Unions accuse Eircom of U-turn on pay cut deal

TRADE UNIONS at Eircom have accused the telecommunications group of reneging on an agreement not to seek voluntary pay cuts from workers until further discussions have taken place on the company’s finances.

In a joint statement issued yesterday, the Communications Workers Union, Impact and Public Service Executive Union “strongly advised” those members affected not to agree to a salary reduction. “We understand that the company document will make reference to staff having the opportunity to take professional advice and we recommend that any company communication is forwarded . . . so that professional, union advice can be provided,” the statement said.

Earlier this month Eircom informed staff that it would be seeking voluntary pay cuts of 10 per cent from managers and 5 per cent from graded staff.

According to the unions, an agreement was reached with the company to hold back on introducing the pay cuts for all bar the top 130 managers. Eircom has since extended this to the staff who report to those managers. These people earn €75,000 or more.

“We have now been advised by the company of its decision to renege on this undertaking and to roll out the ‘invitation’ to accept ‘voluntary’ pay cuts to staff who are direct reports to the top 130 managers,” the union said. This was described as “a significant breach of faith on the company’s part” by the union leadership.

A spokesman for Eircom denied that any such deal on the implementation of the pay cuts had been agreed. “There was no agreement not to proceed ,” he said. “The company never agreed to hold back from that.”

The unions said it was “essential” that they “protect base pay” for members. “Additionally there is a need to see if it is possible to negotiate future benefits if current staff are being asked to make sacrifices,” the unions added.

Eircom is seeking to implement cost-cutting measures in reaction to a decline in activity and pre-tax losses of €791 million in the first half of its financial year.

Earlier this week Babcock & Brown Capital (BCM), which owns a majority of Eircom, said it would end its management agreement with Australian investment firm Babcock & Brown, which engineered the takeover of the company in 2006 but is now bankrupt. BCM and Babcock & Brown agreed to terminate the agreement for a once-off payment of Aus$5 million (€2.57 million).