Ministers meet on Telecom staff stake

Government ministers will meet today to discuss restarting the process on giving Telecom employees a 14.9 per cent stake in the company. Talks on the issue were shelved some months ago, before the general election. The Taoiseach, Mr Ahern, the Minister for Public Enterprise, Ms O'Rourke and the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney are meeting to see how best to advance the issue. The Government partners pledged in their programme for Government to sell workers the stake for a fair price.

It is expected moves will also be put in train to appoint independent consultants to value the stake.

It is understood that in July Ms O'Rourke and Department officials met Mr David Begg, the outgoing general secretary of the Communications Workers Union (CWU) and Mr Con Scanlon, who has now taken over from David Begg. The issue is an important one for Telecom, which is negotiating major restructuring plans with its employees. Mr Scanlon warned in July that the 14.9 per cent shareholding was a non-negotiable principle and tied to the restructuring agreement. The Government partners envisage staff being able to hold the shares through an employee trust. The issue of the 14.9 per cent stake has been around for some time.

At its annual conference in May, CWU members were told that the 14.9 per cent stake had a value of £136 million. The union wants to buy it by giving savings through a series of measures, mainly through agreeing to co-fund pensions for 15 years and forgoing cash dividends over two years as well as eliminating a bonus scheme worth £1,000 a year to employees.

Former communications minister, Mr Alan Dukes was prepared to cede a 5 per cent stake in return for certain work practice changes and a further 5 per cent at full market value. Another 5 per cent was to be available if Telecom's strategic partners KPN/Telia were prepared to sanction it.