Sunday 4 December 2016

Nervous Aer Lingus staff await decision on redundancy liability

John Mulligan and Fionnan Sheahan

Published 08/10/2010 | 05:00

The so-called 'leave and return' scheme hammered out in November 2008 narrowly averted strike action. Photo: Bloomberg News
The so-called 'leave and return' scheme hammered out in November 2008 narrowly averted strike action. Photo: Bloomberg News

TANAISTE Mary Coughlan has tried to allay fears that 715 Aer Lingus staff could be liable to pay large sums of money to the Revenue Commissioners if a deal struck between the airline and its workers in 2008 is found to be incompatible with redundancy tax law.

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It emerged yesterday that two years after the 715 ground handling staff lost their jobs and were awarded redundancy payments of between €30,000 and €140,000 -- and were then rehired by the airline on less advantageous terms -- the Department of Enterprise, Trade and Innovation has not yet determined whether Aer Lingus qualifies for a rebate on the deal.

The so-called 'leave and return' scheme hammered out in November 2008 narrowly averted strike action. A total of 1,073 staff opted for voluntary redundancy.

Normally, companies that have to axe staff and pay redundancy can recoup up to 60pc of the cost from the Revenue Commissioners. That could result in millions of euro being repaid to Aer Lingus.

For employees that lose their jobs, only their statutory redundancy payments are tax-free. Any ex gratia payments can be liable for tax.

Ms Coughlan said yesterday that discussions were continuing between Aer Lingus and the department.

Exemption

The minister added that the issue that arose with the Revenue Commissioners regards their determination under legislation as to whether those who received redundancy packages are excluded and given an exemption as a consequence of being made redundant.

"That matter has not been clarified fully as of yet," she said.

"I will be speaking to the Minister for Enterprise, Trade and Employment, who will update people."

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

It added: "We won't tolerate our members receiving less than what was agreed."

In a statement issued last night, Aer Lingus said it "remains convinced" that the 715 staff in question represented "legitimate redundancies" and that the airline was continuing to engage with the department on the matter.

The Dublin Airport Authority (DAA) has also locked horns with the Revenue Commissioners over a scheme it introduced earlier this year, whereby about 80 staff volunteered for redundancy and opted to take up new roles at T2, which is due to open next month. They accepted less pay for the new positions.

It is believed that the DAA could be better placed than Aer Lingus to claim that the staff who moved were legitimately made redundant and then took on new roles.

No formal ruling has yet been received from the Revenue Commissioners by the DAA but it is believed that the authority will appeal if a ruling is made against it.

Irish Independent

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