INDUSTRIAL RELATIONS ACTS, 1946 TO 2001
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
Chairman: Mr Duffy
Employer Member: Mr Keogh
Worker Member: Mr. Somers
1. Increases under the Programme for Prosperity and Fairness (PPF).
2. Aer Turas, once a subsidiary of Aer Lingus, is now a privately owned company which employs approximately 30 staff. It currently operates one aircraft on the ad hoc cargo market. The Union has submitted a claim on behalf of its five members for pay increases due under the Programme for Prosperity and Fairness (PPF). The Company is claiming that, due to financial difficulties, it is unable to concede the claim.
The claim was the subject of a conciliation conference under the auspices of the Labour Relations Commission on the 21st of May, 2001. No progress was made and the matter was referred to the Labour Court on the 23rd of May, 2001, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 14th of August, 2001, the earliest date suitable to the parties.
3. 1. The first phase of 5.5% was due in April, 2000, the second phase of 5.5% was due in April, 2001 and the supplementary payment of 2% agreed by the social partners was also due in April, 2001. The employees have not received any of these increases.
2. The Company has delayed the implementation of every national pay agreement since, and including, the PESP claiming financial difficulties. Last year the employees had to accept extra annual leave instead of the 2% increase due to them under P2000, even though six staff who had left the company were not replaced, saving the Company approximately £120,000 (152,368.56 Euro) per annum.
3. The employees have ongoing concerns regarding the security of their pensions. They increased their subscription by 3.3% in order to maintain their benefits, but the Company's contributions are in arrears.
4. At local discussions, the Company made an interim offer of a 3% increase, without retrospection, from 1st March, 2001, to be reviewed in July, 2001. This was rejected by the employees, as they cannot afford to subsidise the continued existence of the Company through their suppressed wages.
4. 1. Up to 1997 the Company operated two DC8 aircraft, averaging 3,500 flying hours per aircraft per year. However, due to a lack of business, one aircraft is now grounded and the other one achieves only 1,000 flying hours per year, (30% of its capacity).
2. Because of the downturn in the cargo business, the Company entered into a joint venture with a UK company in 1996 to operate passenger aircraft. This had disastrous results and the Company had to write off $3,500,000.
3. The Company has attempted to obtain suitable long-term contracts for the past number of years, but this has proved impossible. Cost cutting exercises were initiated and staff were not replaced when they left the company. However, the Company is in a difficult financial position (details to the Court) and is unable to pay any increases under the PPF at this time. The Company is pursuing other avenues in order to return to profitability and, if successful, the implementation of the PPF will then take place over a period to be agreed.
It is noted that the Union broadly accepts that the information provided by the Company in relation to its financial circumstances is accurate. This information indicates to the Court that full implementation of the terms of PPF at this time would undermine the economic, commercial and employment circumstance of the firm.
Accordingly, the Company are entitled to rely on the provisions of Clause 7 of Framework 1 Annex 1 of PPF in seeking a deferral of full implementation of the Agreement.
The Court recommends that the parties should review the position at the end of October, 2001. If agreement is not reached at that time, the matter may be referred back to the Court.
Signed on behalf of the Labour Court
17th August, 2001______________________
Enquiries concerning this Recommendation should be addressed to Dympna Greene, Court Secretary.