This is an old chestnut and there are always a variety of different ways of doing it. The one thing you can be sure of is that you will not end up pleasing everybody! However, I will assume here that you are considering seniority with regard to pilot employees, changing fleets and posts within fleets.
Fundamentally, in my opinion, the fairest way is on date of joining - in other words, in order of length of service within either company. If however, one company is taking over the other, there is always an argument in biasing any joint list in favour of the employees of the company doing the "taking over". Also, if you think either of these principles will produce an unacceptable distortion of opportunity for one or other group, you can always superimpose grandfather rights to posts in each company for "home" bids, which you can offer either for just the first bid after merger, any one bid to be chosen by the individual, or even give indefinite preferential bids for "home" posts.
It goes without saying that employees joining after any merger would be added to the bottom of the joint list.
Frankly, there are so many different aspects that may need to be considered that it is difficult to suggest further without knowing more detail.
I wish you luck ... and I certainly think you'll need it
JD
