TALKS to restructure Telecom Eireann are on the verge of collapse, because the Government has failed to respond to trade union requests to allow employees to buy a bigger share in the company. The matter is likely to be raised at the Cabinet today.
Last night reliable sources in Telecom's largest union said that a restructuring agreement to cut the company's operating costs by £110 million and introduce 2,500 redundancies would not be implemented because of the government's attitude.
The unions concluded negotiations on a radical restructuring of the workforce at the weekend. They will not be recommending acceptance of the proposals if there is no reciprocal agreement from the Government to give the employees a 14.9 per cent share of the company.
Yesterday the executive of the Communications Workers' Union met to review the situation ahead of the annual conference in Tralee tomorrow.
Afterwards CWU sources said that Ball bets are off on the restructuring because the union had no word on the employee share option (Esop) scheme. It was too late now for any meeting before the conference and radical changes in work practices could not be proposed while no share offer beyond the Government's 5 per cent offer last year was available.
The CWU, and the smaller Telecom unions, have been seeking an extra 9.9 per cent of the company, for which employees are willing to pay. Last November the general secretary of the CWU, Mr David Begg, announced a bid worth £89.7 million for the share holding - and in February this was increased to £136 million.
Mr Begg was not available for comment last night but he is understood to be deeply disappointed at the failure of the Department of Transport, Energy and Communications, or Telecom's advisers on the Esop, Morgan Stanley, to respond to the detailed proposals.
Two weeks ago, when the Taoiseach met trade union and employer leaders to discuss problems with Partnership 2000, Mr Begg is understood to have warned him that the Telecom deal could unravel if there was no response to the shares bid before the union conference.
A spokesman for the Department declined to comment on the situation. However, official sources said the Government could not be expected to take a decision on such an important matter just to suit the CWU conference timetable.
. Mr Begg has told the CWU executive that he intends resigning in two months to become chief executive of Concern. The announcement has come as a surprise. It will cause some dismay in the union, as well as the Irish Congress of Trade Unions, as Mr Begg has been one of the trade union movement's principal strategists in negotiations on national agreements over the past year.