Wednesday 28 September 2016

Government meddling only damages workers

Published 17/09/2015 | 02:30

Ervia chief executive Michael McNicholas
Ervia chief executive Michael McNicholas

Two parties are to blame for this latest Irish Water controversy - the Government, for only raising an objection to workers receiving performance-related payments following a public outcry, and company management for not having the gumption to tell the Coalition to mind its own business.

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Back in 2012, Ervia made it abundantly clear that if it won the contract to establish a new water utility, it would pay workers based on performance. High achievers could earn between 2.75pc and up to 19pc of salary, and the pay model would actually reduce payroll costs by €34m over a five-year period.

There was no feigned horror, nor objections raised. That is, until repeated public protests last year forced the hand of a weak administration unwilling to stand over its decisions and TDs and ministers started talking about a clampdown.

In the face of unprecedented political pressure, Ervia suspended the payments, effectively ripping up the employment contracts of 600 workers who had joined the utility on the basis that their hard work would be rewarded.

They will all lose out. The decision of the LRC to award an incremental payment will be of little comfort, and could damage the company in the long-term.

The Government's repeated meddling in the affairs of Irish Water has now impacted on those people who are tasked with delivering a world-class water network. It's highly likely that specialists who might have been attracted to join the utility will now seek employment elsewhere.

Clearly, management have a lot to answer for. They should have resisted calls - whether in public or behind closed doors - to suspend the payments, based on a supposed need to clamp down on a bonus-driven culture of entitlement and reward for little effort.

A report on the pay model from consultants AON, which says there is no evidence for this lame assertion, also notes that more than 10pc of Irish Water workers actually took a salary cut when they joined the company, suggesting that many were attracted by the prospect of working for a national water utility rather than a gilt-edged pay packet and pension.

Many of these workers have been utterly demotivated by management's decision to effectively cut their pay. If this happened in another sector, there would be a public outcry. Because it's Irish Water, it's somehow seen as some sort of just desserts.

Irish Independent

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