Understanding the crisis in Dublin Bus

Workers in Dublin bus rejected the Labour Relation Commissions proposals on Thursday 19th March. They initially called for an all-out out strike from March 30th but it has subsequently been postponed. This article firstly deals with the background to the current standoff in Dublin Bus, then examines the initial proposed ‘cost effectiveness plans’ issued by Dublin bus management on the 16th January 2009, subsequently it will review the LRC proposal and conclude with some reflections on how the situation will unfold over the coming months. It is based upon detailed discussions with a driver with who has been working for Dublin Bus for 35 years.

Introduction: The problem began with the government

Dublin Bus is a semi-state private company which is legally mandated to be run on a commercial basis. It is not a state company and whilst it provides a public service, drivers are now de facto private workers. For example, drivers were not affected by the recent pension levy. Pensions differ within Dublin Bus but generally they are akin to private sector pensions defined by contribution. Some are defined by benefit. Drivers tend to view themselves as public workers even though in principle they are private workers. Dublin bus because of its commercial basis cannot run at a loss. So, whilst it makes rational sense for a public service providing transport to a population of 1.5 million people to run at a loss, it can only do so if it covered by a state subsidy. Dublin bus is the lowest subsidised ‘public transport service’ in the EU.

Dublin Bus was mandated by the government to introduce new bus routes three years ago. Dublin bus argued at the time that the bus routes politicians wanted to introduce could not be filled by the public. They argued that the routes to Dublin’s many suburbs could not be commercial because they will not fill them with the necessary numbers. The government ignored this advice and insisted (via their quasi-public representation) that the buses be introduced and new drivers hired. Dublin bus launched an active recruitment drive and employed 160 drivers on the basis of governmental-transport policy. The routes were launched and Dublin Bus was proved correct. People stuck to driving their cars to work and the routes starting losing a fortune. There was no proper planning by either Dublin bus management or the government to ensure that people use public transport. The 160 workers who are now faced with losing their job fall are drivers recruited to provide for these routes/buses.

What is important to note here though, is that the government started this overall problem not the company itself. It is indicative of a complex public-private relationship whereby Dublin bus are expected to act like any other commercial company yet follow a public service logic.  One prime example of this is the fact that many Dublin Bus route are unprofitable and run at a loss but they provide a service to the elderly community who use the service. Poor transport policy decisions started the problem in Dublin Bus. They now need €30 million to pay for routes the government insist upon, but to maintain their commercial mandate (legislated for by the government) they cannot do this. The government will not recapitalise the company. Dublin Bus management are now sacking 160 drivers to potentially reemploy many of them as casual workers cut shift pay for over 300 drivers and decimate the working conditions for all drivers.

16th January: Dublin Bus launches their cost effectiveness plans

Dublin Bus Management announced a ‘cost effectiveness plan on 16th January 2009 without consulting any of the unions. These plans proposed to introduce work practice changes that the Unions (SIPTU and NBRU) had successfully resisted over the past 12 months and job cuts. The six main proposals were:

  1. Force 160 drivers to be sacked without exploring alternative options.
  2. Force a possible 20 permanent staff to be made compulsory redundant.
  3. Re-employ the same 160 drivers on a 2 day week (Saturday – Sunday) that would be used as casual workers on a weekly basis.
  4. Cut the shift pay (worth €112 a week for some drivers) and ensure future drivers would not be in receipt of this shift payment.
  5. Completely eradicate all compensatory payments and decimate working conditions.
  6. Ensure all drivers would suffer a cut in pay.

160 job cuts could have been achieved through voluntary redundancies. The management refused to go down this route because it would have cost them more money. They would have had to pay out full statutory payments. Therefore they went for the easy option to sack 160 new drivers on weak contracts. These are generally young drivers with more to lose. Therefore the initial demand by SIPTU was to introduce voluntary redundancies which would have been taken up en masse by many older drivers.

Some of the proposed working conditions include drivers reversing back to a situation in the 1970’s whereby they are not allocated a fixed route. This means that drivers would arrive into work and be allocated different routes on flexible basis. Other small changes include drivers on bogey duties working say four hours in the morning, taking an unpaid lunch break of five hours and going back to work in the evening for a further four hours. Ultimately the cost effectiveness plan was an assault of the achievements of Dublin bus workers over the past 35 years.

SIPTU and the NBRU called for an all out strike. This was cancelled when management changed course and stated they were willing to negotiate the plan. The Unions and Management entered talks in the Labour Relations Commission on the 2nd March. The LRC is an Industrial Relations conciliation service established in 1991. It emerged out of a series of Industrial Relations Acts aimed at providing a forum for workers and employers to enter into dialogue to solve disputes. It supports the introduction and use of consultation and negotiation procedures to resolve disputes which may arise in individual employments. The parties to an industrial dispute are encouraged to use the Commission’s services when local procedures have been exhausted and when every effort has been made to resolve the issue in dispute.

It is a mechanism for unions and employers to enter into negotiations without resorting to the Labour Court. The LRC cannot issue legally binding recommendations. It is a conciliation service that makes proposals. Thus, even if Dublin Bus workers accept the LRC proposals management can legally renege on anything within the document.

March 19th: The Labour Relations Commission Proposal

The LRC proposal is an attempt to allow Dublin Bus management to achieve ‘cost savings’ whilst accommodating some of the fundamental objections that SIPTU had raised about the original proposals. SIPTU did not recommend to their membership how to vote. Usually SIPTU recommend a Yes or No vote. Not making a recommendation is often read as a semi-preference for the latter.

The LRC proposals ensure that no compulsory redundancies will take place, voluntary severances will be allowed for a number of drivers, no shift driver will suffer a cut in pay (though, crucially this is not ‘guaranteed’ in the proposal), members who previously got paid in cash should continue to do so, current drivers who are on the 6-week rota will have access to Sunday working.

SIPTU held two public meetings with members to discuss these proposals. Several meetings took place on Wednesday 18th March. Overall 200 drivers attended these meetings. The main concern that emerged by members was that nothing in the proposal was guaranteed, particularly the shift pay for drivers on bogey, universal and euro duties. The second main issue raised was related to the terms of voluntary redundancy.

In the proposal drivers over 60 would receive a full redundancy payment. Drivers under 60 would have received a payment of just over €74,000 yet they had to pay back their pension contribution. Thus, a driver after 35 years service was being offered a miniscule payment of €27,000. On this basis Dublin Bus management could not have achieved their 160 voluntary redundancies. The drivers over 60 were generally in favour of the proposal but most other drivers rejected the agreement because of changed working conditions, no guarantee of shift pay and disgraceful redundancy package for drivers under 60.

Dublin bus workers reject the proposal and plans begin for an all out strike on 30th March

Over 80 per cent of SIPTU workers and 90 per cent of the NBRU rejected the LRC proposal on Thursday 19th March. It would appear that Dublin Bus Management predicted a YES vote. They issued letters to some of the over 60 drivers with the terms of reference of their voluntary redundancy in advance of the vote. When the NO vote came through Dublin Bus called many drivers off their duty to issue them with letters of resignation. Dublin Bus management are now reverting to their original plan of sacking 160 drivers and ploughing through cost effectiveness plan. An all out strike is planned for the 30th March.

A driver of 35 years (of which at least 12 months were spent on strike) predicts the events will unfold along the following basis. The drivers will go out on strike on the 30th unless the Labour court intervenes. It will last for maybe two weeks. Drivers start feeling the pinch in their pocket and money issues start to determine their capacity to remain on strike. If the Labour court intervenes the unions will go back into talks with management and achieve a proposal with slightly better conditions.

At the end of the day Dublin Bus are responding to a crisis that emerged through governmental-transport policy. Might it therefore be rational, efficent and equitable for the government to find €30 million to solve this problem in Dublin Bus?  The crisis can be solved by either a) Dublin Bus management offering a standard voluntary redundancy package to drivers (subsidised by the state) in order to achieve 160 voluntary reduncancies or b) the state recapitalising the company to ensure its financial stability during the economic crisis (i.e. a market intervention for the guarantee of efficient transport-service). The larger question for public policy concerns how decisions are made in relation to transport policy, the values guiding these decisions and whether a complex public-private governance arrangement is really the most efficient way to design and deliver quality public services.

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