Cabin crew at Virgin Atlantic have voted in favour of a new pay deal by the narrowest of margins – just 50.2% of votes backed the proposed deal but this simple majority should be enough for the Crawley-based airline to avert any form of industrial action. Negotiations had dragged on for at least the last six months and several proposed deals had already been rejected by Virgin’s community of cabin crew.
In April, it was reported that cabin crew were seriously considering strike action over a proposed pay package that could have seen some crew lose as much as £7,500 per year in tax-free ad diem allowances.
The Telegraph newspaper reported that cabin crew were “angry” over the proposals, while several months later a group of cabin crew even tried to crowdfund legal action against their own airline, arguing that erosion of pay and conditions over the years had left them with a very low salary.
Like many airlines, Virgin Atlantic paid its cabin crew a proportion of their wages through tax-free ad diem allowances that are meant to be used for food, drink and other essentials during international layovers. But the airline was forced to rethink this system when it failed several audits by British tax authorities – the thinking is that Virgin was paying more in tax-free allowances than it needed to.
The new allowance system suggested by tax officials was almost immediately rejected, while another pay deal that Virgin described as “industrial leading” was rejected because many feared it would force some crew under the national minimum wage.
The pay proposal that has finally been approved sought to address many of these issues by significantly bumping up basic pay and guaranteed earnings. Along with a 10% pay rise over three years, cabin crew will be paid a lump sum on every sector they fly, with a minimum of four sectors already built into the basic wage for full-time staff.