INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 20(1), INDUSTRIAL RELATIONS ACT, 1969
NATIONAL IRISH BANK LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
IRISH BANK OFFICIALS' ASSOCIATION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Ms Ni Mhurchu
1. Recognition of Union for collective bargaining purposes.
2. The National Irish Bank is a subsidiary of the National Australia Bank. It employs approximately 850 people of whom 133 are managers. In March, 1998 the Irish Bank Officials' Association (IBOA) wrote to the Bank requesting a meeting to discuss the Bank's new proposals on managers' pay. The IBOA indicated that the vast majority of managers had not accepted the Bank's proposals and were seeking IBOA representation. The Association has full negotiation rights with the Bank for non-managerial staff.
The Bank refused to concede full IBOA recognition for managers on the grounds that alternative mechanisms had been put in place following the 1992 banking dispute which are adequate and which continue to apply to the majority of managers in the industry.
The dispute was referred to the Labour Court by the IBOA on the 23rd of October, 1998 under Section 20(1) of the Industrial Relations Act, 1969. A Labour Court hearing took place on the 24th of November, 1998. The IBOA agreed to be bound by the Court's recommendation. An invitation to attend a conciliation conference at the Labour Relations Commission was declined by the Bank.
3. 1. The Bank has made no attempt to discuss the issue of mangers' pay in a meaningful way or to make any proposals in regard to the matter. The Bank's refusal to accept IBOA representation on behalf of managers collectively, prompted the referral to the Labour Relations Commission. The Bank hold the view that it is sufficient for them to allow individual representation by the IBOA.
2. The Bank's stance destabilises industrial relations in the Company and engenders great uncertainty among all the staff including the managers. The Bank is about to embark on a major programme for change and its decision in this instance is causing major difficulties for everybody in managing this change programme.
3. The dispute emerged from a decision of the Bank to withdraw collective recognition rights from a section of its employees. The Association had always negotiated on behalf of the entire workforce including the branch management. This changed after the Bank introduced individual management contracts based on Performance Related Pay (PRP). Following the Bank's refusal to negotiate the members mandated the Association to seek to restore their collective bargaining rights with their employer.
4. The problem in the PRP system emerged over time, especially as the group of managers who had accepted the initial contract gradually retired. Their replacements have been put on less favourable terms. The managers' grievances in relation to the PRP system include:-
*Lack of transparency.
*Many managers will not progress beyond midpoint.
*The Bank sets percentage increases each year without negotiation.
*Inadequate criteria to properly relate performance to pay.
The managers accept they are on a PRP system and simply want an opportunity to clarify and improve the system in place. They cannot accept that they should be disadvantaged by lack of professional representation when at the same time the Bank can utilise a sophisticated Human Resources Department, access to IBEC etc. The Association has concluded comprehensive agreements on this issue with other financial institutions such as AIB, Ulster Bank and Bank of Ireland in Great Britain.
5. The managers have a major grievance in relation to the unilateral imposition of a new salary structure which was announced in October, 1997.
These include the fact that:-
- Each manager would be written to and given details of their job grading and the appropriate salary on which they would be placed.
- Those managers who are presently earning a higher salary than the proposed salary would have their salaries frozen until retirement.
- New managers appointed to jobs into the future will be assimilated on to new salary ranges.
6. These changes are part of an overall reorganisation plan, the new global Business Model, which is being driven by the National Australia Group. Ireland is one of the last subsidiaries to put this plan into effect and it has, therefore, been given a shorter time frame to bring them about. The Bank has stated that it will not be distracted by other events such as the current enquiries and media attention.
7. Rationalisation of the branches and transfer of managers is being mooted. Within this context the Bank recently announced a voluntary severance package/early retirement plan which was recently opened to managers. This change programme will accelerate very rapidly in the coming year. The scale of this programme can be illustrated by the fact that the Bank has set aside £8.8 million to bring it into effect. All of this is major change which requires the full input of the staff if it is to work smoothly and take everybody's legitimate interests into account. This cannot be done if the managers are allowed to be dealt with on an individual basis. They believe the only chance they have in these circumstances is to be collectively recognised and to have the opportunity of professional representation. A positive recommendation in this instance will give confidence to all the staff that everybody's interests can be taken into account in this period of major change.
4. 1. In the post 1992 scenario, the Bank has continued to recognise the IBOA for the purpose of non-managerial staff. However, in the wake of expulsion, management in consultation with the expelled mangers, put in place a number of mechanisms to ensure that appropriate measures were in place to assist them with any difficulties that might arise. These are as follows:-
(A)Managers Communication Forum
This is a forum which meets approximately three times per year
to facilitate a full briefing of managers, from senior management,
with a question and answer session with the Chief Executive.
This provides special insurance to allow managers legal
representation in the case of any investigation. Managers also
have access to independent telephone advice from a legal
professional as required.
2. These measures represent a significant investment for the Bank and are similar to those introduced by other major banks who faced difficulty when their managers were expelled from the IBOA. Accordingly the Bank has refused to concede full recognition for managers on the grounds that the alternative mechanisms which are in place are more than adequate and continue to apply to the majority of managers in the industry. The Bank has indicated that it is prepared to accept IBOA representation for individual managers for disciplinary action.
3. The IBOA are seeking full representation rights for managers, however, it only represents a minority of managers within National Irish Bank. Of the 26 managers who are known to be members, 5 have applied for voluntary severance and only 3 were managers in 1992.
4. The IBOA have made it clear that it wishes to have a veto over which managers are admitted into membership and who will be refused, this is potentially very divisive and unworkable as far as the Bank is concerned.
5. This is an extremely complex issue. The IBOA have full negotiating rights within National Irish Bank for non-managerial staff. Following the expulsion of Bank managers, alternative mechanisms were put in place across the industry to deal with managers and any industrial relations issues that might arise. It is inappropriate now to run a dual system for managers with some linking into the IBOA and some into the other fora.
6. This issue has potential to become very divisive among managers, some of whom may not choose to reaffiliate to IBOA and some who may be refused admittance. Accordingly, the IBOA should accept management's position and continue with an arrangement for individual representational rights for disciplinary situations.
The Court is satisfied that this is not a union recognition claim as the IBOA already has full negotiating rights within the Bank for non-management grades.
It is a claim to represent a particular level of employee, managers, for all collective bargaining purposes.
The present difficulty would appear to have its origin in the problems surrounding the 1992 dispute and in particular the introduction by the Bank of performance related pay and individual contracts for managers.
The Court is concerned that the Union while looking for representation rights for managers, does not allow automatic entry to all managers who might wish to join.
The Court is equally concerned at the lack of sensitivity or understanding from the employer, in relation to the desire of managers for representation, given their understandable concerns following recent events in the Bank.
While the Court notes the employer’s position on individual representation rights for disciplinary situations, the Court cannot accept that the questions listed on page 3 of the IBOA submission, could not have been addressed by the employer, on a general, if not individual, basis.
The situation outlined in the case is not unusual, where employees on reaching a particular level in the organisation are dealt with on a personal basis in relation to salaries.
In these situations it is usual for the Company to supply information on a broad basis to the representatives.
The Court is of the view that the difficulties arising could in normal circumstances be addressed by the parties, but in this case because of the historical background and the possible fall out from legal investigations, this has not been possible.
Taking into account all the issues involved in this case the Court recommends as follows:-
1. The IBOA to accept that Performance Related Pay is between an individual and the Bank and not for negotiation.
2. In order to allay the fears of the Union that this may devalue the salary levels, the fullest information, on a general basis, to be supplied to the IBOA.
3. The Bank to grant representation rights to the IBOA on behalf of managers with the exception of personal salaries.
4. The IBOA in return for 3 above to allow automatic entry to the IBOA for those managers wishing to join.
Signed on behalf of the Labour Court
29th January, 1999______________________
Enquiries concerning this Recommendation should be addressed to Fran Brennan, Court Secretary.