Lufthansa Accepts Arbitration Proposal

Agreement has been reached at arbitration at pay talks for 55,000 ground staff and cabin crew at Lufthansa. Former government minister Dr. Klaus von Dohnanyi, who was appointed as arbitrator, put forward a final arbitration proposal on February 27 2003, which has been accepted today both by Lufthansa and the ver. di public services workers union.
The arbitration ruling envisages a pay accord to run up to December 31 2004 and a three-tier incremental pay rise amounting to 3.2 per cent back-dated to January 1 2003, a further increase of 1.8 per cent on October 1 2003 and another of 1.2 per cent on May 1 2004. For November and December 2002, employees will receive a one-off payment of 250 euros.
Additionally, resources are to be made available for revision of pay scales for ground staff and pension benefits for cabin crew, amounting in each case to 0.8 per cent, with effect from January 1 2003. The new pay structure is to be completed by July 31 2003. The pay rise, including structural increments, amounts to a yearly average of 2.8 per cent.
The employees have also been granted a share in company profits, amounting to an average of 1.8 per cent of their annual remuneration. Half of the profit-sharing will depend on Group results, the other half on the returns from each employee`s business area. In addition, employees are to receive a non-recurring, special payment amounting to about two per cent of their annual income. This special remuneration for the 2002 business year is in recognition of the exceptional effort from the staff in mastering the difficult period in the aftermath of September 11 2001. Together with profit-sharing, this special remuneration will add up to a one-off payment of about half a monthly salary.
Moreover, the standard practice to safeguard jobs at the Lufthansa Group in times of crisis will include immediate measures to reduce personnel expenses by introducing flexible working time regulations. “This new crisis agreement is crucially important to us in view of the difficult economic and political situation,” commented Stefan Lauer, Chief Officer Human Resources, who led the pay negotiations. “It opens up for us fresh scope for measures to contain costs and, simultaneously, safeguard jobs. A classical win-win situation for the company and employees.”
The negotiations with ver-di and the UFO flight attendants union on “pension benefits” for cabin crew are to be completed by May 31 2003.
Separate arrangements have been agreed for LSG. In addition to forthcoming talks on restructuring, management and unions have reached a basic accord on revising pay terms and concrete measures to reinstate the catering arm on a competitive footing and avert redundancies.
Stefan Lauer: “The arbitrator`s proposal is balanced and fair, and puts our planning on a secure footing in the period the agreement remains in force up to the end of 2004. It will saddle us with additional burdens when the going gets tough, but we have taken safeguards with provisions and budget arrangements. All the same, the agreement must be earned.”