For many workers, reduced hours or pay cuts beat pandemic layoffs. Just ask a WestJet pilot

After the airline industry was grounded in the spring when governments around the world introduced COVID-19 lockdown measures, WestJetpilots were facing significant and immediate job losses.

In total, about 1,200 positions were on the chopping block, but thosein the cockpit made the choice to take a hiton their paycheques instead, agreeing to a 50 per cent pay cut and reducing the number of job losses to 450.

The WestJet agreement is just one example of the tradeoff that many workers and companies face as the pandemic causes severe financial stress formany parts of the economy. Introducing pay cuts or reducing hours for workers and executives is one way to keep companies afloat until business picks up.

"Our pilot group has done what we can to help our company survive," said Capt. Dave Colquhoun, the union chair representing pilots atWestJet andthe company'sdiscount carrier Swoop.

"We balanced saving jobs versus how much of a pay cut our membership was willing to take,"said Colquhoun, a WestJet pilot himself.

Additional pilot positions atWestJetEncore, which are represented by a different union, were also lost.

Economists say that for some workers, taking home a smallerpaychequeis better than nopaychequeat all, considering the current job market.

"We've seen it in a lot of different sectors," said Charles St-Arnaud, chief economist with Alberta Central, the central banking facility for credit unions in the province.

"A lot of workers are making thedecision that we're probably better to take a pay cutthan being unemployed and not being able to find work again,or not finding work for some time."

Employers want toretain skilled workers

For employers, negotiating either reduced wages or hours can be one way of retaining employees, especially those with unique skills, trainingor certification.

"If you lay themoff, howeasy is it to re-hire?" said St-Arnaud. "You don't want to lose your workers, as you would like to be ready to pounceand start making money again" if business improves.

That's one reason behind many cuts to pay and hours in industries like the oil and gas sector,since many workers who leave that industryoften don't return.

WATCH | Ottawa considerssubsidies to rebuild regional airline routes:

Ottawa aims to help rebuild regional airline routes

4 years ago

Duration 1:47

CBC News has learned that the federal government is looking at subsidies for airlines to help rebuild some of the regional routes suspended when the COVID-19 pandemic hit the travel industry.

However, economists say the prevalence of pay cuts is difficult to quantifybecause there are so many other factors impacting the workforce duringCOVID-19.

For instance, average wages in the country were actually higher this summer compared to 2019 because manylower-wagejobs have been lost during the pandemic.

At WestJet, the pay cut was the result of reducing the minimum amount of hours guaranteed to pilots and the suspension of a program where the airline matched the amount of company sharespilotspurchased, up to 20 per cent of their pay. An interim deal had beenin place after WestJet was purchased by Onexin 2019, while the two sides negotiated a replacement program.

Airlines continue to lobby for aid package

"It's a significant cut and may be the most significant cut in compensation across the industry in Canada," according to Capt. Tim Perry, president of the Air Line Pilots Association (ALPA) Canada, which represents pilots at 15 airlines in the country.

"It's absolutely drastic," said Perry, who is also a WestJet pilot."It's hard to overstate the significance of something like that."

He said about half of all the pilots he represents are either furloughed or facingimminent layoffs, and that those who have lost their jobs can have difficulty finding other work.

"We have members who are losing their homes, who are lucky to find a jobdriving a truck in many cases, or worse off than that," Perrysaid. "It's taken an enormous toll on people's ability to cope andget by."

The airline sector has lobbied the federal government for a financial aid package specific to the industry.

The federal government has rolled out several programsoffering liquidity and loan guarantees, such as thelarge employer emergency financing facility (LEEFF)and the business credit availability program (BCAP), which are offered to a variety of sectors.

Prime Minister Justin Trudeau has not directly addressed a bailout of the beleaguered industry, but has said he plans to keep working with airlines hit hard by the pandemic.