Ryanair has expressed its concern with a €32.5 million provision announced by Aer Lingus that covers various costs, including PAYE, interest and penalties, arising from the redundancies of 715 staff negotiated in 2008 at the Labour Relations Commission.
Although the airline believed the redundancy payments would be eligible for tax relief but since 715 of the 913 people that were made redundant in 2009 were rehired by Aer Lingus, the government ruled that the redundancy payments were not liable for PAYE and other taxes.
The €32.5 million was a settlement fee agreed between Aer Lingus and the Irish government. Ryanair, which owns 29.8% of Aer Lingus, has asked who was involved in the original negotiations and why Aer Lingus believed that there were no tax liabilities. It is also aggrieved by a €25.3 million “cash gift” to the Aer Lingus employee share option trust last December and wants to know the current deficit on the Aer Lingus pension scheme.