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October 30, 2011
Qantas has upped the ante in its industrial dispute with the unions with its decision to ground all its aircraft --both national and international. It has escalated the conflict rather than pursue the negotiating option. The indications are that the battle plan for a lockout has been planned for some time by the Qantas Board, and the dramatic escalation of its industrial dispute indicates Qantas' determination to play hardball in order to be break the power of the unions.
The Gillard government was forced to apply to Fair Work Australia to end the dispute because Qantas grounding its fleet forced the government's involvement. So a federal industrial tribunal has been utilized to resolve a major industrial dispute. Will it resolve the unions opposition to Qantas' determination to outsource and offshore some of its functions? Qantas claims that this is properly the domain of company management, not the unions.
The Fair Work Act provides a mechanism for resolution of the dispute through the industrial umpire, Fair Work Australia. Section 431 of the Fair Work Act allows the Minister to terminate industrial action immediately where it can be demonstrated the strike action will cause damage to an important part of the economy or is endangering the community (for example, a dispute affecting hospitals or emergency services). The Minister needs to be satisfied (ie. does not need to be justified legally) that the activity is causing serious damage to an important part of the economy.
The parties have 21 days to sort things out between them. If no agreement is reached, Fair Work Australia could then arbitrate an outcome of the dispute (or it could do so after a further 21-day conciliation period, if all parties agreed to that). Essentially, this would enable Fair Work Australia to broker an agreement determining employment conditions for the relevant Qantas staff for the next few years.
Update
Ten years ago Qantas was widely hailed as one of the strongest airlines in the world. Qantas is now potentially squeezed between Virgin’s aggressive campaign for the premium domestic traveller and lower cost Asian competitors. Qantas International has an ageing, fuel-inefficient aircraft fleet that is compounded by delays in the delivery of new planes. It is running at a loss despite its protection.
Its strategic response has been to follow through the logic of the Jetstar model (cheaper labour) on a global scale even at the longer term expense of the Qantas brand. Its proposed regional hub model based in Asia depends in it regaining international competitiveness.
Qantas' rhetoric is to blame the unions for their unconstructive attitude to the reduced pay and working conditions, and their desire to have a say in how the company strategically responds to its situation of decline and its future as an international airline. In Crunch time for Qantas Stephen Bartholomeusz says:
the issues at the heart of the confrontation weren't conventional industrial relations issues. They were fundamentally about who controls the management and the strategy of the company as it seeks to stake out a viable future in an increasingly difficult international industry environment....Joyce and Clifford see Qantas' international future, in part, depending on creating a hub-style carrier out of Asia, with a combination of the Jetstar brand and a new premium carrier with work practices and cost structures that would enable the group to compete with the Asian and Middle Eastern carriers that have decimated its market share of routes into and out of Australia.The unions want to hang onto the privileged position they have inherited.
If the negotiations required by Fair Work Australia fail after 21 days, then a binding arbitration by Fair Work Australia will take place. It is this compulsory arbitration that the Liberal Party is opposed to.
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Adele Ferguson says that Qantas is determined to beat the unions into submission to reduce costs so that it has a more flexible and lower-cost workforce. Qantas pilots are paid more than some regional counterparts, and that is what Qantas wants to change.