Irish retailer Eason and Son Ltd has deferred paying over 800 staff their Christmas bonus as the company pushes to reduce its cost base by €2.5 million.

The bonus was due to be paid to all staff that joined the company prior to 2011. This equates to about 80 per cent of its 1,000 employees and is worth almost one week’s wages to employees.

Consultative process
In a statement Eason said it had begun a "consultative process," with its staff earlier this year about this new cost-savings round but an agreement has yet to be reached. The company previously reduced its annual costs by €6.1 million between 2011 and 2012.

Eason said in a statement said it had “pursued all viable cost adjustment opportunities and has significantly restructured a number of areas . . . The company believes the remaining costs savings required can only be delivered through a reduction in labour costs.

“As all possible savings and terms and conditions will form part of negotiations, including savings related to the company’s Christmas bonus, it has been decided to defer the payment of this year’s bonus, pending the outcome of this process,” it said.

Eason said it would pay staff their Christmas 2013 bonus at a later date if agreement was reached with its employees on cost reductions.

In a recent email to staff Siptu industrial official Graham Macken accepted that Eason was under financial pressure.

'Unfair'
"It would be unfair to mislead members by not acknowledging that the picture is certainly not good and that there has been a clear outline of the necessity to consider options to return the business to a stable financial position," Mr Macken said. Talks between Eason and its staff representatives are ongoing.

Mr Macken has told Eason employees that some of its proposals during negotiations were “unacceptable”. He did not return calls for further comment yesterday. Eason made a profit of €2.6 million in the year to the end of January 2013 compared with a loss of €5.3 million in the previous 12 months.

Its 239 shareholders recently approved a plan to split its properties into a separate legal entity to facilitate future property and or trade disposals.