I am writing here to ensure that all REX pilots get the message about what has occurred with the EBA negotiations.
We started by collecting the information from the pilot body to develop the claims and spent the better part of 18 months going through a round robin of negotiations. Our preferred position based on the initial surveys was to increase base salary to keep it competitive. We tried to provide an alternate proposal involving an extra RDO in addition to CPI on base; the company withdrew this based on cost.
We returned to the table to pursue the CPI + % formulas around base salary. The Company have persisted with the CPI + Profit Share(PS) + Share Gift(SG) type of offer. This has included at times reduced CPI on base salary, a restructure of the PS based on the Airline rather than the Group profit, and the SG options related to cash or shares. Ultimately, of the options the Company was prepared to put on the table, it came down to what is of value in real dollar terms to the pilots.
Can I say that the negotiators each have a view on the preferred outcome but in the end they are your representatives and have tried to improve the package time and again to no avail.
The purpose of the survey distributed in recent weeks was to give pilots an opportunity to select their preferred option of the offers put forward by the company and to indicate if they would support an agreement containing this option.
Our latest newsletter (sent to members yesterday) explains that, of the survey options put forward, Option 1 had the most support –- annual 3.5% base salary increase + guaranteed Share Gift (2% of base salary) + Profit Share (7.5% of Regional Express Airlines profit shared equally among eligible staff).
The negotiators are not directing the view nor are we going against the majority view put in the response from pilots. It would be remiss of me not to express disappointment at the lack of responses to the survey. We understand frustration and in many cases anger but we need the feedback to ensure that we have the right information.
We are putting the formal offer out to a vote of all REX pilots and it is the REX pilots that will determine the result.
Should the pilot group accept the document when it goes to vote then it will be certified. Should the pilots reject the offer then we will be back to the negotiations and the Protected Industrial Action (PIA). From the Federation’s position we will support the outcome of the pilot vote and happily pursue the course the REX pilots set.
It is always easy sitting on the outside to be a critic but the forthcoming ballot is for the REX pilots only and they will tell us whether the offer is acceptable or not.
When the agreement is ready it will be available for the pilots to consider for a minimum seven-day period before any ballot takes place. Furthermore we will conduct pilot briefing sessions before the vote where the negotiators will explain the document and what it will mean.
It is now up to the REX pilots to decide on what happens next. This is not over until the REX pilot group vote for an agreement that is acceptable to themselves.
Lawrie Cox Manager - Industrial Relations Australian Federation of Air Pilots
Lawrie, I can understand your frustration at the lack of pilot interest in bettering their own terms and conditions. Unfortunately a lot of pilots in this country are spineless, big talkers but when it comes time for action they all run. That being said it has been seen time and time again that playing nice with the company doesn't work. PIA once conmenced should not have been stopped "in good faith". What good faith has the company displayed? All we get is an agreement that should have been resolved over a year ago dragging on and on and on!
Well said NOTAM> I don't wish to read any posts from this point on, from REX pilots whinging and whining about the lack of Union doing this or that. The union is only as strong as it's members. And a majority of them have been adequately described previous to this post. Sorry for the remaining ones that do have a spine, and make the effort, but perhaps now is the time for that reality check ladies.
I hear ya' loud and clear Lawrie, but I'm with Notam re: the suspension of the PIA. Having said that, I do understand the ultimate responsibility lies with the REXPC and the pilot body, so I thank you for publicly explaining the situation.
Chamberlain found out the hard way in '39 what it's like to appease however. Fool me once, shame on you. Fool me twice, shame on me. He lost his job and WW2 was the result! How many times have management walked away from our gestures of good will with a slight smile on their face?
Leopard doesn't change it's spots mate. Something I feel the REXPC may need to be reminded of.
Yes. Disappointing result, but even more so is the bias of the options are towards 1 and 2.
We all hated Profit Share and Share Gift when we had it before. Even more so now as its REX Airlines only not as a Group. We do a good portion of Pel-Air charters, thus it should be the group but its NOT.
Lawie etc, the only reason why the first two options are biased is from your recent spreadsheet which shows that IF this happens and you get this profit share you'll get this. Inevitably that won't happen. It led the unknowing the wrong direction, did not let them think the big picture, only on July to June.And if they leave, well...
After 3 yrs we are only up by 10.5% option 1 or 2 as opposed to option 3 being 12%. We are done with PS and SG let's not bring it in again. If we did not have it years ago, wages would be higher yet again!
You'll never get the massive increase your after, baby steps.
Last edited by Stiff Under Carriage; 1st Aug 2012 at 11:56.
Agreed SUC. Profit share was a crock then, and just as big a crock now. I chose option 3. Not that I felt it was acceptable (and stated as much), but it was the only option that progressses the base, and cuts through all the B.S.!
As much as it may have been with the best of intentions, the explanation sheet, merely translated to me as complex propaganda.
I returned documentation supporting the base pay increase however with an overall NO; it is clear that a CPI + 2% will not be on the table. It appears that a PS+SG scheme will be put to vote and I will be voting NO on this. Putting a substandard agreement to vote just delays the process and pushes us in to the next financial year. We need to move on with a NO vote and get back in to PIA and ramp it up with overtime bans, not operating under MELs, bans on working off RSV etc.
A variation of the incentive package I would see as reasonable and acceptable would be similar to below. Note the share gift replaced with a retention bonus covered under the legislation of ordinary time earnings with super payable by the employer. The profit share of the Group.
4% annual base salary increase 2% retention bonus (of base pay in November each year) Profit share (7.5% of Regional Express Holdings Group -OR- perhaps all Saab operations?) Guaranteed floor of 3% for retention bonus and profit share payment of base salary
The payment of a retention bonus falls under the payment of ordinary time earnings as the payment has a direct correlation between the performance of services and the bonus payment, as such superannuation is payable by the employer on this bonus.
As an alternative take the below into consideration: CPI+2% annual base salary increase 2% retention bonus (of base pay in November each year) NOW... Whilst this may be less attractive this year with CPI only 1.6% in the March quarter, in the long run this could be attractive? Consider that this scenario looks worse than the one above which isn't itself much better than anything on the table at the moment, so why is the company so insistent on PS+SG and no CPI+2%... as their incentive scheme is a DUD!
Well I know my sick leave will be on the rise after this disheartening offer and survey response, only as this really is sickening. The only reason this is going to vote (with a very mixed message from the PC/AFAP) I would imagine is to bargain in good faith so PIA can be ramped up when it gets voted down and the FWA Commissioners don't look unfavourably on us.
One thing that seems to have been lost on all parties involved is regarding the surprisingly and disappointingly low CPI figure used to determine the rate used for calculating pay rises.
The 12 months to March quarter rate of inflation historically delivers the lowest CPI figure of all the reporting periods. What makes it even more disappointing is that this year for the 12 months to March, CPI was 1.6%. However, backtrack 3 months and look at the 12 months up to December 2011, where the CPI was 3.1% - a more respectable rate to build a pay rise on. This was because of an uncommon and isolated massive fall of 30% in fruit prices and reductions in the price of imports in the March quarter.
The ironic thing, and call it bad luck or a bad decision, is firstly agreeing to use the March quarter CPI figures to base your pay rises on, and secondly to now have to shift your demands to a calculation not involving CPI because of a dud figure.
This, as well as the treading-water-in-a-pool-of-sharks approach to EBA negotiation, only plays into the company's hands. To then vote in an agreement which involves profit share and/or share gift - something which historical was riddled with company manipulation and restrictions - would be akin to lining up together with your pilot brethren with your cheeks ready to welcome the Chairman.
I'm with everyone on the PIA, I think it's time to bring it back.
Why not propose an offer with the attached commencement of PIA and if not excepted we ramp it up every 72 hours until all areas of PIA are in action? Surely the company would have to consider the offer as the airline would come to an abrupt stop very quickly?
Some of you would have seen the industry survey we are doing. We really want your airline included in the results but would need a few more responses from REX employees to make her legitimate. If you could just take a few minutes following the link below, your airline will have its own place in the booklet we are producing. Please pass on to your workmates who may not follow PPRuNe.
Are those figures that out there? Knock half a percent off and they aren't too dissimilar from what's on the table just without all the smoke and mirrors of the share gift and profit share. If this EBA get's a resounding no vote then PIA and figures such as those are the only option.
And yes statistically/traditionally the March quarter is the lowest figure. The Company is not entertaining the idea of a CPI link so changing the reference period is even less likely. Anyone interested in CPI links in contracts check out the ABS website.
OK, so now we wait while the proposal is sent off to the REX lawyers. I mean FFS!
While we endure this latest incarnation of delaying BS, it's interesting to note what has been happening to the average REX pilot's pay packet. In my opinion REX pilots are now probably amongst the highest paid regional pilots in the World! Albeit at the cost of a sh!tload of overtime.
A group of REX Captains were sitting around the crew room recently and decided to compare end of year payslips. Very interesting. The average Gross, inclusive of tax free allowances was somewhere between $150-$160K! One Captain boasted $187K! The base yearly salary of a year 10 REX Captain is just over $97K.
A similar investigation of the average F/O's gross salary revealed somewhere between $75-$90K P/A.
So how much is REX paying in overtime? Well, quick beer coaster calcs... around $6-7 mil P/A! The usual O/T bill for REX pilots had been around $75K per month. Last November this blew out to $150K and the GMFO at the time decreed that there would be no O/T unless it was cleared either by himself or the then Head of Check and Training! The reduced schedule of Xmas/New year saw this figure kept in check, but it was merely the calm before the storm.
Since Feburary, the schedule has returned to normal, about a dozen REX captains have resigned, and the bill for pilot O/T has gone nuts. It has now become a problem that is simply too big to handle.
Needless to say REX management believe (perhaps deludeing themselves) that this problem will be adressed by the recruitment of more experienced pilots, despite the previous CEO's public decree that REX will only employ cadets in the future! Notwithstanding that, 10 years ago post Ansett collapse, and 15 years ago pre GA decline, this may have been the case. Now we have a resurgence of major airline recruitment, and a participation rate in people taking up the profession reduced by an order of ten! It's 2007/2008 all over again, but this time there is no fat left in the system. REX will lose them as fast as they can recruit them, they will not be able to replace them this time, and an inevitable reduction in the business will be the result.
A good question to ask is why are REX still losing pilots despite this spike in income? doesn't this vindicate the company line, that no matter what we pay them they will still leave. Personally, I don't believe so. O/T comes at a cost to a pilot's lifestyle. It's not regular (although some may argue against that in the current situation), and even though it substantially fattens the fortnightly pay packet, when it does lighten off from time to time, the "reduction" in pay can leave some with a feeling of disadvantage!
Meanwhile those pilots left at REX will (if they chose to do so) earn an income way above anything that most regional pilots have ever seen. REX have given up on trying to manage the O/T bill. They have now simply decided to live with it, and that may be a first step in manageing their future crewing issues. The ideal situation would be to have little or no O/T and provide an equal amount of what is being currently paid added as a fixed yearly retention bonus. The company are going to have to pay anyway, but the effect on pilot retention I believe would be dramatic.
Think about it. You're a pilot with REX earning the average salary. However at the end of each year you are faced with a decision. Stay that extra day and collect a lump sum of say $50K, New car, big overseas holiday, home renovation, land deposit, Super Salary sacrifice..., or leave and go to Jetstar/DJ etc, pay an almost equal amount in pay for training and lost income whilst endorsement training, and lose out on the bonus. Total loss could be as much as $100K! Needless to say some will probably still go, but overall REX will become the employer of choice for a diminishing pool of experienced pilots!
The "rub" of course is this cannot happen overnight. It would probably take a year or two at least for the effects to be felt. REX will not only have to continue to pay stacks in O/T to keep the show on the road, but they will have to put the money aside to pay those who qualify at the end of the first year. Not as entirely difficult as it may sound though. Second beer coaster calc... would see the average price of a REX ticket increase by approx $10. To date REX has invested around $15mil in the former CEO's much vaunted Cadet scheme. So far this has not produced a single Captain. probably why he is the now the "former" CEO!
Any scheme such as this may take a bit of tweaking. Perhaps make it available to ATPL holders only. That'll reduce the costs substantially. It's playing Devil's advocate I know, but it would have the added effect of providing an incentive for the former REX cadets to actually stay if they ever reach that milestone, because I can tell you now, most will be outta there once they become employable to the likes of DJ/Jetstar. Also a pilot should have to do the entire 365 days to qualify. This will add a significant disincentive to accept what are rapidly becomeing less than ideal working conditions at some of the domestic airlines. Also if ia pilot does leave prior to the full term, REX gets to keep the money. Holy crap! This thing sells itself.
Finally, REX need to stop penny pinching, and stuffing pilots around at EBA time. I mean FFS, they're quibbling over CPI+2% while Rome burns! A Flat CPI with a permanent, 50% on the base salary retention bonus, will change the game at REX forever. Anything less will not work. They'll either need to do it right or it will just be good money after bad.
Within 2 years REX's crewing issues will all but be gone, millions will be saved in reduced training costs, REX passengers will get what they deserve, a stable air service, and REX may just be able to once again take advantage of opportunities that are now slipping through their fingers.
Or...REX can just keep doing what they've always done. When that fails it'll be time for the current COO to dust off his resume'.
All good points Krusty, but I think your focussing a little too much on the pay side of things IMHO. Thats not to say a fully qual. airline pilot responsible for absolutely eveything that happens fromthe time he/she walks in work's door from baggage, pax, fuel, psudeo training capt. in some cases, delays, ...............doesnt deserve at least as much as a plumber.
Being treated with respect goes a long way to most people to stick with the company. That's been missing for a long time, and probably flows down from the top. You've identified that the pilots aren't doing too badly cash wise, albeit with overtime, but thats a choice each person should be able to make for themselves.
Being treated with contempt by NH,CH and others at the top, continues as evident in your current negotiations. C&T Captains 'socking' guys for ridiculous issues, older aircraft with maintenance issues all add up to many deciding, Nyada, I'm outa here.
Yes, pay and conditions are being eaten away across the industry, but ask any virgin pilot and I think youll find they are happy and keen to be part of a company building itself for future growth. The new CEO treats people with respect firstly, pays them appropriately secondly, and provides a future plan with them included.
Absolutely bigbrother, and believe it or not that's also my point. The complete focus of these, and past EBA "negotiations" have been almost exclusively based around pay. And that's no accident. For while management play hard ball with base salary (whilst apparently spending millions on failed ventures), we the pilot group become distracted from all the other aspects of our workplace conditions. I've asked the question before, how much REXPC/AFAP business has taken place while this nonsense has been going on? The answer is simple. None! And that's just the way the company want's it.
Fix the pay once and for all, and there will be energy and focus to spare for the equally important conditions.
Sadly REX are simply not interested in fixing these long term issues. The result of which would be an engaged, enthusiastic workforce. I guess it's just not in their DNA!
I'm afraid the end result will be more of the same, and well into the forseable future. Cancelled flights, disrupted pax, lost company opportunities, unrealized profits, and REX captains earning obscene amounts of overtime!
Speaking of pay earnt by Rex Captains. These incomes seem great but at what cost to there lifestyle? Sure it was at there choice but surely at those figures, they were working 6 days on 1 day off, and all there holidays.
Rex depends on people doing this, back to PIA and first thing should be no casual and no extension then see how quickly things get done about our EBA.
Hopefully we will see a proposal in the not too distant future? If the proposal gets up, then that'll be it, and REX pilots will continue to work heaps of O/T. The company will walk away with the delusion of a win!
If it fails to get up, then all bets are off, and sadly the resulting work bans will result in a virtual grounding of the airline.
The crewing issues that continue to plauge REX will not go away this time. Fact is they didn't really recover from before. It's highly unlikely that management will do anything else but continue to bury their heads in the sand.
Rex depends on people doing this, back to PIA and first thing should be no casual and no extension then see how quickly things get done about our EBA.
So true, but the truth is gamma, good majority of those earning those pays are union members who would not hesitate coming in on days off whether PIA had the restriction or not. Guarantee you that PIA with your restrictions wouldn't be upheld by many. Would be a true test to those commited to action though.
Haha.. your right though too, lifestyle would have taken a beating. So therefore 'those' pays aren't reflective of the base wage, merely by how much people are prepared to sacrifice there lives. Not are bad thing for both, but it wears off after a while.
Last edited by Stiff Under Carriage; 3rd Jul 2012 at 11:09.