AS 9,200 ESB workers begin balloting today on its £270 million restructuring deal, the company's chief executive has warned that it is the "last chance" to provided secure jobs in a competitive energy market.
The ballot on the Cost and Competitiveness Review is the largest restructuring deal ever negotiated in this State. It involved 18 months of intensive negotiations covering some 60 categories of worker, and involved Government representatives, as well as unions and management in determining the future shape of the State's power industry.
In a special edition of the company's internal newsletter, Electric Mail, the chief executive, Mr Joe Moran, tells the workforce: "We have reached the end of the road in the CCR. This is our last chance." Its rejection "will mean the decline of this great company".
The terms are being recommended by the ESB group of unions. It is also recommended as the best deal available by the senior worker director, Mr Joe LaCumbre of the TEEU.
If the deal is accepted it will mean that the company sheds 2,000 full time jobs and can, reduce its operating costs by up to £80 million a year. In return, the Government is prepared to sanction price rises of nearly 7 per cent over three years to fund the £1.5 billion investment programme the ESB needs to prepare for competition in two years' time.
For the consumer, competition will not necessarily mean cheap electricity. Because of the ESB's monopoly position and the fact that the Government had to sanction price rises, the cost of electricity to domestic users was cross subsidised by large industrial users. This will now end.
ESB prices, which have been frozen for 10 years, will have to reflect market conditions and it will have to compete with other power companies for business from large scale use.
The impact of the prices sanctioned by the Government, if the CCR is accepted, would be minimal. They will add less than 50p a week to the average domestic bill over the next three years. However, the price regime after that is "unknown territory", to quote one industry source.
The ESB hopes to recoup the £270 million cost of the CCR - over a 4.4-year period. By far the largest cost, at £210 million, is the voluntary redundancy scheme for the 2,000 workers being let go. This will average out at about £100,000 per employee, or which 20 per cent will go in lump sums, 30 per cent in ongoing payments, until the redundant employees reach 60, and 50 per cent in servicing their ESB pensions after they retire at 60.
The terms on offer to the remaining workforce are equally generous by private sector standards. A 6 per, cent productivity rise, which may involve radical changes in work practice has been negotiated within each category of worker.
Superannuation contributions will be reduced by 2 per cent over a two year period, equivalent to a 2 per cent increase in take home pay. There will be lump sum payments worth £2,000 and a profit sharing scheme that will guarantee payments worth at least £600 per employee during the first four years.
ESB workers will receive all the PCW pay increases in addition to the CCR increases.
If the deal is rejected, the Government's support for the ESB in, the transition to meet competition, including approval of price increases will be withdrawn.