ESB to discuss cost-cutting redundancy deal with unions

A NEW voluntary redundany scheme for ESB workers is set to be discussed by management and unions over the coming weeks in an attempt to reduce running costs.

Union sources have confirmed the plan, which will have to be sanctioned by Government, is likely to be the subject of talks in the near future due to the current economic climate.

In a letter sent by the secretary of the ESB unions group, Brendan Ogle, to the firm’s corporate change manager, Pat Fenlon, on Tuesday, Mr Ogle said staff “welcomed” the “invitation to explore this issue”.

The correspondence, published in the latest edition of Industrial Relations News, added the lack of such a scheme in the past “has caused the unions difficulties in relation to further change proposals”.

Under previous ESB worker severance packages in the 1990s, those taking up the offer were given a one-year salary lump sum and half pay from the age of 48 to 60.

At 60, the individual also received their formal retirement earnings.

However, it is likely any new voluntary scheme will not have such attractive terms due to the country’s chronic economic problems and the criticism a similar package would receive.

The potential talks come as unions representing ESB workers rejected any discussion on a possible 20% overall payroll reduction.

They said such a policy will remain in place until an assurance is given that no cuts will take place in individuals’ basic wage rates.

ESB has already said it is seeking up to €150 million in overall running cost reductions as part of plans to invest billions of euro in infrastructure over the coming years.

Meanwhile, ESB is understood to be preparing a formal response to the Colm McCarthy report’s claims over its financial situation.

At a business lunch last week, the state firm’s chief executive, Padraig McManus, said the economic consultant’s remarks in relation to the energy company’s pension fund and balance sheet were “way off”.

He added that ESB’s position is stronger than that of similar company’s across Europe, with the firm’s debt-to-earnings levels up to 15% lower than other state energy groups.

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