ESB unions move to ballot workers on pension deficit

ESB unions plan to take the first step in balloting workers to strike over the €1.7 billion hole in the company's pension plan next month; and four of its workers yesterday began court action against it over the same issue.

Unions and management at the State-owned energy group have been at loggerheads for two months over the deficit, which would leave current staff with just 4 per cent of their benefits should the scheme be wound up.

The ESB group of unions confirmed yesterday that it will ask delegates at a meeting nest month to consider a motion for industrial action, up to and including strike, in a bid to step up pressure on the company to deal with the retirement scheme’s shortfall.

If the motion is passed at the meeting on September 21st, the unions – Siptu, Unite, UCATT, the TEEU and ESU – will then ballot their members in the company on a motion to take industrial action.

Meanwhile, four workers – Owen Kilmurray, Brian Baitson, William Flavin and Margaret O'Connor – are seeking a declaration that would effectively make the company liable for the pension plan's shortfall. Its latest accounts say that it has no responsibility for future liabilities.

Yesterday their lawyers served a summons on the company seeking the declaration and other reliefs, giving it eight days to lodge its reply with the High Court.

The workers represent four of the five organisations in the group of unions, which is bankrolling the court case but is not taking part directly.

The unions are also seeking to halt the payment of a €400 million special payment from the company to the exchequer pending the sale of its shares in power plants in Spain and Britain, and contesting the €74.4 million dividend paid following the ESB’s annual general meeting.

Workers say these payments are unlawful because the company has not properly accounted for the deficit, while the scheme’s trustees have written to its management advising it against making the €400 million special dividend while the fund is “under severe financial strain”.

The deficit is based on the minimum funding standard laid down in recently passed pensions legislation, which calculates a scheme’s liabilities in the event of it being wound up.

The ESB points out that its actuaries have confirmed that the scheme can meet its liabilities as they fall due. At the same time, it says that the Pensions Board has approved a plan that will eliminate the €1.7 billion minimum funding standard deficit by 2018.

It also says that a plan to address a €2 billion shortfall that emerged in 2010 is on target.

The company argues that the minimum funding standard cannot apply to the ESB pension plan as the 1942 legislation which established it does not envisage the scheme being wound up.