ESB unions confirm Christmas strike averted

Both sides in pensions dispute interpret LRC agreement differently

ESB Group of Unions general secretary Brendan Ogle who said this morning that ‘if there is disruption to services from December 16th, responsibility for this will lie in totality with ESB management’. Photograph: Collins

ESB Group of Unions general secretary Brendan Ogle who said this morning that ‘if there is disruption to services from December 16th, responsibility for this will lie in totality with ESB management’. Photograph: Collins

 

ESB unions have confirmed strike notice documents lodged with the company will be withdrawn by lunchtime.

The move follows a deal reached yesterday on the ESB pension scheme facilitated by the Labour Relations Commission and clarification voiced this morning by the group of unions.

The deal averts the threat of widespread electricity blackouts in the run-up to Christmas.

A difference of interpretation of the deal by unions and the ESB overnight appeared to place a question mark over the deal.

Last night both sides resolved their differences over the company’s pension scheme but since then the sides interpreted the agreement differently.

ESB management appeared to differ significantly from the Labour Relations Commission’s (LRC) interpretation of the effect of the pension settlement on the company’s balance sheet.

However, head of the ESB group of unions, Unite official Brendan Ogle, said this morning threat of strike action in the run up to Christmas has been completely removed.

“There is no danger of [power] outages or a strike,” Mr Ogle said. “A mandate given to the group of unions by 4,000 workers in the ESB has been fully met. The [pension] scheme is a defined scheme and any future problems will be resolved in the traditional manner.”

He said “offending statements” by the ESB “have been removed from the [ESB] accounts.”

“It was not the objective of the unions to damage the financial position of the company,” Mr Ogle told RTÉ.

“The fact is that this dispute was resolved yesterday when two actuaries were brought in by the Labour Relations Commission and [they] gave a range of scenarios that could resolve the dispute all of which were compatible with our mandate.”

He added that, as far as the unions were concerned, “the minimum that will go on the company’s balance sheet... is €369 million, but that is a matter for the ESB and their auditors.”

He insisted the ESB unions had a defined pension scheme which has been “underpinned” by the company.

Mr Ogle confirmed that he and his family had been subjected to death threats and that these are the subject of investigations by the Garda.

Earlier this morning Arthur Hall, acting general secretary of the Technical, Engineering and Electrical Union (TEEU), said his union was unhappy with how the ESB was interpreting the deal which averted the strike.

He called for cool heads and for “the ink to dry” on the agreement between management and unions before any action was contemplated.

The breakthrough was announced yesterday when the LRC - which had been engaging with both sides - issued a statement confirming a resolution had been reached.

The dispute and subsequent strike threat, which retailers had warned would decimate their trade during the festive shopping period, originally arose after the ESB in 2010 changed the description of the pension scheme in its accounts.

It altered the scheme’s description from defined benefit to defined contribution, meaning any deficit would not appear on the ESB’s balance sheet.

The ESB’s group of unions had claimed that this accounting change meant workers could potentially be saddled with responsibility for plugging a deficit of up to €1.7 billion.

The company denied that such a deficit existed.

Last night’s agreement states that both sides now agree the pension scheme is a defined benefit arrangement, which is being viewed in industrial relations circles as an important concession by the company.

The LRC statement also says that “no actuarial deficit currently exists in the scheme and that in those circumstances neither party has an intention to adjust their level of contribution . . . at this time”.

This implies a shift in the unions’ position on the existence of a deficit. The settlement says that if a deficit does arise in future, both sides will negotiate an agreement to plug it “in line with normal practice”.

The statement, issued by the LRC’s head of conciliation Kevin Foley, suggests the company should now go back to treating the scheme as a defined benefit arrangement in its accounts.

“The commission believes that accounting arrangements for the company should reflect these realities, in other words, the company’s accounts should state clearly that the scheme is a defined benefit scheme.”

The ESB, however, appeared to contradict this element of the LRC release in its own statement: “The resolution of this issue protects the financial strength of ESB - there will be no additional liabilities on ESB’s balance sheet.

There will be no change to the accounting treatment of the scheme in the company’s financial statements as a result.”

The company was unable to provide further clarity on this element of the LRC agreement last night.

Mr Hall, speaking on RTE’s Morning Ireland, accused the ESB of ignoring what was in the LRC statement. He said the company was already “trying to move away from the agreement”.

“There is no actuarial deficit in the pension, but if you apply the minimum funding standard that the Pensions Board insists that we do there is going to be a deficit. It’s an artificial deficit because of the minimum funding standards.”

He added: “People need to be calm here. People need to step back to let the ink dry on this agreement and stop posturing.”

He said Minister for Energy Pat Rabbitte must call in the ESB management “and tell them to please read the agreement that they signed”.

“If that happens this storm will blow over.”

He said that if the ESB stand by the agreement that it signed “then there should not even be a hint of industrial action” by his union.

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