Bord na Móna managing director John Hourican yesterday demanded that the Government honour a pledge to give 5 per cent of the company to an employee share trust.
The Government agreed in principle several years ago to give its 2,000 workers 5 per cent of the company, with an opportunity to acquire a further 9.9 per cent, in return for restructuring and changes in work practices.
However, Mr Hourican explained yesterday that the Government has since become bogged down in a row with the trade unions over the exact nature of the deal.
The Government wants to give the shares to the workers individually because it fears that an employee trust could become a powerful voting block similar to the situation that has developed at Eircom, where workers now have almost 21 per cent of the company.
But unions want the shares to be given to an employee share option trust (Esot), a tax-efficient mechanism for disposing of the stake to workers.
Mr Hourican told The Irish Times yesterday that the issue was essentially between the Government and the unions.
"We want the Government to grant the shares that they have pledged to the Bord na Móna employees," he said.
"Ideally a compromise should be reached between the trade unions and the Government," he added. "But if push comes to shove, they should grant the shares to an Esot."
Bord na Móna's accounts for the year to the end of March show that the company's pension fund had a deficit at that point of €34.75 million.Two years earlier it had a shortfall of €60 million.
The problem stems from difficulties in the capital markets and poor bond yields. Mr Hourican warned that new accounting rules mean it will no longer be possible for the company to maintain a defined-benefit pension for its workers.
The rules, to apply to financial reports from April 1st this year, will force companies to report pension fund gains and losses in their profit and loss accounts.
"That is causing havoc," Mr Hourican said.
"It will be unsustainable to continue to operate a defined-benefit scheme," he added. "Our position is that we will honour the commitments we have already made to our existing workforce, but for new workers we want to operate a defined-contribution scheme.
"I regard pensions as deferred pay, very much a matter between the company and the individual, and we should ensure that sufficient investment is made by both parties."
The company has raised this at Government level, as a decision will ultimately have to be made by the Minister for Finance.
Bord na Móna's profit and loss account for the year to March 30th, 2005 shows that profits before tax grew by 1.5 per cent to €17.835 million from €17.5 million the previous year.
Turnover in 2005 rose 2 per cent to €257.8 million from €252.8 million last year. Increased sales and distribution costs left operating profit trailing slightly at €17.8 million compared with €18.4 million in 2004. The company had a redundancy and reorganisation bill of €1.6 million compared with €11 million the previous year.
