Electricity company faces major pay claim and job cuts

In early 2000, Ireland's state-owned electricity company, the Electricity Supply Board (ESB), faces a 16.5% pay claim over and above the terms of the new national pay agreement - the Programme for Prosperity and Fairness - as management and trade unions prepare to negotiate a new round of major change and 2,000 voluntary job cuts.

The Electricity Supply Board (ESB), the state-owned electricity utility, faces a 16.5% pay demand from its second largest trade union as it prepares to negotiate a new era of change and secure agreement on a further 2,000 voluntary job reductions. The changes must be set in the context of EU-driven deregulation, with 28% of the Irish electricity market open to competition since 1 February 2000 (IE9912201N). This is expected to increase to 40% in 2002 and by up to 100% in 2005.

The first major raft of change related to deregulation covered the April 1996-April 1999 period. It was implemented after the negotiation of a tripartite agreement drawn up by management, trade unions and the Department of Public Enterprise. This deal - the Cost and Competitiveness Review (CCR) - included special pay arrangements for different categories and a 5% stakeholding for the employees in return for over 2,000 redundancies and changes in work practices.

The CCR took over two years to negotiate, but this time the parties do not have the luxury of such a lengthy bargaining period. In a shorter time-frame, they must negotiate the closure of inefficient power generation plants, tackle the question of a wider shareholding for employees, negotiate new "pay for change" arrangements and conclude agreement on improved performance and productivity.

The problem the parties face is that much of the traditional public sector industrial relations culture of the ESB remains fundamentally unaltered, despite the fact that union leaders and shop stewards understand the need for change due to the challenges posed by a new competitive environment. To ensure that the company's 9,000 employees understand and then agree to the changes which lies ahead, however, a new tripartite agreement will require a major input in the area of internal communications.

Meanwhile, the company and the government must first of all decide how to approach the claim for a 16.5% pay rise, over and above the terms of the new national pay agreement, the Programme for Prosperity and Fairness (PPF) (IE0003149F), for clerical staff lodged by the ESB Officers Association, which has 2,000 members. Its general secretary, Willie Cremins, claims that there have been significant pay movements in what he regards as key related outside groups, such as the police and public sector health employees.

The government will be wary of the 16.5% claim, which has the potential to trigger a round of "knock-on" claims by other ESB workers. It could also be exploited by employees in a range of other commercial state-run companies. Having just concluded agreement on the PPF, the government - which has already faced a series of pay challenges and strikes by workers in the state-run bus and rail companies - will want to ensure that its pay terms are adhered to.