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Lufthansa, Flight Attendants' Union Accept Proposal on Pay Dispute

Features & Advice James Ruggia November 15, 2012

Lufthansa and the UFO trade union have settled their pay dispute that involved 18,000 flight attendants. Both Lufthansa and the UFO accepted the final arbitration proposal, which included sweeping structural reform of the pay system. The agreement contains wide-ranging assurances on existing rights and job protection for employees.

The agreement resolves the pay dispute, which has occupied the airline since April 2012. The issues discussed at arbitration focused on a pay agreement, profit-sharing and the commitment on both sides to negotiate the compensation structure from the arbitration procedure on Jan. 16, 2011. The two sides negotiated on further issues parallel to arbitration. Agreements on those issues are encompassed together with the arbitration accords in the settlement now reached by Lufthansa and the UFO trade union. The pay settlement will come into effect on Jan. 1. This agreement will last until Dec. 31, 2014.

The accords in detail include an increase of 100 euros for each level in the basic remuneration scale, except for flight attendants and pursers on the final level, whose basic pay will be raised by 50 euros. Additionally, all cabin staff is to receive a one-off payment of 320 euros, which equals the volume of 0.6 percent. The pay agreement thereby envisages an increase of 3.95 percent in total volume in the remuneration scale. The union’s demand for abolition of the so-called preliminary pay levels for around 6,000 staff has also been taken into account in the settlement. This will especially benefit staff on the lower pay tiers. In return, the yearly upgrade was suspended for all employees to a new level in the pay scale. Furthermore, an enhancement of productivity was agreed upon.

Agreement on a new pay scale for all staff recruited in the future will create a firm base to safeguard jobs in the cabin and secure the ongoing competitiveness of Lufthansa in the long term. In combination with the compensation structure reform, an enhanced profit-sharing plan was agreed upon, which can achieve at the maximum the monthly gross pay. The introduction of a yearly working-time model for new staff interested in seasonal employment at Lufthansa constitutes a major component towards balancing in the pay structure the seasonal fluctuations demand. For the duration of the pay settlement, compulsory redundancies in the cabin have also been ruled out despite existing and further anticipated excess capacities. Cabin staff underpinned this assurance by assenting in solidarity to a working-time corridor of 5 percent.

In return for voluntary transition by cabin staff to Germanwings, which is taking over Lufthansa point-to-point traffic in future, the two sides agreed on major safeguards for the staff, especially the retention of their existing pay and maintenance rights.