LCR15427

FULL RECOMMENDATION CD/96/490 RECOMMENDATIONNO.LCR15427 (CC94/764) INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : EAGLE STAR INSURANCE COMPANY - AND - MANUFACTURING, SCIENCE, FINANCE DIVISION : Chairman: Employer Member: Worker Member:

SUBJECT:
1. Claim for the implementation of Clause 3 of the Programme for Economic and Social Progress (PESP).





BACKGROUND:

2. 1. The case before the Court involves a claim by the Union on behalf of 200 administrative employees for the implementation of a 3% pay increase as provided for under Clause 3 (local bargaining) of PESP. The claim was lodged in 1992.

2. The Company rejected the claim on the basis that it would add a further 3% to its labour costs and put it at a competitive disadvantage. Furthermore, it stated that it was not an "exceptional company" within the meaning of Clause 3. Any additional costs would have to be agreed to on a quid pro quo basis.

3. The dispute was the subject of three conciliation conferences, 29th August, 1994, 17th October, 1994 and 22nd August, 1996 under the auspices of the Labour Relations Commission. At the conciliation conference on 17th October, 1994 the Industrial Relations Officer put forward proposals setting out a mechanism for progressing the claim. Following several meetings between the parties, the Company offered the following:-

- a once-off 2% lump sum payment in return for;
- the Union relinquishing its claim for a 3% pay increase;
- the Union to accept the concept of performance related pay;
- the Union to agree to the redefinition of office hours.



The Union rejected the Company's proposals.

4. As no agreement was possible the dispute was referred to the Labour Court on the 22nd August, 1996 in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 14th October, 1996.



UNION'S ARGUMENTS:

3. 1. The Company is a profitable one and can afford to concede this claim. Its profitability has been achieved through the expertise and dedication of the staff.

2. It is the only company among the main insurance companies not to have conceded the claim under Clause 3 of the PESP.

3. The staff have co-operated with the substantial changes which have taken place within the Company over the past number of years which would justify concession of the claim.

4. Concession of the claim would not put the Company at a competitive disadvantage since the main insurance companies have honoured the basic increases under PESP and the PCW.



COMPANY'S ARGUMENTS:

4. 1. The Company is not prepared to concede this claim which would add a further 3% to costs and damage future performance and profitability.

2. The Company's performance in recent years has not been exceptional as to warrant concession of the claim.

3. Clause 3 was intended to operate on a quid pro quo basis.

4. The Company has incurred significant additional costs over the past number of years by improving the Staff Pension Scheme and the Employee Share Participation Scheme.

5. The Company considers that the best method of rewarding its employees is to align benefits more closely to the organisation's success and profitability.





RECOMMENDATION:

The Court has considered all of the views expressed by the parties in their oral and written submissions.

The issue is being dealt with under the local bargaining clause of the PESP which requires that negotiations take full account of the implications for competitiveness, the need for flexibility and change and the contribution made by employees to such change.

The Court given all of the circumstances of this case recommends that the hours of work 8.30 to 5.30 be accepted and that the Company pay 1%.

That the parties further discuss the changes that are necessary with a view to reaching an agreement which will include the payment of the balance of the 3%.

The negotiations to be completed in a period of 8 weeks.

In the event the parties are unable to agree, the Court at their request is prepared to review the discussions and issue a recommendation.



Signed on behalf of the Labour Court



Tom McGrath
9th January, 1997______________________
L.W./D.T.Deputy Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.