'Irish Water was right to offer bonus to staff to increase productivity'
An ex-boss of Bord Gais has insisted Irish Water was right to offer bonuses to its staff as he believes it is the best way to increase productivity.
John Mullins, who ran the semi-state for five years from 2007, said the controversial performance-related payments scheme agreed with employees made sound business sense.
The scheme, which the Government signed off on in 2012, was designed to reward high-performing workers, and also reduce the utility's pay bill by €34m over a five-year period.
It involved staff being paid between 2.75pc and 19pc of salary, if specified targets were achieved.
However, when this model of payment was suspended, the group of unions at the company referred the matter to the Labour Relations Commission (LRC).
Now the LRC has ruled against the utility - and staff are in line for a pay rise of up to 3pc per year, backdated to January last year.
Some 29 employees on a salary of more than €100,000 are set to benefit most.
However, Mr Mullins told the Herald that he believes this type of incentivisation pay model is the best way to increase staff productivity.
"The point of the deal was to ensure that people stopped getting automatic pay increases - and to pay them in another way - while also ensuring they deserved any relevant remuneration," he said.
Mr Mullins also insisted the Government never objected to the bonus payments scheme during negotiations.
"But this deal was done in 2013, when I had already started with another company," he added. "You don't normally go to the Government - it is up to the company to determine rates of pay.
"The point of a bonus, or reward - or whatever you want to call it - is to make sure that if people are receiving it, they have worked for it."
He added: "The model was designed for Bord Gais to save on costs. We wanted to get away from automatic increments for good performers and bad performers alike.
"But this model's application to Irish Water was a 2013 decision."
Fianna Fail leader Micheal Martin slammed the Government for "enabling a bonus culture at a utility that is squandering taxpayers' money".