Widespread confusion about Norwegian’s pilot-employment contracting processes has been raising temperatures at flightcrew associations in Europe for more than a year – and has been having the same effect within US unions since the company applied for transatlantic services.
Representatives from Norwegian, crew contracting agency ARPI, the Norwegian civil aviation authority and the local airline pilot association Norsk Flygerforbund led a lively debate at the 8-9 April Flyoperativt Forum in Oslo. The main subjects of contention were the alleged erosion of employee rights by airlines that extensively hire agency aircrew on limited-term contracts, and the potential effect of the associated job insecurity on aviation safety.
Norsk Flygerforbund chief executive Petter Forde says short-term jobs through crewing agencies in a third country for employees working in one of Norwegian’s overseas bases – but exclusively contracted to the airline – leaves pilots confused about where to pay their income and social taxes. He adds that the situation also robs pilots of the kind of job security that would give them the confidence to take part in safety reporting procedures, and removes any assurance that their job is a step toward a career.
Norwegian civil aviation authority director general Stein Erik Nodeland confesses that the “tempo of change” created by Norwegian’s spectacular growth and the arrival of alternative crew employment models leaves the regulators struggling to keep up. However, he says temporary employees tend to be “less motivated to report”, and observes that “uncertainty generally affects people in a negative way”. If these fears were to be borne out in practice, he hints, legislation might have to be considered to require direct employment by the air operator’s certificate holder. He adds that leadership from the airline could have a positive effect despite some temporary contracting, which he concedes was inevitable.
Norwegian’s director of operations Tomas Hesthammer says the confusion over the carrier’s pilot employment policies has largely been created by misinformation. The company’s policy, he explains, is to contract pilots locally via agencies whenever it sets up a new base, because of the uncertainties surrounding the success of the new venture. However, if a base turns out to be successful, after three years pilots will migrate to the airline’s payroll. Since Norwegian is expanding fast – and intends to continue doing so, says Hesthammer – pilots are needed, and it is in the airline’s interest to attract and retain them. However, the carrier also needs the flexibility it gets from hiring a proportion of its pilots through agencies. Norwegian retains five agencies around its network, he says, but its policy is that pilots pay their income and social taxes in the country where they are based.
Norway-based multinational agency ARPI fielded one of its UK-based executives, Jo Alex Tanem, to explain how it manages the pilots at Norwegian’s relatively new but fast-growing London Gatwick operation. He says all the 222 Norwegian pilots at the Gatwick base are directly employed by ARPI UK, which deducts UK income tax and national insurance dues from salaries before paying them to the pilots, according to UK law. ARPI UK does not have a pension scheme yet, but will provide one when UK law requires it in 2016, he says. Tanem adds: “Our people are our employees, and we want to keep them. We don’t have any self-employed pilots on our books.”
Flightglobal has been provided with a pilot contract drawn up by ARPI’s Warsaw office, which contains the sentence: “Nothing in this contract shall be deemed to create any employee relationship between Crew Member Consultant and ARPI or the Present Lessee [the airline customer].” Tanem says he does not recognise this, but that it must be an old contract. ARPI Holdings partner Frode Finnoy confirms this and indicates that the document probably relating to Norwegian’s Finland base. No such contracts now exist there or anywhere else in the ARPI group, he adds. Hesthammer says Norwegian does not have any pilots on self-employment contracts.
To Forde’s charge that a safety culture at an airline is best assured when the pilot body and individuals have the confidence to speak out and use their best professional judgement, Hesthammer says Norwegian’s policy of hiring pilots through agencies is not a reflection of any antipathy to unions.
It seems some of the confusion and anxiety has come from Norwegian’s recent venture into long-haul – setting up a Dublin-based company within the group, but calling it Norwegian Air International. This would have no base in Ireland, but that country’s recent acceptance that NAI’s Boeing 787s will be Irish-registered gains the company the valuable EU status that Norway does not have. This gives it EU rights in its negotiations with the US Department of Transportation for setting up transatlantic services. Hesthammer says Norwegian’s employment policies also apply at NAI.
Source: FlightGlobal.com
