Irish Ferries Must Cut Costs to Survive

Irish Ferries is offering voluntary severance package to its 543 seafaring employees on its Irish Sea services between Dublin/Holyhead and Rosslare/Pembroke. These offers of voluntary severance for those who wish to leave the company are supported by packages to compensate staff who choose to continue in employment on the ships for any changes in work practices required of them.

The decision results from Irish Ferries’ inability to continue its operations at its current high cost base in the face of low cost shipping competition and increased capacity from low fares airlines. In 2002, the company indicated to staff and unions that its costs position was untenable.

Since then, the company has been unsuccessfully negotiating with SIPTU and the Seaman’s Union of Ireland (SUI) to achieve cost-reductions, both directly and with the help of various third party intermediaries.

Corrective action on costs is now required if Irish Ferries is to avoid becoming unprofitable. The operational context has deteriorated in 2005 with a 9% fall in the Irish Sea Cars market and recent hikes in the cost of fuel (up 50% in 2005 alone).

All existing staff on the Irish Sea have the option of staying on the rates of pay tabled by both unions at the Labour Relations Commission (LRC) in January 2005 ( for the retention of directly employed staff on the MV Normandy and on crew ratios covering time off that are in line with the market ). Compensation for loss of income and time-off will be paid.

Alternatively, all staff can avail of a voluntary redundancy package of up to 8 weeks pay per year of service (including statutory of 2 weeks) provided there is agreement on the company’s right to replace departing staff with crew from an agency employing EU personnel.

Chief Executive, Eamonn Rothwell told staff he regretted having to write the letter to them.

“For many years we have pointed out the major cost differences between us and our competitors and told you about the threat they represent,” he said. “ If action isn’t taken, Irish Ferries will go the way of B&I except, that this time, there’ll be no bail-out by the Irish Government.”