Labour Court concern at union's failure to agree changes

The Labour Court has expressed concern that Aer Lingus unions have failed to agree or implement cost-cutting measures and productivity…

The Labour Court has expressed concern that Aer Lingus unions have failed to agree or implement cost-cutting measures and productivity changes which the court recommended seven months ago.

In a statement concerning the airline's cabin crew issued today, Labour Court chairman Kevin Duffy said he remains convinced the changes are essential to the future viability of Aer Lingus.

But Mr Duffy said he believed they were best achieved "incrementally" in a process to be completed by next June.

His statement comes as cabin crew met today to formalise a response to the company's decision on Tuesday to impose a pay freeze until a cost-cutting plan was implemented.

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Impact, which represented the staff, has sought the intervention of the National Implementation Body in the row, claiming the company's action was "heavy handed and deliberately provocative".

The union claims it had been engaged in the Labour Court process to reach agreement on the airline's cost saving plans and that the carrier's action represented a disregard for the industrial relations machinery of the State.

In his original recommendation in March, Mr Duffy said management's proposed savings were necessary in the changed competitive market conditions it found itself in.

He also recommended that further discussions should take place between management and staff on the cuts and if final agreement was not reached outstanding matters should be referred back to the Labour Court.

Today's supplementary recommendations deal with roster arrangements, start times, days off and one night stop-over entitlements.

He notes with concern that while recommendations were issued in March, they have not yet been decided upon by the unions and "in consequence of which none of the proposed changes have been implemented".

Aer Lingus chief executive Dermot Mannion said on Tuesday that the airline could not wait indefinitely to achieve savings.

The cost-savings plan, known as PCI (Programme for Continuous Improvement), was first signalled a year ago as part of the company's defence against a takeover bid by Ryanair.

It aims to generate up to €20 million annually in labour cost savings and possibly €10-€15 million more in other areas. It was presented to unions in December 2006 and endorsed by the Labour Court in March 2007.

Aer Lingus employees were promised increases totalling 7.5 per cent under the "Towards 2016" pay agreement between employers and unions.

Staff were due a 2.5 per cent increase on Tuesday and another next April plus a further 2.5 per cent annual increase under "Towards 2016".

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times