New agreements signed for Lufthansa cabin and ground staff

In March 2001, collective agreements were signed by management and the new Unified Service Sector Union (Ver.di) for 55,000 cabin and ground staff at the German airline Lufthansa. The settlement followed a warning strike by 10,000 employees. Negotiations continue between Lufthansa and the Cockpit pilots' union, which is bargaining independently of Ver.di.

On 24 March 2001, the newly created Unified Service Sector Union (Vereinigte Dienstleistungsgewerkschaft, Ver.di) and Lufthansa AG concluded new collective agreements for the airline company's 55,000 cabin and ground staff. In January 2001, the German White-Collar Workers' Union (Deutsche Angestellten Gewerkschaft, DAG) and the Public Services, Transport and Traffic Union (Gewerkschaft Öffentliche Dienste, Transport und Verkehr, ÖTV) - which merged with three other unions to form Ver.di (DE9911225F) during the bargaining process - had entered the bargaining round without putting their demands in concrete figures, but with the expectation of an improvement on the previous pay settlement in 1999 and maintenance of both the company's framework agreement and provisions on subsidised transport.

The negotiations started on 5 February 2001 without Lufthansa making a concrete offer. In the third round of talks, management offered a pay increase of 2.6% of monthly income plus an additional payment worth 1.6%. This was not accepted by the two unions. Several thousand employees nationwide participated in warning strikes called by Ver.di to strengthen its position on 23 March, which led to major restrictions in air services. In the fourth round of talks, Lufthansa offered a pay increase of 4% plus profit-sharing. Although Ver.di emphasised that the profit-sharing payment should amount to at least 10% of annual income, it was then possible to reach a pay agreement containing the following provisions:

  • from 1 April 2001, individual basic pay will increase by 3.5%. Furthermore, the agreement provides for a lump sum payment of DEM 250 (DEM 125 for trainees) for February and March 2001. The pay agreement runs for 14 months until 31 March 2002;
  • employees will receive an additional payment of DEM 1,100 gross in respect of the year 2000, which will be paid in June 2001. They can choose whether to take this sum in cash or as the equivalent in Lufthansa shares;
  • employees will also receive a one-off bonus of 10% of basic monthly pay, calculated on the basis of the pay rates applicable from April 2001; and
  • existing provisions concerning the "job ticket", which subsidies employees' commuting travel costs, are extended until 31 March 2002, and the amount paid will increase from 1 June 2001.

Lufthansa and Ver.di also concluded a new agreement on partial retirement (DE9708224F) giving employees, from the age of 55, the right to take partial retirement for up to six years. To compensate for employees' consequent losses in statutory pension rights, Lufthansa will provide a tax-free severance payment of DEM 21,600 to those concerned, instead of a former monthly payment of DEM 175. Only employees working in shifts and employees with severe disabilities will still receive the monthly payment - for a maximum of 18 months in the case of shiftworkers, but without time limits for the latter group. To prevent any financial disadvantages, employees aged 58 or 59 who want to take partial retirement may choose between the old and the new collective agreement.

The Lufthansa framework agreement which was due to expire in May 2001 will now run for another 19 months until 31 December 2001. This guarantees that all Lufthansa agreements will remain effective for employees in the event of structural and organisational changes - for example, if parts of the Lufthansa AG are outsourced.

The new agreement also contains a special clause to ensure that employees who participate in industrial action are not treated disadvantageously or dismissed.

The conclusion of the Lufthansa agreements represented a first public appearance for Ver.di, which had been founded just two days earlier. Ver.di has pursued the policy that all employees at Lufthansa should be treated equally and therefore receive the same pay increase. However, the pilots' trade union, Cockpit, formerly part of DAG and which now organises about 80% of Lufthansa pilots, is demanding a pay increase for pilots of 30% to 40%, arguing that the pay rates for German pilots are below average by international comparison. After more than 200 pilots and co-pilots participated in warning strikes on 28 March 2001 ,Lufthansa offered a pay increase of between 10% and 16.7% on 2 April 2001. Cockpit refused the offer and called a strike ballot for 9 April 2001, and it was unclear when negotiations would continue.

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