ESB will slash up to 700 jobs in cost-cutting deal worth €140m
Published 25/02/2012 | 05:00
THE ESB is set to shed up to 700 staff in a voluntary exit scheme over four years after a deal was struck on €140m worth of payroll cuts.
Management and unions have reached agreement on a range of cost-saving measures despite a major row over whether senior executives should sacrifice performance pay worth €9.3m.
It is understood that voluntary redundancy and retirement schemes in order to slash staff numbers by 700 over four years -- saving €60m -- is the centrepiece of the package of cuts.
But sources said the exit terms will not be as generous as those offered to staff in a previous deal.
Unions wanted senior executives to make a number of concessions to show they were sharing the pain with the rest of the 7,000-strong workforce.
They included giving up performance pay worth €9.3m a year and dropping claims for bonuses they previously sacrificed.
They also proposed that managers' wages be cut again, after claiming that a pay cut they gave up voluntarily to please the Government was secretly reversed.
But relations between the parties soured after the ESB denied that this 5pc pay cut had been restored.
It is unclear what concessions will be made by managers in the deal hammered out on Thursday night after months of talks.
Sources said a compromise was reached on management plans to halt pay increments and gradually reduce wages -- which average over €70,000 a year -- to market rates.
A pay freeze and cuts in overtime and expenses are also believed to be part of the deal.
The ESB confirmed last night that a deal had been agreed by management and unions but refused to give any details of the proposals.
The agreement will now be put to the workforce of 7,000 staff in a ballot.
The unions' negotiating team -- SIPTU, ESBOA, TEEU, UNITE and UCATT -- will meet next Tuesday to discuss the proposals before consulting members.
In a message to staff, secretary of the Group of Unions Brendan Ogle and ESB corporate change manager Pat Fenlon said management finished talks on a proposal on Thursday night "that verifiably addresses the €140m payroll problem".
"This process has involved long and intensive negotiations over many months and all involved have worked extremely hard to address this historically difficult problem."
Union proposals -- seen by the Irish Independent -- said performance-related payments should stop for executive directors, senior managers and staff on professional and middle- management contracts "with immediate effect".
The document said performance payments for 2010 should only be made to those on professional and middle-management contracts, and all outstanding claims withdrawn.
"This generates a verified annual saving of €9.3m," it said.
In addition, it said a 5pc "superannuated pay cut reversed for executive directors and senior managers in January 2011 should be reinstated".
The ESB said managers had foregone performance-related payments in 2010 and last year.
A spokesman would not comment on whether the payments will resume this year or whether claims have been lodged for outstanding payments.
He said ESB senior managers agreed to a voluntary 5pc pay reduction in April 2009 and that reduction remains in place.
Meanwhile, Bord Gais faces the threat of industrial action.
Staff have begun balloting after management imposed cuts in overtime, and allowances that it claims are obsolete.
It is understood that management has also tabled proposals to halt increments and reduce pay to market rates but unions have refused to engage in talks.