Vol. 504 No. 5
107 Mr. Neville asked the Minister for Public Enterprise if those who took voluntary severance and who will receive a pension at the age of 60 will be entitled to the same concessions regarding the availability of shares to Telecom Éireann employees and pensioners as those who are pensioners. [12393/99]
I assume that the Deputy is referring to the Telecom Éireann employee share ownership plan, ESOP and the forthcoming initial public offering, IPO, of shares in Telecom Eireann. Under the ESOP employees will pay £190 million for a 9.9 per cent shareholding in the company with an additional 5 per cent shareholding acquired for company transformation.
The fundamental purpose of employee shareholding schemes is to incentivise and motivate employees through giving them a stakeholding in their company leading to improved productivity and increased employee loyalty and interest in their company's commercial success.
The detailed criteria governing eligibility under the ESOP, including the qualifying service requirement, were matters for the union coalition, representing employees, and the company. In simple terms, these criteria provide that staff who had at least one year's continuous service with the company on 1 November 1998 are eligible to participate in the ESOP. Employees in Telecom Éireann are receiving shares through the ESOP in return for acceptance of substantial changes in work practices, including, inter alia, significant reductions in overtime and subsistence, and the making of pension contributions of 5.3 per cent of salary and the foregoing of the companywide bonus schemes.
As eligibility for participation in the ESOP requires that all participants make these adjustments or contributions, people who have left the company cannot be participants in the ESOP since they are not in a position to make such adjustments or contributions.
With regard to the forthcoming IPO, the current situation is that the overall structure of the retail offer is under consideration by the Government and its advisers. Within this, the Government is considering the question of special purchase rights for Telecom Éireann pensioners. I anticipate that a decision in this regard will be announced closer to the time of the flotation.
