Talks on restructuring the ESB have run into major difficulties and are unlikely to conclude by the May 31st deadline.
The difficulties concern special payments to fitters in Powergen, the power stations division, to allow outside contractors to carry out essential maintenance. Some fitters earn up to £80,000 a year in basic pay, overtime and a special "honey pot" deal that allows outside contractors to come in. The agreement, which dates back to the 1980s, is worth about £4 an hour to the 200 fitters involved, and is paid annually.
The discovery of the payments has upset other workers at Powergen.
Details of the scheme emerged only in the closing stages of the negotiation of the Programme for Action on Competitiveness and Transparency. The ESB board meets next Thursday to approve the outcome of negotiations, but the text is not now expected to be finalised by then.
A major strike was narrowly averted in April after unions and management agreed to complete talks by the end of May. As part of the interim settlement, the company's 8,500 employees are to receive pay increases worth up to 21 per cent, on top of the Programme for Prosperity and Fairness. These are in return for meeting various targets, including 2,000 redundancies, £100 million in cost savings annually and new working practices. Progress has been reported in other business units of the ESB, but Powergen will experience the biggest changes under the PACT, with six power stations to be closed with the loss of 1,200 jobs.
Outmoded work practices are to be replaced by team working. But it was when union representatives sat down to discuss ways of harmonising and rebalancing pay structures that the "honey pot" deal was discovered.
Under this arrangement, a proportion of the savings created by bringing in outside contractors is pooled and divided between fitters at the end of the year. It is worth about £4 an hour on the basic rate. The fitters also receive a £1,200 lump sum annually.
Day workers at the power stations received a £1,200 lump sum in return for allowing greater access to outside contractors under the ESB's last restructuring deal, the Cost and Competitiveness Review in 1995. They did not receive the "honey pot" deal. But electricians, who form the other key group of maintenance workers, did not even receive the £1,200.
Electricians and day workers are also upset because the figures used to calculate the fitters' "honey pot" include costings based on the number of general operatives and electricians as well as fitters brought in by outside contractors. They are demanding that the issue be resolved as part of any final settlement under the PACT.
There is considerable concern that if a formula is not found soon the row could spill over into other divisions of the ESB. Although the "honey pot" deal long predates the PACT or CCR, and the ESB can argue that Powergen workers will be most affected by the new agreement, other workers may see it as an "add-on" to the 21 per cent and unravel the whole deal.
This could seriously damage the long-term prospects of the company and job security of the workforce, and further delay the upgrades vital to business.