Labour Court recommendation on Aer Lingus pension scheme weights in favour of lower paid

11th January 2013

The Labour Court published its recommendation on the pension dispute at Aer Lingus this month. The matter was referred to the Labour Court on foot of an agreement reached between IBEC and ICTU in November 2012, aimed at resolving the long standing dispute, which concerns the current and future pension arrangements for Aer Lingus staff.

The Court recommended that the general structure of the new arrangements, as proposed by Aer Lingus, be accepted. The Court said that this should include proposed new contribution levels.

One of the concerns of the trade union group, led by Ictu, was about how the proposed new scheme would affect lower paid workers. The union group put proposals designed to ease the effects of coordinating the new scheme with the State pension. This involved a weighting of the return from the new scheme to different levels of pensionable pay.

The Court said it saw merit in the approach. As a result, the proposed recommended target levels of benefit for those earning less than €30 thousand is between 89 and 84 per cent. In contrast, for those earning over €60 thousand, the target is between 70 and 66 per cent of final salary. National secretary Matt Staunton said the union welcomed the advanced percentage return in the recommendation.

The Court also recommended that both parties should discuss the question of cost offsetting measures, with a view to reaching agreement. The Court said that the discussions should have regard to the level of investment necessary to reach the targets, and how a staff contribution can be made by way of savings in payroll costs. Matt commented “We don’t like the proposed links to pay stabilisation measures, however, these will need to be explored”.

The Court was described the latest recommendation as an interim measure to provide guidance on what should be included in the new pension scheme. If final agreement is not reached in those discussions by 31st January 2013 outstanding matters may be referred back to the Court.

Matt broadly welcomed the recommendation, and the negotiation process will now continue, with the Court setting a deadline for agreement on the 31st of January. Matt said, “IMPACT will be seeking to maximise pension coverage within the indicative pay bands. The biggest single positive outcome in the recommendation is that we have created a much better outcome for lower paid staff. It’s more equitable, and it is a reassuring step forward in what has been a difficult negotiation process”.

Read the full recommendation HERE.