Australian Industrial Relations Qantas Industrial Dispute

Question: Describe about the Australian Industrial Relations for Qantas Industrial Dispute. Answer: Introduction: In this paper we discuss the Qantas industrial dispute, one of the biggest employer relation disputes in Australia. This industrial dispute is in the headlines of newspapers all over the world, after the step taken by the airline company in October 2011. In 2011, company announced about the proposed lockout of its large number of employees. From the point of view of security regarding job flexibility in employment, this dispute plays an important part in Australia for some period of time. This dispute will result in change in the legislation, so that affected party can apply for protection. Qantas industrial dispute affect the workplace provisions in Australia for long period of time. In this paper, we examine the facts and background of Qantas dispute, and the applicability of the provisions of Fair Work Act 2009 (Cth). In this we discuss the issue involved in the dispute and in last how this dispute will resolved. The Qantas dispute: Parties Involved in Qantas Dispute: This industrial dispute is between Qantas Ltd (Qantas), and three trade unions which are Transport Workers Union (TWU), the Australian and International Pilots Association (AIPA) and the Australian Licensed Aircraft Engineers Association (ALAEA). Background and Facts of the dispute: In 2010 august, Qantas entered into an agreement with ALAEA in may 2011 with TWU in a position which is defensive. Qantas entered into agreement with these unions so that it remain competitive in acclimate which becomes difficult for aviation industry at global level. Qantas also entered into agreement with AIPA. These unions states following matters in their agreements: TWU covers employees related to ramp and baggage handling, and also catering staff employed by the Qantas and other related entities, AIPA cover pilots employed by Qantas for long routes, and ALAEA cover all the aircraft engineers who have license. All these three unions mainly focus on the security of the jobs of their members instead of wages requirements and employment environment, because of the actions taken by Qantas in recent years for increasing the efficiency in its operations by reducing the labor cost. The main claim of AIPA was that Qantas employed only those pilots who could operate any flight with the QF code; TWU wants to restrict the power of Qantas to contract out functions of the job, and ALAEA wants commitment from the company that company retain the maintenance of functions performance for aircraft engineers who have licensed. ALAEA further wants to carry out the checks for maintenance for A380 aircraft. The actual concern of these unions was the employment security, and this concern was the main reason of this dispute (Austlii, n.d.). At the early stages of these agreements with three unions, Qantas expressed that they are not giving any surety regarding the employment security, because such sureties violates the rights of management to run the business as they think fit. Qantas said that no company in this era gives job security for life time. On 29th October of 2011, Qantas Ltd announced that from 31st October of 2011, Qantas lock out large number of employees in their company which include all licensed engineers, ramp staff, baggage handlers and all pilots whether for domestic or international flights. Qantas further specified that only those aircrafts reach their destinations which are currently in air, and stop all other departures whether domestic or international. Qantas state that this lock out will remain in force till the three trade unions that is Transport Workers Union (TWU), the Australian and International Pilots Association (AIPA) and the Australian Licensed Aircraft Engineers Association (ALAEA) agree to leave the demands which are impossible to fulfill, and which made agreement impossible to complete. This lock out was a legal response action taken by employer under the Fair Work Act. This action was a legal response to the action taken by the three unions: ALAEA: Qantas restrict the third party labor contractors. Qantas ensure heavy maintenance facility of staff. That Qantas exclude the competitors of ALAEA from conducting certain functions. ALAEA wants to access the productivity improvements of Qantas including those which are relate to technology and regulatory changes. TWU: Restrict the third party contractors of Qantas. AIPA: Wants to control the terms and conditions of employment agreement who work in other companies, and for employees who work for Qantas. This lock out was actually a response of the tactics used by the ALAEA TWU. The main aim of this tactic was to inform the company about pending stoppages and when company cancelled the flights and rearrange all the flights and their schedules, unions cancel the stoppage. The affect of this tactic was not god for Qantas, because cost incurred by Qantas reached $68 million and they also suffer loss of $15 million per week. This tactic also affects almost 70000 passengers and cancelled 600 flights. Following tactics are used by the unions: ALAEA proposed stoppage for one hour TWU proposes various types of bans on work and stoppages. AIPA ban the in flight announcements (Smith Howard, 2012). As mentioned earlier, on Saturday 29th October 2011 Qantas issue notice to the three unions, and locked out all the employees who are covered under the agreements proposed by the unions. This lockout was a legal action taken under FW Acts 19(3), in which employer prevent his employees to work under their employment agreement, without terminating those agreements. This action is taken by employer and considered as protected industrial action. Section 411 states that such actions can be organized as a response to industrial action taken by employees or their representatives. After announcing this lock out, Alan Joyce CEO of Qantas said that we are forced to take this action, because we have to end this issue. We have adopted the option of protected industrial action, so that unions done sensible ad fair deals with the Qantas. This lock out was essential for the running of the airline. However, the main purpose of this lock out was to end the dispute by creating such situation in which federal government interfere and take a charge. According to Qantas actions taken by three unions are coordinated which not only damage the profitability of company and its customers, but also affect the Australian community at large number. Critics described the strategies of unions as slow bakes of Qantas. The abovementioned claims of these unions not only affect the profitability and flexibility of company, but also some of these claims are not legally valid. Qantas continuously oppose these claims during the period of 14 months. After analyzing the above facts it is clear that this lock out was initiated by Qantas to bought the matter before FWA, so that better outcomes can be achieved. Hearing before FWA: After few hours of announcement of lock out made by Qantas, the Federal Government of Australia makes application under section 424 of the FW Act before the FWA. This application gets support of various governments such as Victoria, NSW and Queensland. Government make application under section 424(1) (d) which states that if FWC is satisfied that protected industrial action is threatening, and can cause damage to the economy of Australia (Commonwealth Consolidated Acts, n.d.). In this case the aviation and tourism industry is affected. This termination was provided to give short period of time to Qantas and all three unions to conclude the agreements. If they are fail to conclude the agreements then FWA would resolve the matter by arbitration. In this case government put an argument that if FWA is not agreed to terminate the action of Qantas, then FWA should impose a suspension on all the protected actions at least for ninety days. FWA listed this application before the full bench of Giudice J, Watson SDP and Roe C at 10: PM on 29th October 2011. Arguments for this case were heard by the bench till the early morning of the next day. The evidences related the damage suffered by the Australian economy in case of proceeds of lockout from the Mike Mrdak, Secretary of Department of Infrastructure and Transport and Drew Clarke, Secretary of Department of Resources, and collectively these evidences are testified and show: Qantas hold 65% industry of domestic aviation industry, 20% of international aviation industry, and 80% of services related to airfreight. This lockout directly affects the 50,000 Australian employees related to aviation industry, and also affects the employees related to tourism and other sectors. Lock out also affect the contribution of tourism in Australian economy which is around $24 million per annum. Impact on aviation industry also badly affects the other sectors of economy. If this lock out was not ended in 24 hours then tourism and other economic sectors will suffer because of cancellation of international and domestic bookings. FWA does not challenge these evidences because damage to Australian economy was not in question. The main issue was whether FWA should terminate the lockout and union protected actions or not. On the basis of the above evidences full bench decided that in this case requirements of section 424 of the FW Act are met. Therefore, bench decided to terminate all the protected industrial action related to proposed agreements. Bench further decided that all the parties to the dispute required resuming the provisions of agreements within 21 days or agree with the outcomes determined by FWA (Sangkuhl, 2011). The full bench further noted that tribunal helps the parties to the dispute in solving their matter and reach the agreement during the time provided by the tribunal. According to FW act it is not necessary that tribunal interfere in these matters, but in this case tribunal help the parties by arranging discussions regarding the agreements. After the so many efforts, parties to the dispute do not reach any agreement during the negotiated period of 21 days. In fact two parties TWU AIPA wants to extend the period for extra 21 days. But Qantas want to adopt the option of arbitration. According to section 266 of the FWA if parties to the dispute do not reach the agreement during the negotiating period after the post industrial action, and that negotiating period is not increased for further 21 days then tribunal can go for arbitration on the basis of grounds mentioned under pt 2-5 div 3 (Commonwealth Consolidated Acts, n.d.). When dispute was solved under arbitration CEO of Qantas indicated that they accept the decision of FWA. The Qantas and the three unions initiate discussion to identify the issues in the agreement which they can solve at their own level and which issues they want to take in the arbitration proceedings. On 119th December 2011, announcement was made by the ALAEA Qantas that they reach the agreement and resolve their dispute. They further announced that their new agreement is for four years and it include 3% increment in the annual pay, but this agreement does not include any provision related to guarantee of job security provided by Qantas. ALAEA also said that they are not able to secure the commitment related to retain A380 heavy maintenance functions within Australia. On the same day parties submitted that agreement to FWA, and also parties requested the tribunal to take the action under section 266 after consist the conditions which are agreed between them. In 2012, dispute between the Qantas and the TWU AIPA were brought in the arbitration proceedings before the full benches. FWA initiate the hearing of dispute between TWU Qantas in March, and subsequent hearing in May June. Arbitration hearings related to pilots are set out in June, August September. Later on tribunal also solve the issue brought by the AIPA in which he challenged the validity of decisions taken by the FWA on 31st October 2011by ending all the industrial actions in the dispute. On 10th May 2012 Federal Court dismisses the appeal raised by AIPA, and also decides that jurisdictional basis for FWA on which FWA proceed with the arbitration matters of TWU AIPA was confirmed. Tribunal gives its decision in the arbitration matter of TWU on 2nd August 2012. The decision was almost in the favor of Qantas, full bench deny the claims of TWU regarding site rates and restricting the contracting from outside for hiring labor. Full bench also consider the request of the Qantas regarding reducing the labor cost because of the competition in domestic and international level. Qantas announce on the same day that almost 2800 jobs in engineering, maintenance and catering operations are effect because of redundancy (Ashrust, 2012). However, this news was already announced by Qantas before this decision. Full bench also give decision in the matter of AIPA on 17th January 2013 which was also in the favor on Airline Company. In last, we explain the dispute in context with Neo-institutional approach. This case leaves a great impact on the airline industry as well as on the society. Employers learn a lot of things from this dispute. As we have mentioned above that this dispute not only affect the aviation industry, but its impact on the society as well as on economy of Australia was wide. Industrial action taken by Qantas was the protected response of the actions of trade unions. Not only aviation industry, but the tourism and other sectors of economy suffered loss from this lock-out. From the point of view of security regarding job flexibility in employment, this dispute plays an important part in Australia for some period of time. This dispute will result in change in the legislation, so that affected party can apply for protection. Conclusion: In this paper we discuss the employer industrial dispute between Qantas Ltd (Qantas), and three trade unions which are Transport Workers Union (TWU), the Australian and International Pilots Association (AIPA) and the Australian Licensed Aircraft Engineers Association (ALAEA). This dispute was one of the biggest disputes in Australia. In this we discuss the background and facts of this case and effect of this case on the Australian economy. In 2011, Qantas announce lock out which was response of the company against the industrial actions taken by three unions. These lock out not only effect the company and employees but also affect economy of Australia at wider level. After few hours of announcement of lock out made by Qantas, the Federal Government of Australia makes application under section 424 of the FW Act before the FWA. FWA terminate all the industrial actions under this dispute and also decide to help in solving this issue. Later on this dispute was go under arbitration and FW A decide the case in the favor of airline. References: Austlii, Forsyth, Anthony; Stewart, Andrew --- "Of 'Kamikazes' and 'Mad Men': The Fallout from the Qantas Industrial Dispute" [2012] MelbULawRw 20; (2012) 36(3) Melbourne University Law Review 785, Retrieved on 4th October 2016 from: https://www.austlii.edu.au/au/journals/MelbULawRw/2012/20.html. Smith, G. Howard, L. (2012), The Qantas dispute: employer's lockout, ministerial intervention and Fair Work Australia's decision, Retrieved on 4th October 2016 from: https://www.claytonutz.com/knowledge/2012/may/the-qantas-dispute-employer-s-lockout-ministerial-intervention-and-fair-work-australia-s-decision. Commonwealth Consolidated Acts, FAIR WORK ACT 2009 - SECT 424, Retrieved on 4th October 2016 from: https://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s424.html. Sangkuhl, E. (2011), THE FAIR WORK AUSTRALIA DECISION ON QANTAS: ENTRENCHING THE IMBALANCE OF POWER BETWEEN EMPLOYEES ADN EMPLOYERS, Retrieved on 4th October 2016 from: https://www.austlii.edu.au/au/journals/UWSLawRw/2011/9.pdf. Commonwealth Consolidated Acts, FAIR WORK ACT 266 - SECT 424, Retrieved on 4th October 2016 from: https://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s266.html. Ashrust, (2012), Outcome in the long-running Qantas dispute with the Transport Workers Union, Retrieved on 4th October 2016 from: file:///C:/Users/Guest/Downloads/Employment%20Alert%20-%208%20Aug%202012.pdf.