Aer Lingus Bumper Layoff Deal
From today's Irish Independent.
AER LINGUS yesterday offered its staff one of the most generous redundancy packages ever put on the table by a semi-state company in a deal that will cost the airline up to €70m.
Redundancy terms of at least nine weeks' pay for each year of service (subject to a maximum of 130 weeks) are up for grabs, a sure signal that the company wants the redundancies to be voluntary and is determined to avoid industrial disruption.
All workers who apply for severance pay will be entitled to a minimum of €40,000 based on at least nine weeks' pay per year of service. But workers do not have much time to make up their mind - September 14 is the deadline for applications.
According to chief executive Willie Walsh, the terms of this scheme are a "significant improvement" on all previous severance programmes.
Mr Walsh said the offer was generous and the airline had no option but to face up to this market reality and act decisively. The company, which has let 3,000 workers go in recent years, now wants to take a further 1,000 people off the payroll.
Letters are to be sent to every employee detailing their own specific financial details and a helpline is to be set up from noon today for those who wish to take up the offer.
Mr Walsh wants to dramatically cut staff numbers from 3,821 at present to 2,668 by 2007.
The jobs cutting plan involves the virtual elimination of the catering division; staff numbers in catering are planned to go from 206 at the moment to just nine in three years time.
Aer Lingus staff at Shannon will see numbers drop from 172 to 66; Cork from 72 to 57. Flight services, which include cabin crew, will see their numbers drop by 223 from 1,003 at present.
However, pilots will not be part of the redundancy scheme. The airline is aiming to achieve a quarter of planned cost savings by reducing employee numbers.
If the offer fails to reduce staff numbers sufficiently, Mr Walsh said: "The management will not shirk its responsibilities. Where necessary we will take the decisions to achieve the objectives of the [business] plan."
Mr Walsh defended the fact that staff have just three-and-a-half weeks to make up their minds on the redundancy deal. "It helps people to make up their minds when time is limited."
There are three different options available for staff who take up the offer. The first option is mainly aimed at those with only a few years' service. They can take €7,000 per year of service. This option has a minimum payout of €40,000 and a maximum of €70,000.
With the second option the offer is nine weeks' basic pay per completed year, up to a maximum of 130 weeks.
Alternatively, there is an option of four weeks' pay per year of service to a maximum of 104 weeks, plus a bonus of €2,750 per year of service (this bonus will not exceed €40,000).
Unions had sought nine weeks' pay for each year of service. Last night Siptu official Michael Halpenny said the offer was acceptable "on the face of it. But there are issues to be ironed out."