Tánaiste Mary Coughlan has said the Department of Enterprise has not yet decided whether or not the so-called ‘leave and return’ scheme introduced at Aer Lingus two years ago qualifies as redundancy.

Ms Coughlan said the Department was still considering whether or not Aer Lingus should receive a rebate on the redundancy payments it made to workers.

As part of the agreement 1,073 staff exited the company under a voluntary severance scheme.

Subsequently 715 staff were re-employed into new roles under significantly different terms and conditions of employment.

Aer Lingus remains has said it remains convinced that the exits of these 715 staff were legitimate redundancies under the Redundancy Payments Acts 1967-2007.

The unprecedented redundancy deal had huge implications for the taxpayer.

If it qualified as a genuine redundancy, the airline was entitled to a State rebate for part of its redundancy costs, which was potentially worth millions.

Staff would also get favourable tax treatment of the package called 'top slicing'.

But when the Dublin Airport Authority sought a similar deal for staff transferring from Terminal One to Terminal Two, the Revenue Commissioners told them that was not a redundancy because the employees were returning to work for a Dublin Airport Authority subsidiary.

However, the DAA has confirmed that it is appealing the decision.

Fall in passenger numbers

Meanwhile, Aer Lingus said its passenger numbers in September fell by 3.4% to 927,000 compared to the same time last year.

However, the airline managed to improve its load factor, how many seats it fills on each flight, by 3.5 points to 81%.

Aer Lingus said its long-haul passenger numbers were static at 86,000.

Its short-haul passenger numbers fell 3.8% to 841,000 compared to the same time last year.