Uncompetitive wage rates will put us out of business, says Greyhound boss

Even while Michael Buckley is painting a picture of a tough, competitive business in which his company's cost base is, he says, not sustainable, he somehow manages to convey enthusiasm for what it is he does.

In the middle of a high-profile dispute with some of his workforce, and despite some harsh commentary and reporting recently in this and other media outlets, he still wants to make the point that he believes the private sector is doing a good job with domestic waste collection.

He says he shares Siptu president Jack O'Connor's concerns about the "race to the bottom" in the waste industry but that he, Buckley, cannot organise a level playing field across the sector, and that as matters stand, his company Greyhound is paying well above the industry average to some of its workers. He also says that establishing a base level wage rate could lead to higher prices for householders.

What annoys him is the fact that his company is being attacked when, at the same time, Siptu, he alleges, has agreed pay rates with competitor companies that are below what Greyhound is offering workers operating out of its base in Clondalkin, Dublin. “I know the pay cuts we are looking for are big, but if [the workers] win, and get what they want, then we are out of business.”

Greyhound is looking to impose pay cuts of approximately 35 per cent on approximately 85 drivers and operatives working out of the Clondalkin plant, a proposal that the workers have refused to accept, and which has led to their being replaced, for the time being anyhow, by agency and contract workers.

Buckley says he has sympathy for workers who have mortgages and bills to pay being asked to take such a pay cut, but says the alternative is the company going out of business and the workers earning nothing.

The dispute at Clondalkin is the latest episode of a longer narrative and one in which, he says, the union may have lost control of its members. He wants the union to agree to go back to the Labour Court for a binding determination, the next stage in the process set out in the company’s agreement with the union. Siptu wants to go back to the court for more talks but “we have been talking for two years”.

He and his brother Brian have photographs of themselves as children standing alongside skips belonging to their parents, Brendan and Maura, who ran a waste business. His late father was a hard worker and his mother was good with accounts, and together they ran a “hump and dump” business.

It was a different business in those days, with rubbish being picked up for dumping in unlicensed landfill sites around the city. “People would be shocked now to learn how many housing estates are built on top of old landfill sites.”

Michael went to UCD to study commerce, and afterwards to KPMG to train as an accountant, while Brian studied economics before going to work with a bank in Australia. While there, Brian did some work on the acquisition of APN by Independent News & Media, and through this route came to learn about paper recycling and the price of newsprint. There was next to no recycling in Ireland at the time. “We saw an opening.”

They set up their Greyhound company and began offering to pay retail multiples for waste material that up to then the businesses had been paying others to get rid of. As the recycling business got up and running, they also began collecting more general waste.

Then there was the landfill crisis in Dublin, with the amount of waste seeking a home shooting forever skywards, and the price being charged for access to landfill keeping pace. “We decided that if we were going to stay in business, we needed to be non-landfill.” They began exporting waste. That was 15 years ago. Now more than 90 per cent of Dublin’s waste is exported.

For those who don’t know, the domestic waste put in green bins is separated into paper, plastic and metal, and exported, while the material put in brown bins is turned into compost in Ireland. (Buckley says they are looking at ways to convert it into a power source.)

For the general waste that goes in black bins, there is not longer nearly enough landfill, and the plan to build an incinerator plant in Poolbeg, Dublin, remains just that, a (very expensive) plan. So the waste is turned into bales, and exported to be burned in power-generating plants. Greyhound sends a chartered ship of the stuff abroad every week (3,500 to 4,000 tonnes).

Greyhound was concentrating on the commercial rather than the domestic waste market until the recession came and turned what was a busy, lucrative sector into a distressed, overcrowded one. A lot of players have hit the wall, and some have been restructured. Yet the level of consolidation that might have been expected has not as yet occurred.

Panda started to look to generate business by directly approaching householders in south Dublin. While commercial waste took a nose dive, there was always going to be a steady demand for domestic waste services. The local council took Panda to court, and argued that it had the right to control domestic waste provision in its area. But High Court judge Mr Justice Liam McKechnie ruled otherwise.

Working conditions

According to Buckley, Ireland is unique in operating a system where local authorities are not allowed be sole operators of domestic waste collection, or be the body that decides who can carry out the function on its behalf.

Greyhound opted not to get involved in seeking business directly from households but instead sought to win tenders to take over from the various Dublin councils which began to withdraw from the service. They lost in tenders to Fingal and Dún Laoghaire/Rathdown, but won in South County Dublin and Dublin City Council.

Buckley says the regime they took over from in the city, in particular, was in a terrible state. The collection of rubbish had been seen for decades as a service and not an income stream or business. The workers were well paid and had attractive working conditions. Between 30 per cent to 40 per cent of households had waivers from waste charges. Political activists were encouraging people not to pay, and the system had a built-in inclination to grant waivers.

Greyhound took over with a regime that included an upfront charge. Buckley says he and his brother were not in the practice of dealing with the media or having a public profile, and the public relations aspect of the business move was badly handled by them. “We got massive flack. There was a huge public backlash.” People who had not paid waste charges for years, were outraged with the company seeking to be paid for collecting their rubbish. “They felt we were taking away their civil rights.”

He says the service was costing the city approximately €12 million per year and the then city manager had said the charge to households would have to be doubled to make the income pay for the service.

Trying to run the service in the city centre, in particular, Buckley says, remains a huge challenge, with householders and tenants in some parts of the inner city putting bags of rubbish on the street seven days a week, despite their being a designated collection day.

Because of the nature of the stickers used on the bags, it is not possible to tell which households are putting the rubbish on the street outside of collection day. It is a “tough challenge” but the company and the council are working together to devise a solution.

It is the taking over of council collections, combined with the arrival of new entrants into the market, that has led to the dispute at Clondalkin. Greyhound had already taken on some council work to do with the collection of green bins, and the workers involved had pay rates equivalent to the council workers.

Buckley says it was possible to run the Dublin collection with these pay rates but then competitors such as City Bin and others came into the market offering flat rates (not involving weight-related charges) that undercut Greyhound.

He says the company and the union funded Mazars to produce three consecutive studies of the company’s position, all of which pointed to the need to reduce costs or increase productivity. As part of the effort to resolve the situation, the workers saw their hours worked per week leap to 39, from 30. However, Buckley says, productivity dropped, taking from any advantage. As a result, he says, the company had to use an increased number of agency workers and contractors to ensure customers’ bins were collected.

Work-to-rule actions

Some of the workers say the loss in productivity was also associated with the removal of the steps they used to stand on when the trucks were driving between pick-ups, increasing the physical demands of the job. Buckley says the steps were removed for insurance reasons, but there are plans to restore them. He also agrees the job is a demanding one. “It’s a young man’s job, really.”

He also says that since the dispute began last month, and the approximately 85 drivers and helpers at Clondalkin were replaced by agency and contracted crews, the level of productivity has increased and the number of truck breakdowns decreased. The level of absenteeism has also changed dramatically.

He says the company did not react to what he says were work-to-rule actions introduced in the run-up to the dispute. The conclusion reached by Mazars that the company’s cost base was not sustainable was accepted by Siptu, but the membership voted down an agreement reached at the Labour Relations Commission between the company and the union.

This prompted matters to go to the Labour Court, where the union argued that savings should come from productivity rather than pay. But, says Buckley, experts engaged by the union and the company agreed that the productivity savings could not be achieved. and so the staff were asked to accept pay cuts of approximately 35 per cent.

Buckley says the agreed industrial relations process is that the staff should accept the pay cuts under protest and take the matter to the Labour Court for a binding determination. But the workers refused to do this. Meanwhile, the company immediately began making greater use of agency and contractor staff. “The service has actually been improved, but I do want to resolve the dispute.”

The Greyhound workers at Clondalkin are paid €19.28 per hour for drivers and €14.40 per hour for operatives, when bonuses and meal allowances are taken into account, he says, while the industry average is , respectively, €12 and €9. He says he is offering rates of €13.06 and €9.90 per hour, respectively, which constitutes a huge pay cut for those affected but is still above the industry average and, crucially, he says, higher than the levels recently agreed by Siptu for workers employed in competitor companies. (Other companies have smaller numbers of unionised workers, with approximately 14 per cent of workers overall being in the union.)

Buckley says his truck drivers are being paid at a rate that exceeds the €14 an hour paid to the drivers of articulated trucks, who often have to spend nights away from home as part of their duties.

He says the company has been using a number of sole operator contractors but that the union and the workers have been unfairly picking on one of them because he is a foreign national. This person is “being victimised,” he says.

Buckley says that this man, who is not registered to act as an employment agent, was wrongly described in documents submitted to the Labour Court as supplying agency workers to Greyhound. He is in fact supplying trucks as a contractor, and then handling such matters as insurance and crews himself, according to Buckley. It came as a surprise to the company last week when it was pointed out to it that the same man had incorporated a company last year that has its registered office at the Greyhound facility in Clondalkin. That company never traded and is now being dissolved, Buckley says.

The Minister for Enterprise, Jobs and Innovation, Richard Burton, partly as a result of representations made by Jack O'Connor, has asked agencies that report to his department to review the waste sector and report back to him, and he may raise the union's concerns about a "race to the bottom" at Cabinet level.

Buckley says the sector is a heavily regulated one, and that he has no problem with that. He accepts his company has been sanctioned a number of times in the courts, but says that so too have other waste companies, and indeed some councils. He says the Dublin council sewage plant in Poolbeg has odour problems, but it has not been prosecuted in the way Greyhound has been for odour problems at Clondalkin.

The company run by him and his brother has approximately 400 staff but its turnover is a closely-guarded secret. The operating companies tend to be unlimited, thereby avoiding the requirement to publish accounts. (They are in turn owned by limited liability companies based in the Isle of Man. This model is used by competitor companies also.)

If competitor companies spot a weakness, he says, they will move in. It is a low margin, distressed business, with prices in the marketplace that don’t make sense.

Overall, though, he believes the private sector has done a good job, with the price charged to householders in Ireland comparing very favourably to those in the main German cities, where the rates paid to drivers are, he says, approximately €9 per hour. A return to public provision would involve a substantial hike in the charge to households.

It is an entrepreneurial, innovative sector, with the latter issue in part due to the unique Irish situation where companies can target households directly rather than seek tenders from local councils. It is a very dynamic business that continues to throw up new challenges. He is “very aggrieved” at comments, such as those made recently in the Dáil by Clare Daly, that seeks to portray those involved in the sector as “cowboys”.

CV: Michael Buckley Name: Michael Buckley

Position: Executive director of Greyhound Waste, which he runs with his brother Brian

Age: 40

Family: Married, with two boys and two girls.

Education: UCD and KPMG

Something you might expect: He resents attacks on his company and on the waste disposal sector generally.

Something that might surprise: He did trials in his younger days for Aston Villa and Millwall.