TEAM increases offer to buy out employment guarantees

In February 1998, trade unions in TEAM Aer Lingus, the Irish aircraft maintenance company, are considering the terms of a revised offer aimed at "buying out" individual employment guarantees held by a majority of its 1,600-strong workforce, which will enable the state-owned concern to be sold to FLS, the Danish company.

Trade unions in the state-owned aircraft maintenance company, TEAM Aer Lingus, are considering a management offer to buy out employment guarantees made to workers who transferred over from the former maintenance and engineering division of the parent company in 1990. The guarantees are in the form of individually signed "letters of comfort" and state that the workers formally remain as employees of Aer Lingus"as if TEAM did not exist" (IE9711235F).

This is seen as the crucial industrial relations issue to be resolved before the Danish company, FLS, can move ahead with its prospective takeover and the absorption of TEAM's IEP 65 million debt. It is expected to be a complete takeover and this will also require the approval of those who hold the guarantees, one of which states that Aer Lingus must retain a 51% controlling interest in TEAM.

In 1990, when TEAM was established, Aer Lingus and the Government had been forced to provide a letter of guarantee for each employee. This demand was made on behalf of the mostly craft-based workforce which had rejected, on three separate occasions, plans to establish a business then seen as having enormous potential for growth. However the 1991 Gulf War and the over-supply of aircraft maintenance services since then have pushed TEAM to the verge of bankruptcy.

The new compensation offer, made at the end of February 1998 is considerably better than a IEP 28 million offer made at the end of December 1997. It would mean individual employees - including those at management levels - receiving service-based tax-free payments of between IEP 30,000 and IEP 40,000 in some cases. Under transfer of undertakings regulations, they would retain their jobs and terms and conditions of employment with the new owners.

A separate industrial relations process has been established to bring the deal to a conclusion, overseen by a legal expert, Gerry Durcan, senior counsel, who is acting in the role of agreed independent "facilitator". Each employee who holds a personal guarantee must opt to accept the offer or not on a personal basis. Those agreeing to do so will also be expected to sign a document relinquishing their individual guarantees.