Dispute over Lufthansa Technik severance deal destined for Labour Court

A dispute over redundancy payments

at troubled aircraft maintenance specialist Lufthansa Technik is heading for the Labour Court after talks between both sides failed.

Representatives of the three unions at the Rathcoole, Co Dublin-based company believe it is increasingly likely that its German parent will decide to close its plant – with the loss of 400 jobs – at a board meeting on Friday.

Talks between management and unions on a severance deal have stalled, and the sides are now seeking a hearing before the Labour Court.

Six weeks' pay
The unions are seeking six weeks' pay for every year of service on top of their members' statutory entitlements, while the company is understood to be offering four weeks.

The unions say a deal given to workers laid off in a previous round of compulsory redundancies in 1994 sets a precedent for their demand for six weeks.

The talks initially went to the Labour Relations Commission last week when the two sides failed to reach agreement. This resulted in the company threatening to take its offer off the table. The LRC referred the matter to the Labour Court.

Unite representative Willy Quigley said yesterday there was urgency about the case as the company had indicated it would begin letting workers go from the end of January.

Workers’ representatives also want the company to clear a deficit in its defined benefit pension scheme. Lufthansa did propose making a €12 million contribution earlier this year to bring it in line with the minimum funding standard required by pensions law. Staff rejected this as being inadequate.

Mr Quigley said yesterday that the closure of the plant now meant that all the accrued benefits of members would have to be full funded, which was likely to cost far more.

New investor
Hopes that a new investor could save the business and its jobs appeared to have faded by the weekend. US group Cloud Investment, whose founding partners include Irishman and former GPA executive Declan Treacy, was interested in taking over the facility.

Lufthansa Technik blamed declining revenues and shrinking market opportunities for its decision to close the company when it announced the plan last month.

The company did not comment yesterday.