State to subsidise unfair dismissals

[Baron von Biffo]

Fair play. Thought it was mad to make redundant and then re-hire? That is weird. Instead of doing all of this, they could have just implemented a pay cut. This is their way of doing a pay cut.

You are quite correct, it was a mechanism to cut pay and dump staff without having to worry about unfair dismissal legislation. The bonus for the company was the expectation that the taxpayer would pick up €5M of the cost.

Sadly, but unsurprisingly, the comments in the duplicate thread on this subject are mostly of the 'kick the staff' variety and very few are questioning the failure of management that led to this mess.

[Proposition Joe]

You are quite correct, it was a mechanism to cut pay and dump staff without having to worry about unfair dismissal legislation. The bonus for the company was the expectation that the taxpayer would pick up €5M of the cost.

Sadly, but unsurprisingly, the comments in the duplicate thread on this subject are mostly of the 'kick the staff' variety and very few are questioning the failure of management that led to this mess.

This scheme was designed for the get-go to evade proper taxation and to defraud state funds.

The ill-begotten proceeds were then shared between the workers (in the form of an inappropriate tax relief) and the company (in the form of a state subsidy on the statutory portion of the redundancy).

Both unions and management were complicit in this attempted fraud, and the proceeds will have to be repaid by both. Simple as.

[Baron von Biffo]

This scheme was designed for the get-go to evade proper taxation and to defraud state funds.

The ill-begotten proceeds were then shared between the workers (in the form of an inappropriate tax relief) and the company (in the form of a state subsidy on the statutory portion of the redundancy).

Both unions and management were complicit in this attempted fraud, and the proceeds will have to be repaid by both. Simple as.

I suspect that the scheme was planned as a means of dumping staff that management didn't like without being trammelled by that pesky unfair dismissals legislation. By dressing it up as redundancy the company could hope to bag the additional benefit of a state subsidy of €5M. In that context union leadership should have recommended resistance to the deal from day one.

The Aer Lingus workers involved in this would do well to get a legal opinion on whether they were improperly advised in relation to the scheme. If the company told them that they would get a particular sum net of taxes and it now emerges that this advice was incorrect then they may have a case against AL for recovery of the difference.

[Proposition Joe]

I suspect that the scheme was planned as a means of dumping staff that management didn't like without being trammelled by that pesky unfair dismissals legislation.

No, it was mainly a mechanism to allow Aer Lingus employees to "cash in" their gilded terms and conditions, if they so desired.

How could a voluntary redundancy amount to unfair dismissal?

The Aer Lingus workers involved in this would do well to get a legal opinion on whether they were improperly advised in relation to the scheme. If the company told them that they would get a particular sum net of taxes and it now emerges that this advice was incorrect then they may have a case against AL for recovery of the difference.

That's like the get-away driver at a bank robbery claiming innocence because his gun-toting and balaclava-clad confederates told him they were only going to a church picnic.

The unions were involved in a conspiracy to evade tax and defraud the Dept of Enterprise. They have zero chance of getting the Aer Lingus to cover the tax bill. And even if in parallel universe they managed to swing it, that in itself would amount to a further taxable benefit.

[DaveM]

SIPTU retracts tax demands claim - RT News

SIPTU has said it was wrong in confirming that Aer Lingus workers had received tax demands from the Revenue Commissioners in relation to a controversial 'leave and return' redundancy scheme.

Yesterday, a SIPTU spokesman confirmed to RTÉ News that staff had received tax demands because the Revenue had deemed the scheme not to qualify for favourable tax treatment.

However, this evening he said that on further investigation it emerged that he had been wrong in confirming this, and that the union had not identified any employees who had received such tax demands.

[Baron von Biffo]

No, it was mainly a mechanism to allow Aer Lingus employees to "cash in" their gilded terms and conditions, if they so desired.

How could a voluntary redundancy amount to unfair dismissal?

Was it a voluntary scheme?

That's like the get-away driver at a bank robbery claiming innocence because his gun-toting and balaclava-clad confederates told him they were only going to a church picnic.

The unions were involved in a conspiracy to evade tax and defraud the Dept of Enterprise. They have zero chance of getting the Aer Lingus to cover the tax bill. And even if in parallel universe they managed to swing it, that in itself would amount to a further taxable benefit.

I see no evidence of the conspiracy you refer to. It's clear that there's a tax avoidance issue but that's perfectly legal.

If the AL workers won a court judgement for the amount they lost due to bad advice it wouldn't be taxable.