Senior pilots have accused Hong Kong’s Cathay Pacific airline of age discrimination after they were made to sign one of two versions of a work contract with differing retirement ages — or face termination — last October, as the airline tightened its belt amid the Covid pandemic.
They said the practice meant pilots have been involuntarily divided into two groups who must retire at different ages, which violated company policy on not tolerating discrimination based on age.
Meanwhile, pilots who are approaching retirement age told HKFP that the cash-strapped airline would be financially better off retaining the most experienced members of its workforce rather than investing in training younger crew members or hiring from overseas.
Cathay veterans on a contract known as COS99 — which dates back to the 1990s — are according to its terms set to retire at the age of 55. In 2009, however, the city’s flag carrier offered a new contract to members of the cockpit crew, with retirement age extended to 65 but with reduced pay and benefits.
While some took up the offer, others elected to remain on the older COS99, because it offered handsome travel benefits and bonuses that pilots joining the airline later would not enjoy. Some also turned down the offer because the newer contract was offered without any prior negotiations, pilots told HKFP.
When many international flights came to a halt due to the pandemic, Cathay Pacific slashed 5,300 jobs in Hong Kong last October in order to survive and asked its pilots to sign a new contract.
Those pilots who had accepted the 2009 offer with retirement at 65 were given a COS18(Rev1) contract with the same retirement age, while those who had rejected the 2009 offer were given a COS18/RA55 contract, with the retirement age remaining at 55.
Under the new COS18 contract, the latter group are now on reduced — and identical — pay benefits compared to their peers who made the switch 12 years ago, but with 10 years less before they must retire.
Under COS18 terms, all pilots had their base pay reduced by about 35 per cent, and housing and provident fund benefits slashed by more than half. While some of the losses could be offset by productivity pay, the remuneration package shrank by about 30 per cent overall, according to estimates by pilots to whom HKFP spoke.
Pilots “should at least be given the opportunity” to opt for a later retirement age, one senior captain, aged 52, told HKFP.
In response to HKFP’s enquiry, Cathay said that all pilots on a contract with a retirement age of 55 “were previously provided an option [in 2009] to sign across to a contract with a retirement age of 65 but they chose not to.”
Some pilots reject this. “The company argues that we made a choice [in 2009] on retirement age: our argument is that we made a choice on an entire contract, which [has] 50 clauses and retirement age was one of them,” said another Cathay senior captain, now aged 51.
“When your choice of not signing is termination, that’s not a choice,” he said.
Both pilots spoke with HKFP on condition of anonymity, as employees are barred from speaking to the press.
They estimate that around 400 of the airline’s 2,900 pilots are on the contract with 55 years as the retirement age, with most wanting to stay on beyond 55. Around two dozen of these pilots will turn 55 in the next six months and be made to retire, while around three dozen will face the same fate in a year’s time, they said.
Meanwhile, as the company grappled with the effects of the pandemic, pilots working overseas were given the option of signing on the new contract with a later retirement age when the company closed overseas bases and had to negotiate their return to Hong Kong. The company also complies with local laws in other countries where it has bases, the two pilots said.
Two Cathay pilots based in New Zealand sued the company over violation of the country’s Employment Relations Act, even though their contracts stated that their employment terms were governed under the laws of Hong Kong. In 2017, the New Zealand Supreme Court ultimately ruled in favour of the pilots, and concluded that they have a right not to be discriminated against by age, independent of their terms of employment.
No more extensions
The question over retirement age differences only became more pressing late last year, when the company appeared to have stopped granting individual requests to pilots seeking to extend employment beyond their original retirement age.
The company laid off 5,300 employees in Hong Kong last October as the pandemic dragged on and the prospect of an early resumption of international flights remained slim. In addition, 540 pilots were made redundant when the company announced the closure of its regional airline Cathay Dragon at the same time.
Mark Hinch, a senior captain who joined the company in 1997 and eventually was promoted to senior captain while on a COS99 contract, said he started talking to the human resources department 18 months before he was due to retire in December last year.
The talks “looked promising until Covid happened,” he said. Even though the company would not commit to a decision until three months before he was due to retire, he was told in email exchanges that he was being considered for an extension. But in September, the company finally said the extension could not be offered.
“If I could work another two or three years at Cathay it would be a benefit to me… I thought they’d value my experience,” he told HKFP. “I think they were doing the best they could to give me the information they could, it was only a matter of circumstances that were changing very quickly.”
“Morale was quite low, a lot of trepidation. People were genuinely concerned about their futures” when the company began slashing jobs, Hinch said.
The airline’s human rights policy and code of conduct both state that “any form of harassment or discrimination on the basis of… age… will not be tolerated.”
Hong Kong, however, has no law to protect workers from age discrimination. In the absence of such legislation, the city’s Equal Opportunities Commission would not act on discrimination complaints based on age.
Cathay said in a statement to HKFP that it “does not discriminate on the basis of age” and pilots’ requests for contract extensions may be reviewed individually based on operational requirements. “We have not had the operational need to extend such pilots during the pandemic, however we continue to review crewing levels regularly,” its statement read.
The 51-year-old senior captain said an internal grievance complaint regarding retirement age made in around 2009 by a colleague at the time was not successful, but he himself was “seriously considering” filing a whistleblowers’ complaint to the airline’s chief executive officer against practices in the flight operations department.
The airline’s union, the Hong Kong Aircrew Officers Association, issued a letter to the company in October last year to raise its concern over the issue. “In any other part of the world, this would be considered the most obvious case of Age Discrimination taking place,” the letter read. “During a restructuring of this magnitude, certain groups should never be singled out and discriminated against.”
“Retain the pilots you have, accept the lower cost base, and have the most experienced pilot group in place for when the rebound occurs so we can all come out of this faster and better than any other airline,” the letter read.
The two pilots currently employed at the airline said however that the issue of retirement age has “since forever” been a deeply divisive issue within the Cathay union itself. Its younger membership and executive committee members appeared reluctant to speak out for more senior peers, as delaying their retirement would hurt promotion prospects for younger officers.
In response to HKFP’s enquiry, the city’s equality watchdog said: “Age discrimination is not within the ambit of the four anti-discrimination ordinances implemented by the EOC… Members of the public may contact the Labour Department for enquiry and assistance on age discrimination issues.”
Guidelines from the Labour Department which are not legally binding recommend that employers consider whether they should offer a “normal” or “mandatory” retirement age, whether the set age is appropriate, and whether the age was set based on rational grounds that a person above such age is unable to carry out the requirements of the job.
The fact that the pilots could not seek recourse in the absence of an a discrimination law “is a fault of the Hong Kong government also,” said the 52-year-old pilot. “This is a first-world big bustling city that doesn’t have those laws.”