Troubled aviation firm SR Technics has said it is not in a position to make good the deficit in its workers’ pension fund as recommended by the Labour Court.
In a statement this evening following the court’s recommendations, the company said its redundancy budget was limited by commercial and financial constraints and it was not in a position to increase the funds which had already been made available.
It has been reported that the deficit in the pension fund at SR Technics could be as high as €26 million.
The company announced last month that it is to close its plant at Dublin Airport with the loss of around 1,100 jobs. Up to 600 people are set to be let go by the company at the end of this week.
Earlier today, the Labour Court advised that SR Technics should make good the shortfall in the company’s defined benefit scheme and also any shortfall in the Irish Airline Superannuation Scheme, to which some of the employees belong.
It said that that the ex gratia payment of one week’s pay per year of service which it has offered to staff being made redundant should be effectively doubled in addition to the statutory two weeks’ pay per year of service.
The Labour Court recommended that in view of the imminence of lay-offs that staff should receive payments in lieu of notice, which will run from two to eight weeks pay, depending on length of service.
But the company tonight said: “The stand alone financial position of the Irish operation is such that, in normal circumstances and without the goodwill of SR Technics Group, the wind down of the company would require a liquidation resulting in statutory redundancy payments only to employees.”
The firm said the running cost of the Dublin operation came to about €2 million a week and there was an insufficient level of business to fund these costs.
It said it fully understood the difficult labour market conditions faced by its employees and “has already provided funding for the redundancy package in excess of the statutory minimum requirement”.
“Due to the financial and commercial challenges which the SR Technics Group is facing as a result of the severe downturn in the global aviation sector, it is unable to provide additional funds for the redundancy budget or to finance any pension fund deficit.”
Siptu described the firm’s response to the Labour Court recommendations as “mean fisted” but not surprising.
Branch organiser Past Ward said: “In stating that the company should meet the deficit in the employees’ pension funds the Court was doing no more than asking SR Technics to meet its moral and financial obligations to the workers.”
Mr Ward said: “They have not alone treated their workers with disrespect but the Labour Court and the Labour Relations Commission as well.
“This is a company backed by some of the wealthiest business people in the world, including Mubadala, the sovereign investment vehicle for the Emirate of Abu Dhabi, yet it says it can barely afford to pay statutory redundancy to its workers, 60 per cent of which will be refunded by the Irish taxpayer,” he added.
Siptu said it would consult with its members and the other unions at SR Technics to decide “the most appropriate strategy in the present circumstances”.
The Labour Party, meanwhile, met the chief executive of IDA Ireland Barry O’Leary this evening to discuss the current crisis at SR Technics.
The delegation included TDs Tommy Broughan, Roisin Shortall and Joe Costello and Senator Dominic Hannigan.