Bus Éireann has told staff that it is planning to separate its loss-making Expressway service from the rest of the company, and is also contemplating changing terms and conditions for staff working in that division. In a letter to employees, the company says that in the current financial situation, no payroll increases can be contemplated at this time.

Arriving for talks at the WRC, union representatives warned that their members would not accept a situation where they were denied pay rises, and warned of the danger of industrial action.

In his letter, Chief Executive Martin Nolan warns staff that the company is facing a very serious and difficult situation of server financial difficulties.

He says the company’s finances are in a “critical” position with losses of €5.6 million in 2015 and projected losses of €6 million for 2016.

He says a minimum turnaround of €7m is required.

He notes that while the schools and Public Service Obligation businesses are performing satisfactorily, the Expressway business is continuing to lose money.

Factors contributing to this include increasing competition from low-cost operators, higher payroll costs attributable to restoration of earlier pay cuts, and more claims against the company.

He said the Bus Éireann strategy would involve separating the Expressway product entirely from the rest of the business and implementing new terms and conditions for staff within the Expressway division.

He says: “It is proposed to sub-contract a number of routes within the plan but it is expected that all routes currently operated will continue to operate.”

Mr Nolan warns that other efficiency measures may also be required across the entire business.

He concludes by saying that the commercial plan is designed to ensure Bus Éireann’s future stability under a sustainable financial model and give protection to services for customers as well as providing longer term sustainable employment for staff.

He warns that the board believes that this action, although very different, is the only course open for the company.

Bus Éireann’s 2,500 workers had a 19-month pay cut restored in January 2015.

They are expected to seek a pay rise similar to the Dublin Bus claim – around 5% per year plus a 6% national wage round that was never paid.

Dublin Bus workers rejected a Labour Court recommendation of 2.75% a year and have planned another 15 days of strikes.

Arriving for today’s talks at the WRC, SIPTU Transport Organiser Willie Noone said it would not be acceptable to his union for the company to indicate not just that there was no money for pay rises, but that there would also be a requirement for further cuts.

He said it would not be good enough for staff at Bus Éireann to see their colleagues in sister companies being offered increases – even if these were not sufficient – when they could face further cuts.

He said SIPTU had not yet balloted members at Bus Éireann for industrial action but said that if it became clear that no money was being put on the table, they would take steps to seek such a mandate.

Earlier this year, Luas workers secured an increase worth 3.8% a year.