We'll go bust unless workers take a pay cut, Irish Rail warns
Published 08/04/2014 | 02:30
IRISH Rail has claimed that it risks going bust unless it reaches a deal on cutting pay that is being resisted by staff.
A document by the semi-state company says its 3,768 workers' unwillingness to accept the 1.7pc wage reduction threatens its future.
It also reveals that the failure to come to an agreement is costing the company €100,000 a week.
The document, seen by the Irish Independent, says the savings it needs are essential to protect the services it provides and allow it to continue employing its workforce.
It was presented to the Labour Court yesterday as it attempts to resolve a long-running dispute over pay cuts, to save €4.6m a year.
The Irish Rail move comes after Transport Minister Leo Varadkar last week warned of a looming financial crisis in the sector.
But unions have vowed to resist the pay cut – with SIPTU saying that staff have already taken cuts to allowances and overtime and haven't had a pay rise in six years.
"The absence of the foregoing of gross pay measure alone is costing the company an additional €100,000 per week (€1.6m since the start of the year) thereby exacerbating an already critical financial position to the point where there is now a serious risk of financial insolvency by 2016," says the Irish Rail document.
It says the company is operating in unprecedented circumstances, which means the payment of wages "is only made possible by credit from banks".
The document says it had already sought to compromise by reducing the savings it sought from employees by 40pc, from €33m to €20m.
Most of the company's employees would suffer a pay cut worth 1.7pc under the plan.
But under a tiered system of cuts, those earning higher amounts would be hit with bigger reductions.
The cuts are not permanent, with pay to return to current levels after three years.
Irish Rail staff have not taken a pay cut since the recession.
The Irish Rail submission says the proposed pay cuts were drawn up "in the context of unprecedented and on-going financial losses".
It shows staff earning €30,000 would lose €510 a year; those on €50,000 would sacrifice €850. For those earning between €56,000 and €61,999, the rate of cut is 2.2pc, then 3.3pc up to €74,999, 3.6pc up to €79,999, 4.1pc up to €94,999, 5.1pc up to €99,999, and 6.1pc for more than €100,000.
SIPTU insists the pay cut is unacceptable because staff have already taken cuts to allowances and overtime, while the economic outlook has improved.
SIPTU organiser Paul Cullen warned that the court's attempt to broker a deal was going to be very difficult.
"Members have not had a pay rise since 2008 and didn't get the last two rounds of the Towards 2016 agreement," he said. "Now they are being asked to take a pay cut and a further three years of pay restraint when there are green shoots in the economy."
National Bus and Railworkers' Union leader Dermot O'Leary said his members were not prepared to take pay cuts at a time while the minister was demonising and disparaging the rail service.
The Labour Court will issue a recommendation, which unions will put to their members in a vote.