Demands on stock values by ESB staff

ESB staff transferring to the national grid company are seeking to double the value of stock granted to their former colleagues in a share plan. If the demands are met, shares worth £8,000 (€10,158) to ESB staff would be valued at more than £16,000 when granted to national grid workers. About 100 workers are leaving to join EirGrid, the company which will operate the national grid when it is separated from the ESB.

Seen as crucial to the fair operation of the newly liberalised power market, the separation was due on June 20th. But this did not happen because EirGrid and the ESB have so far failed to agree on the use of infrastructure and the transfer of assets.

Because of a possible conflict of interest, a condition of the transfer of workers laid down by the Department of Public Enterprise and the Commission for Electricity Regulation is that EirGrid staff should not hold shares in the ESB.

This means that shares granted to the 100 staff will have to be bought out immediately.

According to an informed person, unions representing workers at "local" level within the national grid operation have sought to increase the value of shares by more than two times.

An overwhelming majority of workers at the State company voted last week to accept an employee share option plan, which valued the ESB at £1.4 billion. When distributed to 9,000 staff and former staff in four years, the 5 per cent tranche will be worth about £8,000 per person.

This valuation was agreed by the ESB, its group of unions and the Department of Public Enterprise. But the "local" national grid unions have proposed different calculations which value the ESB at £2£3 billion.

Such a valuation could increase the stake available to national grid workers to more than £16,500.

It is thought that EirGrid and ESB - which are taking a joint management approach in the talks - are fundamentally opposed to such a valuation and talks at the Labour Relations Commission last Friday failed to reach agreement. Those talks were described by one source as "very exploratory".

The process was said to be at a very sensitive stage and the matter is now expected to be referred to an internal industrial council at the ESB.

Sources said the passing of the June 20th deadline had added impetus to the process.

The terms of the Statutory Instrument which will separate EirGrid from the ESB dictate that the terms and conditions of staff in the new company should be no less favourable.

Talks on the infrastructure agreement are said to be "difficult". While EirGrid regards the process as a complete demerger, the ESB is said to be looking primarily at the transfer of assets.