Bus Éireann drivers have been told not to expect a pay rise any time soon to help them cope with the soaring cost of living.

In a letter to staff, Bus Éireann warned drivers to expect a two-year pay freeze because of a "dramatic financial loss" in 2020 after Covid-19. It said it also suffered a "further loss" in 2021.

The Bus Éireann letter sparked fury among the drivers' union reps yesterday.

Dermot O'Leary, of the National Bus and Rail Union, said of the two-year pay freeze: "I can categorically state that the unions will not tolerate such a preposterous proposal."

But quizzed about the pay freeze in the Dáil on Tuesday, Taoiseach Micheál Martin said: "Who's proposing a wage freeze? Bus Éireann? That's not my understanding but I'll follow that up."

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Socialist Party TD Mick Barry said afterwards: "It's quite something that the Taoiseach isn't clued in to what is happening in one of the State's key transport companies.

"I'd advise him to keep a closer eye on this one because there is real anger in the bus depots, it isn't going to go away and the Taoiseach wouldn't want to be sleepwalking into a minefield here.

"Bus workers risked their health every day for the good of society during the Covid pandemic and freezing their pay in a cost-of-living crisis is a poor reward for the sacrifices they made.

"The proposal has been put forward by Bus Éireann in correspondence with trade unions and has provoked an angry reaction from bus workers across the country."

The company blamed soaring fuel costs, losses made during the pandemic and the challenges faced by competing with private operators who pay lower wages as grounds for its dire financial position.

Inflation is running at a 21-year high of 7%.

Deputy Barry added: "Bus drivers risked their own health day-in and day-out when the pandemic was raging and society needed them to go to work to help keep the country moving.

"It is shameful that these same workers are now being kicked in the teeth in a cost-of-living crisis. The way that prices are rising, a two-year pay freeze is equal to a massive cut in pay. There is no way that heroes and heroines of the pandemic should be treated this way."

Transport unions have refused to negotiate on the company's proposal and the issue has now been referred to the Labour Court.

Bus Éireann also told staff: "It is recognised that the inflationary cost pressures mounting in daily life bring new challenges.

"We are faced, however, with the need to protect the business for the long-term and cannot ignore the fact that the revenues still need time to recover to pre-Covid levels.

"During this time, our costs and competitiveness need to be managed very carefully, particularly at a time when some costs, including fuel and utilities, are increasing."

The company says its current five-year financial plan does "not afford increases in base pay in the first two years, i.e. 2022 and 2023."

However the company added in a letter to staff: "The later years of the plan include provisions for base pay increases when our finances allow payment of the same."