Labour Court Database
File Number: CD90169
Case Number: LCR12998
Section / Act: S67
Parties: IRISH FARM ACCOUNTS CO-OPERATIVE SOCIETY LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Claim on behalf of eight employees in the Society's Cavan and Monaghan offices for the introduction of new salary scales.
5. The Court having fully considered the oral and written
submissions of the parties finds that I.F.A.C. is an Accountancy
Practice in the meaning of that term and that the terms and
conditions of employment of those employees in pursuit of a
professional qualification are in line with the terms and
conditions of employment of similar employees in comparable
This claim has been made by the Union on behalf of its members in
the Monaghan Office of I.F.A.C. The Court notes that the Annual
Review for 1990 for employees in the Monaghan Office who are
members of the Union was not, at the request of the Union, carried
out, but that the employer was and is quite willing to carry out
Given all the circumstances of the case the Court recommends as
(1) that I.F.A.C. and SIPTU arrange for the 1990 Annual Review to
be carried out as soon as possible and,
(2) that I.F.A.C. discuss with the Union the procedure to be
adopted concerning the Annual Review in respect of its
members who are following the recognised accountancy
training, such procedure as may be agreed to include the
Annual Review or such other alternative arrangements as may
be acceptable to the parties,
(3) that I.F.A.C. discuss with the Union a salary structure for
its members who have ceased to pursue their course for a
professional qualification, but are continuing employment
within I.F.A.C. as non qualified persons,
(4) that the salary structure for the secretarial member of the
staff of the Monaghan Office should be reviewed with the
The parties should seek to reach agreement as quickly as possible
but in any event before 30th September, 1990.
In the event that agreement cannot be reached the Court is
prepared to assist the parties.
Division: MrMcGrath Mr McHenry Ms Ni Mhurchu
Text of Document__________________________________________________________________
CD90169 RECOMMENDATION NO. LCR12998
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
PARTIES: IRISH FARM ACCOUNTS CO-OPERATIVE SOCIETY LIMITED
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Claim on behalf of eight employees in the Society's Cavan and
Monaghan offices for the introduction of new salary scales.
2. IFAC is an accountancy practice co-operatively owned by
farmers. It was set up to provide accountancy services to farmers
at a reasonable cost. In November, 1989, staff at the offices in
Cavan and Monaghan joined the Union and a meeting was sought with
Management to discuss pay levels. The claimants' salaries range
from #4,000 to #6,000 per annum (details supplied to the Court).
In addition, #400 per annum per employee is payable as examination
fees. The Union is seeking the introduction of a salary scale
commencing at #8,000 per annum x 5 equal increments to #16,000
plus retaining the examination fees. The Society has rejected the
claim. Following the failure of local discussions, the matter was
referred to the conciliation service of the Labour Court on the
6th February, 1990. No agreement was reached at a conciliation
conference on the 13th March and on the 10th April the matter was
referred to the Labour Court for investigation and recommendation.
A Court hearing was held on the 25th May, 1990.
3. 1. Salary adjustments take place in December of each year
following a review of each individual's performance. This
review did not take place in Cavan/Monaghan because the
members decided not to participate in the exercise as it was
considered unlikely to yield the required increases in salary.
2. With the exception of one, all the claimants are described
as trainee accountants. They have no agreed or defined
training period or qualifying salary.
3. 3. Management has described the employment as 'transient'
which would suggest that it would hope that staff will remain
with the Company for about 3-4 years on low wages and then, if
they want a higher income, they can leave and seek it
4. The members' claim is for the introduction of a scale
commencing at #8,000 per annum x 5 equal increments to
#16,000. They would also aspire to retaining the training
fees. This scale provides appropriate remuneration for the
skill and responsibility of a demanding and difficult job.
Not the least of these onerous duties includes meeting the
farmer clients of IFAC to discuss the presentation of the
statement of income etc. as well as the preparation and
completion of all documents relating to the clients' tax
affairs and liaison with the appropriate tax office in
relation to same. The claimants have cultivated a good
relationship with the clients and are recognised as good and
considerate workers but are not paid as such.
5. Morale is being affected by the unreasonable refusal of
Management to address the serious problem of poor salary
levels. There is no justification for this attitude as the
Society is a profitable operation with a national turnover of
6. The existing production bonus is highly unsatisfactory and
has yielded from nil to #150 for various individuals in 1989.
The claimants do not want a bonus which fluctuates as widely
as this. In any event, bonuses based on individual turnover
and production is a most unusual feature of a clerical or
accountancy type of job. They place little value on this
bonus and can never forecast what they may earn from it
because, however diligently they work, long periods of time
may be spent on work which will not necessarily be accurately
reflected in cash turnover. There is no substitute for a
proper salary scale and Management's argument that it is
paying the same rates as other similar employers does not
justify this injustice against the staff. While the Union
cannot produce a comparable list of salaries in other
accounting houses, it is aware that an employee of IFAC in
Cavan with 7 years' experience left the Company and joined
another company in Cavan town with an immediate #1,500
increase in salary. Even clerks doing routine office work in
offices attached to all types of local industry enjoy far
superior wage or salary levels.
7. The Court is respectfully requested to find in favour of
the claim and that the new scales should apply from the 1st
4. 1. The salary levels and the salary scales proposed were
rejected because they were inappropriate and unrealistic.
This is based on the fact that IFAC is an Accountancy Practice
whose income is derived from the provision of accountancy
services and whose competitors are other small to medium
country Accountancy Practices. It is a commercial fact of
life that in order to be viable and to be competitive,
IFAC's staff structure and costs must be in line with the norm
for other Accountancy Practices. It is not appropriate
therefore to consider either the staff structures or salary
scales that prevail in the food industry or other agri-related
2. If IFAC as a whole, or any individual office becomes
inherently uncompetitive and loss-making, it is Board policy
to close it. This would not be in the best interests of
3. The major accountancy bodies require trainees to acquire
practical experience in addition to passing their
examinations. Service with IFAC fulfills this requirement.
4. The structure and remuneration of employment in
Accountancy Practices is different to that obtaining in other
industries. There is a unique inter-relationship between
training, salary levels and high mobility that does not exist
in other industries. These factors must be taken into account
in this case and the relevant comparison to be made should be
how the conditions of employment in IFAC compares to the norm
for other Accountancy Practices.
5. On the grounds that IFAC is a Co-operative, the Union
contends that the salaries paid by IFAC should be in line with
those paid by co-operatives engaged in the food industry and
other agri-related businesses. However, this is inappropriate
and unrealistic because:-
- The ownership structure is not important but rather the
product, in this case accountancy services, that is the
- The income of IFAC is solely related to the provision of
- The fee income that can be derived from the provision of
such services is determined by the level of fees being
charged by IFAC's competitors, the type of clients
being serviced and the amounts the clients are able and
willing to pay.
4. 6. Over 90% of IFAC's total business is the provision of
accountancy services to farmers. It is widely accepted within
the accountancy profession that the farming market provides a
poorer return than other sectors (details supplied to the
7. IFAC pays above the average salary being recommended by
the professional accountancy bodies together with an exam
leave, study leave and study fee expense package comparable to
that being granted by other accountancy firms (details of
scales supplied to the Court).
8. In order to reward performance and initiative by each
individual, staff reviews are carried out on an individual
basis. Reference is made not alone to the fee output of
individuals, but also to the duties undertaken by the
individual. These reviews are normally carried out at the end
of the calendar year.
9. Performance payments are made in addition to the actual
salaries paid, which compare favourably with the going rate in
other Accountancy Practices. In 1989, 80% of the seniors and
trainees exceeded the minimum 300% standard. Performance
payments totalling #66,000 was paid which was 24% of the
actual employment costs of the individuals concerned.
10. IFAC undertakes to pay to trainee staff an amount of
#400 per annum in respect of receipted expenses incurred in
preparation of exams. This is beyond the requirements of the
main accountancy bodies and certainly way in excess of that
paid by competitors. The most likely outcome of the
Union's claim would be that IFAC would accumulate over a
period of time, staff with low ambition, and/or competence,
who would be paid more than they would get in other
Accountancy Practices and who would all progress to the top of
the scale. This of course would be short-sighted as IFAC
would not survive commercially in the longer term.