INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
IRISH LIFE PLC
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Keogh
Worker Member: Mr Rorke
1. Issues relating to the Company's restructuring proposals for field sales staff.
2. The dispute before the Court concerns the Company's restructuring proposals in relation to approximately 30 personal financial advisors (PFAs). The Company is offering a career choice to PFAs: to remain on as PFA, to opt for the role of home service representative (HSR) or to opt for the personal finance consultant role (PFC). The changes proposed by the Company have been the subject of a lengthy dispute with SIPTU and a different union, MSF, who represents the majority of PFAs.
The dispute has already been investigated by the Labour Court (LCR15434) in relation to approximately 300 PFAs represented by MSF. The Union rejected the Court's recommendation but its members returned to work on the 28th May, 1997 following the intervention of the Employer Labour Conference (ELC) which issued binding arbitration. SIPTU remained outside that remit.
Subsequently the Company proposed the ELCs terms to SIPTU but its proposal was rejected. Further discussions failed to resolve the dispute and the Union referred various issues to the Labour Relations Commission. A conciliation conference took place but agreement could not be reached and the dispute was referred to the Labour Court on the 21st July, 1997 under Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 7th August, 1990. The PFAs concerned returned to work on the 29th July, 1997 pending the investigation by the Labour Court.
3. 1. Management through its dictatorial approach created the climate for opposition to any new plan. The recent dispute became inevitable when management attempted to ram through changes which the PFAs consider will reduce earnings potential and destroy sales team spirit. Management's failure to negotiate caused the problem and consequently the losses the PFAs will experience through being absent from their areas of work for 16 weeks should be adjusted by giving credit for the business lost during the strike.
2. The Union is concerned that the Company's proposals will lead to an elimination of the PFAs role. The Individual Development Plan designed to identify and meet the needs of PFAs only concerned itself with the ordinary branch business sales process. It does not address home service issues which can take up to three-quarters of the PFAs time. SIPTU can only conclude that the main function of the plan is to assist management in screening PFAs for the role of HSR and PFC.
3. PFAs in the past enjoyed the support of 70 sales manages. This support was particularly evident at the point of sale and was availed of by PFAs who attributed a large proportion of sales to such support. The PFA will now effectively operate as a stand alone sales person facing the prospects of being unable to survive in the new system because of the lack of support. In the past the Labour Court has recommended the establishment of a forum to put in place the structures necessary to encourage the stand alone sales person through financially recognising self-produced business. To date nothing has been done to address this matter.
4. A PFC who opts for a HSR or PFC role will lose his ordinary branch business or his industrial branch business commission and the benefits associated with the commission. The loss of earnings and salary increments will impact negatively on future pension benefits.
5. The Union is seeking that the Corporate Agent option be made available to the PFAs.
6. There is a serious threat to the safety of the HSR. The expansion of home service operations into loan facilities and house and car insurance further heightens the risk.
7. Management in its document of the 10th June, 1997 indicated that the retirement terms of a previous agreement 'Building Business Advantage' would be made available to staff aged 52 and over. The BBA allowed for early retirement at age 50 and over. The Union is seeking that this option to retire at 50 be extended to the PFAs.
8. In recent years the Company has introduced restructuring plans, none of which has proved successful. The workers received no benefit from these plans which were essentially cost-cutting exercises. This has resulted in a serious decline in industrial relations and has affected the morale of the staff.
4. 1. The Company has explained clearly to the trade unions that it cannot offer voluntary exit packages as it is not seeking to reduce the number of jobs. It has provided alternative career choices which allow PFAs opt for a position which most suits their skills and which offers similar earnings potential. In addition it has described in its proposals of the 10th June, 1997 (details supplied to the Court) the Company's commitment to providing a range of supports to assist and develop PFAs and to help them to be more successful and to provide a quality service to customers. It is also committed to a significant investment in training and development, in technology and to continue to explore ways of improving supports for PFAs. It has stated clearly its intention to retain the existing workforce and to improve the performance of PFAs. In its letter of the 10th June, 1997 it sought to reassure SIPTU that in circumstances where a long serving HSR who fails to succeed in the job it would guarantee that the individual concerned would be treated with respect and dignity in such circumstances. It is committed to full consultation with SIPTU and the involvement of an appropriate third party if necessary in such circumstances.
2. The terms on offer to PFAs in respect of the changes to their existing roles and in respect of the options available to them have been investigated fully by the Labour Court. The terms recommended by the Court were subsequently modified as a result of the Labour Relations Commission and Employer Labour Conference processes. The Company having accepted the Labour Court's recommendations reluctantly accepted these subsequent modifications which created further significant cost issues for the organisation. These terms have now been accepted by the vast majority of staff in the grade.
3. As part of the restructuring plan the Company offered sales managers the opportunity to leave employment and to become self-employed brokers
attached to Irish Life (called a Corporate Agent). This offer included an attractive compensation package. The Company made this offer as part of its plans to reduce significantly the number of manager positions.
In the case of PFAs the Company is not seeking to reduce the number of jobs. Under the Company's proposals PFAs have the option to remain in their current role or to opt for the home service representative role or the personal finance consultant role. The question of whether a Corporate Agency route could be offered to a PFA and if any inducements might apply, is being considered at present.
4. The normal retirement age of all staff in Irish Life is 65 and the cost of providing early retirement is very high. Notwithstanding this the Company responded to the demand for early retirement terms for PFAs by offering an early retirement package to staff aged over 55. Subsequently the Company accepted a proposal to make the early retirement terms available to those aged 52 and over despite the additional cost involved of approximately £500,000. This offer has now been accepted by the vast majority of the staff in this grade and the Company is not prepared to incur any additional costs in this regard.
5. This dispute has been very lengthy and costly for the Company and for the staff concerned. As an organisation it has lost large volumes of sales with consequent adverse effects on its business and profitability. The image of the Company has also been damaged with possible longer term effects on its business success. Notwithstanding the very significant losses suffered by the Company it agreed to offer back to work terms which included incentives for PFAs to collect arrears built up during the dispute as well as an interest free loan on which the Company would bear any benefit in kind. In addition there is also a £3,000 payment to staff for acceptance of the changed working practices.
6. The Company has made genuine efforts to accommodate the issues raised by SIPTU in a constructive manner and the facts clearly support this. The reality is that the Company cannot have a situation where two groups of employees are employed on different terms and conditions to do the same job. Any settlement which concedes greater benefits to members of one union than those applying to members of another union for the PFA job, risks plunging the Company into a further dispute at a time when all of the energies in the Company must be focused on securing its competitiveness in the developing market place. The Company has notified both SIPTU and MSF of its intention to engage in dialogue with them in a genuine effort to find a more constructive and peaceful means of managing the ongoing change programme which will be necessary if Irish Life is to remain a competitive player in this market.
The Court considered carefully all the information supplied by the parties.
Having considered this information the Court is of the view that no new information was supplied that would alter its original recommendation which covered most of the issues listed at the hearing.
The Court would, however, make a number of additional recommendations:-
1. Company to pursue its commitment to maximise the financial benefits to individuals within the Finance Act.
2. Individual losses where exceptional to be examined sympathetically by the Company.
3. The Company to finalise as a matter of urgency its position on corporate agencies.
4. Company to emphasise its commitment that individuals, who fail to make the transition, can revert back to PFA.
5. The letters of understanding of the 10th June and the 1st, 3rd, and 11th July to form basis of this recommendation.
Finally the Court recommend that all the parties to this dispute meet to find a mechanism to conduct their discussions and negotiations in a form that is acceptable to the parties.
Signed on behalf of the Labour Court
1st September, 1997______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.