Ervia has confirmed today that it will accept a proposal in relation to pay from the Labour Relations Commission following its engagement in dispute resolution procedures with its Group of Unions in recent months. The Group of Unions will now be balloting this proposal with their members.
This dispute arose following a decision by Ervia in 2014 not to pay any of the “at-risk” element of pay, known as Performance Related Awards (PRA’s), to certain staff in respect of the years 2013 and 2014. The Ervia Group of Unions considered this decision to be a breach of the agreement with the company in relation to pay and referred the matter to the LRC. Ervia, in accordance with agreed dispute resolution procedures, engaged in the recently concluded talks.
The proposal now put forward by the LRC is that:
1. The pay model introduced to Ervia in 2013 should be implemented in full immediately across the Ervia group, with modified proposals for Irish Water as outlined below.
2. The pay model should apply in Irish Water from 2017. Before then, an interim arrangement will apply where Irish Water employees revert to an increment-based model for a period from January 2014 to the end of 2016. Irish Water employees will receive non-pensionable annual increments ranging from 1.5 to 3% effective from January of each year following their appointments.
3. The PRA element of the Ervia pay model will therefore not apply to staff in Irish Water for this interim period to the end of 2016 and the increments which are applied to Irish Water staff during the interim period will be withdrawn when these staff revert to the Ervia pay model, with effect from 1st January 2017.
In coming to this proposal, the LRC and the Group of Unions noted the findings of the review of the Ervia pay model, commissioned by the Board of Ervia. This report, conducted by international experts in the field, Aon Hewitt Consulting / &Ampersand, has in its conclusions that;
• The Ervia pay model is typical of that in most private sector companies in Ireland
• Commercial semi-states are moving towards this type of a model, but Ervia has adopted it more completely than others
• This model does not enable or encourage high levels of pay
• Individual pay levels at Ervia are lower than typical market levels
• There is no evidence of a “richly rewarded bonus culture” in Ervia
• The link between pay and performance is appropriate to encourage a high performance culture
• There should be no dual approach in Ervia, with Irish Water staff being treated differently to others
The full report is available here.
Ervia has accepted the LRC proposal. The Group of Unions are to ballot their members.
Note to Editors
A new pay structure was agreed and implemented in Ervia in 2013, which involved moving from a traditional increment based pay model that rewarded length of service, to a model that rewarded performance.
The key features of the Ervia Pay Model are as follows:
– Overall payroll costs are reduced by €34m in 5 years
– It is based on robust performance management
– Pay progression is linked directly and unequivocally to performance
– It is externally benchmarked and aligned to market pay rates
– The pay model allows no automatic pay progression
– It encourages a high performance culture
– Non-pensionable ‘Pay at risk’ is a key part of the pay model
– It has enabled Ervia to attract and retain specialised skilled staff in a competitive market
– It was introduced in 2013 following consultation, negotiation and agreement through LRC, along with a pay freeze until 2016
The Ervia pay model was applied to Irish Water when it was established within the Ervia Group in 2013.