LCR23067

PARTIES:

DIVISION:

SUBJECT:

Profit Share, Reward & Benefits Scheme.

BACKGROUND:

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 May 2024 in accordance with Section 26(1) of the Industrial Relations Act, 1990.

Labour Court hearings took place on 18 September and 18 November 2024.

UNION'S ARGUMENTS:

1. The Group of Unions submitted that the Working Group report was a joint process but that they have some issues with it.

 2. The Group of Unions requested that the red-circled cash payment be paid to existing and new staff.

 3. The Group of Unions are seeking an increase in the “Upside Element”.

EMPLOYER'S ARGUMENTS:

 1. The Employer stated that the Working Group report goes beyond what was originally offered but they will accept it.

 2. The Employer is not agreeable to making the cash payment to new staff.

 3. The Employer stated it felt it was a good proposal for all staff.

RECOMMENDATION:

The dispute before the Court arises from a company proposal to amend its staff reward programme. The proposed changes sought to amend the existing profit share scheme, enhance health insurance cover and provide additional annual leave. The parties engaged in a number of conciliation meetings under the auspices of the WRC and significant process was made including the setting up of a working group to look at the concerns raised and to come up with a joint proposal. In order to allay some of the concerns the Company indicated that for existing staff (who had concerns they might lose out under the new profit-sharing scheme) they would pay an annual cash allowance of €4,700 paid on a red circled basis to those employees.

All staff would benefit from the additional annual leave, the enhanced health insurance and the new profit share scheme. The working group put the proposal to the broader shop steward group, but it was rejected by them and did not proceed to a ballot of the members.

At the commencement of the hearing all the Unions confirmed to the Court that they would put the Court’s recommendation to a ballot of their members. The parties agree that the issue in dispute relates to the profit share scheme. The proposal was that the profit share payment would apply to all employees and that it would comprise of 2 elements calculated separately and then added together to determine the total value of the profit share payment Element 1 was a Core profit share- calculated based on the existing profit share formula (with a maximum payment of €8,000).  Element 2 An Upside element which would deliver additional payment values when Global Net Sales targets were exceeded (calculated as €150 for every 1% delivered above target). Plus, a cash allowance payment of €4,700 to be red circled to existing employees only on annual basis.

The parties further agreed that the issues in dispute was the red circling of the cash allowance and the Upside element of the profit share scheme.    

In respect of the red circle cash allowance neither party were prepared to move from their stated position. The Court adjourned to allow the parties to have further talks to see if they could make progress on the Upside element of the profit share scheme.  When the hearing reconvened, the Employer submitted that they were prepared to increase the upside value from €150 to €175 for each 1% achievement in global net sales on condition that the upside payment would be applied to a maximum of 3% of overachievement in any one year. The Union side stated that this fell short of their expectations and that in the Company’s original proposal in November 2022 had a monetary value of €300 per 1% global net sales albeit some of the other elements of the package were also different.

The Court having carefully considered the submissions both written and oral from the parties recommends the following:

Health Benefits:

Annual health benefit allowance of €1,300 as agreed by the working group.

Holiday benefits:

Minimum holiday entitlement to increase by 3 days from the date of joining as agreed by the working group

27 days holidays once 10 years’ service achieved as agreed by the working group

Christmas Eve as an additional company paid holiday as agreed by the working group

Option to buy up to 5 days additional holidays per year as agreed by the working group

Profit Share Payment:

Core profit share element based on the existing profit share formula (with a maximum payment of €8,000)

An Upside element €175 for every 1% achieved above Global net sales target subject to a maximum of 3% overachievement in any one year.

Cash Allowance:

€4,700 to be paid annually to existing employee only and red circled to them (existing employees being employees at the date of this recommendation).  The Court understands that this cash payment is to compensate existing staff for any potential losses that might arise from the change to the Profit Share Scheme and therefore there is no basis for extending it to new employees who commence work after the date of this recommendation.

Finally, the Court recommends that an agreed structured review of the Profit Share Scheme takes place on a three-year cycle with the first such review to take place no later than three years from the date of this recommendation.

The Court so recommends

	Signed on behalf of the Labour Court
	Louise O'Donnell
TH	______________________
9th December 2024	Deputy Chairman

NOTE

Enquiries concerning this Recommendation should be addressed to Therese Hickey, Court Secretary.