Taxpayer facing bill to pay for Irish Water redundancy packages
The taxpayer faces the bill for a multi-million euro redundancy scheme for Irish Water, as the utility seeks to shed 1,200 staff over the next six years.
The company said that some 380 jobs across the company and local authorities, including engineers, construction workers and administration staff, would go in the next two years, and that it wanted to reduce its workforce to around 3,200 by 2021 as part of a major drive to reduce costs.
But managing director John Tierney said that 356 jobs have already been shed in city and county councils, which operate large parts of the network on behalf of the utility under so-called Service Level Agreements (SLAs). He said that discussions would be undertaken with unions, which have vehemently opposed the move.
There has been widespread criticism of a government decision to force the company to enter the SLAs with local authorities when it was established.
The move was widely seen as an attempt to avoid industrial unrest as Irish Water took control of the network.
The decision to reduce numbers will present a political difficulty for the Coalition in the run-up to the General Election, and any redundancy scheme will have to be funded by the exchequer or local authorities.
Some 3,915 council staff currently operate the water network, down from more than 4,300 at the beginning of 2014. Another 600 are directly employed by Irish Water, and the 1,200 jobs are expected to go in both areas.
Mr Tierney said the process of reducing staff numbers had already begun. Some workers had retired, and others redeployed, but he said funding a programme would be the responsibility of Government.
"This is obviously challenging for the unions and ourselves, but we have already been addressing this challenge," he said. "There may well be a voluntary redundancy programme but that's a matter for Government. We will be discussing this with the unions."
The Department of the Environment said that no redundancy package had been agreed, but a scheme in place in 2012 capped payments at two years' salary, based on three weeks' service per year. Last year it was suggested eliminating 1,000 posts could cost almost €50m.
Unions expressed concern at the proposals, with SIPTU threatening strike action and saying it indicated a "clear move" towards privatisation.
"SIPTU will now commence a series of consultative meetings with our members in advance of conducting a ballot for industrial action," spokesman Brendan O'Brien said. "SIPTU members are demanding a strong and unequivocal commitment from Irish Water that it intends to fully honour the terms of the SLA."
Irish Water has also published a six-year business plan which outlines how the utility intends improving the network to bring it into line with EU standards, eliminate boil water notices, reduce leakage and upgrade plants, including amalgamation and introduction of automation.
Some €5.5bn would be invested between 2014 and 2021, it said, with around €3bn funded through borrowings.
Michael McNicholas, chief executive of the utility's parent company Ervia, said that €13bn was needed in the longer term. Operational costs would be reduced by €1.1bn by 2021.