Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Acting Chairman.

I thank the Deputies for raising this important matter. Bus Éireann is in a very difficult financial position. It has incurred accumulated losses of €27 million in the past five years, which is unsustainable and places the viability of the company at risk. In June 2012 the company announced its business recovery plan, with savings of €20 million, to bring the company back to profitability by 2013. Approximately €9 million in savings were to come from terms and conditions, with €11 million to come from operational savings. Although many of the operational savings have been delivered, no progress has been made on savings from terms and conditions, despite the involvement of the Labour Relations Commission and the Labour Court in the process. Without the necessary savings from changes to terms and conditions, as well as ongoing inter-city service changes, Bus Éireann is facing annual losses of more than €11 million, which simply are not sustainable.

According to the Labour Court and the trade unions' own independent financial assessors, Bus Éireann is in a precarious financial situation, with the very viability of the company now under threat. In its recommendation of 8 February last, the Labour Court concluded that significant reductions in the company's cost base, including payroll costs, were essential to ensure its future and to protect employment within the company. Under the company's business recovery plan and the Labour Court recommendation, there would be no reductions to basic pay or employment levels. Moreover, there have been no reductions to basic pay to date, despite the reductions applied to so many others in the country. It is important to emphasise that these issues have been through the full industrial relations machinery of the State, culminating in a Labour Court recommendation that recognised that the savings must be made to protect the jobs of staff. Before implementing the recommendation, the company engaged further with the unions through the Labour Relations Commission to ascertain whether any alternative measures could be identified that would deliver the same savings. This process did not identify any viable alternatives and now, 11 months after negotiations started and three months after the Labour Court recommendation was handed down, the company simply cannot postpone the implementation any longer. I am assured it will engage with the unions at any time and in any place to discuss alternative approaches, but unless these are agreed, the implementation date of 12 May must proceed.

The future of the company must be secured for the public that depends on its services and for the benefit of its employees. Bus Éireann runs commercial Expressway services that are currently loss-making and legally, the State cannot subvent these services. The viability of these services can only be secured if these savings are achieved now. I greatly hope the management and the unions will use the period between now and 12 May to engage in further intensive dialogues, which will ensure the necessary savings are made and that the provision of bus services for the public and the jobs of the staff are preserved.

It is important to explain how Bus Éireann works to those who may not know. Essentially, it operates three sets of services. It operates schools services on a cost-recovery basis. It cannot make a profit on those services because, if it did, it would be obliged to put such services out to tender. The company operates a second set of services, namely, public service obligation, PSO, services. While these are subsidised by my Department, Bus Éireann cannot use the profits made from the PSO to cross-subsidise other services because that would be in breach of competition law. Finally, it operates commercial services that cannot be subsidised or subvented due to state aid rules. Consequently, this is not an issue of subvention and anyone who thinks I can find €1 million or €2 million from my budget or can re-profile spending and provide additional subvention to Bus Éireann to solve this problem is completely wrong, does not understand the facts and is misleading people. I cannot subvent commercial services that are now loss-making to the extent that they cannot be continued.

I also wish to conclude with the important point that there may be some Members of this House, particularly on the benches opposite, who think this Bus Éireann dispute is somehow emblematic of a bigger battle between unions and the Government over the Croke Park agreement or between management and workers or that it is some sort of ideological or philosophical debate about austerity. It is not. This is about a company that operates commercial services in competition with commercial operators and which is losing money. Its losses now are unsustainable, the jobs now are at risk, and the Labour Court says so. I wish to protect jobs, to save this publicly owned company and to protect services. The only way in which this can be done is for the Labour Court recommendation to be respected. I appeal to the Members opposite in this regard. There are bus drivers and Bus Éireann staff who have families to feed and mortgages to pay. There are passengers all over the country who need to get to work or to school. Let us not see bus drivers or Bus Éireann staff being out of pocket or anyone being inconvenienced, because the only way in which this can end is through the Labour Court recommendation being respected.

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