2-Dec-2013 8:04 AM

Settlement reached to reform the collective wage agreement at Austrian Airlines

Austrian Airlines stated (29-Nov-2013) a new and reformed collective wage agreement applying to approximately 2600 administrative and technical staff at Austrian Airlines will take effect as of 01-Jan-2014. A fundamental agreement was reached at the end of Jun-2013 between company and employee representatives. Now specific details have been negotiated and integrated into a new collective wage agreement. Starting salaries will be increased, but the wage curves will be flatter in the future, and a profit sharing model will be introduced for employees. Austrian Airlines CEO Jaan Albrecht said, "On the basis of approving the reform, the employees will bear a considerable part of the burden in restructuring the company. And now we share the responsibility to show that this contribution is not being made in vain". Austrian Airlines Works Council chairman Alfred Junghans added, "A collective wage agreement can not cause jubilation in times of cost savings. In this respect, our main focus was to secure the business location and to limit damage for the employees. Overall, however, it is balanced and fair, and it offers more attractive workplaces especially for apprentices and young employees". The negotiating partners have agreed on the following features of the reform:

  • Profit sharing: Every employee will profit from the company's success in the future. The negotiating partners agreed to use the model developed at SWISS as the basis, according to which the success bonus increases in accordance with the rising earnings margin;
  • Commitment to the business location: Austrian Airlines commits itself to keeping core functions of the company in Vienna at least until 2018. This will also be safeguarded by eventually developing a redundancy programme for employees. Apprenticeship training will be continued. At present about 50 apprentices are undergoing training at Austrian Airlines;
  • New remuneration structure: Starting salaries will be increased but the automatic wage increases will be flatter in the future.  No salary cuts will be implemented;
  • Employee anniversary bonus: Newly-hired employees will be entitled to anniversary bonuses at an earlier time in their careers. However, the total bonus amounts will be reduced. Interim payments will be made to current employees;
  • Severance payments: The severance payment system will be changed to reflect prevailing legal regulations;
  • Pension fund: Austrian Airlines as a company will withdraw from the occupational pension scheme. A continuation of payments on an individual basis will be made possible for employees;
  • Interim payments: Employees will receive interim payments to fulfill the new severance payment and anniversary bonus stipulations as well as the company's withdrawal from the occupational pension scheme;
  • Salary reviews: The negotiating partners reached an agreement on salary levels for 2014 and 2015 as well. There will be a one-off payment of EUR1000 per employee in 2014 as well as a cost-of-living adjustment in 2015;
  • Framework plan for job cuts: The company and employee representatives agreed to implement a framework plan for positions which become redundant in spite of the collective wage agreement reform (related to the elimination of staff redundancy in administrative and technical positions).  [more - original PR - German]

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