Unions Sign Unfavourable Agreement with LOT

On Oct. 5, unions signed an agreement with LOT Polish Airways which includes both a large group dismissal and a pay cut.

The unions have hailed the agreement as some sort of success; LOT had wanted to dismiss around 900 people and, according to the agreement, only 440 people will be sacked. (LOT had already revised this figure to 450 before the negotiations.) However, employment will still actually be reduced by around 600-700 jobs.

Oct.7, the Director of LOT, Sebastian Mikosz, gave a radio interview about the agreement with the unions and plans for restructuring of LOT. In the interview he clarified how many people should actually lose their jobs. This does not necessarily mean that LOT will fire more people than agreed. Staff reduction often is achieved by failure to renew fixed term contracts or contracts with outsourced labour. In this way, employers avoid both talk of dismissals and responsibility such as severance pay.

Not only employers use the lower numbers to convince workers that fewer people will actually be sacked. Trade unions are able to boast of their "success" where deals are still quite unfavourable to the workers. Despite holding a rally in front of the Ministry of the State Treasury where unionists vowed to "fight against dismissals", the actual amount of job loss is little less than originally planned. It would not be surprising if, in the end, LOT will realize its original plans and decrease employment by 900 people.

The unions also agreed to a pay cut which is technically not a pay cut. Many workers in Poland receive "additions" to their salary, which may constitute as much as a third of their pay package. The unions agreed to liquidate many of these additions. It is unclear exactly how much employees will lose but it will amount to at least a 7-10% decrease in the amount of money taken home and may include the liquidation of additional benefits which employees would be forced to cover themselves.

The liquidation of benefits is another way that employers avoid talking about "pay cuts". In many cases, when new costs borne by employees are factored in, liquidation of benefits amount to a significant cut in income after expenses. When unions are fighting for the economic interests of the workers, they tend to condemn any attempts to liquidate benefits and shift costs onto workers. However, when they are signing an unfavourable deal, the same process is described as a "success" because salaries are not cut.

One success for the unions is clear: the two union leaders illegally fired for their activity have been reinstated as part of the deal.