Bord Gáis ordered to pay staff 3.5% rise

THE LABOUR Court has awarded a pay rise to Bord Gáis staff which could add more than over €2 million a year to the State energy company’s wage bill.

Earlier this year, concerns over the recession and competitiveness prompted the company to refuse to pay 3.5 per cent and 2.5 per cent wage increases due under the national pay deal.

Instead of paying the total 6 per cent due under the national agreement, which has been suspended for most of this year, it offered to increase its contributions to the staff pension by 4 per cent with a further €2.5 million investment contribution. The fund has a €38 million deficit.

However, following a case brought by the Bord Gáis group of unions, the Labour Court ruled earlier this week that the company should pay the 3.5 per cent increase due. This increase will add €2.1 million to the company’s pay bill. Its 900 or so staff earn an average of €67,300 a year, the majority of them are qualified and/or highly skilled.

The issue ended up in the Labour Court after talks between the company and its group of unions, and a subsequent referral to the Labour Relations Commission, failed to reach agreement.

The company argued that it would be imprudent to pay the increase in the economic circumstances; that the payment would hit its ability to make capital investments; and it would send the wrong message to its customers.

The unions argued that Bord Gáis is profitable, it made €158 million before tax last year, and that less profitable companies have honoured the national agreement.

The court focused on whether or not the national agreement, Towards 2016, still existed, as a review and attempted renegotiation between the Government and social partners broke down.

The court focused on this, but said it would be “inappropriate” to express a view on resolving the question. Instead, it pointed out that in the private sector the central issue is whether or not individual companies can afford the pay increases.

It ruled that Bord Gáis is highly profitable and should at least pay the first 3.5 per cent. It left open the possibility that the company could also have to pay the 2.5 per cent.

The ruling sparked fears that unions are targeting profitable businesses such as Bord Gáis, and taking claims based on the national pay deal to the Labour Court, in order to set precedents that will force other employers to meet their demands.

However, a spokesman for Siptu, the biggest member of the company’s group of unions, said yesterday there was no such decision being taken by the leadership.

Instead, he pointed out that union representatives make such claims at local level. If they are not resolved there, they go through the normal industrial relations mechanisms.

The Bord Gáis board has yet to approve paying the increase. Labour Court rulings are not binding, though one party can apply to make an individual decision binding.

Bord Gáis operates the Republic’s natural gas network and supplies both gas and electricity to homes and businesses.