INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
IRISH LIFE ASSURANCE PLC
- AND -
MANUFACTURING, SCIENCE, FINANCE
1. Restructuring of the Sales Force.
2. The dispute before the Court concerns the Company's plan "Force for the Future" to restructure its sales force. It proposes to reduce the number of Sales Managers (SMs) from 70 to 45. These managers will then be termed "Personal Finance Managers" (PFMs). The plan also proposes to reduce the number of Area Administrators (AAs) from 13 to 6 to be termed "Regional Auditors".
Options for PFMs and AAs
Those not chosen PFMs have two options - (a) to revert to the Personal Financial Advisor grade (PFA) or take a Corporate Agency (i.e., contract basis). Also, those not taking up one of the six new positions as Regional Auditors can (a) revert to the basic sales grade with £18K compensation, (b) take early retirement, or (c) if under 50 and employed in 1988 or before avail of the early retirement terms negotiated under the Company's previous plan "Building Business Advantage" (BBA).
Terms for Sales Managers (SMs)
The compensation terms on offer for those opting for the PFA route is a lump sum of 100% of potential annual loss of commission earnings plus £18K.
The Union is seeking £20K plus one year's loss of earnings based on a sales performance of £1.2m with a minimum payment of £27K.
Corporate Agency Terms
The Company has offered a cash payment of two years' salary tax free plus £7K for the first five years. Other benefits relate to commission payments, loyalty bonuses, deferred pensions and other fringe benefits.
The Union is seeking a lump sum payment of basic salary X 2.5 times or pensionable earnings X 1.5 times whichever is the greater. In addition, a further payment of £10K X 5 years. The Union wants to extend this to the Area Administrator Grade and to those taking early retirement.
Early Retirement Terms
The Company has put forward the same terms for early retirement as negotiated under the plan "Building Business Advantage". It is not prepared to make any improvement on these terms.
The Union is seeking these terms to cover those over 50 years' of age who have been offered positions as Personal Financial Mangers (PFMs). A lump sum payment of £10K X 5 years is also claimed.
The Company is not prepared to make an exit package available to Sales Managers as there are alternative positions open to them with significant earnings potential.
The Union wants an exit package available to all based on the corporate agency terms with additional lump sum payments. It also wants all negotiated options to remain for a three year period. The Company has rejected this proposal.
As no agreement was possible between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. Several conciliation conferences took place between 1st February, 1996 and 14th May, 1996 but no final agreement was possible. The dispute was referred to the Labour Court on the 22nd May, 1996 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 31st May, 1996.
3. 1. It is not acceptable to the Union that while staff suffer financial loss as a result of the re-organisation, senior management award themselves substantial pay increases.
2. The position of Personal Financial Manager carries more responsibility than that of Sales Manager, yet the Company proposes to cut commission rates and increase the workload.
3. Staff opting for the Personal Financial Adviser grade will suffer a substantial loss in income. The Company should support them financially, until they become established in their new grade.
4. 1. The Company needs to significantly lower its cost base to remain competitive.
2. The Company's plan to re-organise the sales force will improve the quality of service to customers and also reduce costs.
3. The cost of running the sales force exceeds that charged to customers by almost £3m.
4. The Company wants to introduce a flatter management structure in order to achieve the necessary cost reductions.
5. The re-organisation proposed will provide significant earnings potential. There will be a job for everyone affected and there will be no redundancies.
The Court having considered the written and oral submissions made by the parties makes the following recommendation on the issues before it:
The Company proposals to be altered as below:-
1.Terms for Sales Managers opting for PFA Route
Lump sum to be increased to £20,000. Compensation for loss of commission earnings to be at 150% of annual loss.
2.Corporate Agency Terms
The £7,000 per annum for 5 years to be increased to £8,500 per annum for 5 years. Set up contributions of £5,000 to be increased to £7,000.
Compensation of £18,000 to be increased to £20,000.
Signed on behalf of the Labour Court
13th June, 1996______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.