Union leaders in Telecom Eireann responded coolly to confirmation by the Government that it was committed "in principle" to sell employees a 14.9 per cent stake in the company. The general secretary of the Communications Workers' Union, Mr Con Scallan, said that if an Employee Share Option Plan (ESOP) was not agreed soon, co-operation with the Transformation Plan to restructure the company would cease.
The deputy general secretary of IMPACT, Mr Shay Cody, also expressed concern at the lack of progress in negotiations on an ESOP since the Government took office. Both men were responding to a speech by the Minister for Public Enterprise, Ms O'Rourke, in the Dail on Wednesday. She was replying to questions from Opposition TDs. Ms O'Rourke said the Government was committed to the conclusion of an ESOP "in the spirit of social partnership and consensus". She had met Telecom unions and management. A framework was "now almost in place and I look forward to the recommencement of negotiations with a view to reaching agreement on an acceptable deal within the coming months". Ms O'Rourke is anxious to conclude the ESOP negotiations and is meeting the Telecom unions' financial advisers on October 20th. She has also sought a new valuation of the company - and of the unions' own ESOP proposals.
Morgan Stanley, which advised the Government on the sale of 35 per cent of Telecom to KPN/ Telia, is understood to be carrying out the new valuation. However, Mr Scallan said yesterday that time was running out to conclude an ESOP.
"I am hopeful that a deal can be done but time is limited," he said. "The consequences will be serious all round if it fails, and then we would be in a worse position than before."
Forgone bonuses worth about £1,000 per Telecom employee are outstanding since the summer and they are due an increase of 2 per cent under Partnership 2000 from November 1st.
These payments have been earmarked for inclusion in the ESOP proposals, to help fund the workers' stake in Telecom.