Irish

Thursday 24 July 2014

Bord Gais staff to get €4,000 payouts as part of sell-off

Donal O'Donovan

Published 18/02/2014|02:30

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Bord Gais chief executive Michael McNicholas

STAFF at Bord Gais Energy are to receive an average payout of €4,000 to compensate for being moved to the private sector when the company is sold.

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The new compensation package will be made to 450 BGE staff, the Irish Independent has learned. Individual payment amounts will vary based on factors including length of service

It is in addition to an estimated €80,000 each that 900 current and former Bord Gais staff are in line for when an employee share trust (ESOT) is broken up this year.

The latest compensation scheme is understood to have been backed by the Labour Relations Commission on Friday, following weeks of talks between the company and the Bord Gais group of unions.

The one-off 'ex gratia' payment will only be made to staff whose jobs will transfer to the buyers of BGE. It is part of a package of proposals that includes an assurance for workers that current terms and conditions of employment will not change when BGE is sold, and that no staff will lose their jobs under the privatisation plan.

The cash payment is understood to have been sought by unions to compensate staff for the restructuring of the business, and for the move from the semi-state sector to the private sector. It will be subject to tax.

Union members will be balloted on the proposals over the coming weeks.

The deal with staff is understood to remove one of the major remaining barriers to final agreement on the €1.1bn privatisation of BGE announced in December.

Progress on that score is now expected within weeks. Before Christmas the Government announced that agreement had been struck on a deal to sell BGE to a consortium made up of British Gas owner Centrica, Brookfield Renewables and iCON Infrastructure.

BGE will be broken up following the sale and staff will transfer to three new companies, depending on the unit they work in.

STATION

Centrica will take over the main Bord Gais Energy sales business, which supplies gas and electricity to around 900,000 households and businesses, as well as taking over the Whitegate gas-powered electricity station in Cork. It will also get the bulk of current BGE staff.

Canada's Brookfield Renewables will buy Bord Gais's wind farms and planned wind-farm developments.

UK-based iCON Infrastructure will buy Firmus Energy, a Bord Gais unit in Northern Ireland that supplies and distributes gas there.

Meanwhile, an independent valuation of Bord Gais has been commissioned to establish how big a windfall 900 staff and former employees will get for their 3.25pc stake in the company held through the ESOT.

Bord Gais was last valued at around €2.25bn, which values the staff stake at just over €470m, or €80,000 each.

Only employees who were working for the company when the scheme was put in place in 2008 will share in any windfall.

The company is obliged to buy out the ESOT stake because of the break-up of the business.

Once it does, the remaining network and water units will be 100pc state-owned.

Winding up the ESOT requires sign-off from the Revenue Commissioners and ESOT members are likely to be paid out for their shares over a number of years, not in a one-off payment.

Irish Independent

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