Performance-related pay deal for bank employees

Management and worker representatives at ACC Bank have concluded a new deal on performance-related pay covering 700 employees. This group includes both non-union members and unionised staff who have traditionally been opposed to performance-related payment systems. The new system sets out a number of terms for existing and new employees at the bank and will be fully operational as of 1 January 2008.

A performance-related pay (PRP) deal has been agreed at ACC Bank, covering some 700 employees. Of these, 400 are non-union members, while 200 are members of the Services, Industrial, Professional and Technical Union (SIPTU). The remaining 100 are represented by the Amalgamated Transport and General Workers’ Union (T&G Ireland, which is now part of the Unite trade union).

ACC Bank is part of the Rabobank Group which is based in the Netherlands. ACC stands for Agricultural Credit Corporation, but today the bank is known simply as ACC Bank.

Position of trade unions

The two trade unions involved in the deal have never been favourably predisposed to performance-related pay (PRP), both inside and outside ACC Bank. The unions prefer national pay agreements and argue that – while PRP systems may have short-term advantages for younger employees – a traditional graded salary system provides for constant and guaranteed pay increases.

However, in this case, the bank’s management introduced PRP on the basis that a majority of its workforce is non-unionised; thus, the two trade unions felt they had to have an input into the arrangements. The agreement was concluded with the assistance of an independent facilitator, Martin King of Ampersand Consulting, as the parties had previously been unable to reach a final agreement at the Labour Relations Commission (LRC).

A SIPTU spokesperson told the weekly journal Industrial Relations News (IRN) that the union has never been an advocate of PRP. According to the spokesperson, ‘the bank introduced this pay method without consultation with the unions and did not intend to offer us any input or role in its composition or guidelines in addressing complaints…125 union members refused to sign up to performance-related pay as advised by the unions and were denied their bonus payments for a number of years as a result.’

However, the spokesperson claimed that the unions had subsequently concluded an important agreement, which gives its members the right to ‘sit down with the company every year to negotiate the pay terms’ and a guarantee of ‘no less than national pay agreements’.

Terms of pay deal

The terms related to the PRP deal include the following provisions.

• The framework agreement is designed to fully resolve the longstanding points of contention associated with the introduction of the PRP system into ACC Bank.

• The agreement intends to provide the union members who are currently on the graded salary system with a choice of either voluntarily opting to transfer to the PRP system or of individually choosing to remain within the graded salary system.

• The terms set out explain the agreed process to be adopted by the parties to completely implement the PRP system, which will be fully effective as of 1 January 2008.

• The parties concur that the agreement represents a fresh start with regard to matters of individual performance systems and pay determination. Future decisions on objective setting/evaluation, career progression, bonus determination or any other related matter will respect the fact that graded employees have not opted until now to participate in the PRP system.

• The parties agree that they shall, in light of experience, review the operative terms of the agreement after two cycles – in other words, every two years.

• The parties concur that the agreement will be best underpinned by a mutual exchange of information and views as to the adequacy and functioning of the operative terms set out here, from time to time.

• All new employees of ACC Bank will automatically begin on the PRP arrangement. Any employee transferring to the PRP arrangement from the graded system will not be allowed to revert.

Brian Sheehan, IRN Publishing