Pension levy 'puts 500 Aviva jobs at risk'
Published 25/09/2011 | 05:00
THE recently imposed government levy on private pensions contributed to the possible loss of 500 jobs at multi-national insurance company Aviva, according to company sources.
"It's contributed to the climate of uncertainty, people don't know where it will end so they are holding off investing in their pensions and this has led to a downturn in the industry in general," said a senior Aviva source.
Aviva has conceded that there has been a "considerable shrinkage" in the insurance industry -- particularly in the pensions side as a result of the economic downturn. There is also a growing feeling of resentment among the 2,000-strong workforce at Aviva over the role played by the Unite trade union, which represents many of the Irish-based workers.
Unite regional officer Brian Gallagher was quoted as saying last week that trade union representatives had a "very business-like and friendly" meeting with Aviva management, but they were unable to give any assurances to staff about their future.
"Contrast that with what happened in the ESB -- Unite has decided to ballot for strike action because the Government is planning to sell a 25 per cent stake in the state company -- and there aren't even job losses planned there. In our case they are having 'friendly' meetings. It's bizarre," said the source.
A former employee who recently left Aviva said that the root of the problem for the workforce began several years ago when a restructuring of the company linked the Irish operation to the European arm of the insurance giant, rather than the UK headquarters.
"It means that management in Ireland were distracted trying to make this arrangement work -- they took their eye off the ball locally. It didn't help that a lot of senior people were brought in from outside the industry and this added to the problem."
Aviva began an evaluation of its Irish operation last February with a promise that it would get back quickly to the workforce.
However, this has dragged on and a decision is not expected until next month.
"They can't leave it go until after that because they would be into the Christmas period and that would be disastrous," said the source.
It is expected that at least 500 staff at Aviva will lose their jobs but it is believed that the company, which is regarded as a "very good" employer will offer generous severance terms.