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Company could have to pay out $350m after judge rules it was in breach of employment contracts

The Cathay Pacific Flight Attendants Union has scored a surprising legal victory in a long-running dispute over pay and promotion, which could cost the airline as much as $350 million.

The landmark judgment could pave the way for 4,000 present and former flight attendants - hired before 1996 - to seek back-pay from Cathay dating back to 1999.

Mr Justice Anselmo Reyes  of the Court of First Instance ruled yesterday that Cathay Pacific was in breach of its employment contracts with three flight attendants by scrapping long-standing annual pay rises in 1998.

He ruled that the employment contracts of  Esperanza Cruz Lajom, Maria Victoria Santos Calleja and Sushil Dev Biaspal entitled them to annual automatic advancements in rank and pay.

The judge said Cathay could not unilaterally vary the agreed pay scale with flight attendants.

Union leader Becky Kwan,  flanked by Ms Calleja and Mr Biaspal, said outside court  she  was 'very pleased' with the outcome.

'We are confident that, as a responsible company, Cathay Pacific will honour and enforce the judgment made by the court.'

But she said the union regretted that the dispute with Cathay Pacific had to be decided in court. She was congratulated by a group of more than 20  jubilant flight attendants outside the courtroom. The union estimated the court victory could cost the airline $350 million.

An airline spokesperson said, 'it is not immediately clear how the judgment will impact upon the flight attendants generally, as opposed to the three individual plaintiffs'.

Backed by the union, the trio launched their lawsuit in 1999 against the airline's decision in  December 1998 to drop the long-standing automatic advancement.

The airline's move came after the 1997 Asian economic crisis.  The trio subsequently initiated another legal proceeding against Cathay Pacific in 2003, after the introduction of a new pay scale.  They contended the new pay scale effectively reduced their salaries, despite promotions.

Under the automatic advancement scheme, flight attendants were entitled to automatic promotion of one rank after completing a full year of service.

This automatic progression was accompanied by a pay rise, determined by a pay scale.

Mr Justice Reyes said in his ruling, which covered both lawsuits, that  there was an implicit promise in the flight attendants' pay scale, meaning that upon completion of a year of service, they would progress to the next point on the pay scale and receive the matching salary.

Mrs Calleja said outside court that the legal victory was 'bittersweet' because this came after a tortuous legal process. She left the company in 2001 Both Ms Calleja and Mr Biaspal, who is still with the airline, reckoned that they were each owed roughly $100,000.



Flight attendants victorious in court case against Cathay