Thursday, 2 May 2013
Topical Issue Debate
We know from media reports and confirmation from the Department of Transport, Tourism and Sport, that industrial action is pending on behalf of workers in Bus Éireann. This choice of action has arisen after 11 long months of deliberations, negotiations and protracted discussions between management, the Labour Relations Court and workers.
I am concerned about the pending industrial action and the effect it will have on local communities. Does the Minister for Transport think there is any flexibility within his budget to support Bus Éireann in providing what the workers are seeking?
Public transport is vital to the economy and society in general. These talks have been going on for quite a while and, on 10 April, it seemed that progress was being made. I have been informed that they were parking the most contentious issues and were trying to deal with some of the other ones. The unions thought there was progress when they went in the other day. However, after seven minutes, the management gave them an ultimatum that they were going to introduce cuts on 12 May.
The Minister should now intervene. Workers should not have to subsidise the cut in Bus Éireann's subvention. I would like to hear the Minister's position on this matter. Does he agree with the management's position? The NBRU already has a strike mandate if the management introduces cuts. The union does not have to re-ballot its membership. I think it would be quite prepared to take that action if the management brings in those cuts on 12 May.
These workers earn €33,000 per year in basic pay, which is a third of what TDs earn. I do not take that money, but it is €92,000. The workers should not bear austerity cuts; they are providing a vital service. I would like to know if the Minister agrees with the management.
Everybody is shocked that Bus Éireann, with the apparent approval of the Minister, intends unilaterally to impose severe cuts in the pay and conditions of Bus Éireann workers from Sunday, 12 May. According to the latest figures, the company has carried out 36.5 million customer journeys. I am aware of Labour Court recommendation 20463, which recommended significant cuts for drivers, maintenance staff, inspectors and clerical executive workers. After five years of deep recession and major cost reductions in 2009, which impacted on pay and conditions for many drivers and other workers in Bus Éireann, the current threat is the last straw.
On modest core pay, the Labour Court recommended that the first two hours of overtime be cut from time and a half to time and a quarter. In addition, Sunday overtime is being cut from double time to time and a half, while public holidays are down to time and a quarter. These workers work unsocial hours and support the community when the bulk of the population is not working. Shift pay and annual leave is also being severely cut.
Those type of cuts, which are replicated for drivers and other grades, will be devastating for workers and their families. One driver with children at college told me yesterday that he will lose at least €3,000 a year. With property tax, rising health insurance, mortgages and other costs, workers feel they just cannot take any more. It is therefore understandable that the NBRU and SIPTU are balloting staff on whether to take action from the end of next week.
Many efficiencies have been brought about in the CIE companies. For example, we had the Deloitte review in 2008-09, along with retrenchments. In recent years, however the Minister has consistently cut the public service obligation subvention. According to the company's annual report for 2011, it looks like the subvention is down to about 15%. This is the lowest subvention of any major national public bus company in Europe.
The next few weeks constitute a particularly bad time for any kind of industrial action, given that the school bus service may well be involved with 114,000 school-children facing exams. The Minister should take action. We need an alternative strategy which must involve further national support for the company and an end to attempts to scapegoat Bus Éireann workers for the current difficulties. We also need a much more dynamic and innovative management team, which is a prerequisite for change.
Today we learned that Bus Éireann's unilateral decision to cut costs, as well as seeking reductions in overtime, shifts in premium payments, longer working hours for office staff and reductions in annual leave, have resulted in the threat of students being unable to use public transport during an exam period. That is a very serious developing situation. Bus Éireann has outlined that it intends to target about €20 million worth of savings from 12 May, including €9 million from pay and conditions. As the Minister knows, this has resulted in SIPTU balloting over 900 of its members working in Bus Éireann. It now appears that strike action is very much on the cards. It is more of a probability than anything else.
We understand that Bus Éireann needs to find savings and on this side of the House we accept that. It is a given that as a result of increased fuel costs and lower passenger numbers which have resulted in a reduction of revenues for the company, the Minister is not in a position to support the CIE group as previous governments were. I understand that. The Labour Court has pointed out how this can be achieved. It is recognised that the company is in a difficult position.
The Labour Court has stated that the very viability of the transport operator is under threat if something is not done. However, the lack of agreement between management and staff has the potential seriously to disrupt thousands of travellers who rely on Bus Éireann's service every day. As industrial action is most likely to occur in the exam period for colleges and secondary schools in May, this is of particular concern to students and their parents who do not have access to private transport. If industrial action spreads to include school transport services, it is estimated that up to 114,000 children will be affected. That should bring into stark focus, both for the Minister and the Government, that action needs to be taken. Where do the Government and the Minister stand on this issue? Does the Government have a strategy to ensure that our public transport system will not let down those who cannot afford private transportation, particularly during the stressful exam period?
As all parties are currently committed to their positions in this dispute, there is entrenchment on both sides. How does the Minister plan to become involved? I accept the State has an industrial relations mechanism by which such a dispute would normally be resolved. Unfortunately, an impasse has been reached and it now appears extremely likely that strike action will take place, which will affect everyone concerned. The red lights are on and the Minister can see what is happening. He should not have the travelling public or students who face exams be made to suffer to bring about a resolution because ultimately, such a resolution will come at some stage. Consequently, I call for the Minister to become involved as quickly as possible, thereby protecting those who depend so greatly on this vital transport network.
In common with the other Members present, I am sure the Minister is acutely aware that the financial circumstances facing Bus Éireann at present are dire. It has been acknowledged by both the Labour Court and the trade unions' own financial assessors that the company is in a highly precarious position and its very viability and future are under imminent threat. Most people would accept that the company must identify savings fast. It has accumulated losses of more than €27 million over the past five years and this simply is not sustainable. The prospect of industrial action would have serious implications for the company's viability, for those workers and their jobs and for those who rely on the services. As other speakers have noted, the timing is appalling, as 114,000 students are preparing for exams and this may be their only mode of transport to sit those exams. In addition, an entire community of elderly and retired people who live in remote parts of the country rely heavily on these services. Moreover, initial data appear to show the Minister's initiative, The Gathering, will be a huge success. In this context, it is important that the service be fully operational during the months ahead in order that the undoubted benefits that will accrue will be shared evenly across the entire country and not simply in urban areas. As the Minister is aware, many of Ireland's cultural treasures are located in rural areas and it is important that visitors have access to them. As Bus Éireann will play a highly important role in ensuring access to remote parts of the country, the timing is appalling.
I have a couple of questions. First, how long has this process of engagement between the unions, the management and the Labour Relations Commission been under way? Does the Minister expects them to re-engage with one another in the short term? As for the workers who have raised this issue, is it not the case that, unlike other public servants, their core pay has been protected in the past and will be protected in the future? The Minister should address these basic issues.
I thank the Deputies for raising this important and pressing 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 now places the viability of the company at risk. In June 2012 the company announced its business recovery plan, with savings of €20 million-----
I understand the scripts are now being distributed. I also note that none of the Deputies opposite provided a script to me. I was obliged to listen to what they had to say and I hope they will listen to what I have to say. Would it be possible for me to start from scratch?
The Deputy did not distribute it. However, if it is okay with the Deputy, I will not have a row with him over something petty and procedural. This is an important issue.
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.
I thank the Minister. While the Minister has answered my question, he might clarify it a little. I asked whether there was flexibility within his budget to support Bus Éireann, but if my understanding is correct, he stated clearly that even if this was the case, he is not in a position to subvent commercial services. He should confirm this point. In addition, I refer to the first of the three sections within the organisation, namely, the provision of school services. Will they be affected next week or will that service be separate to the actions that will be taken?
According to figures supplied to me, €58 million was taken out of Dublin Bus in 2009.
The sum in question was €38 million from the drivers, with another €20 million now being sought, and €9 million relating to pay and conditions. This is core pay. I am a post office worker and although we very seldom got pay increases, we always negotiated when shift work, extra night work and other allowances were involved to try to support the wages we had, which were very low. These are very low paid workers and they cannot and will not accept these cuts. I ask the Minister to intervene and to bring the management back into the talks. The other day management returned, stayed seven minutes and walked out, leaving an ultimatum that the cuts were to be brought in on 12 May. That is not the way to do business. Managers should be sitting in with the unions right now, discussing the issue.
There is no question here of a bigger battle, an ideology or whatever. All we want is that passengers will not be inconvenienced and that drivers, who are already on very modest pay and conditions, who have to work weekends, rest days and public holidays, will not be more seriously damaged by this. The Minister is the person in charge. What is he going to do about it? Is he going to go back to the industrial relations machinery or try to use some other methodology to have this matter resolved?
I refer to Bus Éireann management. A constant complaint I hear from workers is that senior management has not taken its share of the burden. Is this the case? Would the Minister know if it was the case? Is there not a question to answer in that regard? Does senior management not also have a significant responsibility to offer new and innovative alternatives to what is being proposed?
The Minister spoke at length about public service obligations, PSO, and what managers in Bus Éireann could and could not do. The reality is that the Minister has slashed the public service obligation support for this company. I remember listening to him speak during the previous Dáil. He has no time for public sector companies and wanted to privatise this one. In the United Kingdom, when the national bus service was privatised, the result was an oligopoly of private operators. That is what the Minister, Deputy Varadkar, wants.
I asked the Minister what I thought were three serious questions. First, where does the Government stand on this? The response I got was that the Minister would stand idly by. Second, I asked what strategy the Government expects to put in place to deal with those who will be affected by this strike if it goes ahead, who will not be in a position to afford private transportation. Third, I asked what action the Minister intends to take to mediate between both sides. The best I got from him on those two questions was that he very much hopes that management and unions can get their act together in the period concerned.
More than that is needed from the Minister. He will have to take this as a serious issue. I am not having a go at him personally. I know he is doing his best in this regard. However, he will have to try harder and must put the two sides together. He will have to involve himself in a process of mediation. Clearly, neither the Labour Court nor the machinery of the State that is normally involved in resolving industrial relations is working in this instance. We conceded that and the Minister went on to comment about the Government and the unions vis-à-vis the Croke Park agreement. I believe there are people within the union structure who are very annoyed with the senior sections of their own organisations, who do not believe they are getting a fair hearing through the process of mediation available. This will require a much more involved process and greater intervention by the Minister. I look forward to his taking that on board.
I thank the Minister for his response and I welcome his clarity, particularly in regard to the issue of subvention. It is very important that the staff and the unions are aware the Minister does not have at his disposal a blank cheque that could address this issue. It is important that clarity is available.
I have some other questions and thank the Minister for his answers. How long has the process of negotiation been under way? Does he believe there will be engagement between the unions and the management of Bus Éireann in the coming ten days with a view to averting this action? Does he foresee a resolution?
I can confirm to Deputy Regina Doherty that I cannot subvent commercial services. Bus Éireann can neither use profits from PSO services to subvent these services nor can it make profits from school bus services. I do not know whether school bus services will be affected. That will be a union call, and it is up to the unions to decide whether they want to affect the school services.
In answer to Deputy Walsh, the process has been going on for 11 months, at first with the LRC, then in the Labour Court. The court made its recommendation three months ago and we returned to the LRC and asked it to see if that could be tweaked. Those talks did not go anywhere. At the request of union leaders at senior level I was asked to intervene to defer implementation, which was done. Time has now run out. The company is in a position whereby it will not be able to pay the bills in the coming months because, unfortunately, 11 months were spent getting nowhere, which is very sad. Talks can continue at any time and place until 12 May but on that day the Labour Court recommendations will be implemented. There is no alternative. My role is to tell the people the truth about that and I hope people present, when they assess that, will understand it is the truth and will tell people over whom they have influence that this is the case. In addition, my role is to put in place contingencies in so far as it is possible to put in place alternatives, and to provide information where possible. That is what my Department and the National Transport Authority are now doing.
Deputies Joan Collins and Broughan pointed out that most of the staff in Bus Éireann are on modest core pay, which is entirely correct. It is also correct that core pay is not being reduced in these proposals. In fact, it is not being cut at all in Bus Éireann.