Aer Lingus staff to receive 8.5% pay rise over 39 months

Average increases of about 2.6% annually proposed in Labour Court recommendation

Staff at Aer Lingus are to receive pay increases of 8.5 per cent over a 39-month period under the terms of a new Labour Court recommendation.

The proposed increases, which average at about 2.6 per cent annually are in line with pay improvements anticipated this year in profitable private-sector companies.

Under the terms of the Labour Court recommendation about 3,000 Aer Lingus staff will receive 3 per cent from April 1st, 2017; 2.75 per cent from May 1st, 2018; and 2.75 per cent from June 1st, 2019.

The proposed deal would expire at the end of June 2020.

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The group of unions representing staff at the airline, Siptu, Impact, Unite and the Technical Engineering and Electrical Union, had made claims for pay increases, profit-sharing payments and the restoration of lost increments.

The unions contended that Aer Lingus had made an operating profit every year since 2010 and had about €1 billion in free cash on its balance sheet. They also argued that payroll costs as a percentage of revenue had fallen from 26 per cent to 18.5 per cent since 2009.

The airline, however, maintained that although a pay freeze was in place since 2010, staff had received gain share payments of about €1,500 annually during this period. It said a “stabilisation payment” of €1,800 was also paid.

Aer Lingus argued that its ability to concede on the unions’ claims was “impacted by the emergence of competitors with significantly lower cost bases”.

The Labour Court, in its recommendation, said it noted that there had not been an adjustment to basic pay for staff since 2010.

“The court has been made aware that a number of lump sum payments have been made in that period but is also aware that such payments do not have the value of an adjustment to basic pay when one takes account of pay-related payments and the fact that an adjustment to basic pay is an ongoing adjustment whereas a lump sum payment has application only in the year in which it is paid.”

The Labour Court also urged the airline and unions to engage for three months to try reach a deal on productivity issues based on an "agenda" developed previously at the Workplace Relations Commission.

“Savings achieved as a result of implementation of any agreement arising to be shared between the parties on a ‘one for one’ basis. If direct talks failed to reach agreement in three months, the parties should use normal procedures, including a referral to the court from the Workplace Relations Commission.”

The court also recommended that the parties should engage “without prejudice”, to explore what potential existed to agree an appropriate profit share scheme.

However, it rejected the unions’ claim for restoration of the increments lost over recent years.

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent