The Department of Enterprise, Trade and Employment has sought the advice of the Attorney General on whether a State redundancy payment scheme applies to Irish Ferries' plan to replace workers on its Irish Sea routes.

Siptu, which has served strike notice on Irish Ferries, has argued that the scheme should not apply as the jobs in question are not being abolished. The union said one set of workers was going to be replaced by another, less well-paid set of workers.

The company has not commented on this latest development in the crisis, which was caused by its proposition that staff accept a cut in pay and conditions on the Dún Laoghaire-Holyhead and Rosslare-Pembroke lines.

Alternatively, the company has offered a voluntary redundancy scheme to the 543 workers.

Siptu has served strike notice, which is due to run out on October 3rd, the day after the company's deadline for acceptance of its package.

Under the Redundancy Payments Acts, the State repays 60 per cent of the statutory redundancy payment that must be paid by companies.

Irish Ferries, which has offered significantly in excess of statutory redundancy, might have to pay up to €50 million if all the workers concerned availed of the scheme.

The statutory redundancy element of this would be in the region of €12 million, making for a potential refund from the State of approximately €7 million.

The workers on the company's Normandy route accepted a voluntary redundancy scheme and were replaced by lower-paid workers. In that instance the State paid a refund.

However, it is understood that the Department believes the two situations are not identical.

Siptu general president Jack O'Connor said public money should not be used to "facilitate unscrupulous employers seeking to replace workers with agreed pay and conditions by vulnerable recruits paid much lower rates".

Siptu wrote to the Department last week. "The decision to refer the redundancy package to the Attorney General shows that the Government has finally woken up to what is going on," Mr O'Connor said.

"The only way this kind of blatant abuse can be addressed in the long term is by domestic legislation to prevent job displacement at home, and by legislation at EU level to ensure minimal rights are enjoyed by all seafarers operating in European waters."

There was no comment last night from the Department or from Irish Ferries.