Education for the newbies
During the 1970s, 1980s, and the early 1990s, Cathay Pacific was a very profitable company with good industrial relations at all levels. Part of the reason for the good relationship was that pilots were among the best paid in the world and work schedules were undemanding.
In the early 1990s, management decided to expand into the big league, so things had to change. Cathay saw that the easiest way to reduce costs was to reduce staff costs. However, the way in which this first round of cost-cutting took place sowed the seeds of the present disastrous industrial relations situation.
In 1993 management imposed a ‘B-Scale’ system of pay and conditions. Pilots accepted the B-Scale system in exchange for a negotiated pay rise which was incorporated into a system renamed A-Scale.
B-Scale salaries for new pilots were about 35 percent lower than A-Scale. But hidden within the B-Scale fine print were lower annual salary increments and lower increases for promotions; projected B-Scale career earnings worked out 50 percent less than the A-Scale. But after the first six months or so the whole contract was altered, giving B-Scales less leave, and reduced benefits and contractual rights - mostly changed at Cathay’s discretion. The B-Scale contract worsened over a period of about two years because of “company discretion” clauses in the contract.
Since 1992 there have been no negotiated pay increases for all aircrew groups.
Introduction of B-scale was a complete success for management.
In 1994 Cathay then attacked the A-scale employees, by degrading the A-scale contract: six weeks’ leave instead of eight weeks; three monthly overtime instead of monthly; reductions in travel benefits; “Company’s sole discretion” clauses; and other degradations.
Most pilots willingly signed the new contract. The few who did not sign up are still on their old contracts. The union cannot explain why pilots signed up, but short-sightedness is the kindest way to interpret the probable reason.
Then, introduced unilaterally by Cathay, came a series of new working systems including ASL and Right Choice, all of which degraded conditions while maintaining a divided workforce through differing conditions in employment contracts.
In 1996, the A-scale pilots received their last pay increase of 2.5 percent - way below the rate of inflation at the time.
After the introduction of A- and B-Scales, perhaps Cathay’s most divisive new initiatives concerned Flight Time Limitations (FTLs) which governed rest time rules, and Rostering. Day-to-day rostering became even more chaotic, with 16,000 roster changes in December 2000 alone. Pilots spent up to 4 months without flying a single trip that appeared on their roster. Individuals reported for work to go to Manila overnight and ended up on a week’s flight to Toronto. Hong Kong-based pilots were spending up to a third of their available work days on reserve - a far cry from the contractual 28 days.
In a series of changes, some involving the government’s Civil Aviation Department and court challenges, judges and government officials predictably sided with Cathay Pacific.
This was the state of relations when the 1999 dispute occurred.