YESTERDAY it was slammed for threatening millions of euro of investment into the mid-west — today Aer Lingus faces mass revolt over its internal cost cutting.
The airline and worker representatives will be in the same room for the first time today since Aer Lingus chief executive Dermot Mannion wrote to unions SIPTU, IMPACT and the Irish Airline Pilots Association last Thursday, telling them in no uncertain terms to put up or shut up over the company’s Programme for Continuous Improvement (PCI-07).
Given the combative mood both sides bring to the table, the likely outcome of today’s discussions is a large leap towards strike action, at least by SIPTU.
The PCI-07 initiative sees a reduction in how much an Aer Lingus employee will take home in overtime payments and the amount of holidays they will receive. It will save the company €9 million a year.
Abuse of existing working agreements has led, according to the airline, to pay packets some 17,000 higher than equivalent Ryanair workers and it is not prepared to let that continue.
The unions claim that pay assessment is skewed by the airline, by including the rates of senior management in their pay surveys.
Whatever the cost savings, Aer Lingus said the programme is essential.
Mr Mannion said: “Over the past 18 months, Ryanair has increased its fleet based in Dublin from nine to 20 aircraft, with a further two to arrive in the autumn. In addition to this, they have added additional aircraft in both Shannon and Cork. This increasing capacity and corresponding rise in passenger choice, places downward pressure on fare prices and yields. An appropriate, competitive cost base is a vital part of our response to this changing environment.”
PCI-07 was supposed to kick in on August 1 but that date was pushed back to allow for a hearing on the cabin crews’ Fly Anywhere programme, due to come before the Labour Relations Commission today.
Even though the cabin crew have largely worked with the company on that programme, all three unions will have a presence at that meeting and it is highly likely it will stray beyond Fly Anywhere and highly unlikely that the atmosphere will be cordial, especially as Mr Mannion has already insisted that once this meeting is out of the way, it will be all systems go for PCI-07 and LCR18850.
LCR18850 is the recommendation of the Labour Court in March that PCI-07 should proceed, with a compensation package offered to the workers. It came following near-strike action at the airline when Aer Lingus tried to push PCI-07 through.
Since that recommendation in March, essentially nothing has happened. This intransigence has been much to the chagrin of the airline and it places much of the blame on SIPTU, which represents 1,800 workers.
In a letter last week to SIPTU national industrial secretary Michael Halpenny, Mr Mannion stated: “Since then [March] extensive talks and comprehensive provision of relevant information, at both local and central levels have yielded no tangible progress towards implementation of the recommendation. To date our efforts to secure a response from SIPTU on many issues, let alone progress meaningful engagement, has been met with avoidance and silence,”
Mr Mannion went a step further by attacking SIPTU’s ongoing behaviour saying it had: Failed to engage positively on a single substantive issue arising from LCR18850, including compensation proposals.
In doing so demonstrated disregard for the dispute resolution machinery of the State.
Delayed and frustrated the process the sides had engaged in, effectively re-interpreting the Aer Lingus Charter of Commitments to Employees as a veto on change.
Tried to create a procedural smokescreen to mask SIPTU’s ‘total lack of engagement on the change agenda’.
“In light of all this, it is difficult for us to envisage circumstances going forward that would justify the use of third parties in dispute resolution situations unless there is a clear commitment demonstrated that their outcome will be respected.”
Essentially, that means the airline is not prepared to keep referring to industrial relations bodies such as the Labour Court because unions have not honoured the court’s March recommendation.
Predictably, Mr Halpenny’s response to Mr Mannion has been quick and equally unequivocal.
“While you take up much time and space criticising SIPTU, it is necessary to remind you of the difficult task we experienced in getting even the most basic of information out of management as to how the plan was proposed to operate on the ground,” he said.
“In some circumstances it was clear that management had given little thought to the practicalities of the situation and in others our representatives were given repeated promises of information and rosters etc, which rarely materialised at the promised date,” said Mr Halpenny.
“Despite the fact that we commenced this engagement on information in early March, it was only on June 13 when we got what appeared to be the final pieces of information. We had barely sent this off to our financial adviser for analysis when out of the blue came the date of August 1 which, as we previously pointed out, had its own immediate and negative effect,” he said.
Mr Halpenny said Aer Lingus cannot so arbitrarily dismiss third-party intervention either.
“The simple fact is that our existing agreements provide for third-party dispute mechanisms, as they do in other employments. The fact that the road of industrial relations can sometimes be rocky is the very reason why those third-party mechanisms exist and are utilised by disputant parties. We therefore reject the charge that we have either demonstrated disregard for the dispute resolution machinery of the State, or that we have attempted to create a ‘procedural smoke screen’.”