Discuss about the Employment Relations for the Qantas Lockout of Employees.
Working relationship refers to relationships that arise when one person, corporate body or an individual, contracts or enlist the services of another, to perform a given task for them at an agreed fee and for some period. The relations can be permanent or timely depending on the nature of the employment. Other than the employer and the employees, other key stakeholders play an important role in the working relationship. These are the government which acts are the regulator by enacting laws through the parliament and enforcing them in court; the Employee Trade Unions who help in the negotiation of collective bargaining agreements; and the employee unions. That stated, the aim of this paper will be to analysis the role played by these personalities in The Qantas lockout of employees in 2011 disputes. The article will provide an overview of how the discussion unfolded, the role of the stakeholders, and the resolution of the conflict.
Background of the Dispute
The Qantas lockout of employees in 2011 was a conflict that erupted between Qantas and three unions representing the engineers, long-haul pilots, and the baggage and catering staff (Smith and Howard 2012 b). These unions were the Australian Licensed Aircraft Engineers Association, the Australian and International Pilots Union, and the Transport Workers Union of Australia. The dispute was all about a new enterprise bargaining agreements the unions were trying to negotiate with Qantas (O'Neil 2012). The mains issues of in the proposed bargaining agreements were about levels of payment, issues to do with outsourcing and job security. The employees demanded that the company needed to improve their working conditions which they considered as not being up to the expected standard, they also needed better wages. Several negotiation meetings between the corporation and the Unions were held to try and resolved the issues but the no agreement was reached. This culminated in a series of industrial actions which seemed to incapacitated Qantas of the ability to perform its duties as required. Flight delays were resulting in the company's loss of about AS$68 million (Smith and Howard 2012a). The members of the pilots union voted to engage in protected industrial actions against the company. The Union claimed that the driving force behind their decision was to keep airline's pilots operating its flights. They were against the habit of Qantas outsourcing pilot service which they considered would damage the company's image and brand.
In August 2011, the airline revealed its plan to start a new airline by establishing Jetstar Japan which would be cheaper and other carriers in Singapore. It also made it clear there would be about one thousand job losses (Smith and Howard 2012a) The intention was to make the company more competitive hence increasing its market share and profits. In further response to the industrial actions, the airline's CEO announced that the corporation had decided to ground its services and that it would lock out all employees represented by the three trade unions and no such employee locked-out would be paid their dues (Sarina and Wright 2015). This move threatened the Australian economy considering that the airline was the largest air transport provider in Australia (Sheldon and Thornthwaite 2013). However, it is believed that the aim was to force the Federal government to try and resolve the issue. Furthermore, most Australian depends heavily on air transport hence the government fear of a transport crisis in the country (BBC News 2011). The grounding affected about 108 airplanes and 22 airports.
External Business Environmental Factors the Contributed to the Dispute between the Parties
A variety of factors fueled the Qantas dispute. Some of them economic slowdown in the UK and the United States, Growth potential in the Asian market, Australian Federal Governments Policy, and high competition in global aviation industries from low cost and government subsidized airlines (Smith and Howard 2012b; Forsyth 2002). The Australia Government Policy especially the law governing industrial relations had a significant role to play in leading to the strike of July 2011. Under the Fair Works Act, the employees are allowed to participate in go-slow, picketing, and strikes as long as such industrial action is protected fund the Law of Australia. The Act, however, requires the employee union to notify the employer and try to use other means of dispute resolution before reverting to industrial action. As such, industrial action is expecting to come in as the last action after the parties have exhausted all the available options. In compliance with this legal provision, TWU promptly informs Qantas that its member would be going on industrial action if the company did not address their demands. At the same time, the allow allows an employer to effect a lockout of employees if the employee action is unjustified and are aimed at harming the organization financially and in also like damage the company's reputation. The Fair Work Act also allows the employer to lock the employees out in the instance that there is sufficient evidence that the employees or the union failed to follow the laid down channel of dispute resolution. In such a case, the employer is free of any liability (Stewart 2008). Based on these grounds, Qantas decided to lock out its workforce and to ground its operations and a way of trying to resolve the dispute and force the unions' members back to work.
The other factor is that with their growing economies of the Asian countries, Qantas found that operating business in Asia would be cheaper compared to Australia. The laws of countries like Singapore and Japan were considered investor friendly as compared to Australia. Further, outsourcing also meant that the company would pay such pilot a considerably reduced salary as compared to paying those hired in Australia (Smith and Howard 2012 b; Smith and Howard 2012 a). Its Australian staff required more remuneration as compared to those acquired from Asia countries hence the temptation to use their services. This move agitated the Qantas Pilots who felt that their jobs were at risk hence needed a new employment agreement. On rejecting the new arrangements, the worker went ion industrial strike which resulted in massive losses for Qantas hence the grounding of services and subsequent lockouts. The government funds small airlines hence allowing them to charge few prices per ticket. This encouraged many local passengers to use the carriers as opposed to using Qantas (Francis and Humphreys, Ison and Aicken 2006). They were there increasing competition hence the need for Qantas to cut on spending and increase profits.
The economic slowdown in US and UK affected many businesses. The collapse of the Lehman Banking 2008 resulted in a global financial crisis. Stocks fall by across the world and hence affecting the businesses of other companies. Issues of unemployment cropped up due to continued economic instability (BBC News 2013). Following this trend, Qantas decided to shift its North Atlantic headquarters to Asia. This meant that most Asian had to be employed by the company hence threatening the job security of the Qantas' staff. Costs in Asia also proved to be fewer while the profits were high (Laeven and Valencia 2013). Following this opportunity, Qantas decided to invest in Asia. The employees were displeased hence the industrial actions.
Dispute from Stakeholder Standpoint
Qantas had viewed the actions of the unions and staff as unauthorized and unfounded. The airlines saw these actions and intimidations by employees whose only aim was to force the company into giving way into demands that were unsustainable. At the same time, they argued that moving their North Atlantic operations office to Asia was to improve its strategic position and productivity. The stability in the most Asian economy would not be overlooked by the company (Sarina and Wright 2015). It was more profitable and cheap to invest in Asia than in the United States and Europe. The demands of the unions were, therefore, unachievable according to the company (Smith and Howard 2012b). The company employed negotiations first when this failed, their down their planes so as to force the government to intervene. This was followed by employee lockouts and denial of dues.
Employees and Unions
The on the part of the employees, all they cared for was the need for improved working conditions, job security and better wages. They needed a control on third party labor providers and restrictions on the same (BBC News 2011). The new agreements were also supposed to govern and oversee the works. Furthermore, improvements in productivity including technology needed to be tamed to ensure job security. The employees used negations of new agreements when this failed; they resorted to industrial actions like delays of maintenance by engineers and pilots' downing their services (Smith and Howard 2012 b).
With the threat of economic slowdown, the Federal Minister was forced to intervenes as to bring the crisis to an end. The negotiations were joined by the State of Victoria, Queensland and New South Wales. The Minister extent of the potential damage to the economy and it was found that airline accounted for over 60% of Australia's domestic aviation, twenty percent of global capacity, and 8 percent of the airfreight (BBC New 2011). Ta huge numbers of the countries employees were also employed in the aviation sector, and it likely the side effects would be felt by the tourism industry. It was, therefore, essential to ending the lockout to prevent the economy from crumbling. The Federal Government, therefore, instructed the FWA to intervene and settle the matter (Sarina and Wright 2015). Even though there was no particular winner, the airline seemed to have achieved it intended objective of government intervention
Resolution of the Dispute
FWA came up with several findings. It concluded that no sufficient damage would be caused to the tourism sector and the aviation industry by the industrial actions. The financial loss suffered by Qantas could not affect its financial status so much hence it would not be justified to suspend its services based on the Unisons protected industrial actions (Brigden 2012). The bench reasoned that protected industrial actions were lawful under Australian law and was part of the business system (Australia FW 2012). FWA instructed that it was appropriated for the parties to negotiate new agreements. However, the damage caused to the consumers of the service was one that had a bearing on the tourism industry making the FWA apply its power to terminate the actions and lockout under section 424(1)(d) of the Fair Works Act. The bench, therefore, declared the suspension ended (Sarina and Wright 2015). They argued that the impact of the suspension on the tourism industry were huge and therefore had to come to an end. FWA temporarily suspended the lockout but left it open for further actions by the employers. It also encouraged them to engage in further negotiations so as to avoid similar incidents (Reinhart 2012). Even though the decision seemed to favor the airlines, it was essential in averting the looming crisis (Catanzariti and Kane 2012).
Was the Dispute resolved effectively? Implication of the Dispute to Employment Relations
It is quite hard to tell whether the dispute was effectively settled. However, to some extent, the objective was achieved. The fact the FWA was able to end the lockout, and the industrial actions are a sign of real dispute settlement. The decision was also able to encourage the parties to renegotiate new agreements. However, a union like ALAEA did not achieve its objectives for its member. Allowing the possibility of further lockouts was dangerous and would encourage other employers to use such measures to intimidate their employees from agitating for their rights. As such, the decision is likely to create a situation of business monopoly in Employment Relations hence putting the employee at a disadvantage. Catanzariti and Kane 2012 acknowledges that this ruling had the likelihood of precipitating injustice employer practices in future even though it was necessary.
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