TUI Travel completes first phase of its journey to benefits harmonisation

TUI Travel has completed the first phase of its move towards benefits harmonisation 12 months after it was created following a merger between First Choice Holidays and the tourist division of TUI, owner of Thomson Holidays.

Harmonisation of the terms and conditions of the 19,000 employees in the company’s UK and Ireland division was completed in October.

TUI Travel has so far agreed arrangements on pensions, fleet, childcare vouchers, travel discounts and annual leave conditions for its UK employees, as the first phase of what it says is an ongoing project.

Tim Taylor, head of HR, reward and recognition at TUI Travel UK and Ireland, said: “What we have sought to do is provide [a package] that is within the budget of the overall scheme but also one that provides individuals with a wider range of benefits that is accurately reflective of the size and scale of the [merged] organisation.”

Working with Reward Matters, the merged organisation agreed that with regard to pensions it will adopt First Choice Holidays’ trust-based defined contribution (DC) pension with grade-related employer contributions ranging between 3% and 10% for new joiners. Senior staff contributing 3.5% will receive 10% from the company, whereas lower level employees contributing 3.5% will be given an employer contribution of 5%.

TUI operated a DC scheme whereby members’ contributions were matched one and a half times by the employer, up to a maximum of 8%. This has been closed to new members. Both companies also operated defined benefit schemes for pilots which will remain open.

Fleet arrangements have also been consolidated. Employees who need to drive for work will receive a company car, while senior staff will be given cash allowances to buy the cars they want. Previously, drivers at TUI were given allowances whereas First Choice Holidays drivers could choose between a car and an allowance.

New annual leave entitlements will come into force in 2009, giving all head office employees, regardless of grade, 25 days’ annual leave, increasing to 28 after five years’ service.

Staff travel concessions have been agreed which match and, in some cases exceed, the discounts employees received previously, while childcare vouchers, provided by Busy Bees, have also been introduced.