This term sheet sets forth the necessary modifications to the 2003 – 2009 Flight Attendant Agreement pursuant to Section 1113 (c) of the U.S. Bankruptcy Code.
| Name |
The 2003-2009 Flight Attendant Agreement, as modified herein, shall be referred to in this proposal as the 2005-2010 Flight Attendant Agreement. |
| Effective Date |
The 2005-2010 Flight Attendant Agreement shall become effective on January 7, 2005, subject to membership ratification. |
| Duration |
The 2005-2010 Flight Attendant Agreement shall continue in full force and effect through January 7, 2010, and shall thereafter renew itself yearly without change each January 7th unless written notice of intended change is served in accordance with Title 1, Section 6 of the Railway Labor Act by either party 270 days prior to January 7, 2010 or January 7th of any year thereafter. If such notice is served, negotiations will commence no more than 30 days after service. If a new tentative agreement is not reached by August 7, 2009 (or any August 7 thereafter, if applicable), the parties will jointly invoke the mediation services of the National Mediation Board under Section 5 of the Act. |
| Compensation |
On the Effective Date of the 2005-2010 Flight Attendant Agreement, all hourly pay rates (Section 5.A.1. and 2.) shall be modified as follows:
- All hourly pay rates shall be reduced by 9.5 percent. These shall be the hourly pay rates for purposes of the increases described in paragraphs 4 through 6 below.
- All purser, LIP, and language hourly premiums shall be reduced by 9.0 percent.
- Section 5.H. Understaffing Pay shall be reduced from $10.00 to $5.00 per hour or fraction thereof.
- On May 1, 2007, the hourly pay rates and premiums set forth in paragraphs 1 and 2 shall be increased by 2.0 percent.
- On May 1, 2008, the hourly pay rates and premiums set forth in paragraphs 1 and 2 shall be increased by 2.0 percent.
- On January 1, 2009, the hourly pay rates and premiums set forth in paragraphs 1 and 2 shall be increased by 2.0 percent.
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| Expenses |
On the Effective Date of the 2005 – 2010 Flight Attendant Agreement:
- Eliminate reimbursement for uniform cleaning expenses.
- Per diem (Section 6.A.1.) will be reduced from $1.75 to $1.50. (International will be reduced from $2.00 to $1.75 per hour).
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| Electronic Communications |
Provide for management’s ability to communicate with Flight Attendants and AFA-CWA via electronic means. Eliminate requirement for paper documents for official notices, general information, and correspondence related to grievances and hearing decisions, except that the Company will continue to send paper copies of disciplinary letters, Letters of Charge, and hearing/grievance decisions to the affected Flight Attendant(s). The Company will provide adequate equipment in domiciles for Flight Attendants to access electronic communications. AFA-CWA and the Company will meet to discuss Flight Attendant access issues prior to implementation. |
| Vacation Accrual |
On the Effective Date of the 2005-2010 Flight Attendant Agreement:
- Vacation pay rates for lineholders shall be reduced from 2.8 hours per day to 2.6 hours per day. If PBS is implemented in a domicile, the Sideletter attached hereto as
Appendix A will apply.
- Vacation accrual rates shall be reduced by 4 days as follows:
Years of Service Days of Vacation
After 1st year 12
5 19
10 26
17 33
25 40
Third split at 26 days. |
| Sick Leave |
On the Effective Date of the 2005-2010 Flight Attendant Agreement:
- Flight Attendants sick leave accrual shall be reduced to 4 hours of sick leave credit for each month. (Section 19.A.)
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| Work Rules |
On the Effective Date of the 2005-2010 Flight Attendant Agreement, the work rules/scheduling provisions of the 2003-2009 Flight Attendant Agreement shall be modified as follows:
- The minimum three (3) hours training pay provision will be modified to provide for a one (1) hour minimum pay for up to three (3) training events each calendar year. (Section 15.A.1.)
- Modify Sections 7.A.,
9.E., 10.H.,
12.G., 12.O.,
12.P., and 19.A.4. to provide an additional option to increase scheduled hours maximum to 100/200/300 hours.
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| Defined Benefit Plan |
As provided in the Letter of Agreement attached hereto as Appendix B. |
| 401(k) Plan |
Section 34.B.10. modified in accordance with Sideletter attached hereto as Appendix C. |
| Profit Sharing |
As defined in Section 5.J.2. of the 2003 – 2009 Agreement. |
| Health and Welfare Benefits |
Eliminate the Short Term Disability benefit. (Section 33.F.) |
| Success Sharing |
Modify Success Sharing Program (Section 5.J.1.e.): cash incentive payments for Flight Attendants based on United’s actual performance under the annual incentive program will be:
Target Performance
2005 1.0% of Wages
2006 1.0% of Wages
2007 1.0% of Wages
2008 1.0% of Wages
2009 1.0% of Wages
The incentive payments for Threshold Performance will be 50% of Target Performance and for Maximum Performance will be 200% of Target Performance. |
| Distribution Agreement |
The Company shall adopt the Distribution Agreement as described in Appendix D. |
| Termination Rights |
This Letter of Agreement may be terminated by the Company or the AFA-CWA, on two business days written notice to the other (the “Termination Notice”), given before or after the Effective Date but no later than the Exit Date, upon failure of the Company to implement, through binding agreement or final judicial order effective no later than January 31, 2005, revisions to (i) the labor contracts of the Company’s other unionized employees and (ii) the wages, benefits and working conditions of the Company’s salaried and management employees so that the aggregate revisions in (i) and (ii) are reasonably projected to produce at least $547 million in average annual savings for the Company from January 1, 2005 through and including January 1, 2010, unless such action is cured to the reasonable satisfaction of the AFA-CWA within twenty (20) days of the Termination Notice. |
| Definitive Documentation |
This term sheet is intended only to describe the basic modifications to the 2003-2009 Flight Attendant Agreement that are necessary for the reorganization of the Company under Section 1113(c) of the Bankruptcy Code, and is not intended to constitute final contract language. The parties agree that they will draft final contract language, and execute the 2005-2010 Flight Attendant Agreement, within sixty (60) days of the execution of this term sheet. The parties further agree that in drafting final contract language, they will eliminate or modify any provisions of the 2003-2009 Flight Attendant Agreement that are inconsistent with this term sheet. |
| Early Out Option |
As provided in Letter of Understanding attached hereto as Appendix E. |
| Supplemental Insurance |
As provided in Letter of Understanding attached hereto as Appendix F. |
| Fees |
As provided in Letter of Understanding attached hereto as Appendix G. |
| Section 9.F.7. |
As provided in Letter of Understanding attached hereto as Appendix H. |
| Visas Non-U.S. Citizens |
As provided in Letter of Understanding attached hereto as Appendix I. |