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In May 2011, Qatar Airways announced it intended to buy 35% of the Luxembourg air cargo company, Cargolux. The management of Cargolux was happy with the deal, but one of the country’s main trade unions, OGB-L, said it was not told about the exclusive negotiations with Qatar Airways and attacked its refusal to provide written commitments on job security, although this is not demanded by law. The union also fears the new partnership threatens Luxembourg’s social dialogue model.
In 2009 the Luxembourg freight company Cargolux was forced to restructure its assets as a result of the global financial crisis, and this was done in two stages. First, SAirlines, a subsidiary of the now defunct SAirgGroup, sold its 33.7% stake of Cargolux to the company’s other shareholders, including the Luxembourg government which acquired a direct stake in the company.
By the end of 2009, Cargolux’s shareholders were:
This first step was warmly welcomed by the Independent Trade Union Confederation of Luxembourg (OGB-L) in a press statement (in French, 76 Kb PDF) because it felt the government stake would ensure employment stability. However, this transfer of shares and, more particularly, the state’s role in it had always been intended to be a temporary arrangement. The ultimate objective of this process was to provide Cargolux with sufficient time and resources to find the right industrial partnership and boost its long-term commercial development. This was made clear on December 1, 2009, in an article (in French) in Le Quotidien newspaper.
Consequently, the government and other shareholders felt those expectations had been met when Qatar Airways concluded their negotiations with Cargolux on 9 June, 2011, as discussed in an article (in French) in online newspaper PaperJam.lu.
According to article L.423-3 of the Luxembourg labour code, any economic or financial decision likely to have an impact on a company’s structure and employment hierarchy must first go through a process of information and consultation with a joint committee. However the law does not set terms for the scope and precision of this information. Although the joint committee had been informed in November 2009 about the proposed restructuring and the plan to find a partner, the OGB-L said staff representatives had not been told that Cargolux was conducting exclusive negotiations with Qatar Airways.
It is unclear whether the Cargolux joint committee ought to have been told that Qatar Airways were to become the new shareholders. OGB-L has made no legal move to contest the sale. However, it has emphasised ethical considerations such as the lack of democracy in Qatar and has questioned the desirability of Qatar Airways as a new Cargolux shareholder by quoting a report (in French) by the International Trade Union Confederation (ITUC CSI IGB) about poor working conditions in the Emirates. In a press release (in French, 556Kb PDF) the OGB-L also attacked the refusal of Qatar Airways to give written commitments on job security. However, such a requirement is not explicitly demanded by law.
Considering the Cargolux case in the framework of the information and consultation process, should the social partners be required to highlight issues that go beyond the legal provisions? Should ethical questions prevail over the assessment of economic or financial decisions and their potential impact on an undertaking’s structure and employment? In the global economy, investments frequently cross borders and are more difficult to regulate. On the one hand they may pose a threat to the Luxembourg social model and traditional social dialogue, but on the other they often provide new economic opportunities.
Guy Castegnaro & Ariane Claverie, CASTEGNARO, member of Ius Laboris, for HERA