Despite recording a profit of over fourteen million pounds for 2014, Virgin Airlines is having a global lay-off, with the positions being moved back to England. Fifty-one cabin crews from Hong Kong were recently dismissed, involving more than 600K pounds in severance payments. However, most of the severance payments have been offset by the Mandatory Provident Fund(MPF) payments. Trying to pressure the company into negotiations, the Virgin Atlantic Hong Kong Cabin Crew Union took strike actions. While the outcome was disappointing, the cabin crews said they would keep on fighting.
Twice awarded, now dismissed
Lilian, 44, was among the first employees of Virgin in Hong Kong. Having worked for the company for twenty-two years, a severance payment of almost 30K pounds was in place -- if not for the MPF offset mechanism. "The MPF offset mechanism means that the company only needs to pay me twenty thousand Hong Kong dollars (around one thousand and eight hundred pounds)." After spending half of her life with the company, that is what she received. Losing almost 30K pounds as retirement funds, the Union member was at a loss. "Sometimes I even hope my life won't be too long, because I may not have the means to support myself in my later years."
Every airlines have different retirement ages, with Virgin setting it at 65. "Fly till we can no longer fly" is the Hong Kong Virgin cabin crews' wishes, and the sudden lay-off has caught them totally off-guard.
During the last major lay-off, Virgin claimed that their decisions were based on the employees' performances. The employees, however, saw another picture. Among those fired was a worker who worked in Virgin for 17 years and twice received the "Best Employee" award. Connie, another Union member, criticized the company's management for lacking transparency in their evaluations of the workers, and speculated that, at 44, the employee's age was the deciding factor. Lilian said that the employee's severance payment was all offset by the MPF payment, "probably losing more than 200K Hong Kong dollars (around 20K pounds)."
It is tough to lose the job and more than 20K pounds in retirement funds at the same time at that age. Carol, a member of the HK Flight Attendants Union who is of the same age, felt the pains of her fellow workers. "It is not easy to get used to jobs in another industry at our age." She thought that age discrimination played a role in the company's decision.
Interviewer : "You know you are not young"
The length of service of the dismissed workers ranged from 8 to 22 years, and all of them are above 33 years of age. Other airlines do not have enough vacancies to employ these workers. Besides, there is an unwritten rule in the industry that says people who are 38 years old or older would not be hired.
Switching to another industry would mean that their years of experiences would count for nothing. One of the dismissed workers had sent out more than 20 application letters, and received only one interview invitation. That company offered low wages as well as some "friendly advices": "You know you are not young, and you still want to look for other choices?"
Their ages and lack of qualifications mean that new jobs are hard to come by, and Virgin's restrictive policy is not helping them. Virgin stated that all dismissed workers must work till a date specified by the company, else no reference letter and retention payment, equal to five weeks of basic wages, would be given. Connie, a member of the Virgin Union, was thinking about taking a postnatal care worker training course. However, the course would start before the date specified by the company. Not sure if she should wait for another year for new courses or look for another job, Connie, the sole source of income for her family, has been greatly troubled by the uncertainties.
The burdens of mortgage payments, the needs to provide for their families, the evaporations of their retirement funds, and the cruel treatments from Virgin. The angered workers had no choice but to make their voices be heard with strike actions.
The company's revenge, and the media's silence
During the Christmas of 2015, wildcat strikes were staged by the Virgin cabin crews. The workers were angered by the company's attitude towards them. At first, the workers tried to communicate with the decision makers in England regarding the MPF offset issue. However, they received no responses. With the Hong Kong Labour department unable to provide any help, the Union members voted before Christmas to strike. Instead of improving the communications with the workers, the company showed a fighting stance. Carol said the company is trying to send them the message: "we are not scared."
The Union took strike action in January. Lilian said the action angered the company. The fifty-one workers had their working hours greatly reduced. They could only work for one shift, in effect reducing their wages. She thought the company did these as a revenge. On the other hand, while the strike had persuaded the management to go to the negotiation table, the result of the negotiation was disappointing. Connie summarized the negotiation with the words of a manager: "we won't talk about anything related to money."
The company does not value the contributions of its workers, who had been working in the company for more than ten years. Connie said she would "tear the mask off Richard Branson's face." However, Carol received no responses at all from the different English media, including those "pro-workers" newspapers, after mailing them on behalf of the Union.
Virgin Airlines have a great PR team. Their boss, Richard, Branson, is loved by the media and the general public. During a protest, a customer stood up for Branson and asked the workers not to blame him but his subordinates, because those were the people that were at faults. (Those who wants to know what Virgin actually does behind those PR works, we will soon have another article for you.)
1.9 billion pounds lost in 15 years
Workers at Virgin had 600K pounds of hard-earned money robbed by the company. That was not possible but with the help of the MPF offset mechanism. Severance payments and long service payments were meant to be protections for the workers when they are unemployed. But the offset mechanism allowed employers to use MPF payments to offset the severance and long service payments, and greatly reduced the cost of firing a worker.
There were tens of thousands of workers who suffered from the MPF offset mechanism just like the Virgin cabin crews. Up till 2014, workers in Hong Kong had already lost almost 1.9 billion pounds in offset payments. CY Leung, the Chief Executive of HKSAR, promised to lower the offset ratio gradually in his platform. Before the 2014 Policy Address, there were even rumours that the offset mechanism would be cancelled. However, after the businessmen voiced their oppositions, the cancellation of the offset mechanism had been put on hold indefinitely.
