The Government has published a framework for an employee share option scheme (ESOP) at Aer Lingus clearing the way for all employees to ballot on the survival plan. However, the dispute could be far from over because SIPTU - which is currently balloting members on the survival plan - is planning to reballot those members on the ESOP proposals because they deny them any opportunity to claim retrospection on frozen pay increases.

Under the terms of the Programme for Prosperity and Fairness (PPF), the increases would be worth at least 10 per cent by the time the pay freeze comes up for review before the Labour Court in 15 months' time.

In contrast, IMPACT has welcomed the framework agreement. Its deputy general secretary Mr Shay Cody, whose union has been holding out for the final ESOP document to be published, seemed pleased with the contents and said last night it would begin balloting management grades this morning on the survival plan. Pilots and cabin crew will be balloted shortly.

Mr Cody has defended the decision to delay balloting on the survival plan, although the parameters for the ESOP were agreed in principle in talks between union leaders and the Government almost a week ago. "I think holding out on this issue has made the ESOP substantially better from a union point of view," he said.

A major element is that funds will be provided in the form of an interest-free loan from the company, to allow the 4.7 per cent shareholding already held by individual employees to be acquired by the ESOP.

The price ceiling has been set at €1.25 (£1.58). While the shares were notionally valued at £1, in the recent past they have exchanged hands at auctions within the company for as little at one penny.

Aer Lingus employees wishing to take advantage of the voluntary severance package will be particularly glad to avail of these terms.

SIPTU, the largest union at the company, has already begun balloting members on the survival plan and the result of the poll should be known on Saturday.

However, SIPTU regional secretary Mr Noel Dowling said his union was not happy with the framework agreement because it effectively disallows workers to claim retrospection on the pay increases due under the PPF.

The move by SIPTU should come as no surprise to the Government. Mr Dowling has repeatedly warned that any dilution of the amendments made by the chief executive of the Labour Relations Commission Mr Mulvey to the survival plan would mean reballoting members. The "Mulvey document" allows workers to seek full retrospection.

Meanwhile, the Minister for Public Enterprise, Ms O' Rourke welcomed the finalisation of the framework agreement document last night. She said, "It provides an opportunity for Aer Lingus to face the future with renewed confidence. It now remains for the workforce to vote to embrace the changes which are fundamental to the airline's survival and to the retention of 4,000 jobs."

The company also welcomed the publication of the document and hoped there would be a speedy conclusion of ballots on the survival plan.