INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Ms Jenkinson
Employer Member: Mr McHenry
Worker Member: Ms Ni Mhurchu
1. Pay restructuring to address low pay for clerical and administrative staff.
2. The Union has submitted a pay claim on behalf of clerical and administrative staff employed at Dublin, Shannon and Cork. It states that discussions on pay and other matters have been ongoing since 1996. The Union claims that pay rates in the Company have fallen behind rates for comparable employment in the wider economy. There are four clerical grades in the Company as follows; Grade IV, III, II and I. Grade IV is the basic grade.
The Company states that the claim was initially referred through its own internal conciliation procedures and as a result two recommendations were issued. It was agreed that the Union would enter into a "Partnership Framework Agreement" which would deliver the targets of the "Five Year Plan". In return, the Company would pay increases of 5.5%. The Agreement provided for £13.6 million cost containment and savings to the timetable as set out in the "Five Year Plan". The Company claims, however, that to date savings of only £3.7 million have been achieved.
At conciliation on the 14th of July, 2000, the Industrial Relations Officer put forward three proposals for consideration, Option A; Option B and Option C. The Company states that the Court's recommendation should reflect the inextricable link between pay and savings, and that this is best achieved through the implementation of "Option C", a combination of Lead-In Payments and Pay Rebalancing.
The Union indicated that many of the elements contained in the 3rd option (Option C) were acceptable to them with the exception of the Overtime and Bank Holidays proposal.
The Union is seeking a pay increase to deal with low pay for clerical/administrative staff employed by the Company.
The Company states that any pay increase would have to be on a self financing basis which is in line with the "Partnership Framework Agreement".
Long Service Increments
The Union is looking for four long service increments on the following basis; after 25 years; after 30 years; after 33 years; and after 37 years. The Company has offered three long service increments as follows; after 25 years, after 30 years and after 35 years.
Rostered Duty Allowance
The Union has submitted a claim for an increase in Saturday rostered duty allowance (RDA's) from £10.30 to £30.00 and for Sunday rostered duty allowance from £15.13 to £50.00. The Company rejected this claim and states that it would increase payroll costs by approximately £750,000 per annum.
There are 9 statutory public holidays, the Company treat Good Friday and Christmas Eve as public holidays; as the company is closed on Christmas day, this means that there are 10 days which are treated as premium days (known in the company as " Bank Holidays" ).
Currently when rostered staff work on these premium days they are paid for the day, and if they have more than five years' service will receive an extra two days, which they can choose to be paid for or to take as time off in lieu.
The Company propose to introduce an arrangement whereby it will have the right to allocate one of the two days based on operational requirements. The choice of payment or time in lieu for the second day will remain with the individual.
The Union rejected any proposal to changes in relation to bank holidays.
The Company proposes to replace the current rates of time and a half and double time with a standard overtime rate of 1.6. It claims that savings of £1.5m would accrue from this proposal. The Union has rejected this proposal.
As no agreement was possible between the parties the dispute was referred to the Labour Relations Commission. Five conciliation conferences took place between the 30th June, 2000 and the 18th July, 2000, but no final agreement was reached. The dispute was referred to the Labour Court on the 19th of July, 2000, in accordance with Section 26 (1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 25th of July, 2000. There were a number of outstanding issues still to be resolved. These were the subject of a resumed conciliation hearing at the request of the Court. The matters which remained to be dealt with by the Court included the following; (a) Pay Increase; (b) Long Service Increments; (c) Rostered Duty Allowance; (d) Bank Holidays and (e) Overtime.
3. 1. Pay rates for clerical and administrative staff have fallen behind market rates since the early 1990s.
2. The Company is having difficulty at present in recruiting and retaining staff because of low pay in the clerical and administrative grades.
3. The Union has identified cost savings of £2 million which should off-set some of the increase in payroll costs.
4. The Company has made operating profits since 1995. In 1998 it made £58 million profit and for 1999 profit is expected to exceed £70 million.
5. The Union will not accept any compulsory change on Public Holiday entitlements for existing staff.
4. 1. Any increase in pay for clerical and administrative grades has to be on a self-financing basis.
2. The changes the Company is seeking are moderate and will merely bring the Company into line with industry at large.
3. The Union has failed to deliver on agreements entered into in relation to efficiencies and cost savings.
4. The Company outlined terms at conciliation on the 14th of July, 2000 which were broadly in line with the Union's aspirations.
5. The Company operates in a very competitive market. It must keep costs down or it will lose out to its competitors.
The Court is conscious that the claim for an increase in pay has been under discussion for many years, having been lodged initially in 1996 and while the parties have reduced the number of topics which they are referring to it, the Court is not satisfied that the parties have reached finality in these discussions. There is still work to be done locally to conclude the outstanding matters.
The Union referred three claims to the Court:-
(1) increase in rates of pay,
(2) long service increments,
(3) premium payment for rostered duties (RDAs).
The Company referred two claims to the Court:-
(1) bank holiday arrangements, and
(2) overtime rates.
The initial claim for a pay review led to a "Partnership Framework Agreement" through which savings of £13.6m were to be generated.
Pay increases of 5.5% were paid contingent on acceptance and full co-operation with implementation of the target of £13.6m of savings and while less than £4m have been identified so far the negotiating framework has helped forge new working relationships locally right down to individual work units.
The company has clearly indicated to the Court the need for savings and for the restructuring of pay to be on a self financing basis, however, only a portion of the savings needed have been identified. The Union indicated to the Court that it accepts the need to contribute to these savings.
The Court notes that since its hearing that the Ground Ops Clerical Committee signalled their desire to formally withdraw from all local productivity negotiations. However, the case investigated by the Court was on behalf of all Aer Lingus clerical staff. By its nature this case encompasses both central issues which apply to all, and local issues which form part of the whole. It is not for the Court to determine the collective bargaining units agreed and in force between the parties.
Ground Operations is a frontline core activity of the airline and reflects directly and immediately the airline's ability to respond to customer needs in an increasingly competitive market.
In the Court's view, it is up to the parties themselves to agree arrangements that reflect the present and developing trends in modern air travel. No one section of the Company can operate successfully in isolation from others. The parties need to recognise this interdependence between departments.
The Court, therefore, recommends as follows:-
Increase in Rates of Pay:
A number of different options were offered to the Union during the conciliation process in relation to the claim for pay restructuring. The offer, referred to as Option C, included many elements which the Union indicated were acceptable to them with the exception of the company's position on Overtime and Bank Holidays. The Court recommends that Option C should be accepted with the following amendments:-
- Long service increments of £500 for those with 37 years' service.
- Phase out of Bank Holiday time off in lieu arrangement.
- Retention of the existing overtime premia.
Premium payment for rostered duties (RDAs).
The claim for a substantial increase in RDAs is not one which the Court is willing to make a recommendation on at this point in time due to the level of costs involved and to the company's need to reduce those costs. Therefore, the Court recommends that this issue should be revisited when pay restructuring has been finalised and implemented and savings have been quantified and achieved.
"Bank Holiday" Arrangements
Included in Option C are lead in payments of £1000 for non-shift staff and £2500 for shift staff. The Court accept that these payments take account of the differences in the application of the company's proposal on Bank Holiday time off in lieu arrangements.
The Union has stressed the importance of the need for a voluntary approach to the elimination of the option to take time off in lieu of Bank Holidays. The Court accepts that while there is no diminution of their present entitlement, the practice of taking time off in lieu (as opposed to pay) is very costly in terms of providing cover, and is a facility greatly valued by staff.
The Court rejects the Union's suggestion to pay a lump sum in return for the elimination of lieu days. However, the Court recommends that the parties should agree a phasing out arrangement which will eliminate this practice by 31 December, 2002.
The Court notes that the parties have agreed that the time in lieu entitlement for new staff will be limited to a maximum of 10 days.
In view of the commitment given by the Union to abide by the objective of accruing savings as part of the Framework Agreement, the Court does not recommend that the present overtime policy should be changed, as proposed by the Company. However, the Court recommends that local discussions should take place on providing overtime coverage in a more cost effective manner.
The issue of Annual Leave entitlements for new staff was raised at the Court hearing. The Court notes the agreement reached that new staff will be entitled to the same annual leave as existing staff i.e. basic leave 20 days, ranging up to 26 days per annum for those with 20 years' service or more.
The Court recommends that the outstanding issues detailed at the resumed conciliation hearing should be referred back to the Partnership Framework process where the parties should agree upon the most cost effective and acceptable means of achieving the objectives of viability in light of the commitments given by both sides to that process. Both sides should identify savings and agree the areas where these savings can be achieved.
Signed on behalf of the Labour Court
12th September, 2000.______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.