Are we facing a winter of discontent, which could leave the country without light or power? We may well be – should ESB workers decide to escalate their pensions dispute with ESB management. Next month the State is set to emerge from the bailout programme, and the Government is seeking to reassure financial markets. A power strike now would damage economic recovery and weaken investor confidence at a critical moment. This dispute centres on a disagreement on how to measure the huge pension deficit in the company's defined benefit (final salary) scheme. In 2009, it reported a €2 billion deficit. A year later, the ESB changed its accounting treatment of the scheme, as a defined contribution (DC) rather than a defined benefit (DB) scheme.

The ESB, in redesignating the scheme for accounting purposes, said it was following the current accounting standard. This change in treatment meant the company would not have to place a huge pension liability on its balance sheet. And this has made it easier for the ESB to borrow at competitive rates.

The ESB claims its actions have been much misunderstood: that the change in accounting treatment of the scheme does not change the nature of the scheme itself. It remains a DB scheme, one in which the entitlements of members and the company’s legal obligations to the scheme are the same as before. And it also remains registered as a DB scheme with the Pensions Board, with which it has agreed a plan to achieve the minimum funding standard – the minimum assets a scheme must hold – by 2018.

The ESB unions have not been convinced by these assurances from management, and claim that a pension fund with a €1.7 billion shortfall, if the current scheme were to be wound up, would leave workers with 4 per cent of their benefit. The dispute reflects both a high degree of mutual distrust between the parties, and a clear misunderstanding on the issue, which is best resolved by more “jaw-jaw”, and less threat of “war-war” in the form of a potentially bitter dispute.