French labour watchdog steps in after Cathay Pacific closes Paris pilots' base

Labour watchdog is called in to examine work contracts after airline closes its Paris base

PUBLISHED : Monday, 17 September, 2012, 12:00am
UPDATED : Monday, 17 September, 2012, 4:55am

France's labour watchdog has stepped into a row over the closure of Cathay Pacific's Paris base and is being urged to investigate the employment contracts of the pilots.

Cathay closed its Paris base on September 1, giving the 39 pilots based there just 11 weeks to prepare for their move back to Hong Kong. Pilots said the airline closed the base, one of 18 outside Hong Kong, because it wanted to give them cheaper, local contracts rather than the expatriate terms they were on and to avoid France's stringent labour laws.

The Hong Kong Aircrew Officers Association (AOA) contacted the French Labour Inspectorate about the case late last month after the airline rejected its request to delay the closure. It has also sought legal advice on the officers' contractual rights.

"Investigations into the terms and conditions whereby the Paris-based officers had been employed highlighted the fact that it appeared that there could be irregularities in their employment arrangement under French law, as well as in how the Paris base closure was being handled by Cathay management," AOA chairman Peter Vinna wrote in the union's internal newsletter last week.

The airline last month offered the affected officers paid leave so that they would have more time to make arrangements for returning to Hong Kong. But the offer was contingent upon the AOA signing agreements not to encourage its members to seek redress with the French Labour Inspectorate.

About an hour after the offer was made in a meeting with Cathay's management, the AOA was told that the Labour Inspectorate had paid a visit to Cathay's office at Charles de Gaulle Airport.

"Given the overall facts and circumstances of the situation, and based upon legal advice, it was determined that the best way to proceed that would ensure we were acting in the best interests of the PBOs was to co-operate with the LI (Labour Inspectorate)," the newsletter says.

A union newsletter dated August 29 suggested that the decision to close the Paris base was made on the recommendation of the company's strategic basings review workgroup, which found that the environment in France had become "challenging" and several Boeing 747 services had been removed.

Another AOA newsletter in July quoted Cathay's general manager for aircrew as saying that the bases in Vancouver, Sydney and Manchester were chronically overmanned and did not make business sense. The viability of the bases in Adelaide and Perth were also being reviewed, the newsletter said.

A Cathay spokeswoman said the decision to close the Paris base had not been an easy one. While reviewing the basing policy, the spokeswoman said Cathay took into consideration factors such as operational and scheduling requirements.

"We are conducting a review of our overseas basing strategy but it is too early to say what the outcome will be," the spokeswoman said.

The spokeswoman also said the affected officers have been relocated to Hong Kong with relocation support, including accommodation, provided for them.

The company last month denied that the closure is due to problems with a tax-saving scheme set up in 1992, through which the company's overseas pilots were employed through a shell company.

The Hong Kong Inland Revenue Department is also understood to be looking at possible outstanding payments linked to Cathay and many overseas-based pilots.