After the airline industry was grounded in the spring when governments around the world introduced COVID-19 lockdown measures, WestJet pilots were facing significant and immediate job losses.
In total, about 1,200 positions were on the chopping block, but those in the cockpit made the choice to take a hit on 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 for many 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 at WestJet and the company’s discount 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 at WestJet Encore, which are represented by a different union, were also lost.
Economists say that for some workers, taking home a smaller paycheque is better than no paycheque at 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 the decision that we’re probably better to take a pay cut than being unemployed and not being able to find work again, or not finding work for some time.”
Employers want to retain skilled workers
For employers, negotiating either reduced wages or hours can be one way of retaining employees, especially those with unique skills, training or certification.
“If you lay them off, how easy is it to re-hire?” said St-Arnaud. “You don’t want to lose your workers, as you would like to be ready to pounce and start making money again” if business improves.
However, economists say the prevalence of pay cuts is difficult to quantify because there are so many other factors impacting the workforce during COVID-19.
For instance, average wages in the country were actually higher this summer compared to 2019 because many lower-wage jobs 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 shares pilots purchased, up to 20 per cent of their pay. An interim deal had been in place after WestJet was purchased by Onex in 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 facing imminent 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 job driving a truck in many cases, or worse off than that,” Perry said. “It’s taken an enormous toll on people’s ability to cope and get 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 programs offering liquidity and loan guarantees, such as the large 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.
Canadian publishers call on Ottawa to force Big Tech to pay for news – National Post
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Heritage Minister Steven Guilbeault has voiced his support for regulatory changes that would rein in major tech firms, saying he would resist their “bullying attitudes.” In a September interview with the National Post, he warned that Facebook’s “business model is going to face some serious challenges” if the company continues to threaten to pull its services in response to regulatory decrees.
Daniel Bernhard, executive director of Friends of Canadian Broadcasting, a public broadcasting advocacy group, said the report on Thursday points to a growing consensus among Canadian media companies to address the matter.
“Publishers are sounding the alarm about a serious problem,” Bernhard said. “Right now, publishers have a choice between giving their content away to direct competitors for free, or disappear from the internet. That’s basically the choice. And that’s not much of a choice at all.”
Bernhard is optimistic that regulatory changes could begin to challenge the dominance of major tech firms but warns that it will be a long, slow climb to untangle the imbalances in the digital marketplace.
“It’s been built up over 15 years of government neglect.”
Jim Balsillie, the philanthropist and onetime Blackberry co-CEO who founded the Centre for International Governance Innovation (CIGI) and several other organizations, identified two issues that demand Ottawa address the challenges posed by big tech.
“First, the nature of the data-driven economy is such that it structurally breaks markets because it features economies of both scale and scope, information asymmetries; and, network effects which subvert both public good and fair market competition.
Goldman Sachs to pay billions in new 1MDB scandal penalties – Aljazeera.com
Goldman Sachs Group Inc. admitted its role in the biggest foreign bribery case in U.S. enforcement history, reaching multiple international settlements to end probes into its fundraising for the scandal-plagued Malaysian fund known as 1MDB.
Goldman officials helped spread $1.6 billion in illicit payments across Malaysia and the Middle East as part of a scheme that diverted money raised for development projects into an international spending spree on mansions and lavish parties, the bank said.
The bank agreed to billions of dollars in new penalties to the Justice Department and other U.S. authorities, as well as to regulators in the U.K., Hong Kong and Singapore. The payments brought its overall tab to more than $5 billion to resolve probes into bond deals it arranged for 1MDB.
The Wall Street giant will cut the pay of Chief Executive Officer David Solomon and other current leaders and claw back compensation from his predecessor Lloyd Blankfein and several other former executives, the bank said Thursday.
A small Malaysian unit of the U.S. bank pleaded guilty to a single conspiracy charge on Thursday. But Goldman’s parent company avoided a criminal conviction to resolve the investigations, as part a deal that allows the bank to put off any prosecution as long as it cooperates with ongoing U.S. investigations and submits compliance reports.
The deferred-prosecution agreement is a win for Goldman Sachs, because a conviction might have risked losing some institutional clients that are restricted from working with financial firms with criminal records. The bank’s shares rose 1.2% on Thursday.
The global resolutions announced Thursday conclude more than a half decade of investigations into Goldman’s role in raising $6.5 billion for 1MDB in three bond offerings. To smooth the way for those bond deals, Goldman officials conspired with a 1MDB official to bribe Malaysian officials and officials of a sovereign wealth vehicle in Abu Dhabi, the U.S. Justice Department said.
U.S. authorities said that Goldman’s misconduct rose to the bank’s highest ranks, despite its insistence for years that rogue employees were responsible. “The scheme was principally carried out by senior officials in Goldman,” Acting U.S. Attorney Seth DuCharme said.
In all, some $2.7 billion of the money raised for 1MDB was stolen by people connected to the country’s former prime minister and diverted for bribes, a luxury yacht, fine art and even funding for the Hollywood movie “The Wolf of Wall Street.”
The Justice Department settlement concludes one of the biggest bank probes inherited by the Trump administration. The bank will pay more than $2.3 billion in the plea deal, U.S. prosecutor Alixandra Smith said, the largest penalty in U.S. history for a violation of the Foreign Corrupt Practices Act. Airbus SE paid $2.09 billion earlier this year to settle global bribery probes.
The case against the Wall Street firm focused on its fundraising work in 2012 and 2013 for the state-owned 1MDB, formally known as 1Malaysia Development Bhd. From about 2009 to 2014, the bank’s Malaysia unit “knowingly and willfully agreed to violate the Foreign Corrupt Practices Act by corruptly promising, and paying bribes to foreign officials in order to obtain and retain business for Goldman Sachs,” the bank’s general counsel, Karen Seymour, told U.S. District Judge Margo Brodie in Brooklyn in a video hearing on Thursday.
Goldman’s investment-banking group, led at the time by Solomon, collected $600 million from the bond sales.
Prosecutors in court filings described a corporate culture at Goldman that displayed a casual indifference to bribery, at least among a few senior executives.
In a statement of facts accepted by Goldman, prosecutors highlighted a call in which a managing director discussed with a senior executive problems the bank was having in securing an investment from an Abu Dhabi investment fund related to 1MDB.
The managing director said it was clear that a government official in Abu Dhabi was “trying to get something on the side in his pocket” from the deal. “I think it’s quite disturbing to have come across this piece of information,” he added.
“What’s disturbing about that?” the senior executive replied, according to the filing, which didn’t identify the individuals. “It’s nothing new, is it?”
The suspected mastermind of the 1MDB fraud, a Malaysian financier known as Jho Low, conspired with bankers Tim Leissner, Roger Ng and others to bribe high-ranking officials in Abu Dhabi’s state-owned and state-controlled sovereign wealth fund, International Petroleum Investment Company, and a unit, Aabar Investments PJS, the bank admitted. IPIC agreed to be a guarantor of a 2012 1MDB debt deal, a role that helped the bond offering move ahead.
Bribes also went to the Malaysian government and 1MDB officials, prosecutors said.
At a February 2012 meeting, Low explained to Leissner, Ng and others that “government officials from Abu Dhabi and Malaysia needed to be bribed to both obtain the guarantee from IPIC and get the necessary approvals from Malaysia and 1MDB,” they said.
Goldman’s compliance employees were on notice to keep an eye out for any transactions that might involve Low, who was considered a significant risk. Yet in the 1MDB bond deals, they didn’t take “reasonable steps” to keep him out of it, according to the statement of facts.
For example, Goldman failed to review electronic communications of members of the deal team for evidence of Low’s involvement, which by 2012 would’ve shown Low’s role in the matter, the statement says.
Low, who has professed his innocence, remains at large. Leissner, who was the bank’s southeast Asia chairman, pleaded guilty in the U.S. to conspiring to launder money. He’ll be sentenced in January. Ng was charged with conspiring with Low to launder money. He has denied wrongdoing.
“The board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm,” Goldman’s board said in a statement Thursday announcing the executive pay cuts.
The Justice Department penalty against Goldman credits more than $1 billion in fines paid to other U.S. agencies and foreign authorities. That includes $400 million to the Securities and Exchange Commission, $150 million to New York’s Department of Financial Services and $154 million to the Federal Reserve. After disgorgements of Malaysia profits, the Justice Department places the total U.S. penalty at roughly $2.9 billion.
Goldman Sachs units will also pay $350 million to Hong Kong’s financial regulator, $122 million to Singapore’s government and 96.6 million pounds ($126 million) to the U.K.’s Financial Conduct Authority, those bodies announced Thursday.
Goldman reached a settlement in July with Malaysia, which included a payment of $2.5 billion and an unusual provision that the bank would guarantee that the Asian nation would recoup an additional $1.4 billion from 1MDB assets seized around the world. Malaysia dropped criminal charges against the bank as part of that deal.
Goldman will seek U.S. Labor Department permission before the Malaysia unit’s December sentencing to continue handling retirement funds for Americans, its lawyers said. Banks must secure a waiver from the department to continue handling such funds after an admission of criminal conduct.
The 1MDB saga devolved into a plot to pressure the U.S. to go easy on some of the alleged looters, casting a wider web that has embroiled a prominent Republican fundraiser, an official in the Justice Department and even a former Fugees rap star.
Goldman Sachs agrees to largest penalty ever in 1MDB scandal – Times of India
NEW YORK: Global financial titan Goldman Sachs agreed to pay $2.9 billion in penalties to settle criminal charges in the 1MDB Malaysian bribery scandal, the largest US fine ever in a corruption case, the Justice Department announced Thursday.
Acting US Assistant Attorney General Brian C. Rabbitt said Goldman “accepted responsibility” in the case that involved $1.6 billion in bribes, the largest ever recorded, and massive gains laundered through the US financial system.
Goldman Sachs helped raise $6.5 billion for the Malaysian government’s sovereign wealth fund. The US Justice Department has said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.
The investment fund “was looted by corrupt officials and their co-conspirators, including senior Goldman bankers” turning it “into a piggy bank for corrupt public officials and their cronies,” Rabbitt said at a press briefing.
In a first for Goldman Sachs, the company’s Malaysian unit pleaded guilty in a US court Thursday for violations of American bribery law as part of a deal to end the criminal probe in the sweeping case that involved authorities in nine countries.
The guilty plea could curtail activities of Goldman Sachs Malaysia but allows the parent company to avoid admitting wrongdoing in court — which would have damaged its ability to do business.
The parent company pleaded not guilty in US court and agreed to “deferred prosecution” for three-and-a-half years, during which time the firm will face increased monitoring by regulators.
But Rabbitt stressed that despite the deal, the company has been charged in the bribery scandal, “so there has been a significant amount of criminal liability” for Goldman and “imposes meaningful consequences” in the cases.
The Justice Department has charged three individuals in the case including two former Goldman executives. Tim Leissner, the former Southeast Asia Chairman, has pleaded guilty, while Ng Chong Hwa, also known as “Roger Ng,” former head of investment banking for GS Malaysia, is awaiting trial, and Low Taek Jho remains a fugitive.
“Goldman admitted today that, in order to effectuate the scheme, Leissner, Ng, Employee 1, and others conspired with Low Taek Jho” to pay the bribes and ignored red flags, the statement said.
In another stunning turn, the company said it will demand repayment of $174 million in salary and bonuses paid to current and former executives including Chief Executive David Solomon and his predecessor Lloyd Blankfein.
These so-called clawbacks are almost unheard of in corporate cases.
Solomon said in a statement “it is abundantly clear that certain former employees broke the law, lied to our colleagues and circumvented firm controls,” adding, “we recognize that we did not adequately address red flags.”
Included in the total penalty amount, Goldman will pay a $400 fine to the SEC and repay $600 million in earnings, and pay a $154 million fine to the Federal Reserve, which also will require the company to improve its risk management and internal oversight.
The Malaysian government dropped the charges against Goldman in July after reaching a $3.9 billion settlement with the financial giant.
The firm, which posted profits of $3.5 billion in the latest quarter, had set aside more than $3.1 billion as of September 30 “for litigation and regulatory proceedings.”
Goldman shares closed US trading 1.2 percent higher after settling the uncertainty.
Canadian publishers call on Ottawa to force Big Tech to pay for news – National Post
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