Goodbye MAS Employees Union(MASEU) and other Unions in MAS?

Well, the plans revealed for Malaysian Airlines(MAS) by the Malaysian government wholly owned, Khazanah Nasional Bhd, includes 'the creation of a new company, (NewCo) which will house the ‘new MAS’ and the migration of the right-sized workforce and work practices and contracts into NewCo'... NewCo would require a workforce of approximately 14,000, representing a net reduction of 6,000 or 30% from the approximately 20,000 current staff.

Now, if a new company is created, MAS's existing assets can be 'transfered/sold' to the new company - but this cannot happen to workers. Workers in the OLD-Co(Malaysian Airline System Berhad?) will then be terminated/retrenched and will be entitled to receive termination/retrenchment benefits, etc... 

Then, NewCO can re-employ the workers of OLD-Co. 

a) Will the terms and conditions of employment be the same? [Now, many of the MAS workers are regular employees until retirement, will they be  re-employed by this NewCo as regular employees with employment security until retirement age? Or will they be re-employed as short-term contract employees - a most precarious employment relationship for workers? Or will the NewCo start relying on the 'contractor for labour system' - i.e. entering into arrangements with third parties to supply workers to work in NewCo - these will not be employees of NewCo - an even more precarious employment practice for workers?]

b) Will the workers re-employed by this NewCo be also allowed to enjoy the benefits that with come with tenure(length of service) they had in OLD-Co? Or will they be just considered brand new workers?

c) Will the workers in OLD-Co even be re-employed? Will NewCo just go out and employ new workers - not the old workers? If there is going to be re-employment, will there be any guiding principles....like LIFO[Last In First Out] being the principle when it comes to retrenchment - will NewCo give priority to the length of tenure in OLD-Co when it comes to the re-hiring?

Now, let us talk about the UNIONs in MAS - Most of these Unions are in-house Unions of employees now in OLD-Co - so, effectively when OLD-Co is no more or has no more employees, all these Unions will cease to exist? All existing Collective Agreements will be of no use anymore... The employees of NewCo will now have to re-organize themselves into new unions...and in Malaysia, this can be a long process - the application for registration, the application for recognition, etc ...it could be years before these new trade unions will be able to enter into Collective Bargaining Agreement... [Or maybe the new MAS law may just prevent the formation of trade unions in NewCO]. The biggest of the OLD-Co Unions is the MAS Employees Union(MASEU) and there are another 6-8 other inhouse Unions too... So, if this proposals go through, we will effectively be saying GOODBYE to MASEU and the other existing in-house unions...

Now, with regard the National Union of Flight Attendants(NUFAM), who have managed to already succeed in the secret ballot and get recognition (although this is currently being challenged by OLD-Co in the courts), they would have to start all over again, and claim recognition from NewCo... 

New-Co - is there really a need for the creation of a new Company? Maybe not if the security and welfare of employees is the concern.... The OLD-Co can always re-structure, and that may mean retrenchment which can be done according to the LIFO principles. Steps can also be taken to try to find alternate employment for workers no longer needed in the airline... Justly, the UNIONs should be involved in this process... 

Now, Khazanah was the majority shareholder (69 percent stake in MAS) would have also been in control of MAS, which was suffering losses and failing [even before MH370 and MH17] - so, one wonders whether the government should not handover MAS to some other wholly owned company(not Khazanah) if they truly want to succeed this time around. In fact, Khazanah, being the entity with the controlling interest in MAS should take the blame for MAS's failing to date... shouldn't they? [Or maybe, there has been changes in Khazanah at the top that makes this a 'new' Khazanah?]

In fact, all those who have been in control of MAS (Directors, CEOs, Upper Management, etc) should be let go and new people brought in if we reasonably want our airlines to succeed... 'You do not poor new wine into old skin'. 

Maybe we should be looking at maybe nationalizing the airlines - putting it under the government directly, or alternatively under some other 100% government owned-controlled entity - the Minister of Finance (Incorporated) [MOF (Inc.)]?

Maybe, winding-up OLD-Co may be better - surely better than just transferring assets and liabilities , which include contractual obligations, to NewCo? 

Now workers employment security, and the welfare of themselves and their families, is the concern of the government - this should be the priority for me compared to the future success of the Malaysian airline. But, now it seems that success of the airline and not the welfare of workers seem to be taken as more important. 

As a Malaysian, I am concerned with the future of Malaysian airlines - and, I hope we see a better proposal.

I read that this proposal has already been approved by the cabinet? - well, I believe, that is something that first need to be brought up in Parliament, discussed and approved by Parliament. Even before that, the public need to be allowed to discuss and provide input - after all, it is OUR money...our airlines....and our fellow Malaysian worker and their families that will be affected.

Published: Friday August 29, 2014 MYT 3:31:00 PM
Updated: Saturday August 30, 2014 MYT 9:37:05 AM

Khazanah unveils 12-point plan for MAS

by isabelle lai

KUALA LUMPUR: Khazanah Nasional Bhd has unveiled a 12-point plan to enable Malaysia Airlines (MAS) to achieve sustained profitability within three years of de-listing, by the end of 2017.

Its managing director Tan Sri Azman Mokhtar said the plan involved a comprehensive overhaul of the airline.

“At its core, the plan involves the creation of a new company, (NewCo) which will house the ‘new MAS’ and the migration of the right-sized workforce and work practices and contracts into NewCo,” he told reporters at a special briefing at Khazanah headquarters on Friday.

The plan, entitled “Rebuilding A National Icon – The MAS Recovery Plan”, has four categories which are governance and financial framework, operating business model, leadership and human capital, and regulatory and enabling environment. 

Azman said this plan followed a review of all relevant aspects of MAS’ operations and operating environment that commenced in February this year. 

He said current MAS chief executive officer Ahmad Jauhari Yahya would continue to lead the old company during the transition period over the next 10 months to July 1, 2015.

“Khazanah has commenced the search process for the CEO of NewCo and we envisage that the conclusion of this search will be announced in due course, expected to be before the end of 2014,” he said. 

Azman said it was estimated that NewCo would require a workforce of approximately 14,000, representing a net reduction of 6,000 or 30% from the approximately 20,000 current staff.

He said Khazanah would invest in a Corporate Reskilling Centre to address the reskilling of the appropriate MAS staff who did not migrate to NewCo. 

“MAS and Khazanah are committed to helping each exiting employee minimise the negative impact to their livelihoods and quality of life,” he said. 

On Aug 8, Khazanah announced it would undertake a selective capital reduction and repayment exercise at an offer price of RM0.27 per MAS ordinary share, representing a 29.2% premium to the 3-month volume weighted average market price at the time of announcement. - Star, 29/8/2014, Khazanah unveils 12-point plan for MAS

Tragedy-hit Malaysia Airlines to lose 6,000 jobs in bold revamp

By Al-Zaquan Amer Hamzah

KUALA LUMPUR Fri Aug 29, 2014 6:03am EDT

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 An airport worker walks between Malaysia Airlines planes at Kuala Lumpur International Airport July 25, 2014.Credit: Reuters/Olivia Harris

(Reuters) - Malaysia Airlines (MASM.KL) (MAS) will slash nearly a third of its 20,000 workforce and cut back its global route network as part of a radical 6 billion ringgit ($1.9 billion) restructuring following the devastating impact of two jetliner disasters. 

The 42-year-old company will be de-listed by the end of the year under the broad revival plan announced by state fund Khazanah Nasional on Friday that aims to bring long-elusive efficiency and global standards to the loss-making carrier.

The 6,000 job cuts were higher than expected by the industry and mark a painful new blow for staff after a traumatic year for the national flag-carrier and the Southeast Asian country. Khazanah, which owns a majority stake in MAS, said it would invest in "re-skilling" those who lose jobs and pledged to set up a panel to improve often rocky relations between unions and management.

"Recent tragic events and ongoing difficulties at MAS have created a perfect storm that is allowing this restructuring to take place," Khazanah Managing Director Azman Mokhtar told reporters in Kuala Lumpur. 

"We believe that the 6 billion is not a bailout, we believe it will be recovered with re-listing," he said.

Khazanah, which currently holds a 69 percent stake in MAS, will take 100 percent ownership when the carrier is de-listed. The state fund said this month that it would pay 1.4 billion ringgit to buy out minority shareholders. 

Under the restructuring plan, which was approved by Malaysia's cabinet this week, MAS' assets and liabilities will be transferred to a new company with Khazanah injecting up to 6 billion ringgit. 

Khazanah aims to return MAS to profit by 2017, and re-list the airline within five years, by which time it would be a more regionally focused airline "with lower cost structure and greater emphasis on revenue yield management," the state fund said in a statement. 

An international search for a new chief executive was underway, Khazanah said, and the current CEO Ahmad Jauhari Yahya would stay on until July next year.

Khazanah, which has injected more than 5 billion ringgit into MAS over the last 10 years, said its new fund injections would be strictly tied to the new company meeting performance targets. 

"Success is by no means guaranteed," Khazanah said. 

Airline industry players said the revival plan appeared to be far more comprehensive and radical than several others that have been announced since MAS began struggling in the late 1990s after a period of rapid growth. 

"The plan that has just been announced is comprehensive, credible and adequate even if painful for MAS staff and other stakeholders," said Bertrand Grabowski, DVB Bank's managing director in charge of aviation. DVB is a banker to MAS.

"It is comprehensive because it touches all the key weaknesses that the airline has not being addressing for years - an overstretched network and fleet in an ever more competitive environment, short haul and long haul."

CUTTING DEBTS, FLIGHTS

The drastic downsizing caps a wrenching year for the airline following the unexplained disappearance of Flight MH370 en route from Kuala Lumpur to Beijing in March and the shooting down of Flight MH17 over Ukraine in July.

Even before those deadly tragedies, MAS had been steadily falling behind high-end rivals such as Singapore Airlines (SIAL.SI) and been battered by the rise of Asian budget carriers like AirAsia (AIRA.KL).

The company hasn't made an annual profit since 2010 and on Thursday revealed deepening losses and warned of more to come as nervous travellers steered clear of it after the disasters.

The restructuring is a bold move by the long-ruling government, which has used state firms such as the national airline as social tools to create jobs and reinforce policies favouring majority ethnic Malays over other races.

The main union at MAS has close ties to the ruling UMNO party - and has successfully resisted previous restructuring attempts. 

"If we seek a different outcome from past experiences, we must have the courage to choose a different method," Malaysian Prime Minister Najib Razak said in a statement.

"Piecemeal change will not work."

The executive secretary of the main MAS workers union, Jabbarullah Kadir, declined to comment on the restructuring plan, saying the union had not yet agreed a position on it.

Khazanah said it aimed to reduced MAS' net gearing to as low as 100 percent from 290 percent currently through debt-to-equity swaps. It said it had already secured a commitment from Malaysia's civil servants' pension fund to swap 750 million ringgit of Islamic bonds for equity.

The state fund did not give details on plans to reduce the carrier's flight network, but said several of its European destinations would be reviewed. Malaysia Airlines will retain global flight connectivity through the Oneworld alliance and code-sharing, Khazanah said. 

(Additional reporting by Anshuman Daga in SINGAPORE and Trinna Leong in KUALA LUMPUR; Writing by Stuart Grudgings; Editing by Ryan Woo) - Reuters, 29/8/2014, Tragedy-hit Malaysia Airlines to lose 6,000 jobs in bold revamp