The trade union Siptu has said Aer Lingus will “have to pay” for any losses incurred by employees who are forced to pay tax bills relating to a 2008 redundancy scheme.
A number of Aer Lingus workers who left the company on redundancy terms that year, only to return to employment at the airline on lesser terms shortly afterwards have been issued with tax bills by the Revenue Commissioners, who believe the arrangement was not valid.
Under the so-called “leave and return” scheme, about 1,100 staff left Aer Lingus in 2008 with redundancy packages. Within weeks, the 715 had returned to work for the airline, which was led by then chief executive Dermot Mannion at the time.
They returned to work within weeks on lesser terms and conditions. Siptu, the union representing the staff involved, has said they were paid 20 per cent less on rejoining the company.
In a statement today, Siptu divisional organiser Gerry McCormack said that at the time of the redundancy agreement in 2008, the union was assured that all aspects of the agreement had been endorsed “by independent legal and tax advisors commissioned by the company”.
This assurance had been provided again today in discussions with management, Mr McCormack said.
“The 2008 agreement was reached under the auspices of the National Implementation Body and the detailed proposals involving up to 1,000 workers were drawn up by the Labour Relations Commission after intense negotiations with Siptu and Aer Lingus.”
Mr McCormack said the discussions arose after the union was mandated by its members to take industrial action, up to and including strike action, over “a controversial forced redundancy and outsourcing programme”.
The agreement was eventually registered in the Labour Court in 2010.
Mr McCormack said the company “will have to pay for any losses incurred by members as the result of any successful rebate claims by the Revenue Commissioners”.
“If it transpires that the legal and financial information provided by Aer Lingus was flawed the company will have to pay for any losses incurred by our members.”
Otherwise, he said, the company would have to re-instate the affected members to their previous positions at post-2008 terms and conditions.
“However, we accept the assurances given again to Siptu by Aer Lingus management today that the agreement is legally sound.”
Aer Lingus staff received their redundancy payments even though the Department of Enterprise, Trade and Innovation has not yet formally approved the scheme.
The arrangement was put under the spotlight last October after it emerged that a similar proposal from the Dublin Airport Authority was rebuffed by the Revenue Commissioners.
The Department of Enterprise, Trade and Innovation, which has responsibility in this area, said yesterday it was continuing to engage with Aer Lingus on the redundancy claims submitted by the company.
It hoped to be in a position to make a decision “shortly”.
The Revenue Commissioners has declined to comment.