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01
December
2016
|
11:43
Europe/Amsterdam

Request for alternative consent denied

KLM approached the district court with a request for alternative consent for the establishment of a new pension fund for pilots. Unfortunately, the court has denied this request for alternative consent. KLM is considering its options in response to the court’s decision.

The establishment of a new pension fund was prompted by suspension of the so-called STROT (structural surpluses and shortages) protocol in the existing pension fund. KLM saw no other option than to suspend its STROT protocol with the VNV Pilots’ Union, as well as its implementation agreement with the pension fund. The reason being that new pension legislation has an unintended side-effect which, in combination with low interest rates, confronted KLM with the prospect of having to make a disproportionately large supplementary payment to meet indexation requirements, thereby jeopardising future employment opportunities within the company.

Because KLM previously suspended this implementation agreement with the existing pension fund, a new pension fund had to be established in accordance with future obligations. The VNV Pilots’ Union refused to give consent for the establishment of this new pension fund. The fall-back option, as laid down in law, is that the Works Council is then asked to give consent. Because the Works Council was unable to issue consent within an acceptable timeframe, KLM had no other option than to approach the court for consent. This alternative consent was in the interest of the pilots, ensuring that they will continue to accrue pension after 1 December, even if KLM and VNV are unable to reach an agreement.

In view of the court’s ruling, KLM has decided, free of legal obligation, that it will continue paying into the existing pension fund after 30 November, thereby ensuring continued accrual of pension and insurance of risks in the existing fund. However, this does not imply that KLM withdraws is suspension of the implementation agreement. KLM will continue to pay premiums in this manner for the time being, at least until there is greater clarity. In the coming days, KLM will scrutinise the current situation and carefully consider what subsequent steps are most suitable.