Wizz Air Shareholder To Sell Stake Over Labor Rights Concerns
Danish pension fund AkademikerPension says it is selling its more than $3 million stake in Wizz Air because of what it describes as “human and labor rights abuses,” and specifically concerns that the ULCC’s employees are discouraged from joining unions.
“After engaging with the company’s management, we are in no way reassured that they will initiate the changes we have requested with regard to human and labor rights issues.” AkademikerPension CEO Jens Munch Holst said in a Feb. 7 statement. “Therefore, we see no other way forward than to exclude the company.”
In December 2021, a group of investors—including AkademikerPension, Ardevora Asset Management (which has since sold its shares in Wizz Air), and 12 others—sent a letter to the fast-expanding airline voicing concerns over employee rights.
The investors highlighted the union issue. AkademikerPension cited examples in countries including Italy, Norway, Romania and Ukraine of Wizz Air management refusing to allow employees to join unions and enter into collective bargaining.
In its latest statement confirming its intention to sell its stake, AkademikerPension said that Wizz Air’s management had agreed to a meeting in January after investors had publicly voiced their concerns. During the meeting the pension fund was informed by the ULCC’s management that Wizz Air did not intend to change how it operated.
“The management’s behavior conflicts with human and labor rights as outlined by, among others, the UN Guiding Principles on Business and Human Rights,” Munch Holst said. “The risk of being linked to a clear and persistent breach of our responsible investment policy is simply too high if we remain invested.”
“Exclusion is the last tool in our toolbox,” Munch Holst continued. “If we are not ready to use it, we have no leverage when as an investor we try to influence companies to change course in these kinds of cases. So now Wizz Air is excluded from our investment universe.”
AkademikerPension, whose Wizz Air stake amounts to 0.059% of the airline, said, “Examples of opposition to trade unions and collective bargaining are numerous, and in 2020 the company’s CEO, József Varadi, stated that the company is deliberately against trade unions, as unions are ‘killing the business.’”
In response to AkademikerPension’s announcement, a Wizz Air spokesperson said: “Wizz Air remains fully committed to supporting its employees and to continue creating new opportunities, even during these challenging times.”
They added: “Wizz Air takes the engagement with its employees very seriously and we are confident that our structures and processes that have been in place to support open and transparent engagement are working extremely well, including our People Council, which provides a forum for employees to discuss important issues, frequent employee engagement surveys and a regular ‘Floor Talks’ program which allows for a regular two-way dialogue with our CEO. Additionally, we recently formed a Sustainability and Culture committee for the Board all with a view to dedicating even more focus on environment and people issues.”
Wizz Air noted that while it had let go around 1,000 staff during the height of the pandemic, it had since re-hired many of those, taking its headcount back over 5,500. A further 1,000 staff are expected to be added in the coming months.
“We consider our employees to be our biggest asset, which is why we have worked tirelessly over the last 18 months to preserve the jobs of over 5,000 colleagues, and to provide them with countless opportunities within our network to develop their careers,” the airline said, adding that it had restored cabin crew and pilot salaries to pre-pandemic levels.
“Sustainability is one of the core values of the company and we recently received the best ESG risk rating by Sustainalytics amongst all airlines in Europe,” Wizz Air said, adding it was an area it was always seeking to progress in and improve.