Crossed wires at Eircom

As Eircom management and unions left the Labour Relations Commission on Wednesday night, the messages from both sides could not…

As Eircom management and unions left the Labour Relations Commission on Wednesday night, the messages from both sides could not have been more different, writes Martin Wall, Industry Correspondent.

The parties had just spent more than 12 hours in talks and had successfully averted the first industrial dispute at the State's largest telephone company in 30 years. However, they were by no means on the same wavelength.

"The family spat is over," Eircom group human resources director Tony Olthof said.

However, Steve Fitzpatrick, general secretary of the CWU, the largest union at the company, maintained that its stand had been vindicated in the dispute over attempts by the company to link the payment of a 2 per cent increase due under the terms of the national agreement Towards 2016 with talks on work practice reform. He also expressed concern about the damage that the row had caused and the impact this would have on relations between staff and management in the future.

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And these internal relationships will be tested in the weeks and months ahead as management seeks to introduce major changes to operational procedures at Eircom.

In a document to staff a month ago, Eircom management argued that the pace and scale of change at the company had to continue if it was to successfully protect and grow its revenue base and profitability in the face of new competitors and increasing regulation.

Eircom is seeking to reduce its current workforce of 7,100 by 400 over the next year by means of a voluntary departure scheme as well as through the normal resignations and retirements.

One of the company's key priorities in the weeks ahead will be the establishment of a new "resource business" that would facilitate the retraining and upskilling of staff currently in posts that are deemed surplus to requirement in the future.

The company intends that these staff would be de-deployed throughout the Eircom group and not just within their own business unit as had tended to be the case in the past.

While the "leaving" scheme is voluntary, the company has also not ruled out the possibility of having "honest conversations" with some staff about competency in the new operational requirements.

The implementation of change on this scale could pose difficulties at the best of times. Indeed the Labour Relations Commission, in the first paragraph of its settlement proposals, points out that the parties face significant challenges in terms of dealing with the business issues facing the company.

However, the implementation of the change programme could be made more difficult by what appears to have been an erosion of trust between staff and the new Australian management at the company over recent weeks.

Eircom is now owned by Australian venture capital fund Babcock & Brown, which has put in place its own senior management team over recent months.

One close observer of the company said: "Many of the unions do not believe that these guys are like Michael O'Leary [ of Ryanair] in that they are anti-union. Rather there is a concern that they are on a learning curve and do not fully understand the way that industrial relations in Ireland works.

"Eircom has a very sophisticated and well-developed system of internal industrial relations processes.

"But both within this system and externally in the wider social partnership arrangement there is a specific language, nuances and a way of doing things that are peculiar to the Irish industrial relations system," this observer said.

Fitzpatrick said that a lot of the senior managers who had been in the company and who had experience of dealing with industrial relations had left in recent times.

He said that trust had to be built up between staff and the new owners.

He also said that a lot of staff at the company had also got themselves wound up over the way they had been treated by management in the dispute over the 2 per cent.

"We need to sit down and management have to set out the crucial things they believe need to be done quickly and then we need to start to do things that we can work on together," he said.

Fitzpatrick said that in addition to the change programme, the company also faced a backlog of faults and repairs arising from the summer storms that would require staff goodwill and flexibility to tackle.

Another close observer said that in addition to the issue of the new Australian management, the dynamic at Eircom was also influenced, to some degree, by the bruising experience of some of the unions over recent years at An Post.

"At An Post the previous management also sought to withhold a national pay agreement award and to introduce radical changes. At An Post the unions could appeal to the Government as it owned the company. However, they cannot do that at Eircom as the management are also the people who own the company," he said.

Olthof said that there had been suggestions that there was an An Post "postie" culture within the Communications Workers Union and that there was an "Aussie rules-style" of management emerging.

He said both of these suggestions were "squarely wrong" and were unhelpful in dealing with the real issues facing the company.

He said that both sides in the recent dispute had compromised and neither had lost face.

Olthof said the real issues facing the company had nothing to do with style or personality but rather to do with developing the infrastructure capable of delivering a modern telecommunication service.

He said the company and unions were in a race together against their competitors.