VHI: commitment by Cowen

VHI employees stand to receive shares of up to €90,000 in the event of the state health insurer being sold. This follows a commitment given over 10 years ago by then health minister Brian Cowen, who last week announced VHI was for sale.

Back in 1999 when the sale of the insurer was first mooted, Cowen promised staff they would be given a 14.9% share of the privatised company. This was in line with similar share offers to staff at state companies being sold off, including Eircom; the ICC bank, which was sold to Bank of Scotland; and more recently Aer Lingus.

"We would expect that commitment to be honoured in full," said Colm Quinlan of the Unite trade union, which represents 800 of the 900 staff in the VHI. Based on an estimated sale price of €500m, a 14.9% share would be worth around €75m for the 800 unionised staff in the VHI – over €90,000 each.

But Quinlan pointed out that all the shares would not be given for nothing. While some will be free, staff will have to concede major productivity concessions to 'pay' in return for most of the shares and will probably have to provide some cash as well. In the Eircom and ICC sell offs, staff were given 5% of the company for free or in recognition of their work with the firm. The remaining 9.9% of shares were acquired through a combination of working extra hours for nothing, increasing pension payments, passing up on pay increases or taking out a collective loan to buy the shares.

Quinlan said the union "reserves its position" on the three options now opened up to the VHI – to keep it in public ownership, sell it off or turn it into a mutual company which would be owned by its 1.5 million policy holders. He added the union would not necessarily oppose privatisation if it meant that would ensure everybody paid the same for health insurance regardless of age.

He said he was disappointed health minister Mary Harney had not spoken to the union before the sale was announced, particularly given the work staff had put in over the last number of years. He said he would be consulting with VHI staff first before seeking a meeting with the minister and VHI management on the possible sale.