Thursday, 25 January 2018
Topical Issue Debate
Aer Lingus Staff
When Fine Gael and Labour took the very short-sighted step of selling the State's remaining shareholding in our national airline in 2015, we were told unambiguously that the jobs and conditions of Aer Lingus workers would be protected. We were told at the time by the Minister's predecessor, Deputy Paschal Donohoe:
I want to assure the House that IAG has confirmed that existing employment rights of the employees of Aer Lingus will be fully safeguarded upon completion of the offer ... Aer Lingus will engage in a process of consultation governed by agreed structures with staff and its representatives when any restructuring is required and ... it does not foresee a likelihood of either compulsory redundancy or non-direct employment.
That vision has not come to pass, sadly, because the reality, as I warned at the time, has been the opposite.
On Thursday, 16 November of last year, 20 staff members of Aer Lingus's guest relations were summoned to a meeting in Aer Lingus's head office. They were told it was a business briefing and that they did not need union representation. Despite this, they were told at that meeting that their jobs would be outsourced to North America from the end of February. This has been the strategy under way since 2015. In February 2016, the procurement department was outsourced to Poland, with the loss of 15 jobs. IT was then outsourced to India and the UK, part of the finance department has been outsourced to India, and now guest relations is going to North America, while most customer relations work has already been outsourced to Manila in the Philippines. On top of this, there are very serious rumblings about the outsourcing of catering and ground operations. We know operations such as Menzies Aviation are waiting on the sidelines to franchise the operation that is there. We are also informed initiatives are taking place in this regard, with no guarantees for the jobs or conditions of the workers there. Bad and all as that is, on top of that, the Aer Lingus chief operating officer told staff of the need to cut costs because of Norwegian Air and WOW Air. If that was not enough, Aer Lingus has come up with its own low-cost airline level which it is using to threaten workers with their own jobs and conditions. Aer Lingus claims it will set up a new company to compete with itself. You could not make this stuff up. It is an absolute race to the bottom.
We cannot go into the details of the case, but the Minister may be aware that groups of workers in guest relations at Aer Lingus have a respect and bullying case before the Workplace Relations Commission, WRC, next month.
The point is that very serious push factors are under way in respect of working conditions. Overnight, the employment conditions of 20 workers in that section, some of whom have been there for decades, went from a five-day roster to a seven-day roster. The only day off guaranteed is Christmas Day. Their conditions have been stood on their head without any meaningful engagement whatsoever. Then, advertisements are placed for jobs to be outsourced and they are gone. It is absolutely traumatic for these workers.
I suppose the issue revolves around what the Minister can do. In some ways, he is the Minister who has arrived after the product has been sold and our national airline hived off. I presume, however, that, in the context of the guarantees given by his predecessor to the House - and the utter failure of Aer Lingus to honour them - he has a role to play in the context of intervening urgently with IAG to stop it undermining and pushing workers out of decent jobs and working conditions and to stop outsourcing jobs to outside the country.
I thank Deputy Clare Daly for bringing this matter to my attention. The aviation sector has been an important employer in Ireland for many years. It supports 26,000 jobs directly and a further 16,000 in the supply chain. Ireland's tourism industry, which is heavily dependent on aviation, accounts for a further 180,000 jobs. Aer Lingus itself, now a fully privately-owned airline within the lAG group, employs in the region of 4,000 people.
At the time of the takeover offer, IAG anticipated that, under its ownership, there would be significant job creation opportunities in Aer Lingus's business, predominantly located in Ireland, with net employment growth However, in the context of the Deputy's reference to promises made by lAG regarding jobs, I would like to make a number of clarifications. The legally-binding commitments made by IAG as part of its offer for Aer Lingus relate to Heathrow slots, the location of the headquarters and the Aer Lingus brand. These commitments from IAG are enshrined in Aer Lingus's articles and are enforced via the single Aer Lingus share retained in the name of the Minster for Finance. At no point did IAG make legally-binding commitments to the Government on Aer Lingus jobs as part of its offer. Furthermore, the Government has no role in making or seeking commitments regarding employment in private companies.
The role of the Government at the time was to accept the offer from lAG and to accept the conditions under which the Minister for Finance would retain a single share in the company. My functions, as Minister for Transport, Tourism and Sport on Aer Lingus, are now essentially the same as with any Irish airline.
Any statements made by the companies at the time of the offer concerning growth, jobs, new routes and industrial relations would all be regarded as forward-looking in nature. Such statements were made in good faith by IAG and were based on the available information at the time. However, I reiterate that such statements were never presented by the companies concerned or by the Government at the time as promises.
Having clarified this matter, I can state that since IAG's takeover, Aer Lingus's business has progressed broadly in line with the plans outlined in the offer documentation. In terms of passenger growth and new routes, the company has outperformed what was envisaged at the time of the offer. For example, the offer envisaged two additional transatlantic routes in 2016, whereas three were launched, with a further new service to Miami announced in 2017 and new services to Philadelphia and Seattle announced for 2018. Aer Lingus now offers direct connections between Ireland and 13 major North American airports, and the significant part of this growth has occurred post the 2015 acquisition of Aer Lingus by lAG.
While matters concerning workforce planning are entirely for the company, one would expect that the significant growth in Aer Lingus's passenger numbers, routes and fleet has resulted in a net increase in employment in the company. In this context, it is noted that Aer Lingus recently announced that, since its introduction in 2014, its new strategy created more than 600 new jobs to the end of 2017. It was also announced that the airline will add eight new Airbus A321 long-range aircraft to the fleet. It is understood that this expansion will see the airline add approximately 800 new jobs between 2019 and 2020.
I also welcome the increased connectivity provided by Aer Lingus, particularly in the transatlantic market, which has positive knock-on effects for employment at our airports and in the tourism sector and the wider trading economy. In particular, the stand-out tourism statistic for recent years has been the rapid increase in the number of tourists visiting Ireland from North America, which increased by more than 15% again last year. The commitment and investment which IAG has made, through Aer Lingus's transatlantic services and the growth of Dublin Airport as a transit hub for such services, has certainly helped facilitate this growth in the number of tourists to Ireland from that market.
This is an incredibly important discussion, not least for the people whose livelihoods have been jeopardised. I fully accept the point made by the Minister that IAG made no legally-binding commitments at the time. It is a point I made in the Chamber when the deal was done, but the problem is that the Government parties at the time, namely, Fine Gael and the Labour Party, sold them, in this House and beyond, as commitments. At the time, the chief executive, Stephen Kavanagh, said he did not foresee compulsory redundancies or the use of outsourcing at Aer Lingus.
From the moment the deal was done, outsourcing escalated. A new job is not an additional job. There have been new jobs created at the expense of existing jobs, not to mind that when we take in all the jobs that have been lost it does not compensate. When we take the expansion of the routes and service, and the proportionate increase in workers coinciding with that, the sums do not add up because the work is being done on the shoulders of outsourced providers on much lower terms and conditions of employment.
There has to be a role for the Government somewhere to say that a company which used to be a semi-State company actively using push factors - and deliberately orchestrating conditions and changing people's long-accepted work practices - is really, in essence, driving people out of their jobs. For those jobs to end up in India, the Philippines and North America is utterly tragic for what was a beacon service and company in our area.
The Minister is right that the airport is a key employer. We must ask what type of employer it is, however. We have to stop the rot and this race to the bottom. I put it to the Minister that it is private, but it is private because it was sold on the basis of lies and commitments. The door is open for the Minister to go back and say that we do not think it is acceptable for anybody in our aviation sector to treat people in the way that those in the guest relations department and other departments are being treated. Not only that, the company should be engaging with its staff and should not be going down the road of outsourcing in any event.
I understand what the Deputy is saying. When I was in opposition and this deal was taking place, I would have had views which were sympathetic to hers at the time. We are now in a situation where Aer Lingus is a private company, and the managing director to whom the Deputy referred, Stephen Kavanagh, said he did not foresee any outsourcing when he was taking over. We have to take that as a statement of good faith at the time, but it is not binding as we know, and commercial companies of this sort are no longer semi-State companies. To ask me now to intervene in the activities of a private company, which is acting perfectly within the law, and which is of great benefit for many other jobs, is unrealistic and the Deputy will accept that. Whereas I agree with the sentiment, legally I am not in a position to do anything in the way of a direct intervention. I am sorry about that but I cannot do it.