Industrial action threatened at Austrian Airlines

In late December 2002, the management of Austrian Airlines cancelled a works agreement on job demarcation, in order to cut labour costs. The company's flight staff has responded by threatening to take industrial action, including a strike.

On 29 December 2002, the management of Austrian Airlines (AUA), Austria' national air carrier, gave notice of termination from the end of the year of a works agreement (signed by management and the company works council) on job demarcation. This agreement stipulates that at least 43% of all services performed by the AUA group, including two subsidiaries, must be performed by AUA staff. This rule was agreed in 1997, when AUA acquired both the regional carrier Tyrolean Airways and the Lauda Air charter flight operator, in order to protect the significantly better paid AUA personnel from possible competition with staff at these two lower-wage subsidiaries. In contrast to the standard pattern of sectoral bargaining in Austria, single-employer agreements are concluded for airlines. Hence, pay levels within this sector vary widely (AT9906150F).

Management justified the unilateral cancellation of the works agreement by arguing that the deal has increasingly impeded the AUA group from using its airplane capacity flexibly. Continued implementation of the old scheme would cause inefficiencies and thus damage competitiveness, according to Josef Burger, the head of the AUA marketing department. In particular, cancellation of the agreement means that underutilised Lauda Air airplanes can be used more fully in the near future.

Rudolf Novak, the head of the works council for AUA flight staff, strongly opposed the abolition of the so-called 'infiltration protection' scheme. Mr Novak argued that the new possibility for the company to engage low-paid pilots will probably result in the creation of a new low-cost airline under the umbrella of AUA which, he alleged, would endanger the good reputation of the whole group. Moreover, he cited the example of Swissair, claiming that this showed that the employment of cheaper flight staff - eg from eastern European countries - will create cooperation problems among crew members due to different languages, and thus reduce flight security.

A staff meeting convened by the works council on 3 January 2003 was attended by more than 700 of the 2,000 AUA flight staff. At the meeting, 99.6% of the participants empowered the works council to take all necessary industrial action measures, including a strike, to defend the agreement terminated by management. Almost all of the 2,000 employees were expected to sign this resolution by 17 January 2003.

Meanwhile, despite the threat of a labour dispute, AUA management has provoked even more unrest among employees by announcing that a new, less favourable payment scheme for newly employed pilots - the so-called 'two-tier system'- will be introduced. This measure is also opposed by the works council, on the grounds that an unequal pay system would create two classes of pilots.

Although both sides have publicly stated their readiness for dialogue, a compromise has not been reached so far.

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