Electricity company rejects 12.5% profit-share claim

In March 1999, Ireland's state-owned electricity company, ESB, rejected a claim from its trade unions for a 12.5% "share-out" of its IEP 300 million profits as a breach of the country's three-year national agreement, Partnership 2000.

ESB, the state-owned electricity company, has rejected a major profit-share claim from its trade unions as a breach of Partnership 2000 (P2000), Ireland's current three-year national agreement (IE9702103F). The claim envisages a 12.5% pay-out, worth almost IEP 4,000 per worker, based on total ESB profits in 1997 and 1998 of around IEP 300 million.

The claim was formally lodged by the ESB Group of Unions in February 1999 and heard by the joint management/trade union internal non-binding adjudication body, the Joint Industrial Council (JIC), on 25 March. The unions argued that the claim was legitimate on the basis that it was aimed at securing a percentage of profits, and could be tabled under chapter 9 of P2000, which covers "partnership"-related claims (IE9904276N).

The claim follows two separate publicly aired demands by key ESB union leaders for workers to be granted a greater percentage of shares in the company than the proportion which they nominally hold at present. Under a 1996-9 cost savings plan, the "Cost and Competitiveness Review" (CCR), the employees secured a 5% stake in return for agreeing to changes in work practices, the removal of certain demarcations between work categories and around 3,000 redundancies.

Worker director (employee representative on the board) and craft union representative, Joe LaCumbre, pledged in autumn 1998 to work to secure a 15% stake. This would be similar to the deal negotiated by the trade unions in Telecom Eireann and the government in 1998 (IE9807253N). The main government party, Fianna Fail, is committed to granting such 15% stakes in the form of employee share-ownership plans (ESOP s) "at a fair price". Meanwhile, the general secretary of the ESB Officers Association, Willie Cremins, went on record on 13 February 1999, demanding a 30% ESOP for employees in ESB.

These demands are taking place against a background of growing unease in the company, given that the three-year CCR agreement expires on 1 May 1999. Industrial relations tensions increased in the company's power stations recently when an unofficial stoppage over a disciplinary matter hit two stations in Moneypoint and Tarbert, both in the mid-west region, in mid-March 1999. Power supplies were not affected but the threat to customers was very real.

The government will be anxious that pay discipline in such a key utility is maintained, particularly at a time when pay pressures are increasing across the economy as a whole.