When is redundancy redundancy ?

RTE reports that the Government has yet to rule if the proposed contract restructuring plan at Aer Lingus is eligible for rebate of redundancy payments. Uncertainty exists as to whether or not the plan whereby employees can accept a severance package and return to work on a reduced contract is classified as redundancy. If it is deemed to be redundancy then Aer Lingus are entitled to a rebate on a significant portion of the payment and employees have a lower tax liability on their severance package. Three years ago Irish Ferries received a €4m rebate after making 500 employees redundant.

The question then remains - does a rebate constitute state aid to the airline and would it get past the EU ?