Irish Rail warns of threat to solvency after NBRU rejects plan

Union members vote by three to one against Iarnród Éireann cost-saving proposals

NBRU members have rejected the cost-saving plan at Iarnród Éireann.

NBRU members have rejected the cost-saving plan at Iarnród Éireann.

Wed, May 28, 2014, 18:42

Management at Iarnród Éireann has said that given the acute threat to the financial solvency of the company it will have to give “immediate consideration” on how to respond to the rejection of cost-saving proposals by some groups of employees.

The move followed a decision by staff who are represented by the National Bus and Rail Union (NBRU) to vote by a margin of three to one against a cost saving plans at the company which included pay cuts.

The company has previously warned that rejection of a cost-saving plan put forward last month by the Labour Court could lead to the introduction of compulsory redundancies and the closure of railway lines.

It did not indicate today the nature of its response to the rejection of the cost saving proposals.

The NBRU represents over 500 personnel at the State -owned train company.

The union’s general secretary Dermot O’Leary said: “Our members have been sending a consistent message through three separate ballots on retrenchment proposals, that message to both the company and the Minister (for Transport) is one which says that the responsibility for the financial situation at Irish Rail lies squarely with the Minister whose Government has overseen a 27 per cent subvention reduction from €149 million in 2011 to €117 million this year.”

Mr O’Leary said his members had been “consistently telling the company that there were areas of non-payroll savings that we have identified which to-date have not been seriously considered by the company towards reducing the cost base”.

Last week members of Siptu, which represents about 2,000 of the 3,700 staff at Iarnród Éireann voted narrowly to reject the cost-saving plan.

Siptu members are to ballot on strike action to be undertaken if management seeks to implement cuts unilaterally.

Other staff at the company represented by TEEU and Unite as well as clerical personnel who are members of the TSSA, have voted to back the cost-saving plan.

The plan was recommended last month by the Labour Court which said the measures were unavoidable if the future of the company is to be protected.

The plan called for pay cuts of between 1.7 per cent to 6.1 per cent which would apply for a 28-month period.

The court said that during the 28-month period when the pay cuts were in place, the company should be prevented for seeking any additional reductions in terms or conditions.

It also said a committee should be established to pursue non-payroll savings.

It said any cost reductions secured in this process should be used to reduce the impact on payroll.

The recommendation said the rail company had generated accumulated losses between 2008 and 2014 of just under €150 million.

Iarnród Éireann said it regretted the decision of the NBRU. It said it was now giving “immediate consideration to the results of all ballots and the course of action to adopt given the urgent need to achieve cost savings and the acute threat to the financial solvency of the company”.