The Revenue Commission has issued tax bills to some Aer Lingus staff because they believe a controversial 2008 redundancy scheme was not valid.
Both SIPTU and Aer Lingus have insisted that the redundancies were genuine, and qualify for generous tax relief.
Under the so-called ‘leave and return’ scheme in 2008, almost 1,100 staff left Aer Lingus with generous redundancy packages worth nine weeks pay per year of service. Within weeks, 715 returned to work for the airline, but on lower pay and conditions.
At the time, some queried whether this counted as a redundancy.
If it did, the airline was entitled to a Government rebate for part of the redundancy costs.
The Department of Enterprise Trade and Innovation told the Oireachtas Public Accounts Committee that the rebate could be worth €5m to the company.
For their part, the redundant workers would get favourable tax treatment of the package, which could cost the taxpayer millions in tax foregone.
But late last year, when the Dublin Airport Authority tried to do a similar deal for staff transferring from Terminal 1 to Terminal 2, the Revenue Commissioners told them this did not qualify as a redundancy. The DAA has appealed the ruling.
It then emerged that the Department of Enterprise Trade and Innovation still has not approved the ‘leave and return’ scheme as qualifying for the State rebate. The normal time for processing an application for the rebate is six months.
Meanwhile, just before Christmas, some Aer Lingus staff who had applied for top slicing relief on their redundancy lump sums were told that they did not qualify for redundancy tax treatment, and would have to repay any relief they had been given.
This afternoon, SIPTU confirmed to RTÉ News that members had received such tax demands.
A SIPTU spokesperson for said as far as it was concerned, its members in Aer LIngus had been made redundant, and appointed to completely different jobs where they were paid up to 20% less.
On that basis, they believe these were actual redundancies.
The Revenue Commissioners said they could not comment on individual cases.
Aer LIngus said that it was up to the Department of Enterprise Trade and Innovation to determine if this was a bona fide redundancy. They are awaiting a response from the department.
The Department of Enterprise Trade and Innovation said it was still dealing with issues of clarification with Aer Lingus. It said tax demands were a matter for the Revenue Commissioners.
