Agreement signed for two new ESB power plants

In July 2003, the Irish state-owned electricity company, ESB, concluded a novel 'greenfield' industrial relations agreement with its trade unions, covering two new power generation plants which are set to come on stream in 2004. The deal introduces team-based working, an annual hours system and new reward mechanisms.

Management and trade unions at the state-owned electricity company, the Electricity Supply Board (ESB), have concluded a 'partnership agreement' on working arrangements for workers who will operate two modern electricity generating plants currently under construction in the Irish midlands at a cost of EUR 240 million - the Lough Ree and West Offaly power stations. The agreement places a strong emphasis on equality issues and introduces team-based working, an annual hours system and new reward mechanisms.

The two power stations will employ just 82 workers between them when they come on stream in 2004, replacing existing 'old-style' stations at Shannonbridge and Lanesboro, which are located beside the new plants and where 250 workers are currently employed. Generous voluntary redundancy terms or redeployment will be offered to those of these plants' employees who do not take up employment in the new stations.

The agreement, jointly drawn up in July 2003 by management and union negotiators, is based on the overall partnership principles that have underpinned successive ESB-wide three-year partnership agreements - the 1996-9 Cost and Competitiveness Review (CCR) (IE0004210N) and the current Programme for Competitiveness and Transformation (PACT) (IE0209202N). Under PACT, the ESB unions and management agreed that six out-of-date peat-fired plants (IE9912201N) would be shut down and two modern replacement plants would be constructed to replace the defunct stations at Shannonbridge and Lanesboro.

A 'single representation forum' joint management/union body is to be based in the new plants. The introduction to the agreement states: 'This agreement provides for work practices, flexibilities and staffing levels (41), which reflects best industry practice, coupled with an attractive remuneration package. This has been formulated to support best practice working, an empowered workforce and high performance in an environment where overtime payments are not a feature.' The 41 staff in each plant are to be organised on the basis of 'multi-tasked' teams, whose flexibility will 'serve to underpin the successful operation and maintenance' of the plants. In a key passage of the agreement, the importance of flexibility is underlined: 'While work will be allocated to individuals and teams within the stations … there will be no ownership of particular work or types of work. The work which individuals or teams carry out will be limited only by their competence to carry out that work.'

Working hours will operated in accordance with a 'balanced reward contract', which is a scheme based on contracted annual hours. Essentially, the system encourages management to operate the new annualised hours system efficiently and effectively through the inclusion of a 'decay mechanism'. This is an automatic protection mechanism for employees in that it prevents management from using all 'unused' hours as the calendar year progresses. Wages are to be made up of four components, including basic pay, a work-pattern allowance and the balanced reward contract. Furthermore, each year, depending on the station’s performance against locally developed 'key performance indicators', a pool of up to 6% of total station payroll will be equally divided among all eligible station staff.

The old power station employee categories of 'electrician' and 'fitter' have been replaced by 'team leaders'. The new category of maintenance team member (level 1) will be paid a fixed annual salary of EUR 50,452, maintenance team members (level 2) will receive EUR 39,016 and shiftworkers will receive EUR 57,374. Operations team leaders will have a fixed annual salary of EUR 85,095. In each case, the following additional payments will apply: a CCR profit-sharing payment (worth around EUR 435 a year); a PACT profit-sharing payment (worth 2%-5% of pay); a PACT bonus of 3%; bank holiday payments for shift work; and the abovementioned performance-related payment of up to 6%.

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