The battle continues at Cargolux

Cargolux and its unions, unable to agree on a new contract, will enter a mediation process.

For much of the last five years, the management of Luxembourg-based all-cargo carrier Cargolux has been at daggers drawn with the two unions that represent the carrier’s workers. This relationship is further complicated by the fact that, although Cargolux does have a Board of Directors, it is owned by the government, which means management ultimately must answer to politicians – not a guaranteed recipe for success.

And now the government – in the form of the National Conciliation Office – has been called in to mediate negotiations toward a new Collective Work Agreement (CWA).

The problem, in a nutshell, is that management believes the carrier’s future health requires concessions from employees on pay and working conditions, the union believes the well-being of its members requires guarantees from management that pay and conditions not be cut, and that jobs will not be outsourced to Italy (where Cargolux operates a subsidiary carrier under the Cargolux Italia brand) nor to China (where an investment arm of the Henan provincial government now holds a 35% stake in Cargolux).

After endless offers and counter-offers, things came to a final impasse at the end of 2014, with Cargolux management announcing on 30 December that it had decided to “repudiate the Collective Work Agreement.” Since the CWA was set to expire the next day, the actual impact of the repudiation is debatable, but as a statement of position, it was forceful.

Union response was to call for the implementation of a conciliation process. This may sound relatively mild, but it is a legal requirement before a strike can be called.

Yesterday, Cargolux’s management agreed, and future negotiations will be mediated by the National Conciliation Office.

Not an easy task, given the breadth and depth of the gulf between the two sides, but if that gulf cannot be bridged, Cargolux’s future is very much in doubt.