King & ors -v- Aer Lingus PLC, [2005] IESC 84 (2005)

Parts:King & ors, Aer Lingus PLC
Reporting Judge:McCracken J.
Docket Number:42 & 59/04
 
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THE SUPREME COURT

042/04

Denham J

Geoghegan J

Fennelly J

McCracken J

Macken J

Between:

William King, Garrett Madigan, William Graham,

Dermot D'Arcy, Christopher Healy, Brendan Baker, Matt Graham, Hugh Rafferty, Neil Quinn, John O'Donnell, Patrick Curry,

Richard P. O'Connor, Patrick Gleeson, John Doyle, Liam Colgan, James A. McCann, Christopher O'Connor, Patrick Foley, Gerry Cummins, Thomas Burke, Alan Brodigan, Peter J. Conway,

Michael Dardis, Michael Derham,

AND BY ORDER Aidan Boland, Eamon Buckley, John Keenan, James Maher, Eric Norton, Vincent O'Connor

AND BY ORDER Richard Barber, George Barker, Stephen Brogan, Martin Burke, Thomas Burke, Jim Byrne, Tim Carroll, Laurence Clarke, Jim Doyle, Brian Flood, Padraic Geraghty, Adrian Heron, James Lewis, Patrick Macken, Patrick Molloy, Noel Murphy, Nollaig O'Mahony, Gerald O'Sullivan, John O'Sullivan, Nicholas Radford, William Sharkey, David Smith, Peter Smith, Matthew Walsh, Brian Webberley

Plaintiffs/ Appellants

ANDAer Lingus Plc

Defendant/ Respondent

Judgment of Mr Justice McCracken delivered the 20th day of December 2005

Background

Prior to 1989 the Appellants worked in the maintenance and engineering department of the Respondent in Dublin Airport. At that time by far the greater part of their work was the maintenance and upkeep of the Respondent's fleet of aircraft and ground vehicles. About this time the Respondent had plans to expand the maintenance and engineering department to enable it to service, not only the Respondent's own aircraft, but to obtain contracts to service aircraft from other airlines. They determined that the most efficient way to do this would be to form a separate company within the group, to be known as TEAM Aer Lingus (hereinafter called "Team"). These plans would involve the transfer of the maintenance and engineering staff from the Respondent to Team, a move which was initially opposed by many of such staff and the Trades Unions representing them. Ultimately, after protracted negotiations, and certain undertakings and guarantees having been given to the staff by the Respondent, Team commenced business with most of the maintenance and engineering staff transferring, at least physically, to Team. These proceedings are concerned with the consequences of the negotiations which took place, particularly in the light of subsequent events whereby Team was ultimately sold by the Respondent to a Danish company called FLS Aerospace. To understand the issues now before the Court it is necessary to detail the events leading up to the creation of Team and also the events which occurred at and after the sale of Team.

Negotiations on Setting up Team

It is not necessary to particularise all the negotiations which took place, but they were lengthy and complex. The workers were naturally anxious that the position and status which they had acquired as employees of the Respondent should not be prejudiced, and at the time there undoubtedly was a perception that such employment was extremely secure. They were particularly anxious to protect their position should anything happen to Team. The negotiations progressed through various stages and three ballots of the workers involved were held. The Respondent's proposals were rejected in the first two ballots, but following further representations by the Respondent, the proposals were accepted in the third ballot.

It should be said that at all times the Respondent acknowledged that the existing staff would retain their identity and contracts of employment with the Respondent and would be seconded to the new company but would continue to enjoy full status and conditions as an employee of the Respondent. However, the workers were not satisfied with general statements of this nature and required more detailed information and undertakings from the Respondent.

The Respondent's Representations

There was a large body of correspondence leading up to the taking of the final ballot which approved the Respondent's proposals. The final proposals evolved gradually through this correspondence and for the purpose of this decision it is sufficient to quote from three of these documents, albeit at some length.

On 30th April 1990 the Respondent's general manager-personnel, Mr John O'Neill, wrote to all craft workers in the following terms:-

"This letter compliments all previous correspondence on the matter.

All Dublin based AME's and SME's on secondment to TEAM will remain as Aer Lingus employees and will retire as Aer Lingus employees.

The tradesmen's agreement will continue to apply and all conditions...

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