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Written by: Huang Yongyu
2020-11-09 11:44
Last update date: 2020-11-09 11:45
Cathay Pacific layoffs 5,300 employees in Hong Kong. The Legislative Council's Human Affairs Committee and the Economic Development Committee held a joint meeting today (9th) to discuss the government's response to the recent layoffs and subsequent development of the aviation industry. Cathay Pacific Chairman He Yili, Executive President Deng Jianrong was also present.
When asked if the senior staff only needs to cut their salary for one year, but the front-line staff are required to sign a permanent contract, He Yili disagrees, saying that the administrative staff will cut their salary from April this year to the end of 2021 and will review it later.
He also emphasized that after the reorganization, the liquidity is stable and there is no need for layoffs.
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Cathay Pacific Chairman He Yili said that the company has made difficult decisions in the past few weeks, emphasizing that the capacity has been greatly reduced during the epidemic, and all actions have been taken to avoid layoffs, but in fact, substantial restructuring is still needed to continue operations.
He emphasized that for employees who were laid off and who did not sign new contracts, the company has proposed compensation plans that are superior to labor laws, including MPF non-hedging.
Cheng Yongshun, a member of the DAB Legislative Council, said that it has been several weeks since the reorganization was announced last month, and he is concerned about Cathay Pacific’s latest funding situation and whether it will lay off workers in the future.
He Yili responded that after the company reorganized and opened up the debt market, the liquidity was stable. It is expected that passenger traffic will still be less than 25% in the first half of next year and will rebound in the second half of the year. If the forecast is accurate, no more layoffs are required.
Cathay Pacific Chairman He Yili does not believe that the new contract is a double standard for frontline staff and senior management.
(Screenshot of Legislative Council website)
Democratic Legislative Council Member Lin Zhuoyan is concerned about the issue of new contracts, describing employees as being "forced to sign contracts." Pilots and flight attendants need to cut their salaries substantially without a time limit. However, the high-level salary cuts are only a one-year time limit. The practice is like squeezing frontline employees .
Democratic Party Legislative Council Member Yin Zhaojian also blasted that Cathay Pacific’s practice of "taking advantage of the fire" questioned whether the "double standards" in deciding whether to fatten the upper and thinner, and whether the two board observers appointed by the government have played a role.
In reply, He Yili emphasized that it is a global crisis, and Cathay Pacific's layoffs are lower than other international peers.
He said that under the new agreement for flight attendants, the average salary will be reduced by 15%. The flight level will increase in the future, and there will be a chance to return to the normal level in 2019. This is not considered a double standard.
He pointed out that the administrative staff will be reduced by 30% from April this year to the end of next year. The situation will be reviewed at that time and appropriate decisions will be made.
Chief Executive Officer Deng Jianrong said that Cathay Pacific has planned to re-recruit pilots and will give priority to retrenched employees.
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The civic party Tan Wenhao said that although more than 90% of the employees have signed the new contract, they learned that there are still some vacancies and have re-applied people to fill the vacancies for pilots. He asked whether Hong Kong people would be hired first.
Chief Executive Officer Deng Jianrong admitted that he has planned to re-recruit pilots to the estimated number in advance. As for flight attendants, they are expected to be recruited only in the second half of next year according to passenger transportation needs, emphasizing that the laid-off staff have priority.
In addition, some Members are also concerned about the issue of traffic rights. Liu Jiaqi, Deputy Secretary-General of the Bureau of Transport and Housing, pointed out that Cathay Pacific has to return the traffic rights to the government due to the suspension of Dragonair, and Cathay Pacific may not be able to retrieve it. He emphasized that the bureau will follow the guidelines. Examination and approval, including consideration of whether the approval of the traffic rights can promote healthy competition and whether it is beneficial to the position of Hong Kong's aviation hub.
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Cathay Pacific layoffs
