EurWORK European Observatory of Working Life

Ireland: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

About

Country: 
Ireland
Sector: 
Energy
Author: 
Brian Sheehan and Roisin Farrelly
Institution: 
IRN Publishing

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Like the electrical industry internationally, Ireland’s electricity sector faces the challenge of the varying international cost of oil in a stagnant economic climate and with a growing number of customers - in particular private households - unable to meet their monthly bills.  Social dialogue or collective bargaining have had a limited impact in relation to these problems, although labour costs have largely been controlled and efforts are now underway in some of the main energy utilities to reduce wage and pension costs, with a view to ensuring medium and long-term enterprise viability.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?

Ireland’s National Renewable Action Plan (NREAP), consistent with the EU directive, was published in 2009. In that plan the Government has set a target of sourcing 40% of electricity consumption from renewable sources by 2020.

(A Review of Irish Energy Policy, 2011 http://www.esri.ie/UserFiles/publications/RS21.pdf )

The share of electricity generated from renewable energy sources (RES-E) in 2009 was 14.4%, exceeding the interim EU target (under the Directive) of 13.2% RES-E by 2010 and placing Ireland on track to meet the Government target of 15% of all electricity generation to be from renewable energy sources by 2010.

In 2009, the 14.4% renewable energy generation was made up of 10.5% Wind; 3.2% Hydro; 0.6% Biomass. Fossil fuel energy generation in 2009 was as follows: Coal 14.5%; Peat 9.5%; Oil 3.3%; Gas 55.6%.

“An average annual growth rate of 11.4% is required to meet 12,899 MWh of renewable electricity based on an overall electricity demand of 31,276 MWh in 2020, according to the most recent forecasting exercise by the SEAI Energy Modelling Group”.

“Assuming that the installed capacity targets of 500 MW for ocean energy, 400 MW for biomass and 260 MW for hydro energy by 2020 are met, an installed wind energy capacity of 3,100 MW is required in order to achieve the 2020 RES-E target according to the most recent forecasts i.e. the 40% RES-E target requires 4260 MWe of installed renewable energy capacity, a threefold increase in current installed capacity”.

(Sustainable Energy Authority of Ireland, ‘Renewable Energy in Ireland, 2010)

http://www.seai.ie/Publications/Statistics_Publications/SEI_Renewable_Energy_2010_Update/RE_in_Ire_2010update.pdf

Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?

Ireland’s overall target is to achieve 16% of all energy from renewable sources by 2020.

The Government Energy White Paper (2007) sets out energy mix targets as follows:

  • Electricity from renewable sources to contribute 40% to gross electricity consumption by 2020, with an interim target of 15% by 2010.
  • 12% of thermal energy to come from renewable sources by 2020, with an interim target of 5% by 2010.
  • 10% of petrol, diesel, biofuels and electricity consumed in road and rail transport to come from renewable energy sources by 2020, with interim national targets (biofuels penetration) of 2% by 2008 and 3% in 2010.
  • (http://www.dcenr.gov.ie/NR/rdonlyres/54C78A1E-4E96-4E28-A77A-3226220DF2FC/30374/EnergyWhitePaper12March2007.pdf)

Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?

According to the Minister for Communications, Energy and Natural Resources, speaking in the Dail in October 2011: EirGrid’s GRID25 strategy (http://www.eirgrid.com/media/Grid%2025.pdf) sets out a high level plan for delivering an upgraded electricity transmission network to 2025. “EirGrid is working to enhance the national network capacity between now and 2025 by reinforcing existing lines, deploying new grid technology and building new transmission lines”.

(EirGrid is the State-owned transmission system operator)

Over the four year period 2007 - 2010, a major investment programme of €2.5 billion is being undertaken by ESB Networks to upgrade electricity infrastructure around the country, in addition to a total of €4.0 billion already invested by ESB Networks between 2001 and 2006.

(ESB Networks Ltd., a ring fenced subsidiary within ESB Group, is the state-owned licensed operator of the electricity distribution system in the Republic of Ireland).

In October 2011, work began on a €600 million project to lay 180km of undersea cables to enable the flow of electricity in both directions between Ireland and Britain. The ‘east-west interconnector’ will allow for the export of wind energy generated in Ireland and will also allow the Irish electricity grid to call on power from Britain when needed.

What is the Government stance and what are the ongoing/envisaged action towards generation of electricity from the different broad groups of sources: nuclear /fossil /renewable energy?

The Government has set a target of sourcing 40% of electricity consumption from renewable sources by 2020.

According to the Minister for Communications, Energy and Natural Resources, speaking in the Dail in October 2011: “Currently, there is approximately 1,800 MW of renewable generation operational, of which just over 1,500 MW is from wind power, in addition to 240 MW from hydro-generation and 30 MW from biomass renewable generation. Operators of a further 1,000 MW of new renewable generation from the Gate 1 and Gate 2 group processing series have signed grid connection offers and are awaiting grid connection, mainly in the next year or two”.

“As part of the Gate 3 process, an additional 3,900 MW of offers issued to renewable generators. Even allowing for challenges that some developers face owing to increased planning restrictions in and around special areas of conservation, this amount of renewable generation is well in line with achieving Ireland’s target”.

In addition, the programme for Government states that future wind farms are to be built at locations where the wind regime is best and built in numbers or clusters to reduce the cost of connection to the grid. (http://debates.oireachtas.ie/dail/2011/10/19/00011.asp)

What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossil/renewable energy? Please indicate development since 2005 with reference to generation, distribution, and sale separately.

Employment trends in fossil fuel have stayed relatively stable.

No information on renewable.

1.2. Government policy for increase of the share of renewable resources according to the RES directive

Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details

REFIT -

The REFIT (Renewable Energy Feed-In Tariff) scheme (http://www.dcenr.gov.ie/Energy/Sustainable+and+Renewable+Energy+Division/REFIT.htm) was announced in 2006 and received state aid clearance in 2007. It aims to ensure that the renewable target in electricity is met. This scheme incentivises investment in onshore wind by providing a guaranteed price for such electricity. It also provides a limited subsidy for all wind electricity, no matter what the market price. It is in the course of being extended to include biomass co-firing in peat stations. Much higher guaranteed prices are also guaranteed for electricity produced from offshore wind, tidal or wave sources. (A Review of Irish Energy Policy, 2011 http://www.esri.ie/UserFiles/publications/RS21.pdf )

According to the Minister for Communications, Energy and Natural Resources, speaking in the Dail in October 2011, there is a planned extension of the first REFIT scheme. This is “designed to support up to 4,000 MW of onshore wind, landfill gas and hydro technologies. The new REFIT scheme for biomass technologies is designed to support a range of technologies, including combined heat and power, CHP, and anaerobic digestion, as well as co-firing of biomass in the peat power plants. Separate state aid applications are being progressed with the European Commission in regard to these schemes. The Commission is finalising its assessments on both applications.” (http://debates.oireachtas.ie/dail/2011/10/19/00041.asp)

Corporate Tax Relief

Corporate equity investments in certain renewable energy projects are eligible for tax relief in the form of deduction from a company’s profits for an investment in new ordinary shares in a qualifying company. Budget 2007 announced that the qualifying period for the scheme of tax relief for corporate investment in certain renewable energy projects was being extended from 31 December 2006 to 31 December 2011.

To qualify for the relief the energy project must be in the solar, wind, hydro or biomass technology categories, and be approved by the Minister for Communications, Marine and Natural Resources. The investment in respect of which relief can be given is capped at the lesser of 50% of all capital expenditure or €9.525 million for a single project.

Investment by a company or group is capped at €12.7 million per annum and unless the shares are held for at least five years by the company the relief will be withdrawn.

(Sustainable Energy Authority of Ireland, ‘Renewable Energy in Ireland, 2010)

http://www.seai.ie/Publications/Statistics_Publications/SEI_Renewable_Energy_2010_Update/RE_in_Ire_2010update.pdf

Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disproportionate use of subsidies, etc.)? Please provide brief details.

No information

Are there any other forms of support foreseen for promoting electricity generation of RES?

A carbon tax was introduced in 2010 which applies to much of the economy that is not covered by the EU Emissions Trading Scheme.

Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

In 2009, the Labour Party published ‘The Energy Revolution’, outlining the potential to create 75,000 jobs in the green economy.

(http://www.labour.ie/download/pdf/energy.pdf)

The document states; “There is real potential for job creation from the cleantech industry and renewable sector. This move to an innovative, low carbon society will have the twin benefits of addressing our over-reliance on fossil fuels and our capacity to meet international climate change targets”.

Figures on projected employment potential are as follows:

  • 30,000 direct construction sector jobs that will lead to additional indirect and induced jobs.
  • 10,700 wind energy jobs, including more than 7,000 in the construction sector.
  • 3,700 new clean energy jobs in Ireland created by the ESB.
  • 300 new clean energy jobs created by Bord na Móna.
  • 100 permanent jobs from the creation of one geothermal plant.
  • 20,000 jobs in ocean energy.
  • 5,000 jobs in biofuels and afforestation.
  • 5,000 jobs in biomass.

In addition, based on European Commission figures, the Sustainable Energy Authority of Ireland

projects that Ireland could have 270,000 new jobs in the renewable energy sector by 2030.

In particular, SEAI projects employment opportunities of up to 70,000 jobs in Ocean energy up

to 2050.

(http://www.seai.ie/News_Events/Press_Releases/Pathways_to_2050_release.pdf)

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

The Government holds limited discussions with the social partners on energy policy and in regard to how this relates to employment. These discussions would have been held on a more quasi institutional basis during the period of social partnership (1987-2009) but are currently held on a bilateral basis, but not on any formal structured basis. Individual companies, in particular those that are state owned (ESB, Bord Gais, Bord Na Mona) regularly hold discussions with their “line” department, namely, the Department of Communication, Energy and Natural Resources. The initiative for discussions can come from either the department, the individual companies or from the Government Minister directly responsible.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)
Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Electricity Supply Board (ESB)

7,783*

2009

Semi state workers

Bord Gais

1,006*

2009

Semi state workers

Endessa

110

2008

Private sector

 

Bord na Mona

2,136*

2009

Semi state workers

NUCLEAR        
       
       
HYDRO

Electricity Supply Board (ESB)

7,783*

2009

Semi state workers

       
       
WIND

Airtricity

500

2011

Private sector

Energia (Viridian)

350

2011

Private sector

Bord Gais (SWS)

1,006*

2009

Semi state workers

BIOMASS

Bord na Mona

2,136*

2009

Semi state workers

       
       
PHOTO-VOLTAIC        
       
       

* Figures from the ‘Report of the Review Group on State Assets and Liabilities’ (2011)

ESB figure for total ESB Group

(http://www.finance.gov.ie/documents/publications/reports/2011/revgrpstatassets.pdf)

2.2 Please provide an overview of the current organisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

ESB Networks Ltd., a ring fenced subsidiary within ESB Group, is the state-owned licensed operator of the electricity distribution system in the Republic of Ireland. ESB Networks Ltd. is responsible for building, operating, maintaining and developing the electricity network and serving all electricity customers in the Republic of Ireland.

The Transmission Asset Owner (TAO) function is an integral part of ESB Networks' organisation. The role of the TAO is to ensure that the Transmission System is developed and maintained in accordance with the requirements set down by EirGrid, which is the Transmission System Operator (TSO).

EirGrid, is the State-owned transmission system operator. It operates the single electricity market. There is a legal agreement in place between EirGrid and ESB Networks ("Infrastructure Agreement") which sets down the terms under which ESB Networks provides infrastructure services to EirGrid.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

ESB Networks (part of wider ESB group)

3,000

2009

Semi state workers

       
       

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

In 2008 a three-way agreement was reached between state-owned ESB, its group of unions and the Spanish private sector electricity utility, Endesa. Some 180 union members in the ESB power stations at Great Island and Tarbert voted to back a severance agreement with ESB in tandem with a collective bargaining agreement negotiated between their unions and Endesa. Endesa agreed to purchase the plants and two other locations for €450m, but the entire purchase arrangement was contingent on the vote going through. Under the agreement, about 110 former ESB staff moved to Endesa on terms and conditions similar to what they enjoyed with ESB. A small number of staff redeployed within ESB.

In September 2011, the Government announced it would be selling a minority stake (up to 30%) in ESB as part of commitments under the EU-IMF programme. However, ESB will not be broken up into its component parts and will still remain in majority state ownership. It is possible that a portion of Bord Gais and of Bord na Mona will also be sold off under the privatisation commitments under the EU-IMF programme.

The Government’s NewERA programme will reform how government manages commercial semi-State companies such as the ESB, Bord Gáis and Bord na Móna. It will also be involved in an advisory capacity in the disposal of State assets. The NewERA company will be responsible for setting up utility and semi-State companies in the area of energy, (as well as water provision, natural resources and telecommunications). It is also envisaged that Bord na Mona will be merged with state forestry company Coillte to form a new bio-energy conglomeration. The New Era policy was directly prompted by the requirements of the EU-IMF programme in two ways: (i) to provide finance to repay Government debt and (ii) to find a way of generating funds for investment in new state-led initiatives, such as improving the supply of and the metering of water.

3. Industrial relations in the electricity sector: Actors

4. Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

Electricity Supply Board (ESB)

IBEC

ESB:

Unite – 2200

ESB Officers Association (ESBOA) – 1700

Technical Engineering and Electrical Union (TEEU) – 1366

Services, Industrial, Professional and Technical Union

(SIPTU) – 257

Union of Construction Allied Trades and Technicians

(UCATT) – 4

Bord Gais:

SIPTU – 600

Unite – 150

TEEU – 50

Bord na Mona:

SIPTU – 1,250

Unite - 600

TEEU – 100

Endesa: No breakdown available

Bord Gais

IBEC

Endesa

IBEC

 

Bord na Mona

IBEC

 
NUCLEAR      
   
   
HYDRO

Electricity Supply Board (ESB)

IBEC

ESB:

Unite – 2200

ESB Officers Association (ESBOA) – 1700

Technical Engineering and Electrical Union (TEEU) – 1366

Services, Industrial, Professional and Technical Union

(SIPTU) – 257

Union of Construction Allied Trades and Technicians

(UCATT) – 4

   
   
WIND

Airtricity

IBEC

No information

Energia (Viridian)

IBEC

   
BIOMASS

Bord na Mona

IBEC

Bord na Mona:

SIPTU – 1,250

Unite - 600

TEEU – 100

   
   
PHOTO-VOLTAIC      
   
   
And in the distributing companies

Distribution GRID

companies

ESB networks

 

Figures for all of ESB:

Unite – 2200

ESBOA – 1700

TEEU – 1366

SIPTU – 257

UCATT - 4

   
   

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

In the fossil fuels subsector which is dominated by semi state companies, levels of trade union representation are high.

In the newer private sector companies in the renewable part of the sector, it is estimated that trade union representation is much lower. (Trade union representation in semi-states in the renewable sub-sector would be high as in the fossil fuel sub-sector)

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

There have been no major reorganisations/splits/mergers of trade unions or employers organizations in the sector.

However, in 2011, one union (the TEEU) withdrew from the ESB Group of Unions, which is a negotiating group made up of unions representing all staff in ESB. (http://esbgou.ie/) The withdrawal of the TEEU from the group followed comments made by the chair of the union group, Brendan Ogle. (See section 4.4)

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

No

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

In 2009 the IBEC-CBI Joint Business Council which links members of the Irish Business and Employers Confederation (IBEC) with the Confederation of British Industry (CBI) held a summit focusing on renewable energy and electricity supply. The Joint Business Council aims to encourage much closer links between the UK’s and Ireland’s electricity markets with a view to longer term integration. It also wants to build on the regions’ growing renewable energy research capacity and believes the exploitation of new technologies related to wave, tidal and wind resources will play a key role in achieving this.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?

Until the collapse of formal national-level social partnership in Ireland, collective bargaining was

conducted in the unionised electricity sector along two lines: (i) in accordance with nationally agreed pay - and other non-pay elements - of national-level agreements and (ii) at the level of the firm, involving local agreements covering specific areas such as bonus-related payments, pension changes, agreements covering new plants, partnership structures, flexible working and agreement on issues such as the use of outside contractors on special once-off projects.

Key collective bargaining differences:

Within the producers would include, for example, a mix of tripartitism (Government, company

and unions) in the ESB on some of the issues referred to above, while in Bord Gais bargaining is conducted on more straightforward bipartite (union/management) lines. However, it should be noted that in recent years, ESB and its trade unions have moved away from tripartism towards bipartism to deal with specific issues like performance pay and pensions.

There are no substantial collective bargaining differences between EirGrid, the commercial-semi

state company which administers the transmission assets, and producers such as ESB, Board Gais and Bord Na Mona, other than of the type referred to in the preceding paragraph.

One major non-union company, Airticity, operates outside of traditional union/management

collective bargaining.

Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

All of the fossil fuel sector companies are characterised by high union membership levels, with the exception of senior management grades. Hence, collective bargaining coverage in production and distribution mirrors the very high levels within the Irish public service of around 80% to 90%. The main renewable energy producer, Airtricity, which produces all of its electricity from wind farms, is a non-union company. (ESB and Bord Na Mona also produce some electricity using renewables, but at a relatively low level)

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

No sectoral level agreements apply in the electricity sector in Ireland.

Pay levels

No information on pay levels in the private sector companies in the renewable sector.

National wage agreement

Prior to the breakup of the national level social partnership system in December 2009 (IE0912019I), bargaining on pay in the sector was at national level.

Bord Gais paid the first phase 3.5% wage increase due under the social partnership national wage agreement the ‘Transitional Agreement’ in 2009. But the second phase of 2.5% was put into the pension scheme, following the collapse of the social partnership agreements.

ESB also paid the first phase wage increase in 2009. But was criticized by members of the Government, other Dail members and IBEC. Speaking at the time, Eamon Devoy of TEEUsaid some Ministers “seem intent on following the pro-employer agenda of driving down pay and conditions as the easiest way out of the crisis… The only sin committed by ESB workers is they accepted a pay increase negotiated through the social partnership last year”.

In May 2011, the Labour Court recommended that Bord na Mona pay the 3.5% outstanding pay increase due under the national wage agreement. The Labour Court described the dispute as a “legacy” from the period before the “effective termination” of the Transitional Agreement in December 2009. The Court said it was satisfied that the claim for the national pay agreement was served in late 2008 and “was in process locally during 2009 and before the Agreement was effectively terminated”.In the Court’s view, “there is no justifiable reason as to why the workers associated with this claim should have been treated less favourably than those in comparable State Enterprises and none was advanced by the Company”.

However, in June 2011, the board of Bord na Mona took a decision not to increase rates of pay at the company. If the company had accepted the recommendation, it would have taken on an additional €2.4 million in extra annual costs and a once-off retrospection bill of €5 million. It would also have been leaving itself open to the public relations damage caused by criticism from economic commentators, for granting a pay increase for workers in a state-owned business at a time of fiscal austerity.

Company cost saving agreements

Talks between unions and ESB, on a cost saving programme were ongoing in 2011. A range of pay and conditions were to be examined across the organisation, including the prospect of a voluntary severance programme of up to 1,000 job cuts over a number of years, from a workforce of about 7,800.

Bord Gais was also engaged with unions in talks on cost saving in 2011. It is likely that voluntary redundancies and early retirement will form a part of the 10% reduction in payroll sought by Bord Gais management. It is understood that a broad target of over 60 redundancies is being sought.

4.3. Cooperation between the social partners and government

Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.

No

Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?

No

Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?

Until July 2011, there had been an ongoing dispute between the group of unions in the state’s largest producer, ESB and the Government over the policy of successive Governments in relation to the ownership of the national transmission system. (Prior to liberalisation, state owned ESB had been Ireland’s only national-level producer and distributor of electricity to all parts of the country) The previous Fianna Fail-Green Party coalition Government (prior to the general election of February, 2001) and the current coalition (Fine Gael-Labour) had similar policies in regard to the structure of ESB and the ownership of the transmission assets. This envisaged the transfer of the ownership of the assets to the separate semi-state company, EirGrid, which has been administering the system for several years in accordance with EU regulations. It is important to note, however, that the ESB continued to retain actual ownership of the assets. The unions strong opposed any policy that would alter the status quo in this regard and threatened industrial action should a transfer of ownership occur.

ESB management was constrained from commenting on the issue, as the company’s

shareholder is, in effect, the Irish Government. In Late July, the new Minister for Energy and Natural Resources, Pat Rabbitte secured Government agreement at Cabinet level for a radical change in Government policy. In effect, the Government reversed its policy, which means that the status quo will be unchanged: ESB will continue to own the assets and EirGrid will administer them. In making this decision, the Minister cited a consultant’s report that had been carried out for the previous administration and which had suggested that the ESB seek a formal derogation from the terms of the relevant EU directive. The Minister said that a process of certification under Article 9 (9) of the EU Directive would seek ‘to demonstrate the compliance with the Directive of the existing arrangements for electricity transmission in Ireland. The certification process, which will take a number of months, is a matter for the Commission for Energy Regulation and the European Commission’.

The level of social partner involvement in this major development has been mixed. The main

employers’ body, IBEC, did not get directly involved, perhaps because its member companies in this case adopted different positions. The ICTU, however, fully endorsed the position adopted by the ESB trade unions, either through direct representations to Government during the (pre-2009) social partnership era, or through bipartite channels since that time. In addition, the trade unions, with their links to the minority Labour Party, also lobbied behind-the-scenes for the change in policy.

It should be pointed out, that this significant policy change is unlikely to have any immediate

implications for energy policy, but the potential longer term effects must be assessed in conjunction with the new Government’s ‘NewEra’ plans.

Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

No

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

There has been limited comment by the main employer and trade union bodies on pay and conditions within the sector since 2008. However, there have been two notable incidents which are of interest in the context of the economic downturn, and which demonstrate the pressures which both employers and unions within the sector can be subject to in the adverse climate of recent years.

1. In January 2009, IBEC expressed concern that ESB had paid the 3.5% wage rise then due under the social partnership pact known as the Transitional Agreement (TA). IBEC had called for a widespread deferral of all pay rises that had been negotiated under the national-level agreement in September 2008. (IBEC later formally pulled out of the TA) The then Director of Policy at IBEC, Danny McCoy (who is now Director General) agreed that the payroll part of the company’s overall operation did not make a significant impact on the price of electricity, but he criticised the symbolism inherent in the payment of the increase at a time when economic recession was causing increasing alarm. However, the then (and now retired) Director General, Turlough O’Sullivan, defended the ESB’s decision to make the pay increase. It should be noted that ESB is a member of IBEC, and pays a substantial annual membership fee based on its total employee number of over 6,000. Since that time, ESB has not applied any further basic wage increases, and IBEC has made no further comment on wages in the state company. At the time of Mr McCoy’s criticism, the General Secretary of the Irish Congress of Trade Unions, David Begg, welcomed application of the pay rise.

2. Prior to an engagement between ESB management and trade unions (September to November 2011) on cost reduction, a controversy erupted within the ESB group of unions due to reported comments made by the chair of the union group, Brendan Ogle, at an internal conference organised by the militant republican socialist group, Éirígí, in May 2011. Mr Ogle’s address was recorded and later appeared on YouTube. Mr Ogle told the independent weekly, Industrial Relations News (IRN) that he is not a member of Eirigi, nor was he aware that the material would be made public. What he said attracted controversy for two main reasons. Firstly, Mr Ogle commented that his own members were “spoilt” and secondly, they had got used to "gravy" being poured from above’, a reference to above average pay and conditions secured by ESB workers over many years. His comments were criticised by a number of other trade union officials and led to one union, the Technical Engineering and Electrical Union (TEEU) formally resigning from the ESB group of unions’ structure. IRN has noted that Mr Ogle “has been seen as an ‘anti-establishment’ figure since the mid-1990s”. The controversy also led to critical media commentary in relation to general wage levels within ESB. It strongly suggested that union leaders within ESB are aware that their members are in receipt of higher than average pay and conditions compared to large swaths of industry, both public and private. It is important to note, however, that the controversy did not upset an agreed talk’s process between the unions and company management on securing an agreement that is expected to lead to a labour cost saving of some 20%, which could include 1,000 voluntary redundancies.

5. Commentary

Since the onset of EU-driven competition, Ireland’s electricity sector has witnessed the growth of a range of producers and distributors, such as Bord Gáis Energy and Airtricity, who in recent years have engaged in sometimes aggressive marketing campaigns based on providing cheaper electricity for customers.  These campaigns were all launched before price restrictions, imposed by the Commission for Energy Regulation, were lifted from the largest state utility, ESB. In April 2011, the ESB announced reduced rates of up to 17 per cent to enable it to compete.  However, many of the earlier price reductions, including the ESB’s, were reversed in the Autumn of 2011 due to rising oil prices, in particular.  Meanwhile, the rate of customer disconnections was increasing due to the economic crisis.  In this context, companies in the sector came under increasing pressure to negotiate cost reductions, which might assist the individual companies maintain viability and perhaps, assist in reducing electricity prices. However, labour costs are not considered to be a significant element in overall electricity costs. The main negotiations currently underway include those in Bord Gais and in the formerly dominant market player, ESB, which is negotiating an agreed 20% reduction in labour costs on a bipartite basis with its trade unions.

References

Brian Sheehan and Roisin Farrelly, IRN Publishing