中文版/Chinese version here.
Hong Kong is once again described as the freest economy in the world this year. Behind this title and the quest to attract foreign capitals, the rights of tens of thousands of workers were sacrificed -- like those of the Virgin Airlines cabin crews. They were robbed of more than 600K pounds in retirement funds, with the company excusing itself with the statement "I did not break any laws". The last article discussed how losing their jobs and retirement payments had impacted the middle-aged Virgin cabin crews. We will now discuss how Virgin performed hit-and-runs raiding the resources of other places, just like what many other international capitals do.
"I did not break the law!"
Since the news of the lay-offs and the company's plan to offset retirement payments with Mandatory Provident Fund (MPF) payments broke out, the Virgin crews had been trying to talk with the management, but the management had not responded to them. The Virgin Atlantic Hong Kong Cabin Crew Union then voted to strike, which forced the company to negotiate with the workers. The company was friendly enough on the first day -- but whenever money was mentioned, they would refuse to discuss further. "The law of Hong Kong allows me to offset your payments," they said. The company was getting impatient the next day: "Don't blame us, blame your own government." The offset mechanism had given the company ample ammunitions to exploit the workers.
During the two-day-long negotiation, the workers witnessed how the company manipulated the rhetoric of "localism" and "internationalism" to justify their actions. The company argued that the compensation package and the MPF-offset arrangement is a local "tradition". The workers countered by telling the company that Dragonair, a Hong Kong airline, did not use the offset mechanism, but the management refused to accept that as an example. Later the workers pointed out that, according to Hong Kong's law, severance payment should be proportional to the length of employment, but the company replied that if they pay the workers more money, it would be unfair to workers in other countries. The workers retorted: "Do workers in other countries have to deal with the MPF offset mechanism?" The company replied - and concluded the whole negotiation - with the following statement: "I did not break the law!"
"You are treating me like a junk!" Connie, an Union member who had worked in Virgin for more than 10 years, said. She continued to work with her heart after knowing she would be dismissed, hoping the company would come up with a reasonable arrangement. After the company showed its true color to the workers, however, she could not help but to criticize herself for being too naive on one hand, and the company for being so cruel on another.
A Lay-off Well Thought Out
At one point, Virgin hired more than 200 cabin crews in Hong Kong. After two lay-offs, there were only around 80 workers left in 2014. This time, more than 50 workers were dismissed, so there are only 33 workers left.
The Union criticized the company for the way it planned the lay-off, which leaded to the offsetting of most of the retirement payments. In 2014, the flights to Sydney were axed. The company dismissed the workers claiming they were overstaffed, and tried to persuade the workers to switch to part-time contracts at the same time. "The company claimed that each full-time position could produce two part-time jobs. So they claimed that if more workers agreed to switch to part-time contracts, less people would be fired." Lilian, a member of the Virgin Union, said. She thought that the company had long planned to offset the workers' retirement payments. The changes in 2014 not only allowed the company to cut down its labour costs, they also allowed the company to pay substantially less MPF payments.
Connie had switched to part-time contract at that time. Her wages were almost cut in half, from around 910 pounds to around 490 pounds per month. Her benefits were reduced proportionally; her medical insurance policy would only compensate for half as much as before, and no body checks were included. Lilian pointed out that the part-time jobs were not enough to support the workers' livelihoods, "so many of us had to look for another part-time job."
The Sacrifices Were All For Naught
All of Virgin's outstation workers were affected by this lay-off. Last year, the outstation at Japan was closed. This year, workers in Hong Kong, ShangHai, India and Africa were dismissed. The only exception was the England headquarters, "where workers could keep their jobs, with some new workers hired and some existing workers promoted."
The labour laws in Mainland China offer more protections to the workers than the laws in Hong Kong do. Carol, a member of the HK Flight Attendants Union who works for British Airways, said that an outstation worker in ShangHai could receive more than 36K pounds in compensations after working for around 15 years. In contrast, Lilian, who had been working in the Hong Kong outstation for more than twenty years, could only receive around 2K pounds in severance payment -- if not for the MPF offset mechanism and Virgin's decision to take advantage of it, she could have received around 30K pounds as severance payment. "The Hong Kong outstation had the highest number of dismissals and received the lowest amount of compensations at the same time," Lilian sighed.
Being a cabin crew is a demanding job. For many Virgin workers, their health and relationships with their families were in jeopardy.
Dom, a member of the Virgin Union, started working in Virgin in 2006. He had been injured on numerous occasions in the last 10 years. "The service trolley might look small, but it is actually 300 pounds in weight. Sometimes its wheels have problems, so it won't go smoothly, and that can cause injuries to our waists."
The biggest problem, however, was with sleeping. For long-distance flights, the cabin crews sleep in rotation. Half of them sleep from 2am to 6am, while the other half sleep from 6 to 9. Carol said the first group would be woken up as soon as they fall sleep, while the second group has to fight with drowsiness. Having worked for Virgin for more than 20 years, she had got used to this sleeping pattern. She would wake up 3 or 4 hours after falling asleep, in the middle of the night, even when she was having a day off.
Connie has an eight-year-old son. "Sometimes he could not see me for days, so if possible I want to take him to the school in the mornings as compensation. But the time differences made me sleepless at nights, and I couldn't get up in the mornings, and that made him really sad."
Who Pay the Bills?
Virgin is dismissing workers globally, but it still has the same number of airlines. The workers deduced that the aim of the lay-offs was to move the jobs back to England. Lilian recalled how the composition of the cabin crews had changed: "In the past, among the fourteen crews on a flight, half were Hongkongers and half were British. Later, only five of the crews were Hongkongers. Now we only have two."
Virgin had showed vividly how international capitals could pillage the resources of other places and then simply leave.
According to Article 14 of the air service agreement signed by the HK government and the British government, "Income or profits derived from the operation of aircraft in international traffic by an airline of one Contracting Party, ...... which are subject to tax in the area of that Contracting Party, shall be exempt from tax imposed in the area of the other Contracting Party." In other words, Virgin only has to pay taxes in England, without having to pay for profit tax in Hong Kong.
Carol said that as Virgin did not pay profit tax, they should not be able to make use of the MPF offset mechanism. She pointed out that while Virgin contributed nothing to the Hong Kong Treasury, Hong Kong may have to pay for what Virgin did. As the workers' retirement funds were taken away by the boss with the help of the offset mechanism, if the workers could not support themselves when they get old and had to apply for social security, then "the Hong Kong people would be paying for what the British did".
Virgin is the seventh largest airline in Britain. Its flights connect more than thirty cities all over the world. It employs more than 9000 workers globally. In 2014 Virgin had a profit of 14 million pounds. Besides airlines, the Virgin Group is also involved in the accommodation, telecommunication, retail and even space travel industry. The Group employs around 65,000 workers, with around 500 million pounds of assets.
