Pay agreement at airline subject to company’s non-unionised status

A new four-year agreement at the low-cost carrier Ryanair is set to ‘significantly improve’ terms and conditions of employment for its Dublin-based pilots. Over the past few years, pilots were denied any improvements by the airline, due to the fact that an unspecified number of them sought to pursue claims through trade union representation. However, the deal may be regarded as meeting the loose description of a ‘bargaining unit’ referred to in the Supreme Court judgement earlier this year.

According to Ryanair, a staunchly non-unionised company, the newly reached four-year agreement will ‘significantly improve’ pay, rosters, as well as terms and conditions of employment for the 59 Dublin-based pilots directly involved. The company promises that with this new agreement employment conditions will be brought into line with previously implemented measures for pilots in other Ryanair bases – namely Cork and Shannon.

Reaching agreement

The terms of the agreement stipulate that its implementation is contingent on Ryanair remaining a union-free company: ‘If union recognition for pilots is imposed in Ireland, the four-year agreement is void and terms and conditions will revert to pre-agreement conditions.’

The deal was reached following local discussions between Ryanair management and the pilots involved. The pilots formally put forward a set of proposals to the airline, which then accepted the terms of these proposals. The pilots then engaged a solicitor to verify whether a majority of the pilots accepted the provisions of the agreement and the company subsequently accepted the terms in a majority vote. All of the events were documented by the company.

Provisions of agreement

The agreement provides for pay rises of €25,000 annually for captains and over €15,000 a year for first officers. Further key elements of the deal include:

• a new roster of five days on and four days off for pilots, with an additional 25 planned days off a year;

• an increase in basic pay of 10.38% staggered over four years, with a pay rise of 3% in the first and second year, followed by 2% in the third and fourth year;

• a new, increased sector pay system;

• a new annual allowance of €5,000 for captains and other flight officer grades;

• a matching pension contribution of up to €5,000 a year for captains and up to €2,500 for other flight officers;

• an accelerated promotion system through co-pilot ranks;

• a job-sharing facility;

• a mechanism for pilots who paid for their conversion training to receive a refund of €10,000.

The Irish Municipal Public and Civil Trade Union (IMPACT), which represents an unspecified number of Dublin pilots, claimed that the proposals were not prompted by representations from the pilots, as suggested by the company. Moreover, the trade union underlined that the agreement would have no impact on other claims being taken by certain pilots against Ryanair.

Legal dispute preceding agreement

The trade union’s pilots in Dublin have been involved in a legal dispute with the airline over union representation since 2004 and took a high profile case on a number of issues to the Labour Court under the Industrial Relations (Amendment) Act, 2001 and the Social Welfare (Miscellaneous Provisions) Act, 2004. The 2001 and 2004 acts allow workers to be represented in the Labour Court in cases where the employer refuses collective bargaining. In such cases, the Labour Court can, ultimately, issue a binding decision that is enforceable in the law courts.

Earlier this year, however, the Supreme Court ruled that the Labour Court had not followed fair procedures in the case involving the independent airline Ryanair and IMPACT (IE0702019I). It found that the Labour Court had not properly examined whether internal negotiating procedures, such as an employee representative council, had been exhausted in the dispute between Dublin-based pilots and Ryanair. A re-hearing of the case was ordered, and this has been set for January 2008. In any re-hearing, the company is expected to argue forcefully that a collective bargaining unit was in operation up to the time it was collapsed by the trade union.

Impact of agreement

The significance of the new agreement is that it is likely to be regarded as meeting the loose description of a ‘bargaining unit’ referred to in the Supreme Court judgement. Were IMPACT to consider taking a case against Ryanair today, the company would be able to argue that the latest agreement is an example of having voluntarily entered into negotiations with a group of its employees.

It is understood that Ryanair holds the view that the motivation of the pilots in backing the new agreement resulted from their disillusion with the trade union’s hopes for a successful re-hearing of their case under the 2001 and 2004 acts.

Brian Sheehan, IRN Publishing