CYPRUS Airways (CY) chairman Constantinos Loizides last night stopped short of saying he had gambled and lost when the board decided to issue redundancy letters to 22 pursers in violation of labour laws, which led to a two-day strike.
“It is true that perhaps there was an underestimation of the response from some of the unions. The response from most was well assessed. I think one or two unions did surprise us,” said Loizides.
Loizides was speaking to the Cyprus Mail hours after his vice-chairman Achilleas Kyprianou tendered his resignation saying the board had been kept in the dark on the repercussions of issuing the redundancy letters.
Kyprianou, who has been on the CY board for 12 years, was the second board member to offer his resignation in two days. Late on Wednesday another board member Christos Papaellinas resigned.
The two board members were dissatisfied with the way Loizides handled the pursers affair, which resulted in a two day strike by cabin crew and pilots on Monday and Tuesday.
The initial plan was to have the 22, who were costing close to £1 million a year, to leave the company as soon as possible to save money and meet the targets of a controversial rescue package.
In his resignation letter Kyprianou said the board was “led to believe” the unions would not react to the redundancy letters and that the board had reacted in good faith thinking the action had the full support of the government, which owns a 65 per cent stake in CY. “The events which followed showed that, once again, the board of Cyprus Airways was not properly informed,” Kyprianou said in his letter.
Instead of backing the board the government condemned the action saying CY should have given the pursers the required two months notice.
Loizides said he had informed the three responsible ministers, Labour, Finance and Transport of the decision to lay off the 22 pursers but it appears they did not realise that the company would act immediately and arbitrarily.
“The ministers were informed by us what we intended to do (but) we didn’t discuss it at any length… there was no great detail on the procedure that was going to be followed,” Loizides told the Mail. “The Labour Minister did point out that the procedure was deficient and that we should have it in mind.”
He admitted the company might have taken a chance on how it would work out.
Loizides said the reason the board had underestimated the reaction of the unions was because it was able to lay off 12 managers late last year overnight without any fuss.
“It was the same rationale we used for the managers. We decided the managers had to go. We decided in one night and the next morning they went and that was because we didn’t feel they should stay in the company working while discussions were being held for their redundancy,’ he told the Mail. “Our position was legal from the legal point of view but we had not followed the industrial relations code.”
Loizides said that the board felt it would be bad for morale and for the image of the company to have the 22 pursers at work, knowing they would be made redundant in two months. “We made a cautious decision,” he added.
Asked to comment on Kyprianou’s letter of resignation, Loizides said he would repeat what Transport Minister Haris Thrasou said yesterday afternoon. “We neither seek nor discourage people who want to resign.”
“Achilleas’ position is well known and documented,” Loizides added. “I don’t know if he really intends to resign or not. You either resign or you don’t resign.”
Loizides and members the CY board met Thrasou and Finance Minster Makis Keravnos yesterday afternoon to discuss the latest crisis.
Speaking after the meeting Thrasou said they had had an in-depth discussion including the issue of how the board dealt with the 22 pursers. “The board admitted that what happened was wrong and outside of the labour code,” said Thrasou. “We support the board but not with a blank cheque. The board continues under the watchful eye of the government.”
He said the government’s main concern was the survival of the national carrier, which has just announced losses of close to £37 million for 2004.
Cabin crew union SYPKA also met yesterday and said members had voted to give the executive the green light to strike again if necessary. Asked to comment on the resignations, SYPKA chairman Andreas Koutouroushis said: “Our position is that the entire board should resign.”
