Irish Business News, June 15, 1999

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Injunction bid against TE withdrawn

MORE than 50 employees of Golden Pages Limited, which is 63% owned by Telecom Eireann (TE), yesterday withdrew a High Court application for an injunction against TE in connection with the share flotation of the State communications company.
But the workers are still proceeding with their claim for damages against Telecom although this could take a considerable time to be heard.
The Golden Pages workers intended seeking a Court order restraining TE from proceeding with its share flotation until such time as their entitlement to an allocation of shares with the TE Employee Share Ownership Trust was established.
They were also seeking a Court declaration that they had a legitimate expectation to an entitlement to Telecom shares.
Golden Pages is 63% owned by Telecom and 37% by VNU, a Dutch publishing company with registered offices in Holland.
Telecom Eireann, in refusing to include Golden Pages employees in its shares offer to employees, stated that only subsidiaries which were 100% owned by the company and whose employees were covered by the transformation of the company deal could be considered as eligible.
When the case came to hearing yesterday, Mr. Joseph Finegan SC, for the Golden Pages workers said his clients who had been seeking substantial relief had been overtaken by events and therefore would not be proceeding with their application for an injunction.
Over the weekend, he said, more than a million share prospectuses had been issued.
He told Mr Justice Philip O'Sullivan that the necessary undertaking as to damages which his clients would be obliged to give would probably exceed their ability to pay. He was therefore not proceeding with his injunction application although they would be pursuing their claim for damages in the full hearing.
Mr Dermot Gleeson SC, for Telecom, said in fairness it should be pointed out that Telecom on Tuesday had indicated that it would be proceeding with the announcement of the share flotation at the weekend.
In their action against both Telecom and Golden Pages, the workers will be seeking damages for misrepresentation, negligence and general damages with a further claim against Golden Pages of damages for breach of contract.

Small firms poor on pensions

by Kyran Fitzgerald
A MERE 10% of people working in small businesses have been provided with pensions by their employers, according to a survey carried out by Bank of Ireland's life and pensions arm, Lifetime.
While the employers have taken care to provide for their own retirement, many still prefer to invest in bricks and mortar, taking the view that pension plans offer poor value for money. The research findings highlight the view prevalent among employers that it is hardly worthwhile setting up pension arrangements given the high levels of staff turnover.
In the case of younger employees, it was felt it would be difficult, if not impossible to persuade people usually on low salaries to accept yet another deduction on top of those already being levied. There was also some concern that employees would expect employers to contribute towards a company pension scheme, this at a time when employees are securing higher levels of up-front remuneration.
Attitudes to pension arrangements vary depending on the sector in which a company operates. Retailers, where staff are continually moving on, are much less likely to even consider pension arrangements for employees than manufacturers.
By and large what arrangements are actually put in place are designed for key employees.
A considerable degree of distrust of the pension industry was revealed in the survey, perhaps not surprising in the light of recent revelations about churning and the traditional practice of charging heavy, up-front commission.
Without exception, employers in the survey were critical of the amount of jargon used by the pensions industry. The survey highlighted old-fashioned attitudes on the part of many employers.
"A number expressed the view that female employees would be looked after by their husbands, or partners," survey co-ordinator Elaine Sloane said.
Some bosses also expressed misgivings about the quality of their employees, with some saying staff were less honest than in the past.
Many employers preferred to invest in property because it was tangible while they also had control over the investment process which was not the case with pension contributions. They were much less aware of the negative implications of property ownership, including the prospect of paying capital gains tax.
Lifetime MD Roy Keenan said: "There is still a great deal of work to be done to help business people provide proper pensions for themselves. There has been extensive debate about reforms in the industry but much of it has washed over the ordinary consumer."

Phone sell-off changes sought

by Colette Keane
CHANGES will have to be made to the millions of Telecom Eireann flotation prospectuses in order to take account of the pending High Court action, according to Peter McDonnell, solicitor for the Golden Pages staff.
Mr McDonnell said yesterday that these changes will have to take account of the High Court action and of the potential action by the other five Telecom Eireann related companies - Cablelink, Eirpage, Broadcom Eireann, Accuris, Apion, and Nua some of whom, he claimed, have approached him to represent them in the same issue.
"We believe that Minister for Public Enterprise Mary O'Rourke is guilty of arbitrary discrimination against, and is trampling on the rights of, some of the workers who made Telecom Eireann the company it is today," Mr McDonnell said.
Golden Pages is 63% owned by Telecom Eireann and 163 of its staff are claiming entitlement to the same share options as Telecom Eireann employees.
They are now seeking an injunction to prevent the company from proceeding with the flotation. The injunction, if granted, will halt the flotation.
He said his clients had withdrawn their application for an injunction yesterday because the Telecom prospectus was issued over the weekend.
Under Stock Exchange rules, Telecom will have to re-draft their prospectus to make provision for the impending High Court action, together with other possible claims, he said.
"There is no reason why Golden Pages staff cannot be included as 8,000 Telecom Eireann pensioners were brought into the net after the ESOP was agreed," Mr McDonnell said.
He added that more than 20,000 people are included in the ESOP, including part-time staff, former employees and staff of Telecom's nine subsidiary companies.