Bypass pay - expectation management
 

I read the latest HKAOA newsletter with interest. I see now that "we" are considering compromising with management over the considerable bypass pay burden they will endure with the implementation of RA65.

Here is a simple fact about bypass pay. It does not, repeat, does not fully compensate you for a career of lost earnings.


Simple example but first the assumptions.

Time to command
Current time to command (for those that joined 9 years ago) is 9 years. Future time to command is likely to be 12-14years - that is assuming a growth rate we have had over the last 6 years....but bear in mind that all the current orders in place give a future growth rate below what we have had for the last 6 years.

Retirement Age
"But not everyone will work till 65!". True! But if everyone works just to 60, then for the first five years of the introduction of RA65 there will be 100% extending. Then five years from now we will resume our more than normal 50 or so retirees a year. So whether everyone works to 60 or 65 is open to conjecture. For every 2 years of extension it costs one year to command to an SO or junior FO.


The example.
With the introduction of RA65, if you joined this decade then your command time will be extended beyond what you would have expected. If you are a recent joiner(you get no bypass pay if you joined 1/1/08 onwards - basically screwed!) it will be by 3-5 years by the introduction of RA65. So if you had been a SFO3 after 9 years, you will get bypass pay taking your salary up to CN1. Then when you are SFO4 you get the difference up to CN1 etc. So if your command is delayed say 3 years, you will then finally 'earn' CN1 pay. Without RA65(or any extendees) you would have been on SCN2 at that point. So for the rest of your career you will be 3 increments lower than before the introduction of RA65.

The financial effect of RA65.
When you get to 55, you will have earnt approx a years less salary assuming you got full bypass pay at SO and FO levels. If you don't get any bypass pay you are 3 years behind! So you will work between 1 and 3 years for free from 55onwards to recover the lost earnings.

AOA- CX compromise.
We all joined knowing it was RA55 - that gave us a relatively 'quick' time to command of around 9 years. The goal posts have moved but CX is definitely happy with their movement! Bypass pay ameliorates the pay loss but does not fully compensate for it. So if you are not happy with losing some of this compensation I would let your GC know before it gets 'compromised' to a lower amount.

RA65 is not a win.
Why move it to 65 -why not until 100? Assuming we all die on the job we don't need any money for retirement and so we can save CX the 15.5% PF contributions. I hope to retire one day on or before 55. I have not done all this time in CX a/c so that I can die in one. I hope to have many years in retirement - presumably many share the same intent! So every year you work beyond your original planned retirement date is a year closer to death when you ultimately retire!

This is not an A scale thing - although if RA65 is forced in it should be on your conditions as they existed before your 55th birthday.

I see now the zoologist has finally worked out that RA65 may delay to command - although he says it will not "unduly slow" it. Glad to see someone has explained that to our hierarchy. It was getting a little tiresome over the last five years hearing that RA60 would accelerate time to command - anyone ever heard of Goebells? Last year there were about 100 pax commands planned...this year it is closer to 50!

We all joined on a contract - both parties agreed to its conditions. In that contract was RA55. Normally a contract is only varied with the agreement of both parties(yes we 'agreed' to the paycuts in 99 as we didn't like the alternative). So please make sure that any deal 'negotiated' by your GC is in your best interests before accepting it.

In the current environment of pilot shortages I thought CX should 'compromise' on bypass pay and increase it to reflect the rank you would have been and then promoted you into the increment you would have been. Only in that scenario would you not lose money. So basically, in my example above, the 3 year delayed FO would be paid bypass pay of CN1, CN2, SCN1 and then become SCN2 when he finally gets his command course! Its not hard to work out - but it might take some explaining to our leaders since they are still recovering from the shock of RA65 actually not decreasing time to command!

From AOA newsletter:

I always thought the NORMAL retirement age was 55. This is terminology meant to soften us up to a new way of thinking.

Strangely I feel that the only people being disadvantaged by not having an age 65 deal will be the A scalers who got a command after 4 years here and now want to stay on.

And this from the DFO update last week:
I was under the impression that bypass was written in my contract - its news to me that management now has a choice to agree to " some form of compensation" This sounds like expectation management again......

The language being employed by the people on both sides of this deal scares me. It seems that everybody has already accepted that we will have to make some compromise on bypass!! Ie that the contract I was hired on is now up for renegotiation whether I want to or not?

Age 65 is irrelevant.

April marks the end of Commands on the pax fleet for pax joiners. All future pax commands for quite some time will now go to those who joined as freighter pilots to fly solely the freighters, were told they were only flying freighters, and then got the AOA to get them across onto the pax fleet at the beginning of 2000.

It will be years and years and years before anyone who joined as an S/O gets even a look at the left seat, from April add on at least 4-6 to the 8 it currently takes:(

Thank you AOA.

The perfect foundation for INDUSTRIAL ACTION!!!

Bring it on..NOW!!!:)

well, don't forget to let us know when you three are taking "Industrial Action" so we can come and wave goodbye to you....................

You are all pusillanimous. You can’t even accomplish contract compliance. The AOA and the pilots are a mockery.

But good luck with it, try harder next time. We do what we want, when we want and your AOA assists us. We don’t care what your contract states, we decide on the changes and you and your AOA agree to them.

Promise, we will talk about pay. My bonus to be exact.

To My Bonus.

The Management

Numero

I agree with you 100%. Who wants to die at the sharp end of a 400? Not me.

Time for everyone to think outside the box...the Great Hall of the People is looking for drivers...flick all extensions etc across to KA..that should sort out the sheep from the goats and unclog the pipeline. Most who want to extend would be happy to stay in HKG anyway...cos the only reason to stay is to pay alimony!

Ooops...incoming:E

Sizematters,

Grow a pair and stop drooling on yourself, you f@cking codger!!! I'm sure you are already in the left seat, so any sense of responsibility has already run out the crack of your fat @ss!! It doesn't affect me so......

box

hey Boxjock, I'd offer to engage in a battle of wits with you................

but then again it would be unfair of me to take on an unarmed man !!!!!

Right now we have around 400 B scale CNs. The savings, versus A scale, are around $140million per year on a budget for FOPs of well over $2billion for pilot salaries. That $140million would pay for almost 300SOs and 300FOs to receive bypass pay this year. So before voting on any 'compromise' to help CX save money on the onerous bypass bill they will have, keep that figure in mind - or the $7billion profit. I am sure all the money they take off pilots in reduced profit share, for being sick last year, would pay for a few pilots bypass pay as well!

RA65 may be inevitable in some jurisdictions but to change the rules of the game in the middle of the game, without compensation, is unethical. All past CoS changes have been applied to new joiners not to current employees. If they want RA65 then ensure they don't financially penalise current employees.

Its a simple mathematical equation....does the opportunity cost of 'lost opportunities' exceed the cost of fair and equitable bypass pay.

ST says we don't want to run the "...risk of disadvantaging a large proportion of our number" by discussing pay before NRA. We have around 2300 pilots and about 50 per year due to reach 55 over the next decade. So I suggest that maybe the 'majority' of 98% not reaching 55 this year might disagree with the importance of discussing NRA before pay to help the 2% due to reach 55 this year!

Yes we will all reach 55 one day...but I would like to think that none of us would accept financial gain at the pecuniary loss to our junior colleagues. It is up to the most senior of us to ensure that any transition to RA65 is done fairly.

PhilmeKrackin

I suggest you edit or delete your post.... that is completely uncalled for and shows how immature and ignorant you are.

I thought earlier on this evening that Friday night and a few too many drinks at happy hour would probably generate a few stupid, ill informed remarks. Appears PMK's post has confirmed my theory. Your comments only add weight to the argument that, as a professional body, we can't be taken seriously.

When you wake up in the morning, could you please delete the post.

PhilmeKrackin,

You are like school in hong king right now...NO CLASS

Is that your kind of response to logical, informed dialogue?

You are a coward who hides behind some anonymous name.

For the record I cheat on my taxes, use disabled parking spots, and kick puppies.

Sorry Guys
 

I agree with all the sentiments listed at the start of this thread.
The overall big picture, as we all taught to be aware of as good aviators,
is to remember who we are employed by.
Do a Google search on Swire Company history and see what you find.
It makes for interesting reading.
To the present day, nothing has changed, the greedy people get wealththier but also loose a lot of friends and respect in the meantime.
I ask you, all of you, what is more important, enjoying your life with respect form you peers or making a life for yourself that gives you self-importance and money? I know what I have chosen.
CX gets what CX wants and I know that puts a lot of poeple off-side but look at the situation since 1999/2000 nothing has changed and people will always be selfish and look after No. 1 ( Fact of life).
I have been a HKAOA member since I joined over 10 years ago and my family and I have been through a great deal of stress trying to protect my employment contract, unfortunately to no avail.
So call me a pessimist, but I can't see any reason why this will change in the future.
There are lots of jobs out there at the moment and CX isn't the most sort after employer in the world, so maybe that will give us an advantage but as long as people extend over 55 for a worse contract or poeple join on COS 08 then nothing will change!!!!!!!!!
Think about what is important to you and don't be selfish all your life, it's too short.

NC

Couple of things:

1. Despite what happened in UK, there will probably be RA65 mandated in a lot of places - maybe even UK. (If I were a betting man, I would put money on somebody taking the company to court in the UK in the near future. Maybe even the Association if the deal offered is no good).

If we resist forever, bypass pay will simply disappear, as it was going to in the UK.

Perhaps a bird in the hand would be a lot smarter.

2. Did your analysis take into account a high resignation rate among junior officers?

Milly

Assumptions galore
 

NC :

Thanks again for some thought provoking angles.

Millstream :

It is thinking like yours that worries me. As I see it, you are posting your personal assumptions. Those assumptions grow from fear of the unknown and often become widely held beliefs among our colleagues. Then we vote based on widely held assumptions. That is dangerous because there are many things we do not know. However there are some we do. Even if a particular jurisdiction mandated age 65, why would that negate the company's contractual requirement to pay by-pass ???? If we agree to something now that is watered down then you guarantee a bad deal. If we are patient we may still get a crap deal but maybe we get more. We must be very wary as there are many factors to consider. A rushed deal is not a good deal.

Age 65 retirement is already mandated in the UK, for UK employers.

It was not mandated for the "on shoring" because legally the pilots contracts remain in Hong Kong's jurisdiction. This raises more issues than just retirement, labour law to name one.

As NC pointed out agreeing to any compromise on by pass pay means we work for free for 2 of our three years after 65, some deal ! The current Captains retiring get all of that money. So if they have to extend on freighter or go to the sandpit , I am sorry but they are still less disadvantaged then everyone coming after us. Personally I will feel the pinch only slightly. However I do not think that I can accept something that dramatically affects my mates junior to me.

Also not sure the attrition is higher then 2% per year so not much of a factor when only doing 50-100 commands per year.

One of my thoughts as a way to help out junior crew (SO/JFO) is to DO AWAY with the JFO pay scale. in other words when you pass your 528 you start on FO year 1 like it used to be. The whole delaying QLs etc is just a way of keeping salaries down. You should be paid as an FO right away. The reason it should go is that it is not fairly applied. It depends on the checker you get. There is no way your salary should be decided by luck of the draw. If you are flying as an FO you should get paid as an FO.

Sorry but this issue has bothered me for 10 years !!!!

More ideas are out there !!

FG

Five Green

It was not mandated for the "on shoring" because legally the pilots contracts remain in Hong Kong's jurisdiction. This raises more issues than just retirement, labour law to name one.

The age discrimination legislation does not mean that contracts remain in under HKG jurisdiction. As in Crofts, other UK labour laws apply:bored: and the Age act is so loosely written that it will inevitably apply as well

Age Discrimination??
 

Gentlemen,

We must first look at the contracts that we all signed when we came here. All with the exception of those on COS08 have a written retirement of 55. I know the company is known to change things when it suits them, so I can already hear guys muttering that.

The whole age discrimination argument is a farce because we signed on for it. Look at the case in Canada. A number of current and retired AC pilots took the company (AC) to court because they wanted age 65 (opposed to their contractual 60). They cried age discrimination. The high courts ruled against the pilots plainly stating that their retirement age is/was written in their contract. It was an agreement that they willingly signed and that was negotiated by their pilot union. Essentially, they were told that it was not a discriminatory issue and if they wanted the age changed, their union needed to renegotiate their COS.

Would the same ruling be found here or elsewhere? I don't know; I'll leave that for the lawyers among us.

MACH.88

Number Cruncher, I agree with you 98% of the time, but I must take issue with the tenor of your posts on this thread. You and I know each other, and we’ve both been here for a long time.

We’ve been taking a principled stand for our rights as employees since before the industrial action of 99, and the debacle of the 49ers that followed.

For you to characterize the retirement issue as one that is of importance to only 2% of the pilot group is just spin…and diminishes your usual practical and more balanced tone.

Two percent? Lets take your assumption that it only affects 50 pilots this year. That means that 250 pilots in the past five years would have liked the option to continue past 55. Furthermore, that means 250 pilots in the next five years alone would also like the same option. So you’re saying that those 500 pilots are somehow a marginal number, a group whose feelings and concerns are less worthy?

Those 500 pilots…they fought the same principled battles you and I did!

Most of those pilots, who were here in 99, should be captains by now. So I can make the assumption that the angry posts on this and other threads regarding retirement age belong to those who joined since 1999. Nice words boys!

Number Cruncher, it took you and me ten years, as First Officers, to earn our Commands here at Cathay. Have you read how that effort has been denigrated by some of these posters? Most who have only been here a short time, and probably joined since 99?

Do the 500 colleagues I enumerated above deserve their ridicule? Pprune has started to look like face book for adults. Names like Ramjet, Yeager, Mach Number, and so on, are tough sounding names. Number Cruncher do you remember those pilots in 99 who also talked tough at the time, but then forgot their words? Are you now suggesting that suddenly we who have been taking a principled stand all these years no longer matter or count?

Number Cruncher, for those who joined since 99, I ask you: did ASL or Cathay Freighters delay any of their Commands? Did any of them join on B Scale when their mates who joined a short time earlier did not? Did any of them have to endure the agony of taking a stand in 99? Has their pay ever been cut by 25% here at Cathay? Did any of their friends become 49ers?

You cant be suggesting that somehow only their concerns matter…and the rest of us can just sod off? Sure we signed a contract with age 55 retirement on it. Every one who has joined since 1993 also signed a contract they secretly didn't agree with. In both cases, the contracts need to evolve!

Number Cruncher on another post you used the word amoral. I don't agree with that characterization either. I think you got carried away.

ST is right in the sense that we all need to stick together, and work together, to get the best contract for us ALL! My concerns and those of my friends who have been here for 10 to 20 years also matter. Without our support, or the support of all the other pilot sub-groups there will be no unity and no agreement.

So I suggest some of you show more level thinking, and talk to those of us who have been taking a stand for the many years before you joined Cathay. Lose the angry tone. If you don’t understand that, you need to grow up. Your words reflect on us all, and those words are making us all look bad!

Mach.88
 

MACH.88 wrote:

Just because a group of employees signed a contract in a period prior to a new law being enacted, does not mean that group of (current) employees are forever excluded from benefiting under the new or revised law. That would mean the great majority of employees in any community would be prevented from any benefit intended when a government enacts or amends laws designed to protect and benefit the community.

Take for example the introduction of anti-discrimination laws in Australian, European, UK, Irish, Canadian and US legal systems: all were introduced and immediately applied to all citizens covered under the laws of the particular State.

There are exceptions to age discrimation allowed in all legal systems, but these are common sense exclusions such as for young actors playing a young person, or for Pilots and Bus drivers, which ensure they are retired at an age which protects the travelling public. These exclusions are governed by the licencing systems which mandate the maximum age allowed, NOT the employer or any previously signed contract.

However, despite new laws introduced in this way being applied across the board, they would rarely be applied retrospectively to previously retired employees where they retired under the provisions of their contract. This would cause significant disruption to current employees and possibly impose a significant cost to the employer for retraining etc.

Normally, the provisions of the contract should be amended when age discrimination law is introduced and prior to the employees retirement.

Please read on ...

It is my understanding that the AC case involved a group of guys, one of whom had already retired a couple of years earlier at age 60 (in 2003), in accordance with his contract and the then ICAO mandated maximum age?

The particular case argument hinged more around whether or not the age discrimination provisions should be applied retrospectively to an employee who had been retired as per his contract and in accordance with the ICAO mandated maximum age limit. Air Canada would otherwise have been subject to the age discrimination provisions, if ICAO had mandated age 65 prior to his retirement. There's a subtle, yet important distinction between the two ... as per the court's ruling against the retiree.

At the time of the hearing, ICAO and more importantly, Canadian Aviation Law, had still not yet increased the age for ATPL holders from 60 to 65.

President Bush only signed age 65 into US law in December 2007. The new US law does NOT allow pilots who've already turned 60 to reclaim their jobs or seniority either (the AC situation).

I am fairly certain that should age discrimination law be enacted in Hong Kong, Cathay Pacific Airways WILL be required to comply and allow all current employees the option of age 65 retirement.

The obvious question remains if and when this will happen? As for employees on other bases, the issue of juridiction is paramount and is the issue being fought out with the ongoing UK onshoring negotiations. These issues are far more complex.

ITG