Telecom Eireann and An Post have had to give increases of up to 20 per cent to key information technology staff in recent months to prevent them from being poached by banks and financial services.
Increasing demand for staff capable of overhauling computer systems, including the year 2000 problem, or Y2K, and the introduction of the euro have made "loyalty payments" necessary.
The Department of Finance has also agreed to pay special "loyalty bonuses" of up to £10,000 to 300 key IT staff in the civil service working on the Y2K problem so that they do not go to the private sector. The civil service unions have now presented a claim for another 300 civil servants doing similar work to receive the "loyalty" bonus.
The general secretary of the Communications Workers' Union, Mr Con Scanlon, confirmed yesterday that substantial increases had been awarded to IT staff in both An Post and Telecom Eireann. In Telecom some increases dated back 12 months.
The increases breach existing national pay agreements and in many cases have been made without direct reference to the unions. The terms have been kept confidential.
Mr Scanlon said the trade unions "recognise the companies have no choice on this issue. It's a general problem for all companies to hold on to talent in this area. If payments are not made, the best talent will be poached, especially by the banks and financial institutions." An Post public relations manager, Mr John Foley, confirmed that increases of "around 20 per cent" had been paid to key IT staff. "Like every business in the country, we were losing people in this area."
Reliable sources said most of the An Post staff concerned were earning between £3,000 to £5,000 a year extra from these bonuses. They are usually paid the money in six-monthly instalments. A spokeswoman for Telecom Eireann confirmed that it had been necessary "to look after our IT people and other professionals" to stop them being poached. However, she said the payments were not related specifically to the Y2K problem.
She refused to say how much the bonuses were worth but reliable sources say many of them are significantly higher than those in An Post.
One of the unions which has served a new claim on the Department of Finance for "loyalty" payments is the Civil and Public Service Union. Its assistant general secretary, Mr Derek Mullen, said the staff concerned were doing work that was similar to those already receiving the £10,000 bonus.
The claim was served "in the interests of equality and because the expectation is there that loyalty bonuses will be paid", he said. The acting national secretary of MSF in Ireland, Mr Jerry Shanahan, who represents thousands of workers in the financial services sector, predicted the bonuses would have a "marginal effect" on retaining staff.