option of an immediate non-discounted pension plus a lump sum calculated on the basis of four weeks pay for every completed year of service (inclusive of statutory terms), uncapped.
• In either case the total amount of lump sum should not exceed the total potential earnings of the employee up to age 65.
• The Court does not recommend concession of the Unions’ claim for the extension of the VER scheme to those age between 50 and 55.
The Severance Process
The following principles should be applied to the severance process: -
• The process should be voluntary in the first instance with the bank being free to accept or reject any volunteer.
• Any dispute concerning the acceptance of any volunteer or in relation to redeployment should be referred to binding arbitration by an agreed arbitrator.
• Employees who accept new roles within the organisation should have their existing pay and conditions of employment protected, without limitation (other than in respect to any changes in pensions entitlements).
• An employee who accepts a new role and who later considers it unsuitable should be entitled, within a six-month period, to raise the matter with management and, in genuine and compelling cases, the Bank should give sympatric consideration to either finding the employee a more suitable role or allowing him or her to avail of the severance package recommended above. This should only arise in exceptional cases. Any dispute concerning the application of this recommendation should be referred to the arbitration process recommended above.
Save as where modified by this recommendation the proposals concerning the severance process and the filling of roles within the new organisational structure contained in the statement of the Banks position circulated by the Chairman of the facilitation process should be accepted.
Pay
The Court does not recommend concession of the unions’ claim for the payment of increases due under the pay agreement associated with Towards 2016. However those leaving under the severance scheme, including the VER proposal, should have the initial phase (3.5%) as an added lump sum.
Defined Benefit Pension Scheme
The Court has taken careful account of the opposing arguments advanced on the question of whether or not the Bank’s proposals should be definitively dealt by the Court at this time. Both sides of that argument are cogent.
However, the Court is satisfied that the proposals tabled by the Bank are serious in their implications for existing members of the scheme. Due to the manner in which other issues in relation to the restructuring have been prioritised in the negotiations preceding this referral, the Court is not satisfied that the issues arising from the proposals have been fully explored by the parties. Consequently the Court does not feel confident that it has sufficient information available to it at this time upon which it could formulate a final recommendation.
The Court recommends that the parties reengage on the specific question of the Banks proposals on changes to the defined benefit pension scheme immediately following the issuance of this recommendation. That engagement should be for a period of not more than two weeks. If the matter is not resolved at the end of that period it should be referred back to the Court for final adjudication. If the matter is referred back the Court will facilitate the parties with the earliest possible hearing and recommendation.
Other Matters
Except in so far as it is expressly or implicitly modified by this Recommendation, all other aspects of the Bank’s final position communicated to the parties under cover of the letter of the Chairman of the facilitation process dated 22nd June 2009 should be accepted.
Signed on behalf of the Labour Court
Kevin Duffy
6th August, 2009______________________
JMcCChairman
NOTE
Enquiries concerning this Recommendation should be addressed to Jonathan McCabe, Court Secretary.