Agreement for foreign-based pilots at Aer Lingus settles dispute

In October 2007, the Labour Relations Commission brokered a deal between the former state-owned airline, Aer Lingus, and its pilots, which establishes the terms and conditions of the company’s new base in Belfast in Northern Ireland. The agreement includes a general commitment by the company that the terms and conditions of Dublin pilots will not be affected by the opening of further Aer Lingus bases abroad.

An agreement between Aer Lingus and the pilots’ representative trade union, the Irish Municipal Public and Civil Trade Union (IMPACT), is expected to lay down an industrial relations precedent for any future foreign bases planned by the former state-owned airline. Aer Lingus, which was privatised in 2006, plans to open its new Belfast operations on 10 December 2007.

The agreement is also expected to help pave the way for progress regarding the airline’s wider ‘Programme for cost improvement’, known as the PCI-07, which aims to cut costs and introduce flexibilities across all employee categories. The Belfast base agreement is one aspect of this cost reduction plan, which has a target of €20 million in annual savings. Aer Lingus currently employs about 3,300 workers.

Labour Relations Commission brokers deal

The Belfast base agreement was painstakingly brokered by the Labour Relations Commission (LRC) Chief Executive, Kieran Mulvey, and its Head of Conciliation, Kevin Foley. The two men had put forward similar proposals in August 2007, but agreement had proved to be elusive in the months that followed. The deal also averted potential disruption for the company and its passengers on 17 October 2007.

Before the breakthrough deal, the company had acknowledged a role for the IMPACT trade union in Belfast, but placed a five-year limit on the retention of existing defined benefit (DB) pension arrangements for pilots who might transfer from Dublin to its Belfast base. The trade union had also agreed that the terms and conditions in Belfast would be different to those in Dublin, but wanted transfer rights for Dublin-based pilots based on an existing seniority agreement.

Terms of settlement

The settlement agreed at the LRC on 14 October means that both parties have succeeded in their particular strategic goals. The agreement includes a general commitment by the company that the terms and conditions of Dublin pilots will not be affected by the opening of outside bases.

Pay

Regarding pay scales, a captain pilot in Belfast will receive an annual salary of €113,000 on entry, while a first officer in the Republic of Ireland moving to command an aircraft will receive €98,000 a year. However, a much narrower pay scale will apply in Belfast compared with Dublin.

Pension plans

A defined contribution (DC) pension plan will be introduced for new Belfast pilots. However, those transferring from Dublin to Belfast will be able to take their current DB pension scheme with them. Pilots who secure a transfer to the south in the future will join the Republic of Ireland DB pension scheme, but with the option of converting their DC contributions into the DB plan.

Staffing

The Belfast base will comprise a total of 30 pilots, including 15 captains and 15 co-pilots. As the company had already filled seven of the captain positions, eight posts were reserved for pilots who were on the company’s seniority list in Dublin.

This template will be applied whenever Aer Lingus establishes any other foreign bases. Such a provision constitutes a major concession for the trade union. It means that captains in Dublin will have the right to transfer to such bases if they apply for the position, although the pay and working conditions in all new bases will be determined locally.

Commentary

The next critical stage in the process of securing a final agreement on the PCI-07 could depend on the deliberations of the social partner-led National Implementation Body (NIB). The latter is due to examine a decision by Aer Lingus to freeze remaining pay rises, which were expected under the terms of the 10-year social partnership agreement, [Towards 2016 (2.86Mb PDF)](http://www.taoiseach.gov.ie/attached_files/Pdf files/Towards2016PartnershipAgreement.pdf). The airline is attempting to use the pay freeze to put pressure on the trade unions to finalise the PCI-07. The NIB may find a way of ensuring that the national wage rises are paid, but in such a manner that the company’s overall plan – as backed by the Labour Court – can be properly finalised.

Brian Sheehan, IRN Publishing