SIPTU calls on First Active to reassure its staff over future plans

SIPTU has called on First Active to bring forward urgently meaningful proposals to reassure its staff about their prospects.

A union spokesman said morale among its 600 members at First Active was extremely low and the departure of Mr John Smyth as chief executive on Monday has heightened staff uncertainty.

Mr Smyth recently got board approval to implement a cost-cutting plan which included 175 job losses and the closure of 25 of its 76 branches. "Now that Mr Smyth has gone, staff are asking has anyone got a plan for the future," said a SIPTU spokesman.

The cost-cutting measures met stiff opposition from staff when initially unveiled and the company is due to attend a conciliation session at the Labour Court this week to discuss certain difficulties which the measures have posed for some staff.

First Active's acting chief executive, Mr John Callaghan, has stated there will be no compulsory redundancies and that the target for job losses has already been met on a voluntary basis.

But the SIPTU spokesman said: "They will find it easy to get people to leave but it doesn't augur too well for the future for those who still work at First Active."

Most of the cost-cutting programme aims to slim First Active's management structure but staff are concerned that the workforce will eventually predominantly comprise lower paid workers.

Mr Smyth's plan is expected to trim €13 million off First Active's cost structure annually. The Irish Times has learned that the former chief executive had proposed a more aggressive plan to the board before Christmas, which would entail the cutting of a higher number of management positions. Sources within the company suggested last night that, after the rejection of part of this proposal, his position within the company became difficult.

Mr Smyth declined yesterday to answer any questions about his resignation or recent events leading up to it. First Active has refused to disclose details of its proposed severance package. The amount of money paid to Mr Smyth will have to be disclosed in the company's annual report. A spokesman for First Active said it was precluded from releasing these details ahead of the publication of that document.

In his capacity as one of the largest single shareholders in First Active, Mr Smyth said yesterday he wanted to see an increase in the share price and was confident the strategy he had been pursuing would achieve this end. Most of his 106,000 shares were acquired at prices exceeding yesterday's closing level of €2, he said. "I am a large shareholder and as such I am interested in seeing an improvement in the share price," he added.