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Lufthansa strikes a cabin crew deal which will mean NO enforced redundancies

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Ahead of the ‘make or break’ shareholder vote on its €9 billion bailout package today, Lufthansa has come to agreement with its cabin crew over plans to cut the workforce.  

The deal is expected to lead to annual cost savings of €500 million.  This should improve the chances of the bailout package being agreed, even though Lufthansa’s biggest shareholder has indicated that he may vote against it.

Lufthansa no cabin crew redundancies

The airline and the UFO union have agreed that there will be NO enforced redundancies.  Instead:

cabin crew will be offered a voluntary redundancy package, as well as options such as unpaid leave and early retirement

remaining cabin crew will accept a reduction in working hours 

there will be no pay rises

the airline will no longer make pension contributions for cabin crew

This is a four year deal, ensuring no enforced redundancies until at least 2024.  The proposals will now be put to a vote.

Lufthansa said:

This conclusion is an important signal to our employees, to our shareholders and to the extraordinary general meeting. In this way, we want to avoid redundancies in the Lufthansa cabin due to operational reasonsWe also see this degree as a sign of a regained and constructive social partnership with the UFO.”

The UFO cabin crew union said:

The deal that has now been concluded for the cabin employees of Deutsche Lufthansa brings the urgently needed job security.  In the current crisis, such contributions, which mean safety but also cuts for every cabin employee, will hopefully lead to a clear approval of the federal government’s rescue package at the Annual General Meeting. The coming months will be very challenging for us as social partners. With this package and the other solutions we have found together, we are finally putting our social partnership on a new footing. ”

Relations between Lufthansa and the cabin crew union have been strained for some time, with a number of unofficial strikes last year over proposed pay rises.  It is a minor miracle that any agreement has been reached, although Lufthansa is on the hook if it cannot find enough crew to take voluntary severence.

Of course, it was impossible that any stage of the Lufthansa rescue pass would go smoothly without turning into farce.  In the case of the cabin crew restructuring, a German newspaper reported that the lead negotiator for the UFO union demanded a €1 million PERSONAL payment from the airline in order to ensure an agreement.  The negotiator involved called it a “quality procedure”, which presumably lost something in translation.

Comments (16)

  • insider says:

    Ouch – let’s see how the next few years pan out, but this may cripple their business going forward

    • Josh says:

      Agreed. It doesn’t make much business sense. Nobody will really want to give up their job in the current climate.

  • marcw says:

    Thiele has already confirmed he will vote in favour of the rescue deal.

  • journeying john says:

    What a contrast with Slasher Walsh’s approach at BeyondAbysmal !

    • Mike P says:

      Hardly a fair comparison given Lufthansa has effectively unlimited support from the German government!

    • SteveR says:

      I’m sure BA could retain more staff if they were also given €9 billion. The LH group could buy IAG (BA,Iberia, Aer Lingus, etc.) and still have about £4 billion in the bank.

    • GaryC says:

      It is indeed a contrasting approach, but not necessarily a better one. The BA approach certainly makes it more obvious who will be affected and how. This approach of vast state aid, and smearing the pain with reduced working hours, no pension contributions may ultimately cause more harm. The money to pay people to be economically unproductive has to come from somewhere.

      • insider says:

        yup, and that’s the German taxpayer!

        • RussellH says:

          Whether they are paid by the state supporting their employer, or the state pays unemployment compensation, they are still paid by the state.
          Given that most people would rather be paid to be able to remain in work, rather than be paid compensation for there being no work, I woukld bet that the former leads to a more cohesive society and pleasanter living conditions for everyone.

          • Paul74 says:

            Agreed.

          • Andrew says:

            Try telling the employee of a 100% non-state owned German airline that they should be pleased part of their taxes are going to subsidise a Lufthansa employee so that they can continue earning far more than them for the same job.

  • RussellH says:

    > The negotiator involved called it a “quality procedure”, which presumably lost
    > something in translation. It would seem so!

    [Of course, it should be ‘a negotiator’, not ‘the negotiator’. There will always be a team of negotiators from both sides!]

    I can see that Google Translate could turn ‘Güteverfahren’ into “quality procedure”… quite incorrectly. Certainly ‘Verfahren’ often means a ‘procedure’.
    ‘Güteverfahren’ is not a term I am familiar with, and since it it is neither of my paper dictionaries, I have had to dig a bit further. One translation I found was ‘mediation’, and a bit more digging revealed it as a type of ADR.
    Given that the negotiator in question took Lufthansa to court last year when they tried to sack him, and won his case, one would expect him to be seeking significant compensation.

    • HAM76 says:

      Güteverfahren is a legal procedure that involves a non-judge entity to mediate between the position of two conflicting parties to reach a legally binding agreement. It does look somewhat like CEDR in the UK.

  • memesweeper says:

    This “quality procedure” … did the union rep also get the automatic bottle opener, lemon ice cream recipe and the use of the swivel chair in future negotiations? 😉