INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
MANUFACTURING, SCIENCE, FINANCE
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr Rorke
1. Issues relating to sales force for the future.
2. The dispute relates to the Company's proposals for a major rationalisation programme for the future. The main group of workers involved are the personal financial advisors (PFAs). There are approximately 400 involved in the dispute.
Currently the PFAs sell 2 types of company products - ordinary branch business (OB) and home service business (HS). PFAs are paid commission on the amount they sell. They are also paid an increment on salary, depending on sales. The old and new relationship between the PFAs and their management is as follows:-
Old structureNew structure
Sales Managers (70) Personnel Financial Managers (41)
Area Managers (14) Regional Managers (6)
Regional Managers (3)
The new structure was introduced in 1996.
The Company is seeking the co-operation of the PFAs under 6 headings:-
- 1. Management Support: PFAs to commit themselves to co-operate with and take full advantage of the managerial support now available.
2. Use of the new hand held technology for Home Service business.
3. PFAs to adopt fact find as a standard part of the sales process. This is fundamental to the Company's commitment to move to a "needs based" sales process. The fact find is a two page document which enables the PFA to assess a client's existing financial position and therefore helps him make appropriate product recommendations.
4. PFAs to make an appropriate career choice: the most urgent being the new Home Service Representative (HSR) role - the Home Service Division must commence recruitment to this role immediately.
5. Product understanding: This is to ensure that PFAs are not required to sell new products to customers until they fully understand the product.
6. To streamline administration, a number of payroll related measures need to be implemented.
The Union is seeking the following concessions for the HSR job:-
- 1. Compensation for loss of OB commission and acceptance of new plan for HSR. The levelof compensation should be similar to that conceded to the managers grade (i.e., 4 times salary or minimum of £40,000, which ever is the greatest).
2. 10% collecting commission.
3.Expenses to be allocated pro rata as per the debit.
4. Current salary increment to remain the same.
5. OB leads to be increased from 33% to 50%.
6. Same deal as PF Managers to return to PFA grade after six months, etc., if HSR role does not work out.
7. Normal industry commissions for credit and general insurance.
8. Minimum salary of £10,000 for new entrants.
- 1. For those who opt for HSR, the Company will pay (a) double home service commission for a period of six months from 1st January, 1997 (approximately £1,500 - £2,000), (b) a gross payment of £1,500 after six months.
2. PFAs/PFCs (personal financial consultants)
The Company will pay (a) an extra 10% commission on all business from 1st January, 1997 for a three months period, (b) an additional 5% commission for a further six months.
3. "New Term" PFAs
The proposals include (a) production based increments which will be introduced from 1st January, 1997, (b) the 1st January, 1997 increment will be based on business written in 1995 and 1996. Salary will be capped at £19,000 per annum.
4. An increase in salary for a small number of PFAs with short service and high sales production.
5. A bonus of £300 on successful completion of ALIA exams.
Compensation of 4 times salary or £40,000 - whichever is the greatest.
£1,000 for examination qualification (ALIA etc.).
No change in PFA remuneration or role except to working with PF
The dispute was referred to the Labour Court on 26th November, 1996 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 10th December, 1996.
3. 1. Over the last six years the Company has introduced restructuring plans, none of which have proved successful. The workers received no benefit from the plans which were essentially cost-cutting exercises. The result has been a serious decline in industrial relations in the Company.
2. The Company's proposals will mean less sales support for the PFA as a result of reducing the number of sales managers and increasing the size of the sales teams. It will also involve more monitoring, administration, viability and performance management. The introduction of a sales related bonus scheme (SRB) will penalise PFAs who do not sell the right mix of business. This could force PFAs to mis-sell to clients in order to avoid losing commission.
3. The present size of a HS debit would be worth £3,500 business. The Company now proposes to increase it to £7,000 level of business. At present, a PFA would receive a 7.5% increase in salary for the extra work involved. Under the Company's proposals it will not offer any extra expenses to cover the larger debt.
4. In the new role of HSR, a worker will be expected to write £1,200 worth of business per annum. The difference between the current remuneration and the proposed one is as follows:-
Current remuneration £1,200 pa HS = £1,170 increment
(SRB) proposed remuneration £1,200 pa HS = £82 increment
If a worker writes less than 50%
of this = zero increment
5. The Company also proposes that the HSRs collect 100% of their debit each period. This is not physically possible as clients are not always at home or at their premises on the day. The Company has offered no explanation of how this can be achieved.
6. There is a serious threat to HSR safety with incidents of staff muggings. The Company has to employ "minders" to accompany PFAs on existing debits in high crime areas. If the Company intends to go into loan collection credit clubs etc., the risk will dramatically increase.
7. Since 1988, the PFA has lost the support of various managers because of restructuring. In 1997, this trend is to continue with the loss of support of area managers and sales managers. In the past, managers worked directly with and supported PFAs in prospecting and closing sales etc. The new role of the Personal Financial Manager (PFM) is not one of sales support, but rather a managing one from a removed position. Eventually, the PFA will work in a "stand alone" capacity. The result of reducing the number of sales mangers (proposed PF managers) to 41 will mean larger teams with less support. The PF managers will spend less time with the PFA and will be less involved in direct sales support. The working relationship between the PFA and his manager is the key to success.
4. 1. The Company has committed itself to providing a range of supports to assist and develop the PFAs in being more successful and providing a quality service to the customer. The PF manager will provide real management support across the team (not just to higher performers). The emphasis will be on coaching the PFA and imparting the full range of skills required in the sales process.
2. The Company will invest £1 million in training and development over the next 2 years. Six regional trainers and two technical trainers have been appointed. There will also be a significant investment in technology to support the process.
3. With regard to management support, the PFMs role will be to identify any weakness in the PFAs performance and help to improve it.
4. The Company has invested significantly in hand held technology. It will considerably reduce the amount of paper work/administration. It will improve accuracy and the professional image of the PFA. In a trial involving fifty PFAs, the response was very positive.
5. It is imperative that fact find becomes a standard element of the sales process. Irish Life is the only company of the industry's top five which has not adopted fact find. Fact find builds a close relationship with the customer and leads to a more effective sales presentation.
6. The creation of the HSR route will provide a career choice to PFAs who wish to forgo the personal finance part of their role. The Company has provided an attractive package for those PFAs who wish to transfer.
7. PFAs will not be expected to sell any products until they have a full understanding of that product. The PFAs will continue with training until they are satisfied that they fully understand what is involved.
8. It is over one year since the proposals were presented to the Union. The proposals represent normal standard practice in any progressive sales organisation.
The Court considered the written and oral submissions made by the parties.
While it is clear that the Company must change its method of operation in order to be competitive, it is equally clear that account must be taken of the uncertainty felt by the employees affected, given the extent of the proposed changes.
In order to address specific concerns expressed by the staff, the Court recommends that the Company:-
(a) Accept that while 100% debit collection is a target it may not always be
(b) Address the security issues raised by the Union.
(c) Put in place a mechanism to deal with situations where an individual feels
he is being treated unfairly.
The Court also recommends that the Company proposals of 18th November, 1996 be modified as follows:-
(1) The payment after six months to be increased from £1,500 to £5,000.
(2) The extra 10% commission for three months to be increased to 20% for
three months. The additional 5% commission for a further six months to
be increased to 10% for six months.
(3) The 1997 increment for "new terms" PFAs to be based on all sales since
(4) The target of 1.75 times the maximum quota to be reduced to 1.5 times
the maximum quota.
(5) Examination Bonus offer of £300 to be increased to £400.
Finally, the Court recommends that the Company allow any PFA who, having opted for HSR role, fails despite his best efforts to make the grade, to revert back to the PFA role, as and when an appropriate vacancy arises.
Signed on behalf of the Labour Court
17th January, 1997______________________
Enquiries concerning this Recommendation should be addressed to Ciaran O'Neill, Court Secretary.