Cathay Bases Closure - Options?
 

With the first part of attack by CX over, and most pilots signed over to CoS18 in HKG, the next attack would naturally be on the based passenger pilots.

What are the differences in Law in the USA, UK, AUS in regards to:
If I don’t accept any new terms, and CX offers me to relocate to HKG, and I refuse, is this Redundancy?
What happens to LIFO since all remaining HKG pilots have no LIFO, but the bases do?

Are there any Lawyers out there that can give free advice please?

You will have to look at your particular contract (likely part of a collective agreement) as well as national and state/provincial law. It will depend completely on that. There is no one who can give broadband advice in that these widely differ and are specific to the region.

There may be set remedies according to the contract, or there may be recourse if the situation is part of a broader scheme to end run the contract by taking it offshore. But if it goes to factors beyond the contract (which should be relatively simple) it's way complex and it wholly depends on the law in the location you're in.

Angel 8

Like slasher said, it all depends on the jurisdiction. I am no lawyer but here is my take on it.

There are some general things most base jurisdictions have in common.

If a base jurisdiction has a collective agreement it stays in effect until its expiry date. CX can not impose a COS18 style contract on those bases. However, nothing is preventing management to negotiate temporary concessions with the respective base unions. And exactly this already happened and all base areas agreed to temporary pay-cuts for those pilots who are not flying.

CX has the right to manage. As such it is within their right to close all or some bases or reduce positions on bases. As far as I know all base CBA/CA/EA have provisions for this.

The easiest scenario is for CX to close a base and offer all pilots a position in Hong Kong. For those pilots who return to Hong Kong its fairly straight forward. As soon as they start their employment in Hong Kong, none of the provisions of their base agreement/jurisdiction apply anymore. Hong Kong law applies and CX can do as they please with those officers as long as it is legal according to HKG law. So that means COS18 like everyone else in HKG, regardless what their base agreement said.

Contrary to common belief, even though CX would offer a based pilot a HKG position, this pilot does not have to take CX up on this offer. This does not mean the pilot terminated his/hers employment, because the pilot's position was made redundant in that particular base jurisdiction. It does not matter if a pilot would be offered a position in another country. The respective base law applies, which covers only employment in its particular jurisdiction.

Another possibility could be that CX is not offering any HKG positions for those officers due to COVID, visa regulations or whatever, regardless what it says in the base agreement.

And then it starts to be getting very complicated, as not only the respective contract provisions (eg redundancy clause) come into play, but depending on the jurisdiction, also federal, state/provincial laws. These laws would cover things like the process how a base has to be closed, time lines, if mediation/arbitration is required, and if and how much of a severance package is required. To make things even more complicated it also depends on if the entire base would be closed or only some positions on that base would be reduced. EG, all 777 positions on a base will be made redundant, however all 747 pilots will remain on the base. Different bases have different rules for this scenario.

In regards of LIFO, my understanding is that if the entire base closes (the legal base entity is gone) LIFO is gone as all officers either would go to HKG or would get a redundancy package in accordance with their base agreement/jurisdiction.
However, if CX reduces positions on a base these have to be done according to the provisions in the base agreement. In case CX would ever add positions again on this particular base, those pilots will have to be called back and offered a position in order of seniority, before CX can offer any of those positions to someone else.

In closing, will CX close some or all bases? Who knows? It is possible. For those who say bases are now more expensive then HKG based officers on COS18, I would say it all depends on the base and the temporary pay-cut agreed upon. Also one thing to consider is that most HKG pilots opted for the 2 year transition period and continue to receive their legacy benefits. Within this time period most if not all base agreements are up for re-negotiation.

Base closure is not without cost. An alternate approach could be that CX will continue to negotiate temporary concessions with the base unions as they have done in the past. And when the time comes re-negotiate the respective base agreement reflecting the new reality.

I guess we have to wait and see.

Maybe just maybe because the "local" employed in Hong Kong on Cos18 is still more expensive than the "expat" on the base slot? After all Cathay is still a business.... And for your information as much as I hate to burst your bubble I know of and have personally flown with quite a number of "expat" based pilots whom are actually either Hong Kong citizens or permanent residents who have served their time In Hong Kong and continually paid income tax to Hong Kong either when they were HK based or even still when based overseas!

To answer the OPs question. In reality FOP management can now do whatever they like to the bases as long as it's on par or slightly better than Cos18 T&c or pay. Why? Because if the bases don't accept Cathay just close the base and return the pilots to Hong Kong on Cos18! Well played, well played Cathay! The house always wins!

Slasher1 and GTC58

Thank you both for valuable replies. They are a great help in preparing for what is inevitable.

So if there’s a difference between Federal or State Law, the latter would apply?

All who signed COS 18 now work for CPA.
Why were the new contracts not under VETA?
I believe the answer you are looking for wrt the question of bases lies here.
Is not VETA the entity that administers the bases?
What happens if VETA is wound up?

Not since the bases were on shored I believe! But agreed an interesting question!! The Australian and USA agreements/contracts have specific provisions for the eventuality that VETA is wound up; says that you work for CPA with your original seniority! If you don't believe it then go into crew direct and look at the documents for yourself

Angel 8

It’s more complicated then this. It depends on the particular issue. I assume you are talking about the US, it could be federal law, state law of where a pilot is based or state law where a pilot resides. Even some issues could go to the EEOC. It’s impossible to foresee what could happen as there are too many scenarios possible. If it would come to what you are suggesting lawyers would be involved in the process.

Angel 8

Perhaps both--Federal supersedes state law in general but a state could have specific laws (or more restrictive laws) which could apply. Now a CBA erases many potential traps (but can't erase some of the legal protections and usually acknowledges this within the document itself), but not all and some items are subject to a third party interpretation. GTC had a well worded response in the general case; there have been some specific things that have happened which might muddy the waters even more (at least as far as the company might be concerned--not going to go into them) but it is a real can o' worms. A better strategy would be work out some sort of arrangement in the mean time (which most US carriers have done--along with force reduction packages--within the contexts of their particular CBAs for the very reasons delineated in the thread).

Slasher, those are all pertinent comments. I believe however that the exigency of the current situation gives the company wide latitude of action. I suspect the movement of all HK based pilots to a non-Veta basis is evident of a specific intent and strategy. Although I sympathize with the based pilots, I suspect that the company already well knows what it is planning and when. Ultimately I would plan on coming back to HK, and then re-evaluating ones lifestyle issues from that perspective. Sadly, I cannot see bases continuing as they are. The cost advantage is effectively now gone, and the labour law concerns going forward will only become more difficult to engage once the Covid excuse of radical action is gone. Time will tell.

Whatever happens the company will fully involve the crew in the process as many engagement surveys showed there are issues with the way crew have been managed. The company is keen to rebuild the relationship.

The crew are valued and respected members of the great CX team and CX is a caring company.

The company will also fully comply with the local laws as it is a responsible international company.

Best laugh of the morning CR...! :}

Sarcasm or truth???? Wonder why CX is making HKG based employees file a US tax return?

You are a glass half full kinda chap! Ultimately I would plan on being unemployed, a return to HKG and a job would be a good outcome given the current circumstances.

CX management have taken maximum advantage of the black swan event of the century. Sadly, it will take CX aircrew a decade or more to undo most of the damage. Arguably, they never will (I doubt expat housing/school/medical benefits will ever return). We probably pre-ordained this outcome back in 2001 when we refused to down tools over the firing of the 49ers. It's basically been a slow suicide since then. CX has morphed into just another Asian LCC, with pay and conditions accordingly. Either accept that or move on i'm afraid....

Ultimately, we all are unemployed. The key is in making the time in between count for whatever a person is chasing in life. Sometimes ya gotta do stuff you don't like to do, but if you're always doing something you don't like to do under conditions you don't like the only one to blame for the circumstances is oneself.

....can't argue with that assessment....

I see 4 possible outcomes for the Bases:

1) No change, leave as is.
2)Bases remain, but on COS18 type contracts
3)Bases closed, return to HKG on COS18
4)Bases closed, all made redundant

Razor-sharp analysis :ok:

doolay

Just like the easiest option was to chop Dragon completely with no problems of integration etc the easiest and the most likely is Option 4.

Actually option 4 is the most difficult and expensive option for CX, involving redundancy packages and depending on the base a severance package and possible litigation.

But I agree it could be option 2-4. Option 1 seems unlikely.

I doubt anything will happen in the immediate future (eg the remainder of 2020) as the GMA has already communicated to the base unions about the present status and short term plan for the bases.

God you guys are ******** painful

Got something to add? Peoples whole lives are in the balance. Our caring, engaging company which values their crew as important part of the team are saying nothing. In this vacuum people are looking for information. So again, Got something to add?

FYI, everybody on the bases is paying full HK tax. Some also pay tax on top of that in their place of residence, depending on DTA.

Well as far as I can see, option 4 is not available on my freshly signed 3 yr agreement. Unless of course it's in accordance with LIFO.
I'm concerned they'll approach the respective unions with, "we need to renegotiate this freshly signed agreement, or we'll just close the base."

This won't make me very popular but I will say it anyway.

To have one group on productivity pay and one on fixed terms is disadvantageous for the latter. Terms on bases need to be simlar, or the HK pilots ( with much higher living costs) will get rostered last. Additionally,lucrative long haul flights to Europe, Aus and US are by nature predominantly crewed by based guys.

You must be on the 777! The long haul to North America and Europe on the airbus is all HKG based pilots since there are no pilots based in either of those locations!

Personally I wouldn't worry about the situation you described as the majority of us are in HK and the base numbers are so so small by comparison I don't think a situation such as that would happen, also at the moment the only people flying are a select group of HKG based guys so we have no fear of any based pilot being used to stop us from all
flying above minimum! When things pick up again we will all be so busy as the company shrinks, especially after the next round of layoffs

Curious, if things are going to pick up in a year or two, why would there be a 2 yr transitional contract hoping to retain those previously on more expensive contracts. If the company wanted to get rid of more people now, shouldn't they reduce the term to 1 yr transition or a more lucrative retirement package? Isn't a given some of them who are near to retirement would exit after 2 years of decent housing and schooling?

And I truly believe things are going to pick up once borders open. Did anyone watch the videos of the flood local tourists on mainland mountains? And the number of HKers who love going to Japan and Taiwan 6x a year.

Edited: to add on, do you remember how hard is it to catch a flight back and forth Australia, London, Japan, Taiwan just last year? Skiing season you will see at least 30 IDs trying to get a flight to Japan. And for people who think travel will be different permanently after covid, how else do they travel? By ship? I'm optimistic.

You should have seen Heathrow on Wednesday the last day before Lockdown 2.0.... absolute mayhem. People will be travelling like crazy as soon as borders open for regular travel

Sure Cathay can closes bases and send the pilots back to Hong Kong, but those pilots will cost more money than at the base, both with zero hours a month or 85, it may also force some retirements.

But I would be surprised if they want to spend more money at this point as they are in survival mode.

Southwest CEO Gary Kelly told CNBC's “Squawk Box” on Tuesday. Kelly said he is forgoing his base salary until the end of next year.- Oct 6, 2020. What will ours do on survival mode?

Frank W. Abagnale

The HK government only wants to protect itself. It’s not about protecting jobs for them. They’ve shown that with their stance of cathay dragon. Their only agenda is to please the mainland. If that means killing off a few pilots... they’ll gladly do that.

Rumour of the day is bases to stay but some to shrink and some to close! On what kind of T&Cs is anyone's guess at this point, and which bases are to be targeted is also unclear.

Ballon Buster you may wish to check facts before making an off the cuff statement about “everybody....full HK tax” and stating it as a fact.
Unfortunately you are wrong in the above statement.

In many base jurisdictions, I believe crew claim a partial exemption from full HK tax, and that HK tax that is paid, is then deducted from their own countries tax liability. That said, there may be some (Kiwis spring to mind) to whom paying full HK tax is beneficial, in order to have no NZ tax levied.

However, whilst the tax issue is somewhat irrelevant in whether a base remains or closes, or whether crew are left on their contracts, or “agree under duress” for even greater pay concessions, or perhaps in the Australian case simply kept on “Stand Down” and put on on zero pay, the Company will no doubt already know in fine detail what they will do with the bases.

Based crew at 777 ports it seems would be most at risk of base closure.
Australian Airbus crew who could be kept on, but put on zero pay according to Australian Employment Legislation seem at least risk, with all other bases somewhere in between.
Whatever it will be, crew who are HK or overseas based will have ZERO input at all in the CX decisions. There is therefore little point fretting about it, other than going through your own “what if ...” scenarios so when the base review decision is communicated to you, that you are not surprised.

[QUOTE]Based crew at 777 ports it seems would be most at risk of base closure.
Australian Airbus crew who could be kept on, but put on zero pay according to Australian Employment Legislation seem at least risk, with all other bases somewhere in between.[/QUOTE]

No one knows, why would 777 based crew be at more risk? CX is not allowing based crew to fly, 747 as the exception. Why is a 777 pilot not flying at more risk that a airbus pilot not flying? Do you really think that when this is over the airbus will be the main aircraft into LHR LAX JFK YTO YVR?

Do you really think that when this is “over” we will have ANY 777’s?

[QUOTE=SloppyJoe;10920667]definitely, airlines around the world are doing their best to get rid of inefficient aircraft , cx is no exception. When you compare the 777 to others in its class, and the forecast reduced pax demand, it doesn’t make sense to operate them. 787/350 will be the face of the foreseeable future.

No such thing as a "foreseeable future".

Why can't 777 NAM pilots convert to 747?

Sam Ting Wong

at the moment no, hence the reason the majority of the pax fleet is on the ground. In order for them to start operating, there has to be an immediate foreseeable future.