Irish Rail passengers are facing severe disruption to services in the coming weeks after the company said it was implementing a cost-savings plan without the agreement of two of its largest unions.
The plan will see temporary pay cuts ranging from 1.7% for staff earning up to €56,000, up to 6.1% for those earning more than €100,000. The company said it will start imposing the measures on August 24, which were recommended by the Labour Court to apply for 28 months.
Irish Rail says it has suffered a reduction in annual income of over €108m since the onset of the economic crisis.
Despite reducing annual operating costs by €73m in the same period, it has recorded losses annually in successive years, with a loss of €16.4m in 2013.
“Continued losses are unsustainable, and the company requires payroll measures, further savings in non-payroll areas, business and revenue growth, and sustainable funding of services and network to address the financial situation,” it said.
While three unions at the travel company had accepted the court’s recommendation, the two biggest unions Siptu and the National Bus and Rail Union, have rejected it.
NBRU has said it will now ballot its members up to strike action while Siptu said it would implement industrial action if the company pressed ahead with implementation.
Irish Rail chief executive David Franks said it had always been his wish to secure these savings by agreement.
“I very much regret we have been unable to achieve this with all trade unions,” he said. “Having reviewed the situation, however, I have come to the conclusion that we must introduce these measures to protect the company, our services, and your security of employment.
“The timescale (for implementation) will allow all colleagues the opportunity to consider our financial situation and, I hope, understand why these measures are unavoidable,” he said.
The NBRU said “such a provocative move” as implementation of the cost-savings plan “can only be met with resistance, resistance which will inevitably manifest into a situation where both the company and its staff will be brought into disrepute”.
“We will now move to immediately ballot our members for industrial action up to and including all-out strike in the face of this unilateral attack on our members’ terms and conditions,” said NBRU general secretary Dermot O’Leary.
Siptu organiser, Paul Cullen, said: “Siptu informed the management of Irish Rail that our members will engage in industrial action if the company implements planned pay cuts next month.”
Transport Minister Paschal Donohoe said CIÉ is in a precarious financial situation and is dependent on continued bank funding.
“Cost-saving measures have already been agreed in Bus Éireann and Dublin Bus and savings also need to be made in Irish Rail,” he said. “Irish Rail has incurred accumulated losses of over €147m in the past six years, a position which is unsustainable.
“There have already been substantial fare increases and the payroll savings must happen in the context of the very difficult financial challenges that the company faces,” said the minister.
“It is quite clear to me that it is in everyone’s interest that these savings are achieved,” he said.
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