Allen & Overy secures ruling deeming pilots' union demand for inflation compensation at Lufthansa unlawful

The strike was based on an unlawful claim for automatic inflationary compensation. This is in breach of a statutory prohibition, i.e. section 1 (1) of the German Price Clause Act (PrKG), according to which wages may not automatically be linked to an index. The statutory provision is to prevent the inflationary spiral from being driven further, which would seem important in particular in view of the progressing price trend. VC took this opportunity to withdraw its unlawful claim during an interruption of the hearing and now seeks a salary increase by 8.2 percent instead.

However, the Court came to the conclusion that Deutsche Lufthansa AG needs to tolerate the already ongoing strike until today, 23.59 hrs, and thus rejected injunction claims. In this context, the Court also pointed out that VC may not go on strike again for automatic inflationary compensation.

"The relevance of this decision for the collective bargaining situation extends far beyond the conflict at Lufthansa," explains Thomas Ubber, Employment & Benefits partner at Allen & Overy. "On the basis of the ruling, trade unions will not be permitted to enforce index clauses, which otherwise might have led to become a 'fire accelerant' for further inflation."

Legal counsel Deutsche Lufthansa AG: Thomas Ubber, Dr Felicia von Grundherr, Dr Hendric Stolzenberg

Inhouse Deutsche Lufthansa AG: Christina Hoffmann, Head of Labour Law

Legal counsel VC: MOOG Rechtsanwälte, Dr Schilling

Inhouse VC: Dr Andreas Pinheiro, spokesperson of the collective bargaining committee

Presiding judge: Judge at the Labour Court Brink