FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : SIEMENS HEALTHCARE DIAGNOSTICS MANUFACTURING LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - UNITE DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Connolly Worker Member: Mr McCarthy |
1. Pay Claim.
BACKGROUND:
2. This dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on 17 July 2017 in accordance with Section 26(1) of the Industrial Relations Act, 1990.
UNION’S ARGUMENTS:
3. 1. The Union is seeking a 4.25% basic pay increase per year for all members for 2018, 2019, and 2020.
2. The progression through the incremental pay system from entry point to the top of the scale should be achieved within 5 years.
3. The quartile factor should be excluded.
EMPLOYER'S ARGUMENTS:
4. 1. The Company has proposed a three year pay deal for all employees commencing in January 2018 as follows: 2018 - 2%, 2019 - 2%, 2020 - 2.25%.
2. In addition employee salaries will be reviewed in line with market level comparisons, and the Company proposes to apply a lump sum payment in lieu of a salary increase to staff who are currently at or above 100% of the market level comparison.
3. The Company submits that their proposals for 2018 to 2020 are realistic reasonable and pragmatic working to maintain the manufacturing site as a sustainable entity.
RECOMMENDATION:
The matters in dispute between the parties concern the Union’s claim for (i) pay progression through an incremental pay system from entry point to the top of a scale over a period of five years, with the exclusion of the quartile factor, and (ii) non productivity related pay increases of 4.25% each year for three years from 1stJanuary 2018.
The Court notes that the Company’s remuneration model takes a number of factors into account, (a) business performance, (b) market comparisons and (c) skills attainment. Its goal, for most positions, is to pay rates that reflect the upper end of market rates. The system is designed to maintain competitiveness and in the interest of fairness to “close the gap” for employees below the top rate of pay for comparable roles in the medical device industry. In addition to an increase in the basic rate of pay, salaries are reviewed in line with the market comparisons and with a performance rating (Performance Management Process) which can yield incremental pay awards for those staff who have not reached the top points. The Company estimate that for the period 2018 – 2020, these incremental pay awards could run from approx. 1% to 4% over and above the basic pay award. This system is designed to ensure shorter progression between those on the lower rates of pay who have attained the necessary skills for the role and those on the higher rates.
To address the Union’s claim, the Company made a number of proposed increases in pay for the period 2018 – 2020, which have not been accepted by the Union.
The Union is not satisfied with this pay system, stating that it lacked transparency and has been applied in an inconsistent manner. It sought a replacement of the system with a controlled process benefitting all employees doing the same role, with progression to a top point achievable over a five year period.
The Court is of the view that the pay system in place has merit, is fit for purpose and has provided substantial benefits for those employees seeking to progress to the top points. However, it recommends that the lack of transparency identified by the Union should be addressed. The Court notes that the Company has given a commitment to the Union member representatives to be supplied with direct access to the source data. In addition to that commitment, the Court recommends there should be full engagement and transparency on the operation of the Performance Management Process for those employees in its membership.
The Court notes that for reasons outlined, the period 2018 – 2020 is a crucial period for the Company in terms of its competitiveness and future sustainability.
Having considered the position of the parties, the Court recommends that the Company’s pay proposal 2018 – 2020, dated 3rdMarch 2017 as outlined in Appendix 10 of its submission to the Court should be amended by the following:-
- i.Basic Pay increases:
- 2018 2.5%
2019 2.5%
2020 2.5%
- 2018 2.5%
- ii. Those who are paid above 100% of the upper quartile should be paid the above increases as a lump sum payment as outlined in the proposal, with the proviso that the parties should engage in the latter part of 2020 to review the operation of the current pay system with a view to consolidating the lump sum payments from a future date.
- iii. The Court recommends in favour of acceptance of all other elements of the proposal.
- i.Basic Pay increases:
The Court so Recommends.
Signed on behalf of the Labour Court
Caroline Jenkinson
6 September 2017______________________
MNDeputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Neville, Court Secretary.