INDUSTRIAL RELATIONS ACTS, 1946 TO 2004
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
FIRST ACTIVE PLC
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr McGee
Employer Member: Mr Murphy
Worker Member: Ms Ni Mhurchu
1. Basic pay increase / integration productivity.
2. The issue before the Court originates from the integration of Ulster Bank Group (UBG), into the Royal Bank of Scotland Group. In January, 2004, First Active was acquired by the Royal Bank of Scotland (RBSG) and became part of the Ulster Bank Group. In June, 2004 Ulster Bank Group, including First Active, announced the decision to integrate its back office functions into the RBS Group Platform and Group Operating Model. Integration onto the Group IT platform involves the full utilisation of the Group IT platform across all RBSG brands (including UBG and First Active) as determined by the requirements of the different business units within the Group.
The Union is seeking an increase in basic pay on foot of a range of changes in First Active following its acquisition and integration into Ulster Bank/Royal Bank of Scotland. From a workforce of 500/600 approximately the Company now employes in excess of 5000 across the group. The trigger for the claim arose from the centralisation of the IT function into the RBS platform which has caused a realignment of functions, responsibilities, roles and work practices coupled with the loss of 200 I.T. positions.
The claim is in respect of administrative and clerical grades and is based on the Union's assessment that the existing integration agreement did not cover the degree of change envisaged. The Company has rejected the claim and argued that the existing agreement embraces the changes emerging from the integration process. The agreement allows for a 5% integration bonus to apply to all RBS staff when the Board considers that the integration has been completed sometime in 2007.
The dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 30th June, 2006 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 15th September, 2006.
3.1 There has been a huge cultural change within First Active following the integration of the business into the RBS model. First Active generally had a more hands-on system for dealing with Human Resources and Operational issues. Now everything is directed through line management and in some cases back office functions are now in different jurisdictions (Payroll, H.R.).
2. In the Branches there would be increased effort and stress involved with mortgage and lending advice given to customers. Workers are experiencing severe difficulties with the new systems and workers and customers are being adversely affected as a result of the current integration.
3. The Union claims that despite bringing their concerns to Management's attention at various presentations and meetings, nothing has been put forward to show that integration will take account of workers' concerns. For workers, many with long and loyal service with First Active, this is very disappointing. The Union' best efforts to raise these points have not been successful and in the Union's view a claim for an integration payment is justified.
4.1 The integration process within Ulster Bank Group is a complex process for all parties concerned. These complexities have and will continue to be addressed via the appropriate forum. Working parties involving the Bank and SIPTU and the Bank and IBOA are in operation. A full briefing for Union representatives was held in December, 2005 on all aspects of integration, copy of briefing supplied to the Court.
2. The Bank has committed to a policy of no compulsory redundancies arising from Integration. All IT employees in First Active have the option of voluntary severance or/early retirement or redeployment to a suitable alternative position with UBG. All other impacted employees have the commitment of a suitable alternative position, as defined in the Report issued by the Independent Mediator, Mr. Kieran Mulvey, Chief Executive, Labour Relations Commission, dated 15th December, 2004. In the event of no suitable alternative role being made available then the option of voluntary severance or early retirement will be available. Where a suitable alternative role is available then voluntary severance/early retirement will not be available.
3. An integral part of the Integration Programme is the creation of the 'Dublin Mortgage Centre' (DMC) in the First Active site, Leopardstown. The DMC is now the centre for processing and managing all UBG Euro mortgages under both the Ulster Bank and First Active brands. This represents a considerable investment by the Group in First Active.
4. The Union recently voted in favour of the new National Agreement. This agreement contains a section dealing with private sector pay and related issues. Mostly notably this agreement refers to:"The implementation of this agreement at enterprise or industry level will take full account of the implications for competitiveness and employment and the need for flexibility and change compatible with modern organisation, design, efficiency and business process".The Agreement provides that no cost-increasing claims by trade unions or employees for improvements in pay or conditions of employment, other than those provided in Section 1.6,2.1 and 3.1. The above terms of the new Agreement clearly indicates that the Union is in breach of the new Agreement with the claim before the Court.
5. Management contends that the 5% bonus agreed after mediation will apply to all 5,600 employees. SIPTU represents approximately 450 First Active Staff out of a total of 5,600 UBG employees. Any variation on the mediation settlement of a once-off 5% bonus payment would undoubtedly lead to a consequential or knock on claim from the IBOA for all UBG employees. The Bank feels that the once off bonus payment of 5% of salary is more than generous in the circumstances and in itself should be sufficient to reward staff for their co-operation.
The Court has considered the submissions made to it by the parties, both at and subsequent to the hearing.
The Court recommends that there be an independent assessment carried out, by a mutually agreed assessor, of the relative value of the level of change given by the Claimants vis-a-vis the comparable level of change, and the award already given for that, to direct Ulster Bank Staff.
When this assessment is complete, the parties may revert to the Court for a definitive Recommendation if they are unable to resolve the matter on the basis of the assessment.
Signed on behalf of the Labour Court
Enquiries concerning this Recommendation should be addressed to Jackie Byrne, Court Secretary.