Aer Lingus has told pilots at the airline that it will not pay incremental increases that were due last month.
It is understood that management at the company has told pilots that it would not make any adjustment to pay rates pending completion of talks both on dealing with significant financial difficulties in their pension scheme and in relation a general review of remuneration which is currently under way under the chairmanship of senior counsel Gerry Durcan.
The overall cost-containment plan at Aer Lingus, known as "Greenfield" ended late last year and it is understood that pilots' representatives argued that the payment of increments should have taken place at the beginning of April.
It is understood that Aer Lingus management maintained that it had made it clear from the start of the talks on the pension scheme deficit and the commencement of the pay review that it was seeking “cost stabilisation” from pilots.
Deficits
The company has signalled that pay moderation, rather than pay cuts, would be needed to facilitate investment of shareholder funds to deal with the deficit in the pilot pension scheme.
It is generally believed that any final solution to dealing with the deficit in the pension scheme for pilots and separately the significant deficit in the pension scheme run jointly for workers at the former State-owned airline and in the Dublin Airport Authority will involve the investment of funds by Aer Lingus.
The company is expected to be required to get shareholder approval for any investment in the pension funds to deal with the financial deficits.
It is understood that Aer Lingus has told pilots that to allow for the greatest range of options to stay open in relation to both the remuneration review and the talks on the pension deficit, the airline would not be making any increases to current pay levels until these issues were resolved.
The decision not to pay the incremental increases are understood to have featured strongly at a major meeting of pilots in the airline which was held earlier this week.
Breach
Pilots are understood to have contended that the move by the management to withhold the increment was in breach of their contracts and contrary to legislation governing the payment of wages.
Pilots are also understood to have denied that they had been told by management in talks on the pension issue that it intended not to pay the increment due at the beginning of April.
They are also understood to have argued that they were not consulted in advance about the move .
Pilots at the meeting earlier this week expressed anger at the payment of bonuses to senior management at the time when the incremental increase was being withheld.
Aer Lingus declined to comment on the withholding of the incremental pay increase yesterday.
The Irish Airline Pilots Association could not be contacted on the issue.
