The Transport Minister says the very survival of Bus Eireann now depends on workers there accepting a cost-cutting plan.

"Time has run out" Leo Varadkar told the Dáil this evening, also declaring that he cannot pump another cent in subventions into Bus Eireann. That is because State-aid rules prevent any subventions being put into loss-making inter-city routes.

The company is also not allowed use any profits from routes it is subvented on into loss-making routes, while it cannot make a profit from school transport services.

"It won't be able to pay the bills in the coming months because 11 months have been spent getting nowhere and that is very sad" Minister Varadkar added.

"Talks can continue at any place at any time up until May 12th, but then the Labour Court recommendations will be implemented, there is no alternative to that" he added.

According to the Labour Court the company is in a 'precarious' financial situation facing annual losses of €11 million which were unsustainable.

Under the terms of the agreement overtime rates will be reduced, the working week for clerical staff will increase from 36 to 39 hours, shift rates will be cut and staff will loose three days annual leave over the next three years.

The Labour Court has recommended the following changes to terms and conditions which will now come into effect from May 12th:

• Reduction of overtime rates from 1.5 times to 1.25 times for first two hours of overtime and at 1.5 times thereafter
• Increase in the working week for clerical and executive staff from 36 hours to 39 hours
• Reduction in shift payment of 1/6th to 1/7th (if company’s financial situation improves significantly this will be reviewed in 2014 with a view to restoring the shift rates to current levels)
• Reduction in premium payments such as double time on Sundays to now be paid at 1.5 times
• Reduction in annual leave entitlement by 3 days for three years (2013, 2014, 2015)
• Reduction in self-certified sick leave from 4 to a maximum of 2 days per annum
• A range of allowance and expense payments will be reduced by 20%

It is estimated that these changes will deliver annual savings of approximately €5 million.

Since 2009 the company has reduced its cost base by over 17% cutting achieving savings of €30 million.

In June 2012, the company announced its business recovery plan with savings of €20 million targeted to bring the company back to profitability in 2013.

Some €9 million of savings were to come from terms and conditions and €11 million from operational cuts.