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10% of CIE bus routes to be privatised
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11-09-2013 12:44pmTransport Authority proposes to improve competition on bus routes
Bus Eireann and Dublin Bus are set to lose 10% of their routes to private operators.
The National Transport Authority is planning to amend the existing Public Service Obligation contracts with the companies in 2016.
The NTA says it plans to allocate certain routes in a tendering process aimed at improving competition.
The transport body has called on interested parties to submit their opinions to them before 5pm on Friday, October 11.
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its a fair bit down the road before anything will happen on the ground, but the only way to sharpen Bus Eireann + Dublin Buses sense of professionalism and customer service is to have the threat of loosing routes hanging over them if they dont get their act together.
Bus Eireann Route 109 would be one candidate.
EDIT: the Dublin suburban routes under consideration for removal are-
100 Drogheda - Dunleer Castlebellingham - Dundalk - Newry
101 Dublin - Airport - Balbriggan - Drogheda - Termon Abbey
101X Wilton Tce - Balbriggan -Drogheda - Termon Abbey
133 Dublin Airport - Dublin -Bray -Kilmacanogue -Newtownmountkennedy - Ashford - Wicklow
which actually makes sense as there's already a substantial private operation on the routes (well, to Dundalk/ Drogheda anyhow) so this might simplify things if anything for the consumer.0
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munchkin_utd wrote: »http://www.irishexaminer.com/breakingnews/ireland/transport-authority-proposes-to-improve-competition-on-bus-routes-606554.html
its a fair bit down the road before anything will happen on the ground, but the only way to sharpen Bus Eireann + Dublin Buses sense of professionalism and customer service is to have the threat of loosing routes hanging over them if they dont get their act together.
Bus Eireann Route 109 would be one candidate.
EDIT: the Dublin suburban routes under consideration for removal are-
100 Drogheda - Dunleer Castlebellingham - Dundalk - Newry
101 Dublin - Airport - Balbriggan - Drogheda - Termon Abbey
101X Wilton Tce - Balbriggan -Drogheda - Termon Abbey
133 Dublin Airport - Dublin -Bray -Kilmacanogue -Newtownmountkennedy - Ashford - Wicklow
which actually makes sense as there's already a substantial private operation on the routes (well, to Dundalk/ Drogheda anyhow) so this might simplify things if anything for the consumer.
It is old news just being rehashed in an attempt to coerce DB drivers to accept cuts, much like Leo's intervention yesterday.
All I can say isTransfer of Undertakings
A transfer of undertakings occurs when a business or part of a business is taken over by another employer as a result of a merger or transfer.
When a transfer takes place there is a legal obligation on the new employer to take on the existing staff of the business or the part of the business concerned. The employee's accrued service with his or her original employer is deemed to have been with the new employer. The employee is entitled to terms and conditions of employment with the new employer which are no less favourable than those he or she enjoyed with the previous employer immediately prior to the transfer.
But at least we are now seeing the bigger picture the attack on terms and conditions is with a view to making DB and BE services more attractive to the private operators who would be obliged to take on staff on their current terms and conditions. It is also interesting that the LC in its judgement tried to assert that sick pay was not part of your terms and conditions of employment, hence would not be reinstated after 19 months, if you accept that it might have bigger implications down the road in a transfer of undertakings scenario.0 -
But is this not the polar opposite of a "Transfer of undertakings". The routes, due not to local policy but EU law, must be put to a public tender rather than the current "direct award" system. At present all existing PSO routes are given to CIE group (i.e. BE/DB) by default. There is no tender process or anything like it, they just get it.
The EU has decried this and ruled quite a while ago that the system was to be overhauled by 2014 and public tendering of routes must be introduced. If you care to read the details on the NTA website my understanding would be that the NTA proposes (correct "proposes" - open to a consultation until October) to continue with direct award until 2016, then to begin by opening 10% of PSO routes to tender. BE & DB would have as much right (and correctly so) to tender as any private operator. The most competitive package (be that price, service, whatever or a combination of all) would win the route for a defined period of time. As such I don't believe "Transfer of Undertakings" would apply as it would simply be a Loss of contract situation, employees would remian BE/DB employees, may be reallocated within thata company or may be offered redunancy or some such. It would be like any other contracted service anywhere else in the world or in any other industry. For instance, when a large Irish haulier lost the Tesco contract to Eddie Stobart there was no obligation on Stobart to employ any of the previous contractors employees and any that did migrate had no entitlement to previous conditions. I don't beleive it will be a condition of any new contractor (for that is all CIE are on NTA PSO routes) to employ a previous contractors staff who had lost the contract by way of a public competitve tender.
Are the staff of private operators who lose CIE/BE school contracts by way of a tender after prolonged periods (school contracts 5 years at a time, some held for 20-30 years) entitled to automatic employment on the same conditions with the new contractor. Absolutely not.
The tone of the posts to date would solidify my long held beleif that tendered services, which, in theory should provide the best value for tax payers money, will be the start of a slow death for CIE group companies. Will they be able to compete against many of the private companies? There seems to be some sort oof implication that incumbant priavte operators will just be given the listed licences - not so - they can tender same as DB/Be or any other company. the route licences for the PSO route's are the NTA's I beleive and not CIE's. As a crude example we could see JJ Kavanagh winning some of the M1 contracts, running against the incumbant Matthews in BE's place, we could see Matthew's winning the N11 contract (133) and running against Wexford Bus etc etc.
Every post so far implies BE/CIE are guaranteed to lose the routes. Not so, if they can competitively tender they can win them and continue to run them. Question is, can they competitively tender?0 -
currins_02 wrote: »But is this not the polar opposite of a "Transfer of undertakings". The routes, due not to local policy but EU law, must be put to a public tender rather than the current "direct award" system. At present all existing PSO routes are given to CIE group (i.e. BE/DB) by default. There is no tender process or anything like it, they just get it.
The EU has decried this and ruled quite a while ago that the system was to be overhauled by 2014 and public tendering of routes must be introduced. If you care to read the details on the NTA website my understanding would be that the NTA proposes (correct "proposes" - open to a consultation until October) to continue with direct award until 2016, then to begin by opening 10% of PSO routes to tender. BE & DB would have as much right (and correctly so) to tender as any private operator. The most competitive package (be that price, service, whatever or a combination of all) would win the route for a defined period of time. As such I don't believe "Transfer of Undertakings" would apply as it would simply be a Loss of contract situation, employees would remian BE/DB employees, may be reallocated within thata company or may be offered redunancy or some such. It would be like any other contracted service anywhere else in the world or in any other industry. For instance, when a large Irish haulier lost the Tesco contract to Eddie Stobart there was no obligation on Stobart to employ any of the previous contractors employees and any that did migrate had no entitlement to previous conditions. I don't beleive it will be a condition of any new contractor (for that is all CIE are on NTA PSO routes) to employ a previous contractors staff who had lost the contract by way of a public competitve tender.
Are the staff of private operators who lose CIE/BE school contracts by way of a tender after prolonged periods (school contracts 5 years at a time, some held for 20-30 years) entitled to automatic employment on the same conditions with the new contractor. Absolutely not.
The tone of the posts to date would solidify my long held beleif that tendered services, which, in theory should provide the best value for tax payers money, will be the start of a slow death for CIE group companies. Will they be able to compete against many of the private companies? There seems to be some sort oof implication that incumbant priavte operators will just be given the listed licences - not so - they can tender same as DB/Be or any other company. the route licences for the PSO route's are the NTA's I beleive and not CIE's. As a crude example we could see JJ Kavanagh winning some of the M1 contracts, running against the incumbant Matthews in BE's place, we could see Matthew's winning the N11 contract (133) and running against Wexford Bus etc etc.
Every post so far implies BE/CIE are guaranteed to lose the routes. Not so, if they can competitively tender they can win them and continue to run them. Question is, can they competitively tender?
To answer your question no it is not the polar opposite of a transfer of undertakings, it is exactly what transfer of undertakings is supposed to cover.
And yes Stobarts would have been so obliged as would any contractor operating school services under contract to CIE.
http://www.irishstatutebook.ie/2003/en/si/0131.html0 -
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I am no legal eagle for a start but if that is the case why did the 300 odd unionised drivers with the previous Tesco contractor not get the benefit of it? Why have many many school bus drivers lost out (I know one who lost out after oding a run for 19 years)?
If you read article 3 of your statute it refers to a transfer and implies, to me anyway that it would apply if they ramdonly said right, BE from tomorrow we're giving your work to operator Y. This is neither a "Merger" nor a "Lease Transfer" which are both the specified situations in your statute. That is not the case, BE (and DB in their own case) are operating on fixed term contracts that are neither permanent nor rolling. They have enjoyed the renewal of said contracts by default. Now the NTA must open the contracts to competition (BE & DB may still tender). When the current contract ends, if a new entity wins it, a new contract will start then (so one ends at 00:00 on day X and new one starts probably at 00:01 on day X+1). A Fixed contract is completely different to a merger or any such.
This would be no different to the company supplying tyres to CIE loosing their contract at the end of the term to a more competitive bidder, the new tyre company does not have any legal or moral requirement to reemploy displaced staff from the previous contract holder on any terms never mind their previous ones.
CIE in this case are a contractor to the NTA, they have no divine right to this work and have been protected since the NTA's foundation by the "direct award" of the contract - i.e. without a tender process. The EU has ruled quite a while ago that this protection is illegal and that any contract worth over a certain value (I beleive it is €100,000 but I stand to be corrected) must be offered to public tender. As such the closing date for the NTA to tender was 2014, they are now PROPOSING to defer that again to 2016 and at that PROPOSING to only offer 10% of contracts to tender initially. It is currently merely a consultation (which closes in October) and many things could change between now and then. For instance our EU mandarins may shoot down the deferral to 2016 for example or may say 10% is not enough, they may ask for a longer plan to show when all routes will be tendered (which is the EU's ultimate aim).
I'm personally very worried for CIE and the implications of this. Also the tenders will be open to any EU company and barring the tender puts in protections for Irish operators (e.g. must be established here etc) they could in the main be won by non Irish companies such as Veolia, RATP, Arriva etc.
Unless a solictor says different I don't for a minute accept a fixed term contract expiring to be taken over by a new, more competitive contractor is the same as a merger or lease transfer which is what is trying to be implied. If so the unions would have scuppered Stobart's Tesco work in seconds as one high profile example.0 -
Don't remember staff transfers when Euroceltic had to give up the PSOs and Aer Arann stepped in.
As I've noted in the past, a tactic of "starve the beast" by shaving off routes could lead to a collapse of one or more CIE companies or the whole group if the company isn't able to fully utilise its depots, vehicles and staff in a cash positive way (such as expanding non-regulated activities).0 -
currins_02 wrote: »I'm personally very worried for CIE and the implications of this. Also the tenders will be open to any EU company and barring the tender puts in protections for Irish operators (e.g. must be established here etc) they could in the main be won by non Irish companies such as Veolia, RATP, Arriva etc.0
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currins_02 wrote: »
The tone of the posts to date would solidify my long held beleif that tendered services, which, in theory should provide the best value for tax payers money, will be the start of a slow death for CIE group companies.
CIE has been dying for 70 years. Finally the life support machine is being switched off.0 -
To answer your question no it is not the polar opposite of a transfer of undertakings, it is exactly what transfer of undertakings is supposed to cover.
And yes Stobarts would have been so obliged as would any contractor operating school services under contract to CIE.
http://www.irishstatutebook.ie/2003/en/si/0131.html
Is transfer of undertakings not designed for when one company is taken over/bought out by another and the new company must take on the old staff at their old pay and must recognise the yrars of service to the old company.
If another company gets awarded contracts that Bus Éireann currently get by default there is no transfer of undertakings. the new company have no connection to Bus Éireann.0 -
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does this incorporate B.E in cork???0
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currins_02 wrote: »I am no legal eagle for a start but if that is the case why did the 300 odd unionised drivers with the previous Tesco contractor not get the benefit of it? Why have many many school bus drivers lost out (I know one who lost out after oding a run for 19 years)?
If you read article 3 of your statute it refers to a transfer and implies, to me anyway that it would apply if they ramdonly said right, BE from tomorrow we're giving your work to operator Y. This is neither a "Merger" nor a "Lease Transfer" which are both the specified situations in your statute. That is not the case, BE (and DB in their own case) are operating on fixed term contracts that are neither permanent nor rolling. They have enjoyed the renewal of said contracts by default. Now the NTA must open the contracts to competition (BE & DB may still tender). When the current contract ends, if a new entity wins it, a new contract will start then (so one ends at 00:00 on day X and new one starts probably at 00:01 on day X+1). A Fixed contract is completely different to a merger or any such.
This would be no different to the company supplying tyres to CIE loosing their contract at the end of the term to a more competitive bidder, the new tyre company does not have any legal or moral requirement to reemploy displaced staff from the previous contract holder on any terms never mind their previous ones.
CIE in this case are a contractor to the NTA, they have no divine right to this work and have been protected since the NTA's foundation by the "direct award" of the contract - i.e. without a tender process. The EU has ruled quite a while ago that this protection is illegal and that any contract worth over a certain value (I beleive it is €100,000 but I stand to be corrected) must be offered to public tender. As such the closing date for the NTA to tender was 2014, they are now PROPOSING to defer that again to 2016 and at that PROPOSING to only offer 10% of contracts to tender initially. It is currently merely a consultation (which closes in October) and many things could change between now and then. For instance our EU mandarins may shoot down the deferral to 2016 for example or may say 10% is not enough, they may ask for a longer plan to show when all routes will be tendered (which is the EU's ultimate aim).
I'm personally very worried for CIE and the implications of this. Also the tenders will be open to any EU company and barring the tender puts in protections for Irish operators (e.g. must be established here etc) they could in the main be won by non Irish companies such as Veolia, RATP, Arriva etc.
Unless a solictor says different I don't for a minute accept a fixed term contract expiring to be taken over by a new, more competitive contractor is the same as a merger or lease transfer which is what is trying to be implied. If so the unions would have scuppered Stobart's Tesco work in seconds as one high profile example.
http://www.hayes-solicitors.ie/news/TransferRegulations
Have a read of that it explains a lot, but basically when a transfer happens if the original employer has positions they can offer them to existing staff if they don't the employees become the responsibility of the new employer who has to take them on with all the terms and conditions they enjoyed under the previous employer.
I actually know people that this has happened to where their employer lost a contract some of them were given the opportunity to redeploy with the current employer some weren't all had a right to stay in current position with new employer.0 -
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They include:
Route 17 from Rialto to Blackrock,
Route 33b Swords to Portrane,
Route 111 Dun Laoghaire to Loughlinstown.
What private operator would take these routes on?0 -
It could be any combination of the big international companies, local companies - that depends upon who tenders for them.0
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They include:
Route 17 from Rialto to Blackrock,
Route 33b Swords to Portrane,
Route 111 Dun Laoghaire to Loughlinstown.
What private operator would take these routes on?
They seem to just picked out a few dogs of routes, no company in their right mind would go near the 111 without the surrounding routes, including the 7, as well in the basket. There is no money in the 111 at all.0 -
They've picked out all of the orbital and local services.
As for whether they would work or not - that depends upon what level of service is demanded, and how the operator would be compensated for operating the service in the contract.0 -
Cookie_Monster wrote: »They seem to just picked out a few dogs of routes, no company in their right mind would go near the 111 without the surrounding routes, including the 7, as well in the basket. There is no money in the 111 at all.
Did you read the document written by the NTA?The Authority would propose a gross cost contract with incentives for the Operator for any competitively tendered bus services contract. A gross cost contract is where the operator is paid to operate the service, the fares revenue is kept by the Authority and the operator carries no risk in terms of revenues.
If the operator isn't keeping the fares, it doesn't matter what the passenger numbers are like as long as they're stable or could be grown. Furthermore, they don't include the 7 because:The radial and cross-city routes are key components for the efficient functioning of the Dublin economy, due to the large numbers transported at morning and evening peak times. In terms of risk management, the first market competition should not include these routes.
Furthermore, the bus network will require an element of reconfiguration to complement the new Luas Cross City light rail route. If radial and cross city bus services were included in a competitive tender package, the risks around the process would increase substantially.
Limiting competitive tendering to local and orbital routes which serve outer areas of the city offers significant potential for delivering cost efficiencies and possible service improvement within a low risk environment.
Also, they want to start with low frequency routes because, with only buses bought in 2012/2013 are owned by the NTA. They don't want DB to win every tender by virtue of being the only ones with enough suitable buses so they're proposing to buy the buses and give/lease them to the winner of the tender. If they tender out high frequency routes, they'd have to buy more buses which means even more of an upfront cost.0 -
There's also the issue (mentioned in the report) that the NTA, although having the power to take back the buses they paid for in 2012 and lease them to a private operator, do not have any power to take control of Dublin Bus's depots, or compel Dublin Bus to allow their use by private operators. This lack of access to depots is another of the reasons for this 'toe in the water' approach to tendering.0
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There's also the issue (mentioned in the report) that the NTA, although having the power to take back the buses they paid for in 2012 and lease them to a private operator, do not have any power to take control of Dublin Bus's depots, or compel Dublin Bus to allow their use by private operators. This lack of access to depots is another of the reasons for this 'toe in the water' approach to tendering.
I'm at a loss as to why this is a problem. If the NTA think sharing depots is desirable, couldn't they have a word with the sole shareholder of Dublin Bus and have him direct DB to sell the depots to the NTA for a reasonable price.
I wonder if fear of the unions being awkward is the actual problem?0 -
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Sorry that doesn't qualify as an argument, point out why it is rubbish. I have provided various links including the actual legislation.0
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It is absolute rubbish to suggest that if Firm A loses a contract to Firm B to haul for Retailer X, and in the prcess Firm A goes bust, that Firm B will be in any way shape or form obliged to employ the now REDUNDANT staff from Firm A. You are living in cloud cuckoo land if you think that's how such contracts work.
Have you read up on TUPE ?
First off if a company loses a contract and firm B takes over such contract that is exactly what happens, the only exception is liquidation which is not the case here, if firm A stays or goes out of business is irrelevant, if you tender for a contract you do it on the basis of TUPE.
Not cloud cuckoo it is the law of the land as directed by the EU.
If you think a company can tender for a contract and then just start fresh with new or existing employees on conditions below the previous arrangement it is you that is in cloud cuckoo as you put it.0 -
If the NTA think sharing depots is desirable, couldn't they have a word with the sole shareholder of Dublin Bus and have him direct DB to sell the depots to the NTA for a reasonable price.
ticking a box on a form does not make you of a religion.
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I'm at a loss as to why this is a problem. If the NTA think sharing depots is desirable, couldn't they have a word with the sole shareholder of Dublin Bus and have him direct DB to sell the depots to the NTA for a reasonable price.
I wonder if fear of the unions being awkward is the actual problem?
The problem is that the 10% model with local and orbital routes doesn't give you a geographic base even if you forced DB to hand over a depot what depot would be a good base for such a geographical spread that wouldn't involve significant dead running to get from depot to termini.
Also what would you do with the radial routes based in that depot that DB will still operate.
Ideally you would depot share but working that out would be a logistical headache at the moment particularly with the NTA preferring to avoid TUPE if allowed.0 -
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If you think a company can tender for a contract and then just start fresh with new or existing employees on conditions below the previous arrangement it is you that is in cloud cuckoo as you put it.
If Matthews or JJ Kavanagh, for example won one of the routes they do not have to use DB/BE buses. They can use their own and their own drivers. No need for DB/BE drivers to tupe across.
Happy to be corrected though, if there is some other arrangement.0 -
Queried this TUPE craic with a HR expert (a family friend - who runs a successful HR consultancy for blue chip clients) but granted she is not a solicitor. Agreeing with the points made by me and others including Peppa Pig above. She reckons one of the key points would be that the existing contract would come to it's natural end. As such any new contractor would have no TUPE obligations in her opinion (what would happen the staff if the contract was simply not renewed? - no difference in her opinion).
Now, if (and maybe this is cdebru is alluding to) the NTA took the contract off BE/DB/CIE Before the scheduled end date/time and then appointed a new contractor on an identical contract then yes she beleives TUPE would apply.
As Leo V said at his speach at the CTTC dinner in Dublin last October the whole point of tendering the routes is to improve efficiency and reduce cost. The cost reductions in the main will come from wages, packages of average value of €48k will price BE/DB out of it. Now an interesting point on some of your TUPE links is that it specifically states TUPE does not apply to pensions!
Also, a quick google on the Tesco/Stobart/Keelings case of a few years back would reveal that 300 Keelings staff were made redundant on the basis that Keelings failed to secure the renewal of their Tesco contracts following a more competitive bid by Stobart. Stobart's offered all staff their positions back (under no TUPE obligation) with average wage cuts of €2 per hour, no pension (which they had before) and no medical (which they had before) only 130 opted to take up the new positions, rest were simply made redundant by Keelings.
I'm just going to watch and see but I'll be man enough to admit I'm wrong if TUPE is found to apply if any contarcts are lost but for the moment I firmly beleive this is not a TUPE situation - I suspect part of why the DB unions have gotten so upset by it as they feel it's an indirect threat of job loses to their members.0 -
These solicitors would disagree with you
If Matthews or JJ Kavanagh, for example won one of the routes they do not have to use DB/BE buses. They can use their own and their own drivers. No need for DB/BE drivers to tupe across.
Happy to be corrected though, if there is some other arrangement.
The law on tupe states tangible and intangible assets, you are looking at 2 tangible assets only staff and buses, there are other assets that may be tangible and intangible.
For example route recognition if you take over a defined route with its own customer base you are taking over an asset that is not there to a company trying to establish a route from scratch.
The NTA in their document accepts, that tupe applies.0 -
currins_02 wrote: »Queried this TUPE craic with a HR expert (a family friend - who runs a successful HR consultancy for blue chip clients) but granted she is not a solicitor. Agreeing with the points made by me and others including Peppa Pig above. She reckons one of the key points would be that the existing contract would come to it's natural end. As such any new contractor would have no TUPE obligations in her opinion (what would happen the staff if the contract was simply not renewed? - no difference in her opinion).
Now, if (and maybe this is cdebru is alluding to) the NTA took the contract off BE/DB/CIE Before the scheduled end date/time and then appointed a new contractor on an identical contract then yes she beleives TUPE would apply.
As Leo V said at his speach at the CTTC dinner in Dublin last October the whole point of tendering the routes is to improve efficiency and reduce cost. The cost reductions in the main will come from wages, packages of average value of €48k will price BE/DB out of it. Now an interesting point on some of your TUPE links is that it specifically states TUPE does not apply to pensions!
Also, a quick google on the Tesco/Stobart/Keelings case of a few years back would reveal that 300 Keelings staff were made redundant on the basis that Keelings failed to secure the renewal of their Tesco contracts following a more competitive bid by Stobart. Stobart's offered all staff their positions back (under no TUPE obligation) with average wage cuts of €2 per hour, no pension (which they had before) and no medical (which they had before) only 130 opted to take up the new positions, rest were simply made redundant by Keelings.
I'm just going to watch and see but I'll be man enough to admit I'm wrong if TUPE is found to apply if any contarcts are lost but for the moment I firmly beleive this is not a TUPE situation - I suspect part of why the DB unions have gotten so upset by it as they feel it's an indirect threat of job loses to their members.
Read my reply above, unions are upset if they are upset, because of the timing as far as I can see as they think it makes the current situation re cost savings more difficult.
There is also an issue that this is ideologically driven rather than anything else, the NTAs own document accepts that there may be no cost savings and that the international experience is that any cost savings are short lived as the costs of administering the system wipe out any savings.
You also have to look at the report from the NTA regarding DB performance over the lifetime of the direct tender and see that DB has generally exceeded all the measures the NTA has implemented and the deloitte report said that DB was efficient so why break up a system that is actually working and efficient to replace it with a system that won't save money?0 -
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The law on tupe states tangible and intangible assets, you are looking at 2 tangible assets only staff and buses, there are other assets that may be tangible and intangible.
For example route recognition if you take over a defined route with its own customer base you are taking over an asset that is not there to a company trying to establish a route from scratch.
The NTA in their document accepts, that tupe applies.nta document wrote:4.1.2 Operating staff
The tendering of all Dublin Bus services would include either the potential need to transfer Dublin Bus staff to another employer, if the incumbent were not successful in the competition, in which case EC TUPE (Transfer of Undertakings Protection of Employment) regulations would come into play.
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A smaller tender completion allows the potential for Dublin Bus to downsize and reduce the requirement to transfer staff to a new operator.
It's actually poorly written. The "either" only appears to state one option, then the other one is in a new sentence on the next page. I read it as a company taking all the routes has to take the staff, but a company taking some routes will not have to.0
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