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Saturday 20 July 2019

Contractor 'entitled to ESB shares'

Test case raises spectre of massive pay-outs by other State companies

Andrew Bushe

AN ESB contract worker should be classed as a part-time employee and be compensated for not getting a share of the company's Employee Share Ownership Plan (ESOP), according to a landmark ruling by the Labour Court.

The decision could pave the way for a multi-million windfall for contractors associated with State companies such as Eircom, Aer Lingus and the ESB -- where workers have been given hundreds of millions in shares which are held through ESOPs.

The court found that Christopher McDonnell, who has been employed for 30 years as a seasonal full-time day worker on fixed-term contracts for seven months per annum at Ardnacrusha power station, Limerick, was a part-time worker.

It also found the ESB breached the provisions of the 2001 Protection of Employees (Part-Time Work) Act through its failure to grant him pro-rata access to the share scheme. This would have entitled him to thousands of pounds worth of free shares, which were allotted to staff.

Mr McDonnell has been employed for over 30 years by the ESB and the court said he "must be treated no less favourably than a comparable full-time employee with more than 30 years continuous service".

Mr McDonnell's victory could have wide-ranging implications. It opens the way for other contract workers who may have missed out on the state share windfall in various companies privatised in the last 15 years.

ESOPs now have shareholdings worth hundreds of millions of euro in a range of current and former state companies that have been privatised.

Workers in companies like Eircom, Aer Lingus, ICC Bank, An Post, TSB Bank and Bord Gais have benefited from free shares in the state companies.

The share ownership scheme in Eircom has already paid out five-figure bonuses to 14,000 current and former workers. According to figures filed at the companies office, the Eircom ESOP has at least €109m in cash and over 77 million Vodaphone shares.

A similar filing by the ESB employee scheme reveals that it has 49 million shares in the ESB, although there is no valuation for these.

ATGWU official John Ryder said Mr McDonell's claim was a test case for a dozen other ESB workers at Ardnacrusha in Co Clare. He will be seeking a five-figure compensation award for Mr McDonnell and each of his colleagues. The union is also backing a similar claim by about 300 meterreaders.

"Everyone had around 11,000 shares [in the ESB ESOP]. It is difficult to put a value on ESOP shares. An internal trading mechanism or grey market is being introduced this year," Mr Ryder said, which means that employees may be able to exchange their shares for cash.

He was unable to say what the precedent might be for other contract/part-time workers in other companies. Mr Ryder said the Court finding also involves issues such as the part-time employee's entitlement to pensions.

The court in Mr McDonnell's case adjourned the question of compensation to allow the ESB and the union to negotiate on the matter.

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