Labour Court Database
File Number: CD88734
Case Number: LCR12121
Section / Act: S67
Parties: CREDIT FINANCE BANK - and - IRISH BANK OFFICIALS' ASSOCIATION
Claim, on behalf of twenty nine bank staff for an increase in basic pay.
Division: Mr Fitzgerald Mr Shiel Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88734 RECOMMENDATION NO. LCR12121
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
PARTIES: CREDIT FINANCE BANK
IRISH BANK OFFICIALS' ASSOCIATION
1. Claim, on behalf of twenty nine bank staff for an increase in
2. The Company is a subsidiary of the Allied Irish Banks Group.
Due to financial pressures it embarked on a major rationalisation
programme in 1987. This included shedding 46 staff, the closure
of four provincial branches and restructuring the remaining jobs.
The matter was the subject of Labour Court Recommendation No.
11576. Only 29 staff remained due to the numbers of staff who
opted for voluntary redundancy. In January, 1988 a new Managing
Director was appointed. Following a number of meetings in the
course of which the Association sought an increase in basic pay,
the Association was advised in April, 1988 that the Bank could not
afford to pay any increase to the staff. The last pay agreement
expired on 30th April, 1987 and the current rates of pay are:-
Grade 1 #6,120 - #10,572 (16 points)
Grade 2 #6,450 - #11,259 (16 points) (full details supplied
Grade 3 #8,647 - #15,191 (14 points) to the Court)
The matter was referred on 5th May, 1988, to the Conciliation
Service of the Labour Court. A conciliation conference was held
on 27th May, 1988, at which no agreement was reached. The matter
was then referred to a full hearing of the Labour Court. The
hearing took place on 11th October, 1988. The Company provided
the Court, at its request, with confidential financial information
subsequent to the hearing.
3. 1. As part of the rationalisation programme, the staff were
given a commitment that there would be a general review of
salaries. This commitment was made by both the former and the
current Managing Directors.
3. 2. As part of the agreement on rationalisation, it was
stated by the Company that appropriate pay and conditions for
the remaining staff would be discussed. This has not occurred
despite numerous requests by the Association. A non
negotiable offer was made to four staff in Dundalk and was
implemented without agreement.
3. The Company has enjoyed considerable savings in excess
of what was envisaged through the rationalisation programme,
due to additional job shedding.
4. The staff have not received any increase since May,
1986. Some increments due in January, 1987 and all of those
due in January, 1988, have not been paid. The present rates
of pay are the lowest in the Financial Services Sector and
salaries have not kept pace with inflation.
5. Staff have fully co-operated with management. The
initial estimated staff requirement after rationalisation was
thirty three. In fact there are now only twenty seven staff.
Jobs have changed considerably under the new structure and
total flexibility has been given by the staff. There has been
co-operation with the introduction of a computer system. Long
hours have been worked by many staff, some without overtime
6. Allied Irish Banks is a 77% shareholder in the Company
and has invested a considerable amount of money in it. A
number of ties between the two Companies have been established
and the Association believes that in this environment, an
increase in staff pay is easily affordable. The Company is
currently going through a remarkable recovery in its
performance and trends indicate that this upturn will
4. 1. The Company is in a grave financial position. A
particularly difficult period has recently been experienced.
It has been possible to improve the Company's situation only
by selling its 'lease book' to one of its shareholders
2. Credit Finance Bank has a high level of bad or doubtful
debts and arrears must be provided for in line with the
required ratios approved by the Bank. It is very difficult to
get good quality low risk business as there are twenty two
banks competing for the same business. The result of this
high degree of competition is that the only business available
(outside of very high risk) is low volumes and even lower
4. 3. In 1987 Credit Finance Bank had a considerable operating
loss in addition to the cost of the rationalisation programme.
The Chairman's interim statement for the six months up to
30th June, 1988, highlights the seriousness of the situation.
A high operating loss was recorded and bad/doubtful debts are
remaining very high. The budgets for the latter months of the
year however show a trading profit on a month by month basis.
This will be of great assistance to the Company, but will only
be achieved with determined hard work. It is imperative that
in the interim there are no increases in costs.
4. The Company is committed to its current staff and
everything that can be done is being done to try and secure
their future. It would be economic suicide to increase costs
at this time.
5. The Company is prepared to negotiate with the
Association with a view to eliminating any anomalies which may
5. The Court, having considered the submissions made by the
parties, recommends that management offer and the Association
accept a pay increase of 4% effective from 1st April, 1988 for a
period of six months, this to be followed by a pay increase of 3%
on the first #120 of basic weekly pay and 2% on any amount of
basic weekly pay over #120, this increase to have effect over a
twelve month period. No further cost increasing claims to be made
on the Bank during the period of this agreement.
The Court also recommends that any annual increments due should
now be paid.
The Court notes that management have undertaken to negotiate with
the Association for the elimination of any anomalies. The Court
recommends that these negotiations be finalised by 31st December,
Signed on behalf of the Labour Court
15th November, 1988 Nicholas Fitzgerald