The Qantas disputes: one agreement made, two to go?

An early agreement with at least one Qantas union has been reached despite strong rhetoric on both sides. AAP

Qantas management has made an early agreement with the Australian Licensed Aircraft Engineers Association (ALAEA) in a deal that reflects compromise by both parties, despite earlier strong rhetoric from both sides.

The ALAEA is seen by many as the most militant of the three unions involved in the industrial dispute. So what are the prospects for such agreements with the other two unions, the Transport Workers Union of Australia (TWU) andthe Australian and International Pilots Association (AIPA)?

After Qantas dramatically grounded its whole fleet on October 29, these disputes were all referred to Fair Work Australia (FWA) to arbitrate if the parties were not able to make their own agreements within 21 days by negotiation.

None of the disputes were settled by negotiation during the 21-day period. Nevertheless, FWA Senior Deputy President Les Kaufman had conducted conciliation and the ALAEA then reached an understanding with Qantas that the status quo would continue for any matters that could not be agreed.

The parties were not able to agree to changes to a job security clause of the current enterprise bargaining agreement (EBA 8), so this particular matter would carry over to the next round of negotiations: EBA 9.

Nonetheless, the ALAEA and Qantas have succeeded in negotiating an agreement on other matters. This means that it should no longer be necessary for FWA to arbitrate in this dispute. The agreement reminds us that whenever possible industrial relations parties usually prefer to make their own agreements, rather than leaving it for a “third party” to make an arbitrated decision.

Almost inevitably an arbitrated decision is not completely predictable and may include aspects that might be unpalatable to one or both of the parties. Therefore it is generally better for them to make their own agreements, if possible.

On Monday, 19 December Qantas and the ALAEA submitted their agreement to a FWA full bench hearing (made up of Vice President Graeme Watson, Justice Alan Boulton and Commissioner Julius Roe) for a “workplace determination”. This was the first such case under the Fair Work Act.

ALAEA Federal President Steve Purvinas. AAP

At the end of the hearing Vice President Watson indicated that FWA might decide to relist the case, though it would try to avoid doing so. Although this was a “consent deal”, FWA reserved its decision. This may have been because such a decision was unprecedented under the Fair Work Act, so FWA wished to give it further consideration.

Another matter may have inhibited FWA from making an immediate determination: One of the licensed aircraft maintenance engineers (known as LAMEs) was his own “bargaining agent” and had separate negotiations with Qantas.

Although some employers’ interests promote the notion of so-called “individual bargaining”, this is an example of how individual bargaining is not necessarily “a good thing” for employers. Individual bargaining can complicate negotiations and dispute settlement. This is in spite of the engineer withdrawing his individual claims during the 21 days of talks.

Qantas argued that there were two ways of dealing with this matter: one was to infer agreement from the lack of a claim from the engineer at the end of the 21 days. The other way would be to accept that the union represented the “vast majority” of LAMEs and that the individual bargaining agent was not pursuing any claims at the end of the period.

Despite such considerations for FWA before making a determination, Justice Boulton seemed to echo the view of most people when he said that it was “a very significant achievement” for the parties to have reached agreement.

New Workplace Relations Minister Bill Shorten said that he was pleased with the result and said “negotiations are always better than fighting”. He added: “Any mug can start a fight, the trick is how you finish it, on what terms.”

Alan Joyce: portrayed as a winner? AAP

Qantas said the proposed agreement was a “good deal” for the company and the engineers. Qantas commented: “It does not contain any of the restrictive demands that would have handed control of parts of the airline to the union”.

Despite one of ALAEA’s initial claims, the agreement does not bind Qantas to conduct heavy maintenance for the new A380 super jumbo jets in Australia and it will not block Qantas’s current strategy to start up new airlines based overseas. But most importantly for the ALAEA, the agreement does provide job security for LAMEs in Australia, at least for the next three years.

When he spoke with me, ALAEA federal secretary Steve Purvinas also seemed pleased with the settlement, not least since ALAEA’s federal executive had endorsed it and the members had overwhelmingly approved it. He indicated that the Gillard government, including Shorten, had played a role in encouraging the two sides to make a deal.

In short, other major aspects of the agreement include:

  • four-year agreement backdated to January 2011
  • a minimum 3% pay increase per year
  • additional pay allowances for all LAMEs for up-skilling

It is interesting to compare the various ways that the agreement has been portrayed in different serious media. The Australian Financial Review saw it as a Qantas victory: “Joyce wins battle with engineers”, Crikey’s headline writer saw it more as a “Win-win,” while the specialist news subscription publication, Workplace Express offered much more detail and careful analysis in its article: “Bench reserves on first workplace determination, after consent Qantas-ALAEA deal tabled”.

After further consideration, it is likely that FWA will make a workplace determination that endorses the ALAEA-Qantas agreement. But at this stage similar agreements between Qantas and the other two unions do not appear probable. Hence FWA is scheduled to arbitrate their disputes in 2012 in March (TWU) and June (AIPA). However, before then perhaps the influential new Workplace Relations Minister Bill Shorten might yet intervene behind the scenes to encourage these parties also to make settlements themselves?

Watch this space!