Portugal’s Supreme Court has delivered a decisive ruling requiring TAP Air Portugal to pay retroactive wages to 1,200 cabin crew members who were initially hired under short-term contracts. The decision, issued on December 12, mandates that TAP compensate these employees as if they had been permanent staff since their initial hiring, which could result in costs of up to €300 million ($315 million) for the airline.
The court’s ruling affects flight personnel hired in 2020 and 2021 on one-year contracts that were repeatedly renewed over the next three years. Despite performing the same tasks as permanent cabin crew, these employees received lower salaries, overtime rates, and allowances. The court determined that TAP must retroactively treat these staff members as full-time permanent employees and compensate them for the pay disparity.
The ruling, described as having a “unifying” character, sets a significant legal precedent for similar cases. Ricardo Penarroias, head of the SNPVAC union for flight personnel, stated that the decision could extend to several hundred more employees hired under comparable short-term contracts dating back to 2006. This could push the total affected workforce to approximately 2,000 employees and escalate TAP’s liability to between €200 million and €300 million.
The decision comes as TAP navigates a complex privatisation process following a €3.2 billion state-backed rescue plan approved by the European Commission in 2021. Interested buyers include Air France-KLM, British Airways-owner IAG, and Lufthansa, all of whom have expressed interest in acquiring Portugal’s flag carrier.
Penarroias emphasized that the ruling highlights the importance of involving workers in TAP’s privatisation discussions. “This decision shows it is crucial for governments, boards, and interested parties in TAP's privatisation to speak to workers to avoid these situations,” he said.
The Supreme Court’s decision is a major blow for TAP as it attempts to stabilize its financial position and attract buyers amid its privatisation. The financial burden of back payments could complicate the restructuring efforts imposed under the rescue plan and create additional hurdles in negotiations with potential investors.
