Labour Court Database
File Number: CD88638
Case Number: LCR12086
Section / Act: S67
Parties: INSURANCE CORPORATION OF IRELAND P.L.C. - and - MANUFACTURING SCIENCE AND FINANCE
Claim by the Union on behalf of 57 workers concerning the alteration in the terms and conditions of newly appointed staff.
5. The Court is satisfied that the Company is in breach of
several Company/Union Agreements and accordingly recommends
concession of the Union's claim.
Division: Ms Owens Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD88638 RECOMMENDATION NO. LCR12086
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
PARTIES: INSURANCE CORPORATION OF IRELAND p.l.c.
MANUFACTURING SCIENCE AND FINANCE
1. Claim by the Union on behalf of 57 workers concerning the
alteration in the terms and conditions of newly appointed staff.
2. Since the appointment of an Administrator in March, 1985, the
Company has employed over 100 temporary staff on short-term
contracts pending a resources review and reorganisation of the
Company. This reorganisation was carried out in 1987, and in
early May, 1988, the Company made permanent 57 of the temporary
staff. These 57 workers were required to give an undertaking that
they would be subject to a new merit based assessment procedure
which has not yet been negotiated with the rest of the staff i.e.
their progress through the salary scale to be based on merit
awards rather than increment progression. A further condition of
their permanent status was that the attainment of professional
qualifications would in future be a requirement for promotion for
the 57 workers. This is not a condition of employment for the
rest of the staff. The Union claims that the new conditions
imposed on the 57 is in breach of a number of written
Company/Union Agreements. Furthermore, plans were in train for
detailed negotiations with the Company on the introduction of an
assessment procedure for all staff. The Union sought to have the
status quo maintained and the 57 newly appointed staff put on the
same incremental scale as the existing staff. The Company
declined to do this. On 5th May, 1988, the matter was referred to
the conciliation service of the Labour Court. No agreement was
reached at conciliation conferences held on 9th June, and 28th
July, 1988, and the issue was referred on 15th August, 1988, to
the Labour Court for investigation and recommendation. A Court
hearing took place on 29th September, 1988.
3. 1. The Company, through the Procedural Agreement, has
accepted the Union's right to negotiate on the terms and
conditions of the staff. As part of the 1988 Pay Agreement in
February, 1988, the Union agreed to have discussions on a
merit system. The Company never called a meeting on this
matter between February and May, 1988. Instead the Company
unilaterally introduced a merit system without agreement.
This is not only bad industrial relations practice but also
contravenes the spirit of all agreements.
2. It was recently discovered that the Company has also
breached agreements on sick leave for temporary staff, holiday
entitlements for temporary staff, the 1979 probationary
appointments agreement and the 1971 procedural agreement on
promotion from within.
3. Since it's debacle in 1985, the staff have contributed to
the Company's turn-around. Many sacrifices and changes were
made by the staff and these were publicly acknowledged by the
Company. No one could accuse the staff of being unreasonable.
Yet the Company have behaved in a cavalier fashion, which is
an insult to the contribution the staff have made.
4. The Company has claimed that the Department of Finance
would not agree to the creation of these jobs if they were not
based on a meritorious reward system. The Union does not
believe this. It is more probable that the Company made these
proposals and the Department 'rubber stamped' them.
5. It is difficult to understand why the Company decided to
break the Agreement, particularly since the Union had agreed
to discuss a merit award system. Although talks would be
difficult, the parties had agreed the use of an arbitrator in
case of deadlock.
6. The Union believes no negotiations should take place until
the status quo is restored and agreements adhered to. This
means that the Company should place the workers involved on
the nearest high incremental point on existing agreed scales,
delete the 'professional qualifications' clause and return to
discussions on the merit award system.
4. 1. Part of the Company's strategy in achieving a turnaround
since the 1985 collapse has been to improve and encourage
greater professionalism among it's staff, particularly in view
of impending freedom of services and external competition.
The Company believes that the best way to do this is to create
a genuine meritocracy in which effort and achievement and
professionalism are recognised and rewarded. Specifically the
Company was particularly unhappy with the fixed increment
system and wished to move to a more merit based review
process. It was agreed with the Union as part of the 1988 Pay
Agreement that negotiations on the matter would commence.
4. 2. Ideally the Company would very much have wished that the
merit pay basis on which it offered permanency to the new
staff had already, as part of the main negotiations, been
agreed with the Union. However, in the early part of 1988,
the Company was losing valuable temporary staff and was under
pressure to stabilise the employment of this group of staff.
It was also under pressure from the temporary staff themselves
many of whom were contemplating employment elsewhere.
3. Under the existing scheme progression from grade 2 to
grade 3 is automatic resulting in basic clerical activities
being rewarded at potentially #15,584 on grade 3 which is also
the grade for experienced underwriting staff. Progression
within the grade is via fixed incremental points. Under the
new scheme as applied to the newly appointed staff, basic
clerical/secretarial duties are provided for in grade A
(A1 & A2) i.e. to max. of #12,710. Technical and professional
activities are provided for in grade B (B1 & B2) with
progression from B1 (traineeship) to full technical B2 being
contingent on satisfactory qualifications and traineeship. In
adopting this approach the Company is placing the practice of
insurance on a similar professional basis to that in other
fields such as accountancy and banking and believes this is
the only way to compete successfully in the open market of the
1990's. All other conditions including staff insurance and
loan schemes were as per existing permanent staff.
4. Although the Procedural Agreement refers to the Union's
negotiating rights it should be noted that recent Pay
Agreements apply specifically to existing permanent staff.
The position of temporary staff has never been addressed other
than clarification on numbers and deployment. No provision
was made for a large number of temporary staff progressing to
permanency. Therefore, the Company feels that it was
reasonable to appoint the new permanent staff on a comparable
salary level whilst also adopting the new merit award system,
pending resolution of the merit system for the Company as a
whole. The Company is totally committed to the orderly
conduct of industrial relations and to it's procedures
agreement with the Union.