Caribbean Airlines pilots take 57% pay cut to save jobs

airline pilots

Trinidad and Tobago Airline Pilots Association (TTALPA) and Caribbean Airlines (CAL) have agreed that all pilots’ salaries will be cut by 57 per cent—just over half—for the next three months, to support CAL’s cost cutting measures amid the COVID-19 pandemic.

TTALPA represents CAL’s estimated 149 pilots. The development halts CAL’s plan to start sending home some pilots on three months’ No-Pay Leave from Monday.

The pay cut will halve the salaries of all CAL’s pilots until January 2021.

It will also affect other aspects of their pay up to June 2021, but they will keep their jobs.

TTTALPA had been negotiating with CAL in recent weeks on the issue.

CAL received revised documents from TALPA last Friday. A Memorandum of Agreement (MOA) was signed by CAL Human Resources head Roger Berkley and TTALPA head, captain Larry Imamshah later that day.

“It’s a bittersweet situation,” said TTALPA’s industrial relations consultant Gerard Pinard. “It meant between a rock and hard place, but we’re making the sacrifices and reached an agreement.”

CAL communications manager Dionne Ligoure said discussions which had been ongoing were expected to be concluded shortly.

Pilots were among the employees which CAL planned to send home temporarily due to effects from the pandemic which closed T&T’s borders. Up to June, the grounded airline lost $96 million.

Last month CAL announced it would send home about one-third of staff—600—for three months and institute pay cuts for others earning $7,500 over eight months starting last Thursday. CAL was to expected to start issuing letters on Monday to pilots.

Pinard said after CAL rejected an initial TTALPA proposal, TTALPA suggested a salary cut and CAL called the 57 per cent figure and other conditions. He detailed the situation.

Apart from wanting to ensure CAL and T&T keep steady, pilots then voted among themselves to accept the three months 57 per cent pay cut for some of their fellow pilots—who would have been sent home temporarily without pay—to continue working.

Pinard said pilots accepted the pay cut despite operating with salary rates negotiated in 2014. Negotiations are outstanding for collective agreements for 2015-2018 and 2018-2021.

Under the agreement for fleet managers captains, pilots:

  • If the situation improves, both sides will review the agreement.
  • Starting Monday, subject to earlier termination and based on what was agreed by both parties the agreement will end by June 18, 2020.
  • All pilots will forgo 57 per cent of salary for three months starting Monday until January 18, 2021. Pension plan contributions will be temporarily halted for the period.
  • From January 2021 pilots will also forgo a portion of their salary for five months. Those earning $21,000 to $40,000 will take a ten per cent cut. Those earning over $40,000 will take a 15 per cent cut.
  • At the end of eight months on June 18, 2021, CAL agrees to restore pilots to full substantive salaries.
  • In event of retrenchment exercises being contemplated any time during the agreement, pilots’ base salary will be used as a basis for severance benefits.

With the agreement, the recall of pilots to flying will be according firstly to operational requirements and secondly, the seniority list.

CAL’s financial situation will be reviewed monthly. In event of improved circumstances during the time, parties will review terms of the agreement.

Pinard said CAL had in good faith been paying pilots since the lockdown, “So pilots felt they also had to act in good faith. Though I don’t know who would have accepted this sort of salary cut, especially in this sector.

“But everybody’s prepared to make sacrifices for pay cuts hoping things improve for CAL and T&T. CAL said they have no more Government financing and had to find ways to keep going to achieve target savings.”

TALPA head Imamshah last Friday confirmed, “Pilots are very willing to undertake salary sacrifices to prevent going home without pay.”

Pinard added, “TTALPA should be commended for its responsible sacrifice to ensure CAL remains a viable concern and trusts that these sacrifices will not go unnoticed when bargaining recommences for the outstanding collective agreements.”

TTALPA’s pay cut acceptance is the latest action among sectors trying to deal with increased costs due to the COVID pandemic. Many areas have attempted to retool since the pandemic hit. Last week Prime Minister Keith Rowley announced a proposal to cap the tax exemptions on government vehicles.

Some pilots said it was fair if they were co-operating to give CAL savings and accepting pay cuts, no pilots should be sent home. “Pilots have vested interests in CAL.”

While CAL has been grounded, small chartered aircraft have been busy transporting those who have obtained exemptions.

HOW IT WAS ACHIEVED:

  • CAL’s initial plan was to retain the minimum number of staff required to maintain their reduced level of operation, and send home the rest of employees on No-Pay Leave for 90 days, in the first instance, while reducing the salaries of those kept in service by five per cent to 20 per cent for eight months.
  • CAL estimated saving US$1.8 million across the entire staff complement. Based on that proposed plan, savings of US$1 million was projected from pilots’ salaries alone.
  • TTALPA initially proposed CAL could achieve their desired cost savings by applying a 30 per cent salary reduction across the entire company. Based on their total personnel costs of US$6 million, that would result in the desired US$1.8 million in savings.
  • CAL rejected TTALPA’s suggestion and went ahead with their original plan for the rest of staff, sending people home on No Pay Leave for 90 days.
  • TTALPA refused to accept this proposal and insisted on negotiating a better arrangement for pilots that wouldn’t result in any pilots being sent off on No Pay Leave—even if it meant taking a salary sacrifice instead.
  • CAL advised TTALPA it would require a salary sacrifice of 57 per cent from all pilots for 90 days and suspension of pension plan contributions over the same period, in order to achieve the desired savings. Also, salary sacrifices of between 15 per cent and 20 per cent of pilots’ salaries for five months after the end of the initial 90-day period.

Trinidad & Tobago Gardian

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