Part 1
This is a bit long so it had to be split into two parts.
A paper portraying the case against the offer, supported by several Cathay Captains.
HKAOA EGM 15TH FEBRUARY 2005
THE CASE AGAINST “THE OFFER”
Ladies & Gentlemen
At the 15th February EGM, we are being asked to vote For or Against “The Offer”. Whilst the AOA GC is recommending that we accept the Offer, this paper details some of the issues that merit voting Against acceptance. It focuses on the issues for the non-49er Member. It is up to each individual 49er to decide whether the provisions of the Offer meet his own needs. For example, is he prepared to become a Year 1 freighter F/O instead of the Senior Captain on previous CoS? Only by considering all of the issues can we, the non-49ers, make informed and balanced decisions about our future.
Here are the “highlights”:
The current AOA Strategy has not forged a new working relationship.
The negotiation objectives have not been met:
o We have not protected our job security.
o We have not achieved Fair Treatment for The 49ers.
The Offer is not about The 49ers – it’s about withdrawing the legals.
The legal costs issue is a red herring.
The Offer is fundamentally flawed and unacceptable.
The Association’s future is best served by a No vote.
AOA Strategy. Our Association’s stated strategy is:
“The overall strategy since September 2002 has been to move away from a confrontational position and engage Management in constructive discussions with a view to forging a new working relationship. We believe that this path will benefit our Association. It is the path most likely to lead to a resolution to the 49ers; it is the path that will enable us to strengthen our Membership and therefore it is the path that is most likely to protect and improve our Conditions of Service. These are all very important objectives”; and,
“After every dispute there is never long-lasting peace unless there is rehabilitation. An essential part of the rehabilitation process is to find an acceptable resolution for The 49ers, and that would be our next step”; and,
“However, we are conscious that all parties have already lost greatly out of this dispute, the 49ers more than any, and what is needed is a resolution that allows us all to move forward.”
At the 29th December Focus Night, the President stated:
We thought {The 49ers negotiation} would go one of two ways:
Having agreed to negotiate they could make an offer that was generous enough to be seen to try and put the wrong right, and allow everyone to put it behind them and move forward. That’s one way and that’s the way we hoped they’d do it.
On the other hand, they could make an offer, which was better than any court could provide, but didn’t go as far as allowing people to put it all behind them. And that’s the path they’ve unfortunately chosen to go… a missed opportunity in my view.
The President is quite clear that the Offer does not permit “us all to move forward” nor does it “put the wrong right”. The DFO was also quite clear last month:
“The Company is keen to demonstrate that the confrontational approach of previous committees has no place within the Swire Group of companies”.
It is clear that our current strategy has not “forged a new working relationship”.
Negotiation Objectives. Last autumn, in preparation for upcoming negotiations, a 49er and the AOA President had the following communication:
I expressed to the President the view that the objectives of any negotiations that might be enjoined should be twofold:
1. To ensure that Cathay Pacific pilots can never again be put in the position in which we have found ourselves.
2. To ensure full reinstatement and proper compensation for 49ers who are qualified and wish to return to work for CX and to ensure proper compensation for those who are not now qualified or do not wish to return to work for CX.
The President agreed with both of these objectives.
The President responded on 13th October with: “I agree with the sentiment of the letter particularly as regards our objectives in any negotiation” and on 19th October, after reading the above final text in an internal 49er newsletter, with: ”Seems like fair comment to me”.
In essence, these negotiation Objectives are “Job Security via Fair Treatment For The 49ers”.
Neither Objective has been met.
The 49ers’ newsletter also included:
“The President also gave me an undertaking that financial assistance to the 49ers in pursuit of the legal cases will continue for the foreseeable future. I related to him that some people were concerned that he was going to negotiate a deal that does not satisfy the needs of the 49ers, put it to a membership vote and, if it passed, stop the assistance if the 49ers did not agree to accept the deal. He stated to me that this will not happen”.
That’s exactly what has happened.
Why Should I Have a Vote? The legal situation is that each 49er is in litigation with the Company. Therefore, any legal settlement is essentially between The 49er and the Company. However, as a peculiarity of the Offer, we non-49er Members have become directly involved: “The Association would be required to cease funding all legal actions related to the dismissals”. As a point of Law, the Association has never funded the legal actions nor are we permitted to do so. We have, however, given welfare loans to 49ers so they can pursue their own legal actions. This subtle but important difference means that we are not in litigation with the Company. We are, however, financially assisting our fellow Members who were unfairly terminated 31/2 years ago. That’s a basic union members’ responsibility, covered by the Rules.
Therefore, our vote is nothing to do with industrial relations or The 49ers, per se – it is all about withdrawing financial subsistence to those seeking legal justice.
Legal Funding. We have been told that:
“Even in the event of a victory in the actions, if the award is less than the current Offer, and it almost certainly will be, the courts would determine that we should pay the Company’s costs, as well as our own, from the time of the Offer going forward. Given that most of the costs still lie ahead of us, Instructing Solicitors advise that we would need to budget for a net outflow of up to HKD 20m”.
This statement is misleading and incorrect. Firstly, the Company has not yet made a “payment into Court”. Therefore the status of this Offer is not the trigger point for us accruing any liability, nor is the EGM date of 15th February. That trigger would only occur once the Company chose to make a formal “payment into Court”. One must wonder, if it could save such huge sums of money and force the AOA to pay its costs, why management has not done so in the last 31/2 years? It is a fact that there is every chance that the Company will not “pay into Court” because of associated jeopardy. Even if it did so, that would not preclude us accepting the payment with no liability.
Secondly, until it does so, it continues to be liable for a percentage of The 49ers’ costs to date: ≈HK$12m. By accepting this Offer, we would be agreeing to write off ≈HK$8.5m to date that CPA will almost inevitably be ordered to pay – even if it “pays into Court” - more than HK$9000 per Member.
The legal costs issue is a red herring designed to mislead you to abandon the long-running legal strategy.
The Voting Balance. For most of us, the vote is straightforward: we will continue to support The 49ers and vote whichever way they choose:
If all The 49ers accept – we will accept: the Yes vote.
If all The 49ers decline – we will decline: the No vote.
Objectively, we need to consider what to do if The 49ers are, say, split 50:50. Any other balance is just a weaker permutation of Yes or No. Clearly, the notion that “if one 49er accepts then we should all accept and forsake the other 49ers” is absurd. Therefore, let’s focus on the 50:50 scenario.
The argument is that we should all vote Yes “otherwise we are preventing The 49ers from being employed”. Let’s be clear here: the Association Membership has never prevented any 49er from being employed - management are. They could rehire all of The 49ers on full back pay tomorrow if they so desired. The only reason your vote is required now is that they want you to stop giving financial assistance to any 49er seeking legal justice. If you vote NO, you are not stopping any 49er being employed. If you vote NO, you are voting to continue assisting The 49ers who find the Offer unacceptable. We’ve been doing that proudly for 31/2 years and something that costs us less than the monthly Hourly Duty Pay we negotiated.
If you vote Yes – what does that mean for The 49ers who wish to decline the Offer? You are voting to abandon those 49ers. For those men and their families, the hardship of the last 31/2 years would be wasted, only to be abandoned by their union.
If you vote Yes – what does that mean for The 49ers who wish to accept the Offer? It means that they could proceed to a job interview - if they sacrifice their statutory legal rights first. It does not guarantee employment in a new F/O position and it is certainly not “re”-employment or “re”-instatement. It is only a job interview. To even consider abandoning some of The 49ers then surely the other 49ers should at least be guaranteed employment, subject to medical criteria? If 25 walk into the interview then 25 should receive job offers.
We are told that “the assessment procedure will permit a fair and objective decision to be made in each case”. What behavioural proof do we have of that? At the last Command Assessment panel 8 out of 10 SFOs were categorised Cat B. There is at least one Cat C F/O (not yet suitable for further Command training) who received no extra sectors and passed all his check rides on his Command Training. Is it likely that a junior manager will override the directions of the DFO? Why did the minutes of the original Star Chamber disappear? The Flight Ops Boards are heavily influenced by personal opinions and are definitely opaque. Why should this procedure be any different?
If management had faith in the natural justice of their own interview procedure they would have offered employment, subject to individual withdrawal of ongoing legal action. The 49ers could then choose to rescind their legal position once the job offer was actually available, and not before. There is no downside to this for CPA – unless they wish to retain the “weeding out” facility. Conversely, there is a major downside for our Association. In the scenario, we could face the situation where only half of the candidates secure employment, leaving us to support twenty-five 49ers that declined the Offer and twelve 49ers that now have no statutory legal rights.
Consequently, it is far too hazardous for us, as Members, to accede to 49ers sacrificing their legal rights just for an interview. It is also more hazardous to stop assisting The 49ers who still need our financial assistance.
On that basis alone, this Offer is fundamentally flawed and unacceptable.
The Association’s Future. Acceptance of the Offer will destroy the objectives of “Job Security via Fair Treatment For The 49ers” and waste our efforts of the last 31/2 years. Not only would we abandon some 49ers and their families, we would also set a dire precedent for the future of our Association. We would be saying to management that, any time they have a disagreement with the Association, they can “fire 20 or 30 pilots and the rest will fall into line”. The contractual Discipline & Grievance Procedure would be meaningless. “Moving on” would be condoning intimidation through capitulation. More importantly, we would be signalling that this Association is prepared to quit in the fight for justice. As our Association does not currently comprise quitters, it is very likely that many will decide that our Association no longer represents our morals or values and therefore resign. Just step back and look at this Offer morally and ethically. You know it’s wrong, don’t you?
The Association’s future is best served by a No Vote.
The President said that this Offer is “not a famous victory”. Stop it becoming “a famous defeat” that will emasculate our Association for the foreseeable future. When The 49ers vote No, please vote No with them.
Conclusion.
The current AOA Strategy has not forged a new working relationship.
The negotiation objectives have not been met:
o We have not protected our job security.
o We have not achieved Fair Treatment for The 49ers.
This Offer is not about The 49ers – it’s about withdrawing the legals.
The legal costs issue is a red herring.
This Offer is fundamentally flawed and unacceptable.
The Association’s future is best served by a No vote.
Please Vote NO at the forthcoming EGM