LONDON -Danish pension fund AkademikerPension said on Monday it was selling its stake in budget airline Wizz Air over alleged “human and labour rights abuses” towards its workers.
The $23 billion fund was one of 14 investors that called on Wizz in December to allow employees to form and join trade unions, saying their research suggested it was discouraging the practice in breach of staff rights.
AkademikerPension said on Monday that, after meeting management, it saw no sign the airline’s practices would change, and so it had begun to divest its holding, worth more than $3 million. The market value of London-listed Wizz Air is around $5.8 billion.
The fund said it had sold the shares it directly held in Wizz Air on Feb. 1, and had given its external fund managers until Feb. 8 to do the same.
“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 labour rights issues,” said AkademikerPension Chief Executive Jens Munch Holst.
Responding to the fund’s criticism of labour rights at the airline, a spokesperson for Wizz Air said sustainability was a core value for the company, citing its top ranking among European airlines according to such criteria from data provider Sustainalytics.
“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,” the airline said in a statement.
As airlines continue to recover from the impact of the Covid pandemic, Wizz Air noted its plan to hire more than 1,000 staff in the coming months and said it had restored the pay of cabin crew and staff to pre-pandemic levels.
The move by AkademikerPension followed an investigation in which it found multiple instances where the company had refused to recognise the rights of staff to form a trade union.
In their December letter, the 14 investors and potential investors, which also included Britain’s Ardevora Asset Management, quoted an interview with Chief Executive Jozsef Varadi in which he said the company kept out unions as they were “killing the business”.
($1 = 0.7376 pounds)
(Reporting by Simon JessopEditing by Mark Potter and Tomasz Janowski)