Ryanair and SIPTU on collision course over baggage handlers

AS THE New Year opens for business, two determined forces are preparing for a bloody industrial relations battle. The tension has been building for years and over the past few weeks clear markers have been set in place.

SIPTU, the country's largest trade union, is determined to be recognised as representing staff, especially baggage handlers, at Ryanair. The gutsy private airline is equally determined to stick to its `no union' policy.

The stand-off has the making of one of the most bitter industrial disputes in years and may rock the current Partnership 2000 `social consensus.'

Ryanair, the buccaneering airline, models itself closely on the more adaptable regional airlines in the US, where many employers keep their companies `union-free zones' as an act of business faith. Ryanair was able to follow this path until recently. Now as a quoted company with some nervous investors, it's not so free to ignore pressures from employees who have joined SIPTU.

SIPTU, which is in the middle of a restructuring of many of its senior positions, has one main aim. Since Jimmy Somers took over as president last April, it has begun to look more seriously at its lack of representation in some important industrial sectors. It is eagerly seeking entry points into the computer technology and healthcare companies which decline to recognise trade union representation. For years, it has been trying to organise workers at Elan, the Athlone-based pharmaceutical firm.

In the 1970s, the main constituent of SIPTU, the Irish Transport and General Workers Union, was happy to do so-called `sweetheart' deals with newly arrived multinationals. The practical view was that having a single union in a plant avoided any problems with inter-union rivalry, especially those between small craft unions.

In the late 1980s, more multinational subsidiaries felt that they would be more competitive and adaptable if they avoided signing any workplace agreements with a trade union. They were right but running a `no union here' policy can be expensive. It can also prove costly to employees, as the staff of Seagate in Clonmel can testify.

First, you need to be in a profitable sector with good margins and ensure that labour costs are a relatively small part of your overheads. Then you need to pay above the local rates and ensure that all staff are treated fairly and equally and that their achievements are acknowledged and rewarded with bonuses or perks.

Finally, you need to have the ultimate threat of pulling out of the country if trade unions try to exert political pressure on the company to negotiate.

Ryanair meets few of these criteria. It operates on slender margins and its wage structures compare poorly with those in rival airlines. Its record on being upfront with its staff and customers on its performance has been less than impressive in recent years.

Alternatively, within the airline sector, SIPTU has been at the forefront of inhibiting the Aer Lingus management ambitions to reduce costs dramatically. The lengthy negotiations associated with the `Cahill Plan' and the current delays over the disposal of TEAM are not something Michael O'Leary would want to embrace at Ryanair.

Whatever the strategic perspectives of both the union and the airline, on the ground at Dublin Airport the pressure is building up. It appears that Ryanair added a sweetener to a 27pc pay rise given to most of its staff last May post flotation. It was an informal assurance to baggage handlers that they would not be paid any less than their counterparts working for Aer Lingus or Servisair.

That is what you have to do to stop employees either leaving or becoming disgruntled and seeking trade union membership. Two months ago, an estimated 70 of the 80 baggage handlers signed up with SIPTU, where its aviation branch chiefs, Paul O'Sullivan and Tony Walsh, were waiting with outstretched arms.

Batting for Ryanair is its operations director, Conor McCarthy, a man who knows SIPTU only too well since his days running Aer Lingus' commuter services. As the tension grew before Christmas, Mr McCarthy labled SIPTU ``the Aer Lingus union,'' claiming that the union ``would happily sacrifice Ryanair and our people, at any time, if it benefited your many thousands of members in Aer Lingus.''

The union counters that the Ryanair baggage handlers have tried to negotiate directly and then ``freely decided that dealing directly with Ryanair is not their preferred choice'' and voted by secret ballot to join SIPTU.

These baggage handlers, who say that they earn £13,100 a year compared to £16,000 at Servisair, have a legal right to join any union. Equally, the airline cannot be forced to recognise or negotiate with any union representatives.

Therein lies the challenge. The baggage handlers will next week start daily stoppages which could lead to either a full strike or to being sacked by the airline. The union backed off a Christmas holiday period disruption in the expectation that Ryanair might reconsider its `no union' stance.

Not surprisingly, neither Mr O'Leary nor Mr McCarthy were going to change policy that quickly. The inevitable solution will be preceded by a disruption of Ryanair services and increased bitterness between management and staff at the discount airline.

The early months of the year may not be so busy for airlines but the baggage handlers are possibly banking on passengers having more time to book with competing airlines rather than travelling with only hand luggage.

Last year, Ryanair faced down the travel agents after it imposed a 16pc cut in commission rates, though not without suffering some loss of business. On the industrial front, many `non-union' plants will be watching closely to see if SIPTU can represent the disgruntled airline staff.

If the trade union cannot secure recognition at an Irish-based company, it will never get inside the gates of Elan, Intel or any of the other big targets for unionisation.