Labour Court Database __________________________________________________________________________________ File Number: CD89527 Case Number: LCR12569 Section / Act: S67 Parties: IRISH STEEL LIMITED - and - IRISH STEEL GROUP OF UNIONS |
Revision of Company bonus scheme.
Recommendation:
5. The Court having considered the submissions of the parties
notes that negotiations for the take over of the Company are
currently in progress.
The Court considers however that, notwithstanding these
negotiations, the issues in dispute should be resolved as
follows:-
1. That a payment be made to the workers concerned of an amount
equivalent to 2% of salary calculated from the 1st January,
1988 to the date of introduction of a new incentive scheme,
subject to every effort being made by all concerned to meet
the criteria of the present incentive scheme (i.e. that the
standard of performance be maintained or improved when
compared with the average performance achieved since the
introduction of the scheme in 1987).
2. That the Company, if necessary with the assistance of
Consultants, negotiate with the Unions a revised incentive
scheme as soon as possible.
The Court so recommends.
Division: MrMcGrath Mr Brennan Mr Devine
Text of Document__________________________________________________________________
CD89527 RECOMMENDATION NO. LCR12569
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: IRISH STEEL LIMITED
AND
IRISH STEEL GROUP OF UNIONS
SUBJECT:
1. Revision of Company bonus scheme.
BACKGROUND:
2. Following the "economic crises" in the steel industry in the
1980's which resulted in wage freezes for a few years, a
rationalisation programe was undertaken in an effort to make the
Company viable. In response to wages claims made by the Unions in
1986 the Company put forward a bonus incentive scheme related to
energy and employment costs. The bonus scheme which was quite
complex was drawn up by consultants and has yielded only #20 in
bonus payments since its implementation in 1987. The Unions
sought re-negotiation of the bonus scheme in 1988 and suggested a
revised scheme which was not acceptable to the Company. The
Company then engaged management consultants to review the 1987
scheme and make recommendations for a new scheme. During the
review of the 1987 scheme negotiations regarding the proposed sale
of the Company to a German firm (Korf K.G.) dominated the scene
and no progress was made on the provision of the bonus scheme.
The Company contends that when the issue of ownership of the
Company is resolved and if the Company is still in present
ownership, it will negotiate the introduction of a new bonus
incentive scheme as speedily as possible. The Union contends that
the Company benefited in profitability through the scheme but that
the workers did not receive the level of bonus payments that they
expected due to their increased efforts. The Union is therefore
claiming compensation of 5% from 1st January, 1988 on basic wages
and that the Company should negotiate and implement a revised
bonus incentive scheme without delay. The matter was referred to
the conciliation service of the Labour Court on 23rd June, 1989.
A conciliation conference held on 13th July, 1989 failed to
resolve the issue and it was referred, on 28th July, 1989, to a
full hearing of the Labour Court. The hearing took place on 30th
August, 1989.
UNIONS' ARGUMENTS:
3. 1. When the bonus incentive scheme was introduced the Company
stated that it was their expectation that there would be an
increase in the region of 2% to 5% in the workers earnings.
The scheme was very complicated and did not work as it only
produced one bonus payment of #20 in 1987.
2. The Company achieved improved production and profits
through the operation of the scheme by the workers. However
the scheme did not operate in favour of the workers as it did
not produce the expected amount of bonus payments.
3. During 1988 the Unions suggested a revised bonus scheme
(details supplied to the Court) which was less complicated and
would have given the workers a modest increase in bonus
payments. Attempts to discuss the Union's proposals with the
Company failed and the Company has refused to negotiate any
revision from their obviously failed scheme.
4. The workers did not receive the rewards which they had
reasonably expected to receive from the operation of the bonus
scheme. Accordingly they should receive compensation as the
scheme did not reward them for their efforts.
COMPANY'S ARGUMENTS:
4. 1. The bonus scheme which was introduced in 1987 was based on
energy, performance and labour costs per tonne against a
reference period from November, 1985 to May, 1986. The scheme
yielded very little by way of payment as the reference period
performance particularly on energy was rarely achieved.
2. During the operation of the bonus scheme output was
improved. However the introduction of an extra shift and
extra workers was a major factor in this improvement.
3. The Company accepts that the 1987 scheme needed
improvement and engaged management consultants to make
recommendations for a new scheme. However when negotiations
for the sale of the Company commenced in 1988 negotiations on
a new bonus scheme had to be suspended. When the issue of
ownership of the Company is resolved a new bonus scheme can be
negotiated.
RECOMMENDATION:
5. The Court having considered the submissions of the parties
notes that negotiations for the take over of the Company are
currently in progress.
The Court considers however that, notwithstanding these
negotiations, the issues in dispute should be resolved as
follows:-
1. That a payment be made to the workers concerned of an amount
equivalent to 2% of salary calculated from the 1st January,
1988 to the date of introduction of a new incentive scheme,
subject to every effort being made by all concerned to meet
the criteria of the present incentive scheme (i.e. that the
standard of performance be maintained or improved when
compared with the average performance achieved since the
introduction of the scheme in 1987).
2. That the Company, if necessary with the assistance of
Consultants, negotiate with the Unions a revised incentive
scheme as soon as possible.
The Court so recommends.
~
Signed on behalf of the Labour Court,
Tom McGrath
__25th__September,__1989. ___________________
A. S. / M. F. Deputy Chairman