Portugal’s Supreme Court has ruled that TAP Air Portugal must pay retroactive wages to 1,200 cabin crew members who were initially hired on short-term contracts. This landmark decision, which could cost the airline up to 300 million euros ($315 million), mandates that these employees be treated as if they had always held permanent positions, entitling them to back pay dating from the start of their employment.
Background of the Case
The ruling, dated December 12, 2023, addresses the situation of flight personnel who were hired for one-year contracts during 2020 and 2021. Despite their contracts being renewed over the following three years, TAP had classified them as short-term workers, thereby avoiding the higher salaries and benefits afforded to permanent staff. The Supreme Court’s decision highlights the equal nature of the work performed by both groups, emphasizing that all employees should receive fair compensation.
Financial Implications for TAP
The financial ramifications of this ruling are significant. TAP, which is currently undergoing a privatization process, may face costs ranging from 200 million to 300 million euros. This is due to the potential for back pay to be calculated at rates that can be double those of short-term workers.
TAP’s Current Situation
TAP Air Portugal is currently navigating a complex restructuring process, having received a 3.2 billion euro rescue plan approved by Brussels in 2021. The airline has attracted interest from potential buyers, including major players like Air France-KLM, British Airways-owner IAG, and Lufthansa.
As TAP moves forward with its privatization, the court’s ruling serves as a critical reminder of the importance of fair labor practices and the need for transparent communication between management and employees.
