INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr Rorke
1. (1) Bonus, (2) Sick Pay.
2. The Company is engaged in the processing of scrap materials which are then sold to Irish Ispat at home and abroad. It employs approximately 58 and operates out of three plants, Dublin, Cork and Athlone.
The Union submitted a claim on behalf of 19 employees at the Dublin plant for an improvement in the Bonus Scheme and is also seeking the introduction of a proper Sick Pay Scheme for its members. The workers concerned are general operatives and earn approximately £190.00 per week with additional average bonus earnings of £60.00 per week. Up to the mid 1980s bonus payments were adjusted by the same percentage increase as applied to basic pay. However, the Union claims that the Company has failed to apply recent National Pay Agreements to the current Bonus Scheme. It also claims that the Company is in breach of an agreement reached following a conciliation conference on the 1st December, 1995 and confirmed to both sides in a letter of the 4th December, 1995 from the Industrial Relations Officer.
The Union is also seeking the introduction of a Sick Pay Scheme to replace the current Mutual Benefit Fund Scheme which is operated in tandem with another Company called Van Leers Limited. It wants these two schemes separated and a proper Sick Pay Scheme put in place by the Company which will provide increased benefits for its members.
The Company claims that since the conciliation conference on the 1st December, 1995 its trading position has worsened and is not in a financial position to apply National Pay Agreements to the Bonus Scheme. In relation to the Mutual Benefit Fund it is prepared to increase its contributions as follows:-
Current Company contributions £1,200 per annum
1st January, 1997 to £2,200 per annum
1st January, 1998 to £2,200 per annum
1st January, 1999 to £2,400 per annum
The Company claims that any proposals above these figures would pose serious financial difficulties for it.
The Union rejected the Company's proposals.
As no agreement was possible between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. Conciliation conferences to resolve the dispute were held on the 1st November, 1995, 1st December, 1995, 7th October, 1996 and 7th March, 1997 but no agreement was possible. The dispute was referred to the Labour Court under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 11th August, 1997.
3. 1. The application of National Pay Agreements should apply to the Bonus Scheme.
2. The productivity agreement of April, 1979 provided that the bonus rate would maintain its relationship with basic pay.
3. An agreement was concluded by both sides in December, 1995 following conciliation on the Bonus Scheme issue.
4. It is unacceptable and contrary to good industrial relations for the Company to abrogate this agreement within two months of accepting it.
4. 1. The Company's financial position precludes it from applying National Wage Agreements to the Bonus Scheme.
2. The Company operates in a very competitive market and must keep its costs down in order to survive.
3. All National Wage Agreements state clearly that wage increases are applied to basic pay only.
4. Concession of the claim is cost increasing and is, therefore, precluded under the terms of Partnership 2000.
SICK PAY SCHEME
5. 1. The Union wants a proper Sick Pay Scheme put in place instead of the current Mutual Benefit Fund Scheme.
2. Any alterations to the benefits of the current scheme are subject to veto by a third party which the Company, the Union and its members have no connection with.
3. A proper Sick Pay Scheme is an important aspect of an employee's conditions of employment. The Company should provide such a scheme for its employees.
6. 1. The Company is not in a position to absorb any additional costs because of its trading position vis-�-vis its competitors.
2. Labour costs in the Company are considerably above those of its competitors who do not have bonus, sick pay or pension schemes.
3. The Company is prepared to increase its contributions to the current scheme in tandem with any increases from the employees.
It is accepted by both parties that those 2 issues, Bonus and Sick Pay, were the subject of an L.R.C. Conference in December 1995, resulting in the I.R.O. letter of 4th December 1995, the interpretation of which is now in dispute.
On the Bonus issue the Company claimed that it sought clarification from the I.R.O. that the letter of the 4th December was incorrect, and that the pay rounds should not be added to the bonus. This the Company said was confirmed by the I.R.O. although the letter stated the opposite.
On Sick Pay the Company while outlining that it had done some investigations on the matter accepted that it had not addressed the matter as outlined in the 4th December letter although it had accepted the proposal.
The I.R.O. has indicated to the Court that he was not made aware that the Company believed the letter to be an incorrect interpretation of the outcome of the December conciliation conference, no clarification was sought by the Company and at the subsequent October conciliation conference the Company was arguing against implementation because of its competitive position.
Given the background to this case, the Court's Recommendations are:-
Sick Pay Scheme:
The Company enter into discussions with the Union along the lines of the I.R.O.'s letter of 4th December, 1995.
The Company to discontinue the divergence of basic bonus rates of pay as caused by the non application of various pay rounds to basic earnings, unless otherwise agreed.
The Company concerns in relation to financial, operational or competitive matters should be raised with the Union.
Signed on behalf of the Labour Court
28th August, 1997______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.