Cathay union vows legal action against salary-cutting contracts, as Jardine Aviation announces lay-offs amid pandemic downturn

Danny Lee
·5-min read

Cathay Pacific’s largest unionised workforce has said it will push ahead with unspecified legal action in an ongoing row over salary-slashing new contracts after winning the overwhelming backing of its flight attendant members at an emergency meeting on Tuesday.

The Flight Attendants Union’s move to stave off a fresh round of terminations on the heels of record lay-offs at Hong Kong’s flagship carrier came as one of the city’s largest aviation services firms announced it would be cutting 340 jobs, following Cathay and the wider industry’s lead in shedding costs amid the Covid-19 pandemic.

Amber Suen, Flight Attendants Union internal vice-chairwoman, said the group had received legal advice suggesting it had grounds to challenge the airline’s vow to terminate staff, rather than make them redundant, should they refuse to sign much cheaper contracts in the wake of the lay-offs.

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“They should have given the same package as those who left us on the [21st of October],” she said, referring to the thousands of employees cut loose last month.

However, the union said its legal challenge would take much longer than the airline’s looming deadline for signing the new contracts, which comes on Wednesday.

“It won’t happen in days,” Suen cautioned. “It might take a longer period of time, but if you’re asking if we’re confident enough, we still have our members’ support and we’re doing everything we can to seek government support, contacting lawmakers to look into [the contract] and raise more awareness, because it doesn’t only affect us.”

Some 1,682 members voted in favour of empowering the union to escalate its legal action, with only 10 against and the same number abstaining.

On Monday, Cathay sought to coax holdouts to sign the new cabin crew contracts with fresh financial incentives. Under the original arrangement, staff who signed ahead of an early deadline last week received a one-off transitional payment, prompting most cabin crew and pilots to take advantage.

Now, the remaining holdouts who sign before November 4 will also get a transitional payment – albeit just half of the earlier amount – while those who do not sign by then will be fired.

Cathay Pacific cabin crew to vote on whether to take legal action against airline

Accepting the new contracts would mean taking pay cuts of 20 to 40 per cent for flight attendants, and 40 to 60 per cent for aircrew, according to their respective unions.

In a drastic effort to cope with the devastating financial fallout of the coronavirus pandemic, Cathay Pacific laid off 5,900 people – most of them in Hong Kong – some two weeks ago, and shut down its regional Cathay Dragon brand.

Cathay Pacific will meet with the Flight Attendants Union and the Labour Department on Wednesday morning, the union has said.

Separately, Jardine Aviation Services Group (JAS) – whose staff handle tasks such as airport check-in, baggage handling and other ground services for various airlines – announced on Tuesday that it, too, would be cutting jobs starting in December, blaming the end of a six-month government wage subsidies programme and a complete lack of “credible prospects” for an aviation sector recovery.

Jardine Aviation Services Group has announced it will be cutting some 340 jobs in December. Photo: Handout
Jardine Aviation Services Group has announced it will be cutting some 340 jobs in December. Photo: Handout

“[We] had to make the very difficult decision to restructure our business. This step has been taken as a last resort and is essential in order to ensure the long-term survival of JAS,” the company said in a statement. The firm said its monthly costs were currently double its revenue.

The coronavirus pandemic, which began in Asia at the start of the year, has devastated the aviation sector, with many airlines seeking billions in government bailouts and others going out of business. Cathay Pacific secured a HK$39 billion (US$5 billion) bailout in June, with more than two-thirds coming from the government.

Industries that support the airlines have encountered less generous cash support, increasing the risk for the supply chain breakdowns.

For several months, as airlines stopped flying to and from Hong Kong, JAS burned through its cash reserves while slashing spending, rolling out unpaid leave and opting into the Employment Support Scheme (ESS) – set to expire at the end of the month – to cope with dwindling income.

Asia airlines seen staving off pandemic ruin, for now

Under the ESS, the government pays up to 50 per cent of employees’ salaries per month, with the monthly subsidy for each worker capped at HK$9,000. Companies cannot cut jobs while receiving the government funds.

JAS’s two business units secured some HK$50 million for 2,031 employees in the first tranche of wage aid. It also applied for a second round, but the amount of support has not been disclosed.

The Federation of Hong Kong and Kowloon Labour Unions and the Airport Air Freight Employees’ Association urged JAS to consider reducing the number of job cuts in a joint statement on Tuesday.

Both groups suggested parent company Jardine Matheson absorbed laid-off JAS staff into the conglomerate’s other businesses, and also called on the government to roll out targeted financial aid to the beleaguered aviation sector.

This article Cathay union vows legal action against salary-cutting contracts, as Jardine Aviation announces lay-offs amid pandemic downturn first appeared on South China Morning Post

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