(Adds trade union comment, Lufthansa shares)
VIENNA, June 3 A top legal official at the
European Court of Justice (ECJ)advised judges on Tuesday to rule
that old Austrian Airlines collective wage agreements are valid
until a new one is agreed.
The ECJ has been asked to rule whether Austrian Airlines,
owned by Lufthansa, could unilaterally cancel a
previous agreement when it transferred its flight operations to
its lower-cost Tyrolean Airways subsidiary in 2012.
Lufthansa said in its 2013 annual report that the outcome of
various court cases challenging the transfer could threaten
Austrian Airlines' future.
The transfer of about 2,000 pilots and flight attendants to
Tyrolean was a key element of a restructuring programme the
loss-making Austrian Airlines embarked on after its 2009
takeover by Lufthansa from the Austrian government.
Tyrolean staff now work according to their previous pay
deals, while Austrian Airlines pay has been frozen.
Austrian Airlines called off long-running talks last week
with its works council on a new collective wage agreement, after
the works council rejected an offer from the company that it
said could lead to wage cuts in real terms.
The works council wants the basis for the talks to be the
old Austrian Airlines collective wage agreement, while the
company wants to negotiate on the basis of the less-generous
The ECJ's advocate-general, whose opinion is followed by the
court in most cases, said on Tuesday collective wage agreements
remain in force when operations are transferred to a new company
until they expire or are replaced by a new agreement, even if
cancelled by one side.
In general, ECJ judgments follow three to six months after
the opinion. No date has yet been set for a ruling in this case,
which was referred by the Austrian Supreme Court.
The Vida trade union and the Austrian Airlines works council
welcomed the advocate-general's opinion in a joint statement.
"It is, however, neither a time for jubilation nor for
putting one's head in the sand. What counts is not to waste the
time until the potential ruling of the ECJ or the Supreme Court
but to return to the negotiating table immediately," they said.
An Austrian Airlines spokesman said the opinion did not
necessarily go against the company since it implied that both
the previous Austrian and Tyrolean collective wage agreements
were still valid.
"There is still room for interpretation and we have enough
time to look into the issue in more detail and to determine what
room we have for negotiation," he said.
As a result of the 2012 transfer to Tyrolean, Austrian
reduced its pension obligations, helping the carrier to return
to an operating profit last year after five years of losses.
Lufthansa said in its 2013 report: "If it should come to a
definitive judgment against the company, the one-off effects
alone, such as the additional provisions for pensions and
severance payments as well as the necessary back payments to
employees, would jeopardise the unqualified classification of
Austrian Airlines AG as a going concern."
"A further external opinion would then be needed to
determine the chances of the company's continued existence."
Lufthansa shares were down 0.7 percent at 19.44 euros by
1415 GMT, broadly in line with the European transport and
(Reporting by Georgina Prodhan and Alexandra Schwarz-Goerlich;
Editing by Erica Billingham and Pravin Char)