The Qantas dispute: What next and a recap

Will arbitration by Fair Work Australia provide the outcome Qantas chief Alan Joyce wants? Not necessarily. AAP

Memo to the Qantas public relations team: if you mount a Twitter campaign calling for travellers’ luxury flying experiences in the middle of an unresolved industrial dispute, be aware there might be a certain amount of blow-back.

In the meantime, if you’re lost track of the various developments in relation to this landmark industrial dispute, Greg Bamber, Professor in the Department of Management at Monash University previews what’s next and gives a re-cap for The Conversation.

How did it get to this?

After Qantas grounded its world-wide fleet on October 29, 2011, Fair Work Australia (FWA) convened a “full bench” of three members who listened to submissions from the parties, working late into the night on that Saturday and Sunday. Then FWA determined that Qantas and the three unions that were in dispute with it should terminate all industrial action. FWA awarded the parties in dispute a period of 21 days in which to try to negotiate settlements. The parties were obliged to engage in bargaining “in good faith”.

That deadline passed at midnight on Monday, so the parties now move to binding arbitration determined by the FWA. Such settlements could last for up to four years.

What happens in arbitration?

In the next few days, with FWA’s help, Qantas and the unions will work through which aspects of the disputes have already been mutually agreed and which would be determined by arbitration. The arbitration process could be accelerated if the parties could narrow down which issues remain to be arbitrated, that is decided by FWA.

Nonetheless, in view of the complexities of this case, the arbitration process is not likely to be concluded until 2012. The FWA determinations are not entirely predictable, except that it is unlikely that FWA will award a complete victory to any party.

Qantas seems to be assuming that FWA would not make decisions that would seriously encroach on what employers refer to under such headings as “business decisions” and “managerial prerogatives.” These might include which work is conducted, by whom and in which country that work is performed. Qantas see its proposals to outsource more work and establish more subsidiaries overseas as falling under such headings. This is why Qantas generally seems to be less concerned than some of the unions about the possible outcomes of the arbitration process.

Nevertheless, FWA will no doubt listen to lots of submissions from the parties including expert witnesses and allegations that some of the earlier bargaining was not being conducted in good faith.

In the meantime, the challenge for all the parties is to rebuild trust, to restore good working relationships and to rescue Qantas’s reputation with its staff, customers, the government and other stakeholders.

Could there be further industrial action?

While arbitration is proceeding, there should also be no discrimination again those who were involved in the earlier industrial action. These parties are not allowed to take part in further industrial action.

But this ban on further industrial action does not apply to overseas unions. This could be a vulnerability for Qantas, since it is possible that the London-based International Transport Workers’ Federation of unions (ITF) might campaign further against Qantas.

The ITF was a key player in the waterfront dispute in the late 1990s. The ITF recently coordinated union members from around the world staging protests on 16 November 2011 to show their solidarity with Qantas workers who are in dispute. Protesters gathered outside the Australian High Commission in London as part of this “Qantas action day”, to demonstrate support for airline staff engaged in this dispute in Australia.

How did all this start?

QANTAS was founded in 1920 in Queensland, in outback Australia. It is now one of the oldest airlines in the world. Qantas grew to become one of Australia’s most famous brands, with a great reputation and its largest airline (the “national flag carrier”) and is one of the few airlines that flies to all inhabited continents. Qantas was owned by the Australian government for many years, until it was fully privatised in 1995.

Much more recently, the unions that represent three important categories of Qantas staff had been trying to negotiate with Qantas new “enterprise bargaining agreements”: the Transport Workers Union of Australia, the Australian and International Pilots Union and the Australian Licensed Aircraft Engineers Association. The issues differ in each case, but all include the levels of pay and aspects of outsourcing and job security.

After many negotiations between Qantas and of these three unions, each union balloted their members then deployed relatively mild industrial-relations sanctions. These were lawful forms of “protected industrial action.”

In retaliation, on October 29, 2011, Qantas CEO Alan Joyce made the radical decision to ground Qantas’s worldwide fleet immediately. He also announced that two days later, Qantas would lock out its staff who are represented by the three unions involved. These workers would not be paid while locked out.

This tactic threatened to damage Qantas’s reputation. It disrupted many of its customers and its workforce. But Alan Joyce held that he had no alternative. His aim was to trigger government intervention.

In my view he could have achieved the same outcome in other ways. However, his tactic appeared to succeed because it precipitated a national crisis, since Australia is a large island continent, which depends on airlines to transport people and goods to overseas destinations and within Australia. Unfortunately, Australia does not have high-speed rail or road connections between its major cities. Therefore, the federal government asked its agency, FWA, to intervene immediately.

The role of Fair Work Australia (FWA)

FWA is the national workplace-relations tribunal. It is impartial and sometimes called the industrial-relations umpire. Its decision to terminate industrial action by the unions still faces the possibility of a legal challenge by two of the unions: the Australian and International Pilots Association and the Transport Workers Union. However, Qantas and the federal government are strongly opposing any such legal challenge.

Some commentators have observed that FWA is a relatively new institution (it was born on 1 July 2009) and that this is its biggest test so far. Although FWA is only two and a half years old, it has much experience on which to draw. Its predecessor institutions include the Australian Industrial Relations Commission (AIRC). FWA inherited all of the AIRC’s rich expertise. Its members are well versed in dispute settlement. Before being appointed to FWA or one of its predecessor institutions; most FWA members had worked as industrial-relations practitioners, either as officials of unions, employers, governments or in the field of industrial law. So it is not necessary to worry about FWA’s skills in this field!