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QANTAS Dispute - More Than Meets the Eye

Tuesday 8 November 2011
by Brian Boyd, VTHC Secretary

The grounding by Alan Joyce of the QANTAS air fleet both nationwide and globally on Saturday 29 October 2011, is still reverberating.

The reaction by many has been interesting.

But we shouldn’t forget that the QANTAS CEO grounded five aircraft on the 13/10/11, over two weeks earlier. This action alone ceased over 100 flights a week. Subsequently on the 18/10/11 Joyce added two more aircraft to the tarmac, costing another 80 flights per week.

There was a lot of mud slinging between the federal government and the Abbott opposition about who knew what first about Joyce’s 29/10/11 stunt. Specifically whose ear or ears did Alan Joyce really have in the lead up to his provocative, “extreme” action on that now infamous Saturday. Some journalists seemed to have been well backgrounded.

For example Malcolm Maiden on the 3/11/11 indicated the government ‘understood’ what Joyce wanted to achieve, weeks in advance. Senior government Ministers were said to be ‘sympathetic’ to what QANTAS needed in order to ‘break the deadlock’ over the unions seeking job security. These Ministers were “just flying under the radar”, suggested Maiden. No one has challenged his assertions.

The QANTAS dispute is a fair dinkum, basic one for thousands of hard working Australians. Joyce wants to make significant operational changes that will have profound implications for its workers, simply put this is code for large job losses.

Such a corporate game plan flies in the face of the ‘Flying Kangaroo’ brand – Spirit of Australia. For years QANTAS sold itself nationally and internationally off the back of its loyal, dedicated workforce. Their reliability allowed QANTAS to promote itself for decades as the world’s safest airline. Now Joyce wants to create more cheaper, offshoot airlines and send crucial maintenance work offshore.

Unions under the Fair Work Act have to give three days notice for strike action, employers do not have to give notice, a WorkChoices legacy. The ACTU’s position to a recent Senate Inquiry was to push for amendments to the Air Navigation, Civil Aviation and QANTAS Sale Acts to clarify the original intent of the existing law with respect to ‘protecting the national interest’.

The three week FWA cooling off period will run out quickly (19/11).

The current relevant QANTAS/Union EBA’s in contention are not a ‘legacy’ that’s stopping the airline from competing in the global aviation industry. The spruikers arguing in favour of Joyce’s anti-union tactics say he needs a freer hand to be world competitive.

Yet everyone knows the key international competitors of QANTAS are highly subsidised by the governments of their country of origin. This especially relates to Eastern and Asian carriers, with well positioned airport hubs to boot.

If the wider Australian public were told this information upfront they would be even more sympathetic to the airline industry employees whose livelihoods have been under pressure for the last few years. There is no real free trade or free competition framework operating in the world’s skies.

Forced arbitration is not a tested mechanism in FWA. It is hard to see how the tribunal could make decisions about management decisions, especially concerning job security.

If no agreement is reached in three weeks then Section 266 applies allowing three weeks of further negotiations (10/12 – just before the end of year holiday period begins).

A similar national carrier like QANTAS is Air Canada. This airline is currently going through similar hassles to QANTAS in relation to wanting to establish a budget international subsidiary.

QANTAS already has JetStar. Three years ago (2008) the flight engineers union for example, had a major dispute over similar issues confronting its members today. It was settled by negotiations and enterprise bargaining, but good faith is not carrying any weight this time. The employer says the company wants certainty. Why can’t the workforce ask for certainty too?

The Licensed Engineers do not want lower paid unlicensed engineers to perform some of their allotted tasks. This apparently occurs in other countries. The ‘safest airline’ claim could lose from this move alone.

A key issue for unions is what will happen to their most important claims if arbitration is their only way forward.

The ghost of WorkChoices, still living inside the Fair Work Act, starts to haunt proceedings. IR experts have already gone public and reminded everyone that the old Sec 170MX never delivered and the new parallel sections are more than likely to do the same.

Claims by QANTAS after Joyce grounded his fleet that services were cancelled “due to industrial action” was disingenuous at best and dishonest at worst. Joyce shut it down, not the unions.

The reaction to the QANTAS grounding by the federal government has been characterised by some commentators as Gillard getting behind the airline unions and QANTAS employees as some sort of strategy to ‘desperately’ reconnect with Labor’s traditional base. Not true. The government was angry because it was blindsided by Joyce, after it had been making behind the scenes sympathetic noises for months about the company’s situation.

No one should forget that the Federal Government, back in September, released a draft plan for the blue water shipping industry, whereby, in effect, the owners of such ships are exempt from the Fair Work Act and the crew’s can be paid “international rates”.

The current federal government is more interested in macro-economic reform than the wages and conditions of established workforces.

The offer by QANTAS to its angry customer base of free tickets and extra frequent flyer points should be seen for what it is – bribery at its cynical best. No one should forget how uncaring Joyce was to over 70,000 passengers on the 29/10/11.

The unions have been negotiating in good faith for nine months: Senator Doug Cameron gave Alan Joyce a grilling at the Senate hearing last week. He publicly called Joyce a “rogue employer” who held “the travelling public and his workers to ransom”. All good stuff. But we do need Senator Cameron to also reveal the federal government’s long term, deeper relationship with QANTAS. Specifically, what are the real views of certain Cabinet Ministers?

We need to compare the domestic operations of QANTAS with its international operations.

It is understood its current domestic coverage is 65% of the market. In contrast its low cost subsidiary JetStar is continuing to expand and make profits as it slowly takes over QANTAS routes in the Asia-Pacific region.

QANTAS itself now carries only 18% of international traffic in and out of Australia, compared with 34% ten years ago.

Buried in the media commentary it is admitted QANTAS made “poor management decisions in the past”. One of these was not to read the ever changing global aviation market over the last decade.

In particular, QANTAS specifically decided not to serve emerging routes to central Asia, north Africa and eastern Europe. Its foreign competitors didn’t force QANTAS from these important options. QANTAS simply decided not to take them up.

Australian aviation industry workers are now in the gun because of QANTAS mismanagement. They should not have to put up with reduced wages and conditions and job insecurity for a scenario that was never in their control.