FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : AN POST - AND - CWU DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Murphy Worker Member: Mr Shanahan |
1. Consolidation of Change Allowance
BACKGROUND:
2. This case concerns a dispute between the Company and Union in relation to a claim to have a productivity allowance consolidated into basic pay. The allowance has not been applied to all staff which the Union contends is causing difficulties within the workforce. Management's position is that the agreements on the application of the allowance provided that it would apply to all staff who were in the employment of the Company when the provisions of the agreements were applied but would not be applied to new entrants. Management contends that the agreement specifically provided that it was a non-consolidated allowance and was applied on a personal to holder basis. Management further contends that it could not sustain the cost of consolidating the allowance into basic pay given the financial and operational difficulties being experienced at present.
The dispute was not 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 matter was referred to the Labour Court on 28th November 2013 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 24th January 2014
UNION'S ARGUMENTS:
3 1 The workers have cooperated with the changes that were implemented as part of work practice change agreements and continue to co-operate with all operational change without any recognition. The productivity/change allowance was agreed and was to be paid to staff employed at the effective date of the agreements. However, an anomaly exists whereby some staff with less service are paid the allowance and other more senior members of staff are not paid the allowance yet must also cooperate with all change initiatives within the Company. This is causing serious difficulties within the workforce and cannot continue.
2 The Union acknowledges the financial and operational difficulties facing management at present but the workforce cannot continue to subsidise the operation of the business having already incurred significant losses of earnings.
COMPANY'S ARGUMENTS:
4 1 Management cannot accept that the allowance should be consolidated into basic pay as that would be contrary to the specific provisions of the agreement which provides for the payment of a non-consolidated allowance.
2 The Company is experiencing serious financial difficulties and cannot sustain the costs associated with the Union's claim. Concession of the claim would inevitably lead to a situation where harsher remedies would be implemented to protect the viability of the Company into the future.
RECOMMENDATION:
The issue before the Court concerns the consolidation of a change allowance into basic pay and its application to new entrants. The allowance came about following “Work Practice Change Agreements” between 2002 and 2007 a key element of which was the introduction of a non-consolidated productivity allowance of 12.5% which it was agreed would be paid on a phased basis to existing employees in the employment of the Company when the Agreements took effect. The Agreements specified that the payment arrangements would not apply to new entrants.
The Agreements were designed to achieve a level of operational change sufficiently productive to fund the cost of the Agreement while providing stable earnings for staff and make a significant contribution to the Company’s financial situation which was under threat from the increasing level of electronic methods of communication. The Agreements provided for phased implementation of the allowance in line with specified levels of savings, commencing from 16thJanuary 2006 and culminating in full payment by 31stDecember 2008, when 96% of the savings had to be achieved.
The Union submitted to the Court that in the order of 20% of employees do not receive the 12.5% change allowance yet they are required to fully co-operate with all changes. This in a situation where decreases in take-home pay through a reduction in overtime and allowances were part of the overall Agreements entered into. It submitted that the fact that there are different pay rates for the same work is causing disharmony among the workforce. These factors coupled with pension changes and a pay freeze in place since August 2008 have given rise to the current claim.
The Company informed the Court of the significant costs involved in the claim, the implications such costs would have on the pension scheme and it outlined the very challenging financial difficulties facing it in an ever-changing market and referred to the obstacles it faces in not having control over postal rates.
In all the circumstances of this case the Court has no alternative but to uphold the “Work Practice Change Agreement” as is its normal practice. However, it is of the view that issues have been identified by both parties which merit further consideration and discussion. Therefore, the Court recommends that the Monitoring Group set up under the Agreement should examine the issues which have arisen in this case in consultation with both parties. This process should take place with immediate effect and any outstanding issues may be referred back to the Court in which event the Court would require a report from the Monitoring Group on progress made.
Signed on behalf of the Labour Court
Caroline Jenkinson
14th February 2014______________________
AHDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Andrew Heavey, Court Secretary.