The basings fiasco

[MrClaus]

Rumour has it that the basing fiasco is now so out of hand, that it has been elevated from the children in the basings office to one of the adults at Swire to fix it up. Anyone heard anything about this one?

[Nullaman]

You are essentially on the right track

[Arfur Dent]

Next basings anomaly will be when the first crew achieve the grand old age of 65 but don't want to leave - in UK for sure.

[Abbeville]

Next basings anomaly will be when the first crew achieve the grand old age of 65 but don't want to leave - in UK for sure.

While the case of crew is somewhat influenced by the various regulatory authorities I grant you there may be some sucking of teeth somewhere on this one with thoughts of 'oh no not another court case'.

When do your first 'baby-boomer' crews come up to this cut-off?

[Hellenic aviator]

I've heard the same - They've called in Swire to deal with the aftermath of what has happened.

I also heard (from D.L. Manager of the Basings Office) that in the case of the Canadians that are in the U.S. - the Company had hired a team of attorneys to file for A work visa for ONE Canadian, just to see what the U.S. Immigration would do. If they were successful, then the team would use the same process for the rest of the Canadians.

Well, someone apparently 'didn't do their homework' - the Canadian that agreed to be the 'guinea pig' was a holder of a 'Green Card'. Consequently, he was denied the work visa (which makes sense).

D.L. thinks 'they' have one more chance at this (all of course at somebody's expense, as I would think that the attorney team is not taking this on a pro bono basis). :rolleyes:

One thing that the managers failed to realise (regardless the country of the Base) is that, contrary to their belief that it is the responsibility of the crew member to ensure that he/she takes care of their own affairs when it comes to work status and taxes, it is also the responsibility of the Company as a Corporation to ensure that they abide by the work laws of that country. They simply cannot just 'pass the buck' to the employee and claim "Well we told him".

[airplaneridesrfun]

After writing my senators and representatives in the US Congress about this, as well as the INS; I doubt any Canadians working for CX will be getting work Visa's. just my .02.

[Northern Harrier]

Brace, brace!

[Oval3Holer]

I don't think they need 'em

[Rook]

Canadians can be in the us 183 days in a row, leave and restart. Flying a Cx plane registered in HK shouldn't qualify you for US tax. No US jobs are lost. Nuff said.

[Tornado Ali]

....hmm....'nuff said'....Rook....really? There is a big difference between an airline positioning crew to operate aircraft, and having those same crew 'based' in a US port, operating OUT of that port and back TO that port at the end of duty. The INS and IRS in the USA will i'm sure be more interested in the issue than you purport. Just as an American can not be based in Vancouver, neither should an Canuck be allowed to be 'based' in the US. I know it may not be what you want to hear, but how do you justify blocking dozens of base slots from legit Americans who want them? And why would you think that those same Americans might eventually feel they need to make an issue of it with their local congressmen or senators? Eventually CX will have to resolve this, but they will probably mess it up in their usual short-shrift way.

[BusyB]

AA are based in LHR on the 777:}

[Freehills]

FEDEX have a base in Hong Kong. Evil yanks stealing HK'ers' jobs.

[Maple Leafs]

The American Direct Entry First Officers on a Toronto base (that’s in Canada by the way).

[GTC58]

And the American Freighter Captains and COS08 DEFO's in YVR. As far as FO's concerned there is now equal or more Americans in Canada then Canadians in the US. None of the Americans have work permits which they actually need as they work for an onshored entity of CX.
Funny, haven't heard any Canadian's bitching and writing their MP's or tipping off immigration ......

[boxjockey]

I was under the impression that the Americans on Canadian bases were going to be shipped out, no? Because they "got no papers', they were going to have to leave. Is this wrong?

box

[INDPEN]

Rook,

Quote, "No US jobs are lost."

Except for the approximately 80 or so Captains based in the US, flown by Canadian citizens preventing American citizen pilots from those positions, you are correct.

Ultimately this company has screwed itself up completely by not requiring proof of residence all along. I'm sure the Canucks wish they could be based in Canada and I'm sure the Yanks based up North could be based in the US. Just for simplicity sake.

What Cathay really needs to do, to let the status quo remain is see what the NHL does. That is a business that has Canadians 'working' in the US and Americans 'working' in Canada. How do they do it?

[INDPEN]

Working temporarily in Canada: Jobs that do not require a work permit (http://www.cic.gc.ca/english/work/apply-who-nopermit.asp)



This link makes it very clear that pilots operating foreign registered aircraft in and out of Canada DO NOT need work vias. I am pretty confidant that The same is true for the US as well. I'm going to do some more diggin but DL needs to see this.

[GTC58]

Canada Immigration and Refugee Protection Regulations (IRPR)

Division 3

Work Without a Permit

No permit required

186. A foreign national may work in Canada without a work permit

(s) as a member of a crew who is employed by a foreign company aboard a means of transportation that

(i) is foreign-owned and not registered in Canada, and

(ii) is engaged primarily in international transportation;



As CX Canada is onshored and deemed a Canadian Employer for immigration and employment purposes the above does not apply, as one of the conditions clearly states that the crew member has to be employed by a "foreign company".

[rick.shaw]

I'm with INDPEN on this one. The text below with my highlighting(from the link above):

Crew members
Foreign crew members, such as truck drivers, bus drivers, shipping and airline personnel, do not need work permits when:

they are working on vehicles of foreign ownership and registry that are engaged primarily in the international transport of cargo and passengers,
their work is related to the operation of the vehicles or the provision of services to passengers.My interpretation is the fact that the vehicles (planes) are owned and registered by the foreign company is what counts - not the fact that the person is onshored.

Yes, a very simplistic way of looking at it perhaps? At the very least, it should open up temporary basings to those who are not ordinarily able to reside in Canada. Is the company still giving people grief on that one?

[boxjockey]

As GTC58 has said, with the onshoring I believe that Canadian based pilots are now deemed to work for a Canadian company, so the employees are no longer foreign nationals.

box

[Mooseflyer]

Nice to see a link to some source data instead of conjecture (which we don't see often in this forum, source data I mean).

Regarding the requirement for work visas, and "who do Canadian based pilots actually work for", the AOA Canada newsletter update of 2 Jan 2011 provides info.

[jriv]

So a Mexican can be based in LAX? A Lithuanian can be based in yyz?

[404 Titan]

As has been said, Swire has taken this mess out of CX’s and the basings office hands. A little birdie has informed me that Swire has already unofficially tested the waters with the US authorities and the response wasn’t what they were wanting to hear.

[GTC58]

Even though CX Canada is a HKG entity, the Canadian authorities rejected CX's application for foreign employer status. Hence the decision that CX has to pay the employer portion of the Canada Pension Plan and Employment Insurance contributions. Also the CRA, in one of their latest communications, clearly states that CX Canada is considered a Canadian employer. However, the HKIRD has a different opinion in terms of taxes.
As such and as far as I know all Canadian laws and regulations apply to CX Canada and it's employees (the pilots) equally as to any other Canadian employer. The fact that CX Canada was setup as a HKG entity does not make it a foreign employer.

[BlunderBus]

The obvious answer is read the law.
USAB does not even qualify as a US base. It is a hong kong company, the crews are employed and paid in hong kong just as they were before they left for either canada or the usa 'base'.
The 'resident for tax purposes' in the USA is defined as 183 days in country ..counting all the current calendar year,1/3 of the previous year and 1/6 of the year before that..add it up and no matter what visa one holds ..if you bust 183 you are tax resident....EXCEPT
the days spent in the USA having entered on a crewmans landing permit(C1/D visa) count for ZERO when accumulating aforementioned days.
The permit allows 29 days on EACH entry.
So green card or not...any foreigner entering as an international flag carrier crewmember is exempt from tax.
CX can call a base anything they want..the FACT is the 'base' is not legally qualified...i.e one may as well be working for cx in hong kong as essentially the same conditions apply.The fact you start and end a flight cycle in the USA is irrelevent and no current law covers it.
Additionally they've ballsed up witholding tax for USAB...
Currently tax is witheld for 'flying in usa airspace' but to invoke this rule more than 50% of total wages must be derived in the USA.
So ...my advice to all concerned..simply read the law.:ugh:

[Giuseppe Giovanni]

Word on the street is that CX are currently doing a feasibility study to determine if it's more economical to close the Oz base as opposed to keeping it open.

The ATO most probably want CX to pay many years of back-dated payroll tax for crew based in Australia, when CX didn't declare them.

This would explain why there are very few Oz bases available in the current pool.

This on-shoring is beginning to bite.

Only time will tell....

[SeldomFixit]

And thus it has always been - do it until you get caught. In risk management terms, way, way in front when it comes to any like for like penalty vs gain equation.:*

[quadspeed]

This would explain why there are very few Oz bases available in the current pool.

but then it doesn't explain why there are any at all.

[404 Titan]

Giuseppe Giovanni

What a load of sh*t. As an account in my previous life closing the OZ bases doesn’t absolve CX from its tax liabilities and penalties to the ATO for past omissions and indiscretions. The cost to CX will be exactly the same either way.

[BIG MACH]

GTC 58 has hit the nail on the head, not only in respect of Canada but also Europe. There never was a need to onshore. The original basings system, where you operated in and out of your preferred port was within the law and onshoring dropped an unecessary can of worms into the lap of a badly advised CX management.

I hope Swire understand this better than CX FOPS did when they set up the whole mess.

HKIRD do not recognise CX basing companies and will be sniffing around for the tax that they should rightfully have been paid before onshoring took place.

[BIG MACH]

Got a GrpWise this week invitibg applications for Aussie base. Does right hand know what left is doing?

[BIG MACH]

"Invitibg" should be "inviting". Clearly my fingers are easily confused never mind right and left hands.

[jetset]

I think basings are open for application but there is next to nothing available...

[jriv]

USAB
The obvious answer is read the law.
USAB does not even qualify as a US base. It is a hong kong company, the crews are employed and paid in hong kong just as they were before they left for either canada or the usa 'base'.
The 'resident for tax purposes' in the USA is defined as 183 days in country ..counting all the current calendar year,1/3 of the previous year and 1/6 of the year before that..add it up and no matter what visa one holds ..if you bust 183 you are tax resident....EXCEPT
the days spent in the USA having entered on a crewmans landing permit(C1/D visa) count for ZERO when accumulating aforementioned days.
The permit allows 29 days on EACH entry.
So green card or not...any foreigner entering as an international flag carrier crewmember is exempt from tax.
CX can call a base anything they want..the FACT is the 'base' is not legally qualified...i.e one may as well be working for cx in hong kong as essentially the same conditions apply.The fact you start and end a flight cycle in the USA is irrelevent and no current law covers it.
Additionally they've ballsed up witholding tax for USAB...
Currently tax is witheld for 'flying in usa airspace' but to invoke this rule more than 50% of total wages must be derived in the USA.
So ...my advice to all concerned..simply read the law.

With this interpretation, any foreign national can legally take a US base. Try explaining that to the immigration officer:E.

[LongTimeInCX]

I dont think the crew member entering on the crew C1/D visa needs to explain anything. The Visa is self explanatory.
Visas are good - save you having to justify your entry to poorly educated, low paid, barely english speaking protectors of the border that they themselves infiltrated a few years earlier. Apologies to the few fluent intelligent ones.

It should more likely be a case of the company having to explain why it has not been doing things correctly. One may wish to question the validity of the high price advice the Company received, that appears to have been either woefully incorrect or interpreted and applied wrongly.
I think you may find Blunderbus knows a lot more than he is cracking on, I believe he's acutely aware of the legislation with regard to how it applies to non-US citizens.

[BIG MACH]

Jriv.

Any foreign national can operate into the US and stay there for 29 days on his crew visa. If he is flying a foreign registered aircraft on a Hong Kong AOC he is based in Hong Kong. If the company gives him 28 days R and R in the US that does not constitute a basing. We got into this mess because we called the places of R and R 'bases' and then we compounded the problem by pretending that we could onshore a foreign entity involved in international travel.

CX should return to the position pre-2008. What they were doing was perfectly legal, although their expensive advisers seemed not to understand the legislation and gave appllingly bad advise. I would like to volunteer my services to CX as an adviser with a roaming brief. I would charge half the money and my advice would be no worse than that of their current internationally recognised advisers. CX should sue K....G for this mess.

[VforVENDETTA]

Unfortunately, there's more to this can of worms than simply what the US federal law says. In the US, each state has it's own set of laws about a lot of things. Employment and taxes are a couple of them to say the least. Years ago an airline I used to work for got caught by the state of California for not providing state mandated overtime pay (higher than federal requirements), making employees pay for half their uniform costs (to be fully paid for by employer in CA). The company's lawyers (high paid large Texas law firm) argued that since the company is/was Texas based, it shouldn't have to comply with California law in those regards and that since the paychecks are issued in Texas, all those employees are subject to Texas labor laws, not California's. Well they lost in court to state of California’s labor board and paid over $250,000 USD in overtime back pay alone. The Judge's ruling went as far as saying that even if they were a foreign company, as long as they based even a single employee in the state of CA, they had to comply with CA’s labor laws for at least that one employee.

It’s amazing how they insist on running this airline as if it’s the same small less than 500 pilots popsicle stand outfit it once was, in this and many other ways. Currently, this popsicle stand is under the radar of the states in the US. They don’t even understand the federal law which is simple in comparison. They don’t understand what “basing” means under legal terms. You can’t say someone is based at XXX but they’re not a “resident” of that place. Good luck banging your head against the wall, but the law is what it is. Nobody gives a damn what your definition of it is. Once you call it basing, good luck trying to say you really mean something else, even if you really do. So why even call it that in the first place? All of this could’ve been prevented by either first getting the approval of the corporate legal department (which from the looks of things, we don’t have one) or do what the corporate legal department would’ve done if one existed, …HIRE AN IN COUNTRY LEGAL FIRM IN EACH COUNTRY! Which is the only way to get advice worth a crap when you’re such a large international company. Run this place like it’s a 21st century international airline, not like a 19th century colonial possession. Which happens to be the corporate culture mentality in all things around here.

[Flap10]

The Judge's ruling went as far as saying that even if they were a foreign company, as long as they based even a single employee in the state of CA, they had to comply with CA’s labor laws for at least that one employee.

If you recall, a few of the 49ers were "based" in LAX at the time of of their dismissal. I could be wrong, but I believe one even had the legal right to reside in the US. A lawsuit was filed in CA against CX or USAB for wrongful termination using some high profile attorneys. The case went nowhere because the judge concluded that the state of CA had no jurisdiction over the matter.

[VforVENDETTA]

Hmm, that's interesting. Of course what I was referring to isn't an actual ruling. Just what the judge said in his ruling statement.

[jriv]

Big Mach,

If you're right, why don't any of Cathay's European pilots take a base in beautiful Southern California?

[BIG MACH]

jriv

Primarily because our families would not be allowed to stay in CA. They would be allowed to come in as visitors, but would not be allowed to put down roots. They would be treated differently from crew. If I were single I would have happily taken a CA base.
The current situation is that the company will no longer give a CA base to a crewmember who does not have the right to live and work in the US. If they knew what they were doing they would realise that the restriction is not necessary.

[Rook]

exactly. right on the money. Cx looked at this all wrong.

[jriv]

Big Mach,

That sounds reasonable enough. But I think you underestimate the authority of US immigration officers. If you told them (or they otherwise found out) that you were essentially using the visa to give youself permanent residency, they would put a stop to it one way or another.

I have personally had a work visa revoked by an immigration officer when he realized I had "creatively" applied for a visa. Nothing illegal, just my liberal interpretation of the law.

If you don't believe me, just ask immigration on your next trip to the US.

[cpdude]

If you ask 10 different Immigration Officers you will most likely get 10 different answers!

[Bob Hawke]

The company no doubt, will extend itself in its time honoured fashion and seek input from all effected in this basing debacle. Your valuable thoughts and strategies on this topic will be taken into due consideration and you will feel the appreciation of being a team player. You may even have some suggestions that will surprise or surpass the eminently trained manager/s, who will graciously acknowledge the contributions you may make.

[MrClaus]

Well, looks like its the beginning of a few changes. Check your Groupwise guys and you will find that temp bases in toto, base swaps beyond national boundaries and preferred ports beyond national boundaries are all dead. Glad I took my temp base last year, I had a feeling I might not get another chance.

[Rook]

More mismanagement, yet again.

[MrClaus]

It sets a worrying precedent. CX looks like it will take the easy road and just get rid of things, rather than put in the resources and find a equitable and workable solution.

ps. Did I just put the words 'equitable' and 'workable' in the same sentence as CX. I guess I am still a little naive!

[AQIS Boigu]

Can't ....ing believe that one of the best benefits of working at CX is gone...

[joebanana]

I assumed the paragraph titled 'Corporate Responsibility' was finally going to be a recognition that CX had a responsibility to its employees.

But then I should really have known better....:rolleyes:

[BIG MACH]

Note from all this that HKIRD regard us all to be HK based and international agreements back up their claim. We are about to be caught between conflicting governments and a company that does not want to get involved.

The HKIRD have every right to lay claim to our tax dollars. The agreements are clear. The fiasco continues.

[req visual]

Our best benefit (arguably behind housing) gone.

Very sad to see that management took the easy road once again and said "cannot la" on temp base, prefered port and base swap etc etc. Just like AMS closure.. Surely there are ways around this with just a little time and effort. Would have thought that was the job for the basings office staff?? Blows me away that most of the business think CX is run really well..

This job once again seriously lost its feel-good..

[Waterskier]

This sounds like a negotiating tactic. Terminate all the perks in the current basing agreement so we have to fight for stuff we already had, never mind improving the document.

"Ohh you'de like to negotiate for Temp Bases, sign off on the new FTLs and its yours."

"Ohh you want mutual base exchanges, well we need this in return"

"Ohh those preferred ports which make both our lives easier, sorry they're gone, but if you work with us on the HK Housing problem, we might find a solution."

"Ohh you want us to clear up the onshore double taxation with HKIRD, well we need some leeway with International Cadets"

What better way to negotiate than remove all perks before coming to the table?

[Glass Half Empty]

The loss of temp base, base swaps and preferred ports is a disgrace and without a valid reason to boot. This company is really the pits and anyone thinking of joining this outfit should go elsewhere.

[BIG MACH]

The Basings Manager has said that taxation is a matter between the employee and the authorities who demand the tax. So we are now faced with HKIRD taking full tax and, in addition, paying full tax in home port.

When the Aussie based crew believed that they were not liable for Aussie tax the company paid them a lower salary reflecting their tax free advantage. When the UK cabin crew won their case against HMRC (operators of a protection racket in the UK) absolving them of the requirement to pay National Insurance, this bonus was cited as a reason for them only getting two per cent or thereabouts in the recent pay rise. The company also gained from not having to pay employers NI, but thatdoes not count.

Can I assume that, given the extra burden of taxation about to fall on some of the based crew, and in the light of their previous reaction to taxation changes, the company will grant an immediate payrise to cover the additional burden. After all it was the company and their incompetent advisers who put us in this situation in the first place.

[Captain Dart]

Who on an Australian base would give 47 c + 15 c = 62 cents of most dollars of their 'hard earned' to two governments, one of which is a country they don't even live in? It's insane! It wouldn't be worth working!

Maybe the Hong Kong Government could start taxing QANTAS pilots who regularly bid HKG patterns.

If this isn't resolved CX had better brace themselves for two things:

1. Large numbers of pilots and families coming to Hong Kong with the associated costs

2. Large numbers of pilots who don't want to come back resigning.

[elgringo]

as a "yank", a 9 year F/O and maybe no chance of EVER going back to US, and if I do, no social security, unemployment, medical after retirement... all i can say is... if UPS starts to hire I hope to be wearing the brown uniform..

[MilPilot]

as a "yank", a 9 year F/O and maybe no chance of EVER going back to US, and if I do, no social security, unemployment, medical after retirement... all i can say is... if UPS starts to hire I hope to be wearing the brown uniform..
After 9 years in HK on housing allowance don't you have a significant part of retirement taken care of?
I have friends i Dragon Air that have been there for probably around 9 years or so and I think they would be bringing back a nice chunk if they left today. Or maybe they are all talk :}

[404 Titan]

MilPilot

The point is that if you joined today as a DEFO, you are on local terms for the term of your career. If you come to Hong Kong there is no housing.

[Harbour Dweller]

After 9 years in HK on housing allowance don't you have a significant part of retirement taken care of?

Only if you buy.

New measures have been taken by the HK Government to cool the property market.

Buying here has just become out out reach of most expats coming to HK with a family.

[Sir KDM Lowe]

.......and only if the price goes up and interest rates stay low. It's only a "perk" when you've sold and hopefully made a profit. Some guys have got they're fingers burnt in the past. The debt is in your name after all and as Harbour Dweller says, finding 30% deposit for a decent sized family home is probably out of reach for most of us.

Once the company has finished attacking the housing policy, then there's no real point in staying in HK. It's a race to the bottom in this industry I'm afraid and CX is playing catch up.

[gjanf]

Sir KDM,

I take your point about the 30% deposit, but if your flat is paid off over time, you are always in profit regardless of whether the price has gone up or down. The up and down just determines the level of profit, not whether there is one or not. The alternative would be to keep the flat and let it out to give you retirement income. Admittedly it may take up to 15 years to pay off a large mortgage, but it takes even longer to build up a decent pension fund.

[404 Titan]

gjanf

These are back of my beer coaster numbers but it is possible to walk away from owning property in HK even with the company paying it off and lose money. There are some guys around that are still behind from the Asian economic crisis in 1997. Let’s assume you buy a place for HK$7.8M with an average annual interest rate of 3.5% over a term of 15 years. Total interest will be about HK$2.4M and tax will be about HK$1.7M. This leaves a total profit with no capital gains of HK$3.7M. After stamp duty, property taxes, management fees etc, you would only need to have the property market decline about 40% if you bought at the wrong part of the cycle and you are stuffed. It’s happened before and it will happen again.