Bus Éireann management and unions will commence talks about pay rises next month - despite the fact that the company is still in a fragile financial situation.

Last year, the company endured a three-week strike over threatened cost reductions amid fears that it was close to insolvency - partly due to increasing competition from private bus operators.

A Labour Court recommendation, subsequently accepted by unions, introduced significant cost reduction measures including 240 redundancies, more efficient rosters and a composite pay rate.

One year on, unions argue that having delivered savings that have permitted the company to expand services and announce planned recruitment of 200 new staff, the workforce should be entitled to a pay rise.

Following a meeting between management and unions today, a Bus Éireann spokesperson said management had acknowledged that a review of pay levels across all grades of staff must now be considered.

She said all parties accepted that the Labour Court recommendation provides a mechanism to review aspects of pay and conditions at the company.

She said Bus Éireann acknowledged the major contribution made by staff in the ongoing transformation of the company's business, but cautioned that the company faces ongoing financial challenges within an ever changing public transport landscape.

On 10 May, management wrote to unions saying it was difficult to see how it could afford a pay claim at this time, given a large accumulated deficit, the loss of certain routes to private operators, a "considerable" fall in revenue on certain routes, and a sharp increase in the hiring of private buses due to unprecedented absenteeism.

It is understood the company will now review existing pay rates for all grades on the basis outlined in the Labour Court recommendation - but will reserve the right to place items on the agenda on a grade by grade basis.  

This is likely to involve productivity trade-offs in return for any pay rises.

The talks will get underway on 17 June, but no completion date has been set.

Welcoming the talks process, the National Bus and Rail Union said the recent announcements on service expansion and driver recruitment were a clear indication that Bus Éireann was once again open for business.

General Secretary Dermot O'Leary said management's commitment to dialogue on pay would appear to support the union's contention that their members had significantly contributed to the turnaround at Bus Éireann.

He added that the least that could be expected in return was a pay rise commensurate with others in the public transport sector, with recent increases of 3.75% at Dublin Bus, and 2.5% at Iarnród Éireann.

SIPTU Sector Organiser John Murphy urged the National Transport Authority to provide adequate funding to allow Bus Éireann to maintain services and increase basic pay in line with industry norms. 

He described today's meeting with management as constructive, but cautioned that the problem of severe underfunding at Bus Éireann remained. 

He said SIPTU had no wish to engage in a lengthy process regarding members' pay, which could ultimately prove unsuccessful, and result in further disruption to services. 

He said that to avoid that prospect, the National Transport Authority would have to step up to the mark and provide adequate funding, recognising the sacrifices made by staff to secure the continued viability of the company.