IRELAND - The Services, Industrial, Professional and Technical Union (SIPTU) has requested intervention from the government and the Irish Congress of Trade Unions (ICTU) in a dispute with Aer Lingus over the impact outsourcing plans will have on its pension fund.

Talks between the union and the airline, facilitated by the Labour Relations Commission (LRC), broke down last week after both sides accused the other of not properly "engaging" in a process designed to find alternative ways to save money at the firm than by outsourcing an estimated 1,250 jobs.

Gerry McCormack, national industrial secretary at SIPTU, claimed Aer Lingus had refused to answer "some of the basic questions of most concern to our members", including how the "very large costs that will be incurred on the pension fund will be met if there are mass redundancies at the airline".

Figures from Aer Lingus' annual report for 2007 confirmed the organisation operates a number of "externally-funded" Irish pension schemes, including the Irish Airline (General Employees) Superannuation Scheme.

However, while it revealed the group's pension contributions for 2007 totalled €23.5m, up from €17m in 2006, it argued because the "company contribution rate is entirely independent of the Irish pension schemes' funding level, the value of the Irish pension schemes' assets and liabilities are not relevant in the context of reporting under IAS 19 of retirement benefits".

SIPTU claimed the management of Aer Lingus has refused to produce figures justifying its outsourcing strategy relating, in particular, to the value of redundancy packages and the "implications of such a massive shedding of jobs for the pension fund".

McCormack said: "Anyone can see that the cost of shoring up the pension fund to cope with over 1,250 employees leaving the company and switching from the asset to the liability side of the balance sheet will be enormous. Commentators estimate the cost could be anything between €250m and €540m."

He warned even at the lower figure, "it would take five years for the company to recoup the expense from staff savings", not including the costs of any potential redundancy packages.

"Without putting figures on these two items it is impossible to assess the real, net, gains the airline would make from shedding over 1,250 jobs. This is not just a difficult time for airlines but it is also a difficult time for people to be thrown on the labour market and for pension funds," added McCormack.

Following the breakdown of the talks, SIPTU revealed it is now seeking assistance from ICTU and the Irish government to help find a solution to the outsourcing and to avoid industrial action.

McCormack said: "At talks with the company over the past three weeks management was not prepared to discuss anything except cutting staff costs and staff jobs. Despite repeated attempts by us to raise other issues they failed to discuss their business strategy with us or provide information that would allow for informed discussion on anything other than job cuts and the decimation of pay and conditions for those who survived the axe.

"We will now seek the assistance of ICTU and the Government to find a solution to this problem but it takes two sides to find a solution to this crisis and that means the company will have to abandon its current position and look seriously for more creative options," he added.

In the meantime, McCormack warned, the union would conclude its ballot for industrial action this week, although he confirmed any strike mandate would not be 'activated' unless Aer Lingus "carries out its threat to outsource work unilaterally from 1 December".

"If, as in the past, the company attempts to bypass SIPTU and write to members to accept any redundancy package we will be advising them to ignore such correspondence and await full information from our national shop stewards' committee," added McCormack.

Aer Lingus was unavailable for comment at the time of publication.

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