INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Keogh
Worker Member: Ms Ni Mhurchu
1. Employee Share Option Scheme (ESOP).
2. The dispute concerns a claim by the Union for the introduction of an ESOP scheme for its members. The Company is 75% owned by Telecom Eireann and 25% by RTE. The Government has instructed both companies to dispose of their share holding in the Company as part of a move towards liberalisation of the telecommunications sector in Ireland.
The major union in the Company is the ATGWU which represents about 180 staff. SIPTU represents about 42 staff of whom 25 are on secondment from RTE.
The Company rejects the Union's claim for the introduction of an ESOP scheme given the massive investment required (£400 million) in the Company by the prospective buyer. It also claims that this position has been accepted by the ATGWU.
The Union claims that ESOPs are being discussed in the context of many other proposed sales of semi-state companies and cannot understand the Company's refusal to negotiate on the issue.
As no agreement was possible between the parties the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 23rd of November, 1998 but no agreement was reached. The dispute was referred to the Labour Court on the 4th of January, 1999, under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 29th of January, 1999.
3. 1. The Company has consistently made profits over the past number of years. The workers should receive some benefit from this success which they have helped to achieve.
2. The idea of ESOP schemes is common in many semi-state companies where restructuring or privatisation has taken place.
3. The Company has the potential to become a major player in the developing cable market.
4. Under Partnership 2000 great emphasis is laid on the concept of developing a stock-holding culture amongst staff members.
4. 1. An ESOP scheme is not appropriate given the substantial investment required in the Company by the prospective buyers.
2. The Company claims that it must proceed with the sale as quickly as possible in order to secure the necessary capital investment required.
3. The ATGWU which has the largest membership in the Company is not supporting this claim.
4. It is usual that when ESOPs are introduced they are normally part of a process that is going forward. In this paticular case, Cablelink shareholders are departing the Company.
In relation to the Union's claim, the Court notes the Company's contention that this is primarily a matter for the incoming owner. The Court accepts the logic of the Company's position in that regard. The Court is conscious that in other similar situations in the state sector arrangements of the type now claimed by SIPTU have been introduced.
Such an arrangement could, in the Court's view, be beneficial to the new shareholders and the staff of this Company. The Court also notes that this approach is consistent with Chapter 9 of Partnership 2000.
Any such arrangement would, however, only be practicable if it were supported by both Unions representing the Company's staff. It should also be introduced in consideration of staff co-operation with organisational change which may follow from the proposed change in ownership.
While supporting the concept of employee financial involvement in principal, for the reasons set out above, the Court considers that the detailed arrangements within which it should be introduced are matters for agreement between the Unions concerned and the new owners.
The Court recommends that the Union's claim should be raised with the new owners as soon as their identity becomes known and a consensus approach is formulated between both Unions.
Should agreement not be reached with the new owners, the matter may be referred back to the Court in the normal way.
Signed on behalf of the Labour Court
4th February, 1999______________________
Enquiries concerning this Recommendation should be addressed to Larry Wisely, Court Secretary.