Iarnród Éireann plans pay cuts despite union protests

Friday 18 July 2014 15.57
Unions say they will take industrial action if the company implements the cuts without agreement
Unions say they will take industrial action if the company implements the cuts without agreement

Rail passengers could face disruption in the coming weeks after Iarnród Éireann announced it is pressing ahead with pay cuts at the State rail company.

This is despite the opposition of the two largest unions at the company, SIPTU and the National Bus and Rail Union.

In a statement, the company said it had advised unions that it will implement measures to achieve payroll savings from Sunday 24 August.

Chief Executive David Franks told staff that he regretted that savings could not be secured by agreement.

He said that the company must introduce the measures to protect the company’s services and their security of employment.

Unions have already warned that they will take industrial action if the company implements the cuts without agreement.

For almost two years, management and unions have been locked in negotiations.

The negotiations are aimed at reducing the cost base amid warnings that the viability of the company was in serious jeopardy, and that it could face insolvency.

The total savings targeted over the term of the agreement are €16.9m.

The dispute has already been addressed at the Labour Relations Commission, the Labour Court and in further negotiations - but four different sets of proposals have been rejected.

While a number of unions have accepted the proposed cuts, the two largest unions, SIPTU and the NBRU, have repeatedly rejected them.

Last week, SIPTU rejected the latest proposals emerging from direct talks between the two sides by 53% to 47%.

SIPTU members have voted to take industrial action, but stopped short of backing indefinite strike action.

The NBRU has not yet balloted but warned it could do so within a week if the company moves to implement changes without agreement.

The company says it will implement pay cuts ranging from 1.7% to 6.1%, as well as a number of other productivity measures.

However, the latest cuts package is significantly less severe than those proposed last year.

Originally the temporary pay cuts would have lasted for 45 months - but will now only last for 25 months.

Sources say that workers are reluctant to concede pay cuts at a time when they are hearing that the economy is improving and are seeing pay rises in other companies.

However, the company says the savings are critical to the future of the company, and notes that there has already been a delay of almost two years in implementing them, further worsening its financial position.

Minister for Transport Paschal Donohue has urged all parties to work together to put Iarnród Éireann on the strongest possible footing for the future.

Mr Donohue said while he understands today's announcement will cause worry to employees he said the sole purpose is to ensure the company's viability.

Mr Donohue added he is hopeful disruption can be avoided.

In today's statement, Iarnród Éireann says it has suffered a reduction in annual income of over €108m since the onset of the economic crisis.

The cut includes €72.3m in PSO payments, a reduction of 38%, and €35.2m.

Despite reducing annual operating costs by €73m in the same period, the company has recorded losses annually in successive years, with a loss of €16.4m in 2013.