INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Flood
Employer Member: Mr Pierce
Worker Member: Mr. Somers
1. Bonus scheme.
2. Park Motors is one of five retail motor dealers owned by Motor Services Limited (MSL) who employs a total workforce of 207. There are 32 workers employed at Park Motors, of whom 14 are involved in the current dispute. In 1998 MSL introduced a Performance Related Pay (PRP) scheme to be paid in addition to the employees' basic pay. The scheme was accepted in all of the Company's garages but was rejected by the employees in Park Motors.
Agreement could not be reached to introduce the scheme in Park Motors. The issue was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 7th of June, 2000. As agreement was not possible at conciliation, the dispute was referred to the Labour Court in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 24th of October, 2000, the earliest date suitable to the parties.
3. 1. The Performance Related Pay scheme was being arbitrarily introduced by Management without any prior consultations or negotiations with either shop stewards or Union officials. It was not within the spirit of Partnership 2000, particularly with reference to Clause 9.
2. The workers concerned enjoy excellent working relationships and do not want an individual bonus scheme which would set worker against worker. They do not feel the need for a bonus scheme, but believe that they should share in the Company's profits which are being made on the basis of additional productivity and throughput, and a reduction in manning levels.
3. The Company is profitable and should introduce a Profit and Gain Sharing Scheme. If this is not possible, a proper bonus scheme based on a group reward system should be introduced. It should be negotiated with the Union and should be vetted either by an agreed outside third party or by a Union Industrial Engineer. The scheme should be totally transparent and open, with adjustments being made where required.
4. 1. The Company introduced the Performance Related Pay (PRP) scheme to reward mechanics and partspersons based on their performance and to enhance productivity. For mechanics the scheme is related to hours sold, while for partspersons it is related to parts sold and gross margins achieved. The payment is an additional payment over and above basic pay. The employees could not earn less under the scheme, and were almost certain to earn substantially more.
2. Under the PRP scheme the Company and employees are working together to increase productivity, thus helping to secure the long term prosperity of the company for the benefit of all concerned. The mechanics in the other MSL dealerships have earned an average of £110 per week, while the partspersons have earned an average of £95 per week under the scheme. If the scheme had been implemented in Park Motors for the past two years, the mechanics could have earned bonuses of approximately £11,000, while the partspersons could have earned £8,000 each on average.
3. For the past three years the Company has paid an annual bonus of four weeks' basic pay (7.7%) to all employees in recognition of the Company's performance. The Company has always been willing to listen to employees' points of view and has made changes to the PRP scheme in response to their representations. The scheme has worked well for the past two years and has been accepted by 86% of the MSL workforce. The Company cannot envisage changing the scheme for 14% of the employees.
The Court having considered the written and oral submissions made by the parties recommends that the employees operate the Company bonus system for a 6 month trial period. During this period the employees should be free to make suggestions in relation to modifying the scheme, as employees did in other locations.
At the end of the trial period the employees should be free to revert back to their current working arrangement if they so decide.
Signed on behalf of the Labour Court
6th November, 2000______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.