In November last, Aer Lingus announced its intention to introduce new cost-cutting measures, which included the shedding of up to 1,500 jobs. Aer Lingus argued that the measures were necessary to ensure the future of its operations in the current economic climate. However, Trade Unions branded the €74 million cost saving measures as ‘‘Irish Ferries Mark II’’. The cost-cutting proposals sought to outsource more than a third of its total workforce, amounting to the loss of 1,500 jobs. Under the plan, workers would move to an outsourcing service provider under a transfer of undertakings arrangement, or alternatively take a redundancy package. Staff opting for the redundancy package could seek employment with the new service provider, but only on new terms and conditions.  

Siptu, the largest union at Aer Lingus, balloted its 1,200 members for allout industrial action in protest at the outsourcing plan. This was passed with a majority of 80 per cent in favour of strike action. It also balloted its members on the use of legislation on collective redundancies, introduced by the Government in the wake of the Irish Ferries controversy. The Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007, came into force on 8 May 2007. Under the Act, an exceptional collective redundancy is a dismissal which is both collective and compulsory, and which takes place in circumstances where the dismissed employees are replaced by others who will perform essentially the same functions as those dismissed, but on terms and conditions of employment materially inferior to those who have been dismissed. The Act provides for the establishment of a redundancy panel, and for reference to it of certain proposed collective redundancies. If an exceptional collective redundancy situation exists and employees are dismissed, it is possible for employees to claim unfair dismissal and possibly receive compensation of up to five years pay, depending on length of service.  

It had been proposed by the company that services to Boston, New York and San Francisco would be operated by cabin crew recruited in the Unites States on different terms and conditions of employment that currently apply to staff working on these routes. Such measures were perceived in some quarters as potentially coming within the ambit of the exceptional collective redundancies legislation, as the company were intending to replace current employees with workers on less beneficial terms and conditions of employment. However, agreement was later reached between the company and the trade unions, and it is now intended that Irish based cabin crew will continue to operate the transatlantic routes. The agreement is subject to new lower entry rates, 96 voluntary redundancies and changes in working conditions.  

After several tense weeks of threatened staff cuts, strike action, takeover bids and negotiations, an alternative plan was agreed averting the need for the outsourcing of 1,500 jobs. As part of the new deal, the number of staff will be reduced by 7 per cent through early retirement or voluntary redundancy. Further, half of the ground operations staff will be required to leave the company and reapply for positions with Aer Lingus on lower terms and conditions. A key feature of the deal was this ‘leave and return’ policy, under which some 850 workers have chosen to take a lump sum payment and leave the company before returning on reduced pay and conditions. The agreement is part of the overall cost reduction plan that envisages total savings of €74 million, of which €50 million will be taken from labour costs.