According to the court, the unions in the case — Siptu, Teeu, Unite and Ucatt — had been seeking the restoration of earning following the introduction of a cost recovery plan in 2009; to retrospectively introduce a profit-sharing scheme; a 6% pay claim with 3% retrospectively applied from January 2013 and a further 3% applied from January 2014; the abolition of the cost recovery plan, with temporary pay reductions returned to members before talks on a new agreement.
For its part the DAA, which operates Cork and Dublin airports, said it was inappropriate for the unions to seek retrospection on deductions made in line with the cost recovery plan. It said no meaningful discussions had taken place over a profit-sharing scheme. On the 6% pay claim, it said it was not in a position to concede the unions’ claim.
The DAA said it was open to reaching agreement on an alternative cost recovery plan but there were certain key areas which had to be addressed in doing so.
In its recommendation, the court said the cost recovery plan was agreed in 2009 to improve the efficiency of the DAA, save up to €40m annually in payroll costs and restore profitability while maintaining levels of employment.
It said a model was agreed on how pay levels were to be restored, on a graduated basis. That included achieving at a minimum an average return on equity of 4.75% to 6.75% or €60m profit after tax. Pay would be completely restored if and when the average return on equity achieved a third consecutive year of either 6.75% or above.
Those targets have not been met. The court said it had been supplied with details of the company’s financial position for the years since 2009 and those figures showed that for 2014 return on equity was 4% and group profits before exceptional items were €39.8m of which about €22m was generated domestically.
Nonetheless, the unions said the cost recovery plan agreement had delivered savings, including €45.9m in payroll costs, but had not delivered a restoration in the temporary pay cut contributions, nor any benefits from the profit-sharing scheme as per the cost recovery plan agreement and neither had it facilitated an intended pay increase since mid-2011.
They told the court the cost recovery plan agreement had created a “stagnant, regressive, conflictual and hostile industrial relations climate”. Management said the return on equity targets and profit points had not been met.
It said annual increments continued to be paid in line with the cost recovery plan agreement and 63% of employees who had a pay adjustment were now earning higher pay. Although the financial position of the company has improved since 2010 its position remains very challenging.
The court recommended, in exchange for immediately engaging with management on a new “management / employee operating model, staff should receive a 2% pay rise with effect from July 1, 2014 for 12 months and a 2% rise with effect from July 1, 2015 for 12 months.
A DAA spokesman said it was studying the Labour Court recommendation.