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Thursday, July 18, 2024

Norwegian Air lost pensions case

UPDATED: Norwegian Air Shuttle “grossly” violated its obligations towards its local pilots when it unilaterally changed the pension system for its employees, the labour relations court (Arbeidsretten) has found. The ruling could prove very costly for the airline, which will have to re-introduce the pension system it had hoped to get rid of.

Norwegian's pilots have won a pensions dispute with their employer. PHOTO: Norwegian Air/Hans Olav Nyborg
Norwegian’s pilots have won a pensions dispute with their employer. PHOTO: Norwegian Air/Hans Olav Nyborg

“We just received the ruling and need some time to go through it,” spokeswoman Anne-Sissel Skånvik told Dagens Næringsliv‘s website

The change, introduced unilaterally by Norwegian last year amid loud protests from the pilots’ union, transferred the employees from the traditional Norwegian pension system where the employer basically supplies the pension part of a worker’s pay to a new deal where the employee assumes much more responsibility for his or her pensions earnings, and also the risk. Numerous employers in Norway are carrying out this kind of switch, from ytelsespensjon to innskuddspensjon, often in the face of fierce resistance with their workers who fear their right to pension will be undermined.

Norwegian’s pilots claimed their right to the old kind of pension system was laid down in their local pay agreement with the airline. The court agreed with them and called the violation “gross” (grovt).

The labour court’s ruling orders Norwegian Air Shuttle to introduce a new pension arrangement before September 1. Furthermore, Norwegian Air must be prepared to compensate eventual losses that its Norwegian pilots could suffer because of the forced termination of their pension plan. And in a highly unusual move in this kind of disputes, it ordered Norwegian to pay expenses generated by union federation Parat which conducted the case on behalf of the pilot union.

Parat’s attorney, Christen Horn Johannessen, told that he’s happy that the ruling is very clear.

“That’s why we went to court. Those who do not live by the pay agreement must be forced to do so. Norwegian is not above the agreements it has entered, Horn Johannessen said.

Norwegian Air has stirred controversy in Norway over plans to hire more crew members abroad and pay them less than their Norwegian colleagues. The court ruling, however, only applies to employees covered by the Norwegian wage agreement, not the entire company, Skånvik stressed.

Most decisions by the labour relations court are accepted as final by the involved parties and are seldom appealed, according to staff

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