New agreement will protect employment at Aer Lingus - Nash
27 May 2015
Dáil Éireann, Motion re sale of shares in Aer Lingus
A Cheann Comhairle,
The most important point to remember here is that Aer Lingus is a private company. It was privatised in 2006, a scheme that Fianna Fáil in Government had been working on since before the end of the last century.
Both the parties now in Government opposed that process at every stage.
Back then, a minority stake was held onto by the State, with the sole purpose of blocking the sale or transfer of Heathrow slots.
This was the only reason given for holding onto any shares at all. But the arrangement cobbled together by the last Government was badly flawed.
Their deal didn’t give the Government any influence on the actual use of the Heathrow slots and it made no provision for the future of our airports.
Nor was there any protection against the State’s shareholding simply being diluted below the magic percentage by new share issues.
On this, as on so many other issues, we inherited a very weak hand when Fianna Fáil retired from the fray.
Compare then with now. We have here a very good deal, which will protect the State’s long-term transport interests, protect and grow jobs, and boost infrastructural and regional investment.
The State will receive around €335 million, which we will ring-fence for investment in transport and other 'connectivity' projects.
The State’s veto is enormously strengthened, so that we can in future, acting unilaterally, block any proposed disposal of the Heathrow slots.
The Aer Lingus name, brand and head office are protected, again indefinitely.
The schedules to Heathrow from Dublin, Cork and Shannon are protected for seven years.
IAG has a significant growth plan for Dublin, Cork and Shannon over the long-term.
I want to talk briefly about the employment aspects. When the Government got the IAG offer, we asked for specific information on future employment prospects in Aer Lingus.
They told us they anticipate that by the end of 2016, around 150 net new jobs will be created in Ireland. This takes account of approximately 50 voluntary redundancies, primarily in back office functions, which would happen on a phased basis through 2016.
They also told us that by 2020 Aer Lingus could create up to 635 highly skilled jobs, comprising pilots, cabin crew, engineers and other ground staff.
IAG have confirmed that Aer Lingus will remain responsible for employee and industrial relations matters.
In particular, any decision about a registered employment agreement in Aer Lingus will remain the responsibility of Aer Lingus management.
That is the significance of the letter my colleague the Minister for Transport secured from Aer Lingus’s CEO.
They have confirmed a strong preference for direct labour and have confirmed their preference and practice of avoiding compulsory redundancies.
They agree that registered employment agreements are mutually beneficial and safeguard the interest of employer and workers.
And they are committed to expansion of the scope of their REAs, to include staff groups not covered by the current agreements.
I hope, if there is time in tomorrow’s schedule, to move second stage of the Industrial Relations Amendment Bill 2015. The Bill re-introduces a mechanism for the registration of employment agreements at individual enterprise level. There has been a gap in our law since May 2013 when the Supreme Court held that the old REA system was invalid. Of course, there can be no REA unless and until this legislation is passed.
An REA is negotiated between a union and an employer. It can include provisions on both pay and on conditions of employment generally. Once it is registered, the terms of an REA then become part of the contract of every worker which the agreement covers.
And, because the effect of an REA is to adapt individual employment contracts, the benefit of an REA will survive any change of ownership.
Under the Transfer of Undertakings Regulations 2003, where a company is transferred to new ownership, the transferor’s rights and obligations under employment contracts are automatically transferred to the new owners.
I am hoping, with the co-operation of the two Houses, that this Bill will pass into law by the summer.
The important point is that there is of course nothing to prevent employers and workers from starting their negotiations on an employment agreement right now, with a view to having it registered as soon as the Bill becomes law.
I would encourage them to do so. With a fair wind behind those talks, they could be concluded, and an agreement could be registered, before the proposed IAG sale is concluded.
The re-introduction of REAs in a constitutionally robust manner will provide certainty around what pay and conditions will be into the future and will promote industrial peace.
The Government is responsible for the legislation that will govern this negotiation process. We have also secured a commitment that the company will engage in talks. Some people believe we should go further. They seem to think we could and should actually dictate what is in the finalagreement.
I want to be clear about this. As Minister with responsibility for Labour Affairs and as a Labour Party member, I am more than happy to walk the extra mile on behalf of my friends in the trade union movement. But neither I nor any Minister can do their job for them. We cannot set out what is to be in the REA between Aer Lingus and its unions. That would not be good for Government and it would certainly not be good for the unions.
To be fair to the trade unions, I don’t believe they want us to take their place at the negotiating table – any more than they would want Government to dictate what goes into the next REA coming down the line, for Dublin Bus and Bus Éireann.
An REA is a voluntary agreement, negotiated between a business and its workforce, through their unions. Its content has to be settled between the parties themselves.
Aer Lingus has made its position clear to me and to colleagues in Government. It is perhaps now time for them to lift up the phone and engage directly with their workers.
But, from what I have seen and heard, as a result of the work done by the Minister for Transport and all my colleagues, I am satisfied that there will be a new REA to protect the employment, and conditions of employment, at Aer Lingus.
I am also satisfied that Aer Lingus has fully taken on board our concerns over outsourcing of employment and compulsory redundancies and I believe that these concerns will be addressed in full. This should be done through a meaningful industrial relations process which I believe should commence immediately.
I therefore have no hesitation in supporting this motion.