Court ruling may end dispute at Aer Lingus

The Labour Court has recommended a new deal on pay and conditions at Aer Lingus which would see workers receiving a 4 per cent pay rise over and above the national pay agreement.

If accepted, the court's ruling could end the long-running pay and jobs dispute between management and workers ahead of the privatisation of the company, which is due to go ahead next month.

The company and union representatives yesterday received the Labour Court ruling, which addresses pay and job security issues. Siptu leaders are due to meet Aer Lingus shop stewards this morning ahead of any decision to put the proposals to the union's members.

The key element in the new deal would be a 4 per cent pay increase, in addition to the 10 per cent recently agreed as part of the national pay agreement. This would be payable in two instalments of 3.5 per cent on September 1st followed by 0.5 per cent on April 1st 2007. The increase is in addition to lump-sum payments, already offered by the company, of approximately €4,000 per worker, depending on length of service.

The court also recommends, as previously put forward by Aer Lingus, that pension contributions be increased by 2 per cent from staff and by 4 per cent from the company.

The pay rise would represent a compromise for both sides. In June, the company offered a 3 per cent increase, which it said was its final offer. Siptu rejected that offer and, it is understood, arrived at the Labour Court last week seeking 5 per cent.

The court ruled that workers should be given the 4 per cent rise to compensate for the additional pension contribution.

Aer Lingus said last night that it was considering the court's ruling. However, it looks likely to accept the compromise to allow it to move ahead with plans to make an initial public offering of the company next month.

Siptu, the largest union at the airline, continues to oppose privatisation but is seeking to protect workers' pay and conditions in the event of privatisation going ahead. A spokesman for the union said that the Labour Court deal "does go some way to addressing the union's concerns in the area of job security".

However, it will not be known until after today's meeting with shop stewards whether the offer goes far enough to be recommended to a ballot of workers. There is also a risk that workers might reject any deal, regardless of a union recommendation, in protest at the privatisation plans.