The Department of Enterprise, Trade and Innovation will have to pay Aer Lingus €5m if it is decided that a controversial redundancy scheme at the airline qualifies for a State rebate payment.
In 2008, the airline made almost 1,000 workers redundant on generous terms of nine weeks of pay per year of service.
However, 715 of the workers were re-employed within weeks on lower terms and conditions.
At the time, some observers queried whether this constituted a bona fide redundancy entitling the company and the workers to State support.
If it were deemed genuine, the company would be entitled to a refund of 60% of the statutory redundancy portion of the package, which the department today confirmed could amount to €5m.
In addition, the employees would qualify for special tax relief on their lump sum, which would lead to millions in tax foregone for the taxpayer.
Sean Gorman, Secretary General of the Department of Enterprise, Trade and Innovation, told the Oireachtas Public Accounts committee that two years after the staff left and returned, the department still has not adjudicated on whether the leave and return scheme qualifies as a redundancy scheme.
The normal period for making a decision is six months.
The committee’s chairman, Bernard Allen of Fine Gael, asked whether these were bogus redundancies.
Mr Gorman said the matter was very complex.
He confirmed that a further 350 claims of a similar nature have been lodged on behalf of DAA staff transferring from Terminal One to Terminal Two.
