Union warns Aer Lingus over scheme costs

SIPTU has told Aer Lingus it will have to bear any costs to the union’s members if the company’s 2008 “leave and return” scheme is found to be flawed.

In November 2008 Aer Lingus had threatened to outsource or to make redundant more than 1,300 staff at the airline in order to secure €50m in cost savings.

However after strike threats and crisis talks it agreed a scheme with SIPTU in which workers would receive a redundancy package of nine weeks pay per year of service with a minimum payment of €30,000.

The option was also given that workers who accepted the redundancy package would be able to return on inferior terms and conditions and 715 staff took up that option.

At the time Aer Lingus told staff that it had made “every possible effort” to ensure that it qualified under the terms provided for in the Redundancy Payment (Amendment) Act 2003.

“In that context we are confident that this will result in a positive outcome to your tax liability should you wish to choose this option,” it told workers.

However, when Dublin Airport Authority sought to carry out an almost identical “leave and return” scheme in recent weeks it was told by Revenue that it was not a redundancy because the employees were returning to work for a Dublin Airport Authority subsidiary.

The DAA is appealing the decision.

Yesterday Dr Michael Doherty, a lecturer in employment at Dublin City University, questioned whether the 2008 events at Aer Lingus constituted a genuine redundancy situation.

“A unilateral change to pay does not constitute a redundancy,” he told RTÉ.

“What has to happen is some kind of substantial alteration in the positions which resulted in those workers no longer being required.

“It would appear workers were re-employed to do substantially the same work.”

The Department of Enterprise has not yet decided whether the “leave and return” scheme qualifies as redundancy.

If it decides it does not qualify, the airline could potentially lose out on millions of euro through a state rebate for part of its redundancy costs and staff would lose out on favourable tax treatment on the money they received.

SIPTU said it had been assured by Aer Lingus that the redundancy deal had been endorsed by independent legal and tax advisers.

“If it transpires that financial information provided by Aer Lingus is flawed the company will have to pay for any losses incurred by our members,” said SIPTU official Jason Palmer.

“We will not tolerate our members receiving anything less than what was agreed with Aer Lingus in 2008.”

In a statement, an Aer Lingus spokesperson said the firm was “convinced” the 715 staff movements were “legitimate redundancies” under the Redundancy Payments Acts 1967 – 2007.

“We continue to engage with the Department of Enterprise Trade and Innovation in relation to this matter,” the spokesperson said.

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