Menu Close

Fair Work Australia decision reveals the flaw in Qantas’ strategy

Qantas flights are back in the air after Fair Work Australia ordered the termination of industrial action. AAP

The Fair Work Australia (FWA) decision on the Qantas industrial dispute makes it clear the action by the three unions was not enough to trigger a decision by FWA to terminate the bargaining periods.

A bargaining period is a period of time in which employees are legally able to take industrial action in the process of negotiating a new collective agreement. They can’t do this if an existing agreement has not expired or of they haven’t been bargaining in good faith.

It was the lockout by Qantas that triggered the decision.

Read the Fair Work Australia decision here

Read Roy Green, Dean of UTS Business School: Planes set to fly again - but what now for Qantas?

Read Shae McCrystal, Senior Lecturer at Sydney Law School: Why Fair Work Australia terminated the Qantas industrial action

Read our previous coverage here

FWA was hesitant to intervene, and it noted in its decision that it thought there were still prospects for an agreement between the parties.

As it said, the design of the system is to encourage the parties to bargain without external intervention.

The sort of industrial action the unions had undertaken and foreshadowed, and which was relatively limited, was not threatening to cause major damage to the tourism and aviation industries, according to FWA.

“Damage to the economy”

It was the actions of Qantas management that, according to FWA, threatened to cause significant damage to the tourism and air transport sectors, and to industry more generally.

At the time Alan Joyce announced the grounding of the entire fleet, it wasn’t entirely clear what he was trying to achieve.

In the short term he could only have been hoping for one of two things from shutting down the airline.

Either he expected the unions to capitulate and agree to his demands. Or he expected the government to intervene to ask Fair Work Australia to terminate the bargaining periods and preclude further legal industrial action.

Mood of the unions

But if he expected the unions to capitulate, he must have badly misread the mood of the unions.

This action unified the unions against Qantas, in no small part because the airline’s response is disproportionate to the actions undertaken by the union, and because it had the appearance of being aimed at “breaking” the unions.

Qantas chief Alan Joyce at a press conference this morning. AAP
Yet if he wanted to achieve government intervention, it is notable that he did not seek intervention by the government or FWA before Saturday.

It appears from media reports that he had not even raised this possibility with the government in private discussions before then.

Yet his press conference this morning made it clear that it was indeed his objective to secure intervention and a termination of the bargaining period.

No notice “extraordinary”

It is extraordinary that, if this was his aim, he appears to have given no notice that he was demanding such intervention.

Of course, as he said in his press conference, the advice he received from his own lawyers was that the action that unions were undertaking was indeed not damaging enough to trigger a termination of the bargaining periods.

This advice was correct, as confirmed by FWA this morning.

He needed to up the ante, and undertake, or at least threaten to undertake, an action that would be genuinely damaging to the economy.

Claims therefore that the government could have intervened beforehand and prevented the grounding are baseless.

Legal basis to intervene

It simply did not have the legal grounds to do so. What’s more, the whole basis of the system supported by both political parties and both sides of the industrial fence has been about encouraging direct bargaining between the parties.

You can’t say government should keep out of private negotiations and then say it should be intervening when an employer is disadvantaged by industrial action.

Nor can it reasonably be argued that the government should have utilised the untested powers available under section 431 of the Fair Work Act, to unilaterally do what it instead asked FWA to do – declare the bargaining period terminated because of damage to the economy.

If the government had done this before Saturday, such a declaration could have been subjected to legal challenges, on the grounds that there was not sufficient damage to the economy to warrant it.

More importantly, regardless of when such a declaration was made, it would have lacked the legitimacy of a decision by FWA.

The reason that this section of the Act has not been used is that any government which used it would appear, probably correctly, to be highly partisan in intervening is a dispute in this way.

But what isn’t clear is why Alan Joyce actually grounded the fleet. He could have announced that, unless certain conditions were met, he would lockout the staff and ground the fleet.

Assistant Treasurer Bill Shorten outside FWA offices. AAP

That would have been enough to trigger FWA intervention, because the relevant section of the Act talks about responding to action that is threatened, not just action that is already underway.

Indeed, it was the threatened action of Qantas that FWA was actually responding to.

So Qantas could have achieved the same outcome by plausibly threatening to do what it actually did.

It could have brought about a termination of the agreement without leaving passengers stranded in airports around the world.

Alternative means

So it isn’t really accurate to say that Qantas had no choice. It did have alternative means it could have deployed to achieve the same ends.

But it chose to undertake the most high profile and damaging method to achieve its ends.

Why it did this is not clear, but it reflects something about the aggressive management style at Qantas.

Whether everything will go Qantas’ way from here on is unclear. If the dispute goes to arbitration, Qantas can’t assume that, on matters like the site rates that FWA identified as being central to the TWU claims, FWA will side all the way with it.

In the meantime, Joyce and the Qantas board have caused huge, and unnecessary, damage to the Qantas brand. It’s hard to think of anything that could have done more harm to it.

It’s a big price to pay to satisfy what looks like a testosterone-driven urge to demonstrate just how tough you want people to think you are.

Want to write?

Write an article and join a growing community of more than 181,700 academics and researchers from 4,934 institutions.

Register now