Aer Lingus makes €32.5m exceptional provision
Aer Lingus is to put aside €32.5m as it tries to settle a dispute with the Revenue over redundancies under a 2008 restructuring programme.
In 2009, 913 Aer Lingus staff were made redundant, but 715 were re-employed on changed duties and lower salaries.
The restructuring was agreed on the basis that severance payments made to staff would qualify as redundancy under legislation, with rebates for Aer Lingus and tax relief for the workers affected.
Aer Lingus said Revenue and the Department of Enterprise, Trade and Innovation were questioning whether those who returned to the airline should be considered to be redundant.
An urgent review was commenced of the terms on which these redundancies were agreed by all of the parties involved at the time.
The airline said that, after taking advice, it had concluded that it was in their best interests to seek a settlement with Revenue. Revenue has confined that it wants to recover PAYE and PRSI which it thinks should have been deducted for termination payments to workers in 2009. Negotiations with Revenue are continuing.
Aer Lingus accepts that it gave assurances to staff at the time that any terminations of employment should qualify as legitimate redundancies and that staff members made their decision on the basis that any tax liability in relation to the programme would be limited.
On this basis, Aer Lingus believes that it is inappropriate to seek to recover any amounts from staff.
