Sunday, June 9, 2013

Air Cargo Dispute Worsens as Freight Carrier Unions Seek Mediation

Troubles for Part State Owned Airline Continue
Shipping News Feature

LUXEMBOURG – As predicted in our previous story in May, unions have rejected what the management of Cargolux, the freight only airline, described as a ‘final’ offer which entailed the resurrection of a Collective Work Agreement, which both parties say they wish in place, in return for a $12.5 million reduction in employee costs for the airline’s 2014 financial year. Unions say the current collective bargaining agreement was unilaterally terminated on September 28 last year by the management of Cargolux and will expire on 1 September 2013.

On June 7 a meeting between workers representatives and the airlines acting director Richard Forson and Chairman Paul Helminger took place but was closed when dialogue to agree on the major points for avoidance of industrial action failed. The discussions will now go to conciliation with the compulsory appointment of a mediator to conclude a new collective agreement.

Both sides in the dispute acknowledge the need to make substantial savings when it comes to making the airline financially viable but the unions feel they are being misled as to the degree of cuts and where exactly they are to be made. They point out that the current working agreement was unilaterally terminated by Cargolux last September yet the first meeting with the two unions involved, the Luxembourg Confederation of Christian Trade Unions (LCGB) and OGBL, was delayed until four months later with the management stalling ever since.

For its part the company says productivity and efficiency improvements would be the first priority in reaching the targeted savings figure and only in the event of the target not being achieved through these measures would other employee cost savings measures be effected. In that case the unions would be given the first opportunity of identifying which additional measures would be introduced, hardly likely to be an attractive proposal as it would basically involve the workforce’s representatives deciding on whose job was forfeit.

In addition, management had agreed to reimburse up to $6.25 million of any savings achieved through the implementation of other employee cost reductions, provided the financial targets of the company were achieved for its 2014 financial year. The unions see this as a trick, say they are aware of the need to economise, and have proposed that employees can pay part of their salary or their 13th month’s wages back to the company if the savings were not sufficient to achieve the goal.

Meanwhile the company remains partially in the ownership of the Luxembourg government whilst a new buyer to take over the shares discarded by Qatar Airways is found. A most unlikely prospect until this latest industrial dispute is resolved completely.