Threat to job losses at Lufthansa Technik Airmotive averted

In April 2009, workers at Lufthansa Technik Airmotive voted by a large majority to accept last minute proposals that could secure the future of a key part of the company’s Irish operation for the next 20 years, easing fears that the 465 Irish jobs could be lost to Germany. Since then, managers claim that workers are failing to honour this agreement, with work having to be turned away. They have warned that unless workers adopt new work practices, they will reissue protective notices.

Workers at the Lufthansa Technik Airmotive Ireland (LTAI) aircraft maintenance plant in Rathcoole in County Dublin voted by 229 votes to 60 in favour of new work practices and flexibility measures, agreed in April 2009 under the auspices of the social partner-led National Implementation Body (NIB). The company, which also accepted the proposals, later stood down ‘protective notices’ that it had issued to all staff after trade unions had initially rejected a formal recommendation on the dispute by the Labour Court.

The vote ended a dispute that began in January 2008 and had been through the full range of Irish industrial relations procedures, moving from local level discussions to the Labour Relations Commission (LRC), the Labour Court and, finally, the NIB.

However, in the meantime, managers at the Rathcoole plant claim that workers are failing to honour this agreement with some of them refusing to work overtime. As a result, the company has had to turn work away. Thus, management has warned workers that unless they adopt new work practices, the company will be forced to reissue protective notices.

Outcome of agreement

As a result of the NIB’s intervention, it was believed that the company would be able to secure a USD 40 million (about €28.4 million as at 11 June 2009) investment in what is known as the ‘V2500’ aircraft engine project, which would help to replace work on other aircraft engines that are gradually becoming obsolete.

Members of the Unite trade union accepted the final set of NIB brokered proposals by 121 votes to 38, members of the Technical, Engineering and Electrical Union (TEEU) voted 45 to 15 in favour, and members of the Services, Industrial, Professional and Technical Union (SIPTU) accepted the proposals by 63 to seven votes. SIPTU members, who are mainly clerical and operative workers, had also voted in favour of the original Labour Court proposals. The main opposition to the previous proposals came from craft workers in the Unite and TEEU unions.

Reasons for dispute

At the centre of the dispute was the issue of changes to work practice, including the introduction of a new working time system of ‘minus/plus’ hours and a reduction in shift premiums. Rules for a new hours system were as follows.

In terms of ‘minus hours’, the selection of participants will in the first instance be on a voluntary basis. However, if sufficient volunteers are not available, senior management will select workers on the basis of:

  • skills required for the business;
  • existing personal plus/minus balances in working time accounts;
  • fair rotation among all staff bearing in mind the above.

With regard to ‘plus hours’, full payment of overtime and premiums will occur under the following circumstances (whichever occurs first):

  • exceeding the plus 56-hour account limit;
  • the annual cap indicator has reached plus 56 hours and the worker’s account has surplus hours.

Background and rejection of initial proposals

A number of factors are believed to have caused the workers to initially reject the proposed changes. For example, there were fears of a loss of overtime. Many workers depend on overtime to boost their basic salary. Basic pay at the Lufthansa Technik plant averages at €38,000, with overtime adding about €10,000 to this figure. The NIB settlement proposals went some way to addressing this fear.

The weekly magazine Industrial Relations News (IRN) reported that the investment could have gone to a plant in Hamburg, where pay rates for shift working are considerably lower than in Ireland. ‘In contrast to many recent outsourcing or job replacement stories, jobs at Lufthansa were at risk of being lost to Germany, not to a traditionally low cost labour destination. In the current economic climate, these jobs would no doubt have been welcomed by German workers and trade unions alike’, IRN reported.

According to IRN, there was a feeling among the workforce that management might have been using the current economic crisis – and the recent closure of the Swiss-owned aircraft maintenance company SR Technics – to push through the change programme at Lufthansa Technik. Workers felt that if they gave in to these changes, then more would follow.

Furthermore, it was also suggested that the prospect of an attractive severance payment could have been a motivation for a section of the workforce to oppose the deal. However, the fact that SR Technics chose to pay only statutory redundancy terms may have influenced workers to accept the final programme for change.

This was the second time in recent years that the Lufthansa board faced a dispute in which its Irish workforce has rejected a Labour Court recommendation. In 2006, workers in Shannon Aerospace in County Clare in the west of Ireland, which is also wholly owned by Lufthansa Technik, strongly rejected a Labour Court recommendation that they should agree cost-offsetting measures in return for the final two national pay rises (worth 4%) under the social partnership agreement Sustaining Progress (IE0301209F and IE0304201N).

SIPTU branch organiser, Teresa Hannick, said that the decision by workers to accept the NIB proposals ‘should ensure the continuing viability and competitiveness of the plant’. TEEU General Secretary Designate, Eamon Devoy, stated that ‘everyone was mindful of the need to protect the 465 jobs and the future of the aircraft maintenance industry in Ireland.’

A meeting was due to take place between trade unions and management on 11 June 2009 amid growing fears regarding the future of the 465 jobs at the Rathcoole plant.

Brian Sheehan, IRN Publishing

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