THE DEPARTMENT of Enterprise and Employment is understood to have signalled that a controversial scheme proposed at Aer Lingus under which some staff would leave with a severance package and be re-employed on different terms will fall within the scope of redundancy legislation.
This would allow Aer Lingus to claim a rebate from the State on some of the cost of the statutory redundancy element of payments on offer to staff who are leaving.
It would also allow employees who left under the plan to receive favourable tax treatment on the money they receive.
The Irish Times understands that the question of whether the Aer Lingus proposals would be considered a genuine redundancy programme under the legislation was considered at a meeting between the department and management and the trade union Siptu last Tuesday night. The meeting was also attended by representatives of the Irish Congress of Trade Unions and Ibec.
Industry sources maintained that although the department could not provide any guarantees until formal applications under the scheme were received it had indicated, on the basis of the information received, that the proposals would come within the scope of the current legislation.
The department declined to comment on the issue. In a statement, it said: "Applications are examined to see if they meet the eligibility criteria set down in the Redundancy Payments Acts for a rebate to employers when an employer provides notice that jobs have become redundant and submits the relevant documentation. The department is not in a position to comment publicly on any particular company's applications."
However, Siptu and Aer Lingus are both confident that the proposal - currently the subject of a ballot - comes within the Redundancy Payments Acts.
Sources have maintained that there will be a delay of possibly four weeks before staff who leave under the proposals could return. Sources said that they would also have to compete for their jobs.
Siptu said last night in a statement that it was satisfied that the proposal did fall under the current legislation. It said the company had told staff this was so.
Aer Lingus told staff on Thursday that it recognised that the question of tax treatment for those considering the option of leaving and returning had "a very important bearing on any decision being considered at this time".
"For this very reason we have made every possible effort to ensure that this option will qualify under the terms provided for in the Redundancy Payment (Amendment) Act 2003. In that context we are confident that this will result in a positive outcome to your tax liability should you wish to choose (this option)," it said.
The airline said that "in the extremely unlikely event that this does not happen" the employee concerned could withdraw their application to take part.
The "leave and return" scheme forms part of a package agreed by management and Siptu as an alternative to proposals put forward by the airline to cut around 1,300 jobs through outsourcing, redundancy and early retirement.
