After the airline industry was entrenched in the spring when governments around the world introduced COVID-19 lockdowns, WestJet pilots faced significant and immediate job losses.
In total, around 1,200 jobs were on the chopping block, but those in the cockpit opted to take a hit on their paychecks instead, accepting a 50% pay cut and reducing the number of job losses. to 450.
The WestJet deal is just one example of the compromise many workers and businesses face as the pandemic causes severe financial stress in many sectors of the economy. Introducing pay cuts or cutting hours for workers and managers is one way to keep businesses afloat until business picks up.
“Our group of pilots did what we could to help our business survive,” said Captain Dave Colquhoun, president of the union representing pilots at WestJet and discount carrier Swoop.
“We struck a balance between saving jobs and the amount of pay cut our members were willing to take,” said Colquhoun, himself a WestJet pilot.
Additional pilot positions at WestJet Encore, which are represented by a different union, have also been lost.
Economists say that for some workers, it’s better to bring home a small paycheck than no paycheck at all, given the current job market.
“We’ve seen it in many different industries,” said Charles St-Arnaud, chief economist at Alberta Central, the central bank for credit unions in the province.
“Many workers decide that it is probably better to take a pay cut than to be unemployed and not be able to find work, or not find work for a while. “
Employers want to retain skilled workers
For employers, negotiating reduced wages or hours can be a way to retain employees, especially those with unique skills, training or certification.
“If you fire them, is it easy to hire them back? »Says St-Arnaud. “You don’t want to lose your workers because you would like to be ready to jump in and start making money again” if business improves.
This is one of the reasons behind many wage and hour cuts in industries like the oil and gas sector, as many workers who leave this industry often do not return.
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However, economists say the prevalence of pay cuts is difficult to quantify as many other factors impact the workforce during COVID-19.
For example, average wages in the country were actually higher this summer compared to 2019, as many low-paying jobs were lost during the pandemic.
At WestJet, the pay cut resulted from the reduction in the minimum number of guaranteed hours for pilots and the suspension of a program where the airline matched the amount of company shares purchased by pilots, by up to 20% of their salary. An interim deal was reached after Onex bought WestJet in 2019, while the two sides negotiated a replacement program.
Airlines continue to push for aid package
“This is a significant reduction and possibly the largest reduction in compensation in the industry in Canada,” said Captain Tim Perry, President of the Air Line Pilots Association (ALPA) Canada, who represents the pilots of 15 airlines across the country.
“It’s absolutely radical,” said Perry, who is also a pilot with WestJet. “It’s hard to overstate the meaning of something like this. “
He said about half of all the pilots he represents are either on leave or threatened with imminent layoffs, and those who have lost their jobs may have difficulty finding other jobs.
“We have members who lose their homes, who are lucky enough to find a job behind the wheel of a truck in many cases, or worse than that,” Perry said. “It had a huge impact on the ability of people to cope and get out of this. “
The airline industry lobbied the federal government for an industry-specific financial assistance program.
The federal government has rolled out several programs providing liquidity and loan guarantees, such as the Large Employer Emergency Financing Facility (LEEFF) and Business Credit Availability Program (BCAP), which are available to various industries .
Prime Minister Justin Trudeau did not directly address the bailout of the struggling industry, but said he plans to continue working with airlines hit hard by the pandemic.