British Airways flew into fresh turbulence in its increasingly bitter industrial dispute when it announced plans to hire 1,250 new cabin crew on wages of around half those of the striking cabin crew.
BA will pay basic salaries to the new recruits of approximately £11,000 per annum, with an extra £7,000 available in allowances. That compares with an average annual salary of around £35,000 for a steward based at London Heathrow serving long-haul routes and £25,700 on short-haul routes.
However, BA cabin crew flying out of London Gatwick – who are not on strike –typically earn about one-third less. It also remains a competitive salary compared to BA’s main rivals, including Easyjet, Ryanair, BMI and Virgin Atlantic.
‘Our Heathrow cabin crew costs are way out of line with our competitors and much more than our cabin crew costs at Gatwick. We can no longer afford this cost difference,’ a BA spokesman told Reuters.
The new recruits are being hired to staff a new fleet of aircraft within BA and will be required to serve on both long and short-haul routes, eroding the traditional distinction between long and short haul. BA hopes that within 10 years 40% of its crew – it employs some 13,500 cabin crew in total – will have been hired on this new package.
The union was set to ballot Heathrow staff between 29 June and 27 July over a third series of strike action, which was to be carried out from early August. Twenty-two days of strikes this year have already cost the airline approximately £150m, while the airline has posted losses of £401m and £531m in consecutive financial years.
On Friday 25 June, BA made a new offer which included two years of guaranteed rises in basic salary from February 2011. The new offer includes a top-up payment to guarantee that existing crew will not lose out on route allowances when newly-recruited staff begin flying in the autumn. Unite has confirmed that the strike ballot is likely to be postponed ‘so our members can review this latest offer.’
The question is, however, is BA flying into fresh legal turbulence as a result of its latest move? We put some questions to Andy Williams, an employment lawyer at solicitors Charles Russell.
Q: Can what BA is doing be legal?
A: The legal minefield BA is walking into in adopting this plan of action is the world of equal pay. If the new recruits become disgruntled at a later stage in their career with BA, there will be a danger they could turn round and claim they are not receiving the same salary or overall benefits package as those longer serving cabin crew. BA might then be obliged to 'level up' the salary and benefits of the new, lower paid, recruits. This would of course remove the entire financial benefit to BA of such an arrangement, which is the sole reason this exercise is being undertaken.
Q: Could the new staff legally be put to work covering routes affected by striking workers (if a strike went on that long)?
A: Certainly the new recruits can cover the routes affected by the striking workers, and presumably being on lower salaries would be keen to do so, to boost their earnings. I am sure the unions are wise to this and will be attempting to sign up as many of the new recruits as trade union members at the earliest opportunity.
Q: Is it a sensible move by BA from an industrial relations point of view?
A: It is a dangerous move by BA from an industrial relations perspective in respect of their workforce, and the initial reaction from the unions proves that. However, it is a commercial gamble that BA simply has to take, to reduce the significant financial burden it is under as a result of paying its cabin crew substantially more than any of its competitor airlines. How this move will impact on the public perception of BA is less certain, but I believe on balance, most passengers will view BA's proposals positively: if for no other reason than it means future strikes are less likely to be effective, so Joe Public is more likely to be able to take his two weeks in the sun without fear of industrial action turning his summer holiday into a camping expedition at Terminal 5.
Q: Is there any way that BA could dispense with the services of its striking crew members?
A: This proposed course of action would not allow BA to dismiss its striking crew members as of right. Provided strikes are legitimately called, striking workers have strong legal protection against being dismissed. That will not change. In the short term, it may even encourage the existing, higher paid, crew members, to strike more often. However, I am convinced that aside from reducing salary costs over both the short-term and long-term, BA's motivating factor in doing this will be to try and "de-unionise" their workforce through the back door, by flooding the workforce with fresh faces, who are not interested in union activity.
Q: Is there any way that BA could move staff to the new terms and conditions?
A: It is possible, but very difficult, to reduce the salary and benefits of any existing workforce, and BA is no exception to this principle. Unless consent to the change can be obtained from those workers affected, BA would have to undergo a fraught consultation, and ultimately it would have to dismiss its existing crew and offer them re-employment on the new terms and conditions. This is a very risky plan for many reasons, not least of which is that is could leave BA without a cabin crew workforce. This would bring the airline to its knees. However, unless BA can do something radical in the near future to improve its financial standing, this armageddon situation may well be the only option left open to BA.