INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
IRISH LIFE AND PERMANENT
- AND -
MANUFACTURING, SCIENCE, FINANCE
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr. Somers
2. The dispute concerns approximately 800 workers employed as customer advisor/administrative and officer grades. The Company proposes to restructure pay scales for these grades of staff, establish a structure to provide for the finalisation of negotiations and the closure of 17 Branches, and establish an enabling framework and schedule for handling negotiations on Vision 21, a restructuring and repositioning plan to ensure the long term viability of the Company.
The parties reached a level of agreement at local negotiations on the issues of Branch Closures, and Vision 21and negotiations are ongoing on these proposals. In relation to pay, the Company currently operates an incremental grading for all staff below manager level. Fixed amount increments are awarded on the anniversary of a worker's date of commencement. An agreement exists between the Union and the Company on a maximum starting salary of £12,500. The Company has experienced serious problems in recruiting staff and requires the flexibility to offer salary levels of up to £15,750 to certain staff. The Union is agreeable to this provided that existing staff who have progressed through the scales solely on the basis of service are appropriately rewarded. The Union's claim is summarised as follows:
(1) All existing staff to receive an immediate increase equivalent to three increments.
(2) The minimum salary for existing staff to be £15,500.
(3) Service to be recognised by the introduction of a V.H.I. subsidy for staff with six or more years service.
(4) Staff currently on the top of the scale to receive the equivalent of three increments on a personal to holder basis.
The Company rejected the Union's claim. The dispute was referred to the Labour Relations Commission. Following two conciliation conferences proposals put forward by the Company, recommended for acceptance by the parties, were rejected following a ballot of the workforce. At the third conciliation conference held on the 2nd of June, 2000, the Company put forward it final offer. The proposals, inter alia, provided for the application of one increment to workers earning over £15,000 per annum , the restructuring of the salary scale by reducing the number of points to 25, and providing a mechanism to move staff on to the newly created points. This framework provides an average increase of £1,320 per annum for workers under £15,750 per annum and an average increase of £1,170 per annum for those over £15,750.
The offer is contingent on the Company obtaining full flexibility to recruit staff at a salary of up to £15,750 per annum, to progress workers in the range below £15,750 per annum to that figure as it deems necessary, and to have the flexibility to retain staff at any pay level by having the right to respond to any offer made by another employer. The Union representatives, while noting the improved offer, felt unable to recommend acceptance of the offer to the membership.
The dispute was referred to the Labour Court by the Labour Relations Commission on the 6th of June, 2000. A Court hearing was held on the 7th of June, 2000.
3. 1. The existing workforce in the Company have given long and loyal service and in many cases have waited 28 years to reach the scale maximum. In addition to this, irrespective of how good their performance was, no additional payments were made to them nor was the fact of their loyalty recognised in any monetary way. It is true that the so called "Celtic Tiger" has made recruitment more difficult but any attempt to address this which does not equally acknowledge the past loyalty of existing staff is both unjust and seriously damaging to staff morale. The very workers who helped create this tiger are now the only ones who are not reaping the benefits. The Union's claim does not even fully restore the differential based on service, however, it believes that the claim represents a reasonable solution to a situation outside both the Company's and the Union's control.
2. The fact that the membership has rejected a Union recommendation a number of times illustrates to the Court the depth of feeling which this issue has aroused. A failure to resolve the issue now will place in jeopardy the three-year operational plan of the Company with subsequent consequences to its competitive position.
3. MSF recognises that the current claim has cost implications for the Company, however, the catalyst for this claim was not of its making and merely reflects an attempt to maintain the status quo where, with the full agreement of the Company, salary is a reflection of years' service. The Union acknowledges that the Company, in its latest offer, has moved considerably but would ask the Court to recommend the full implementation of its claim.
4. 1. Irish Permanent is the only Company in the Group which does not have this facility to meet the market and secure or retain staff.
2. The offer will place Irish Permanent staff above £15,000 per annum ahead of those employed by all of its competitors. The proposals represent an 8.6% increase in the Company's labour costs for these categories over and above the terms of National Agreements.
3. The Company believes that the arrangements provided for in this proposal go a long way towards meeting the requirements of the business and those of the staff.
4. The proposal will increase Company cost income ratio by another few percentage points and over time the Company, through the increased sale of mortgage, savings, investment and insurance products, will have to fund this increase in a manner which makes this increase cost neutral.
5. In effect, this proposal is a short term investment decision by the Company, to achieve a high level of stability and certainty around staffing levels, so that it can build the business for the future.
6. The economic status of the business is an issue which the Company is seeking to address through its Vision 21 project, which aimed at retaining the competitiveness of the Company in a very pressurised and rapidly changing marketplace.
In relation to Branch Closures and Vision 21, the Court notes that a negotiating framework has been put in position to deal with these issues, that progress has been made, and that discussions are continuing.
On the recruitment/retention of staff, the Court accepts that the current problem faced by the Company in recruiting and retaining staff has to be urgently addressed. In doing so, the Court is also conscious of the sensitivities involved for current staff, in changing the pay arrangements, particularly for those who have given service over the years.
However, having considered the written and oral submissions made by the parties, the Court is satisfied that the Company proposals of 2nd of June, 2000, are a fair and reasonable approach to addressing the problems raised by the current situation.
The Court, therefore, recommends that the employees accept the Company's proposals of 2nd of June, 2000 as the means of settling this dispute.
Signed on behalf of the Labour Court
12th June, 2000______________________
Enquiries concerning this Recommendation should be addressed to Tom O'Dea, Court Secretary.