Qantas Lockout: A Case Study Essay On Australian Industrial Dispute.

Discuss about the Industrial Dispute forTransport Workers Union.

The prefigured lockout conducted by Qantas on 29^th October 2011 affected almost 3000 employees and number of passengers at global level. This lockout was conducted by Qantas without any warning to the public. As this case mainly derive the mind of public on the controls possessed by Federal industrial tribunal to interfere in the industrial disputes. Different acts of shipwrecked passengers, hearings conducted by Fair Work Australia (FWA) at late night, and the involvements by the Federal and state governments capture the attention of the civic.

In this assignment we discussed the case law the Qantas bargaining dispute with the Australian Licenced Aircraft Engineers Association (ALAEA); the Transport Workers Union (TWU); and the Australian and International Pilots Association (AIPA). Structure of the report includes background of the case in brief which mainly includes description related to parties of the case, after that issue in dispute, options used by parties under the Fair Work Act 2009 (Cth) to press their claims and interest. How dispute is resolved, and if the dispute is still going on than how it can be resolved. Lastly, paper is concluded with brief conclusion.

On 29^th October 2011, media release was issued by the Qantas under which they announced that from 8:00 PM on 31^st October 2011, they conduct lockout and this lockout covers all the licensed engineers, ramp staff, baggage handlers, and all the pilots at both Australian and international level. This media release further states that, all the aircrafts of the Qantas which were presently flied in the air would complete their segments, but after that no flights at both national and international level would take place across the globe. Qantas further stated that this lockout will be continued till the time necessary unions that were the Australian Licensed Aircraft Engineers Association (ALAEA), the Transport Workers Union (TWU) and the Australian and International Pilots Union (AIPA) dropped their high end demands because of which it is not possible to reach their agreements (The Conversation, 2011).

Lockout was the action which was bona fide in nature and considered as the employer answer which was taken under the fair work Act. In context of legal purposes, all the three unions conduct their actions in response such as ALAEA proposed one hour stoppage, TWU proposed different work bans and stoppages, and AIPA proposed a ban on complying with the Qantas in-flight announcements. Actually, this lockout was considered as answer to a “slow-bake” tactic which was framed by the ALAEA and TWU. The idea was to inform the Qantas about the stoppage which was pending, and later when flights was cancelled by the Qantas and rearranged the schedules then cancel the stoppage (NEWS, 2011).

Dispute in Question and Legal Actions Taken

For the purpose of this tactic, Qantas spend almost $68 million and also had to bear loss of revenue of $15billion. Almost 7000 travelers get pretentious and almost 600 flights had been negated (Traveller, 2011). As observed by the Doganis, as unit price related to the labors changes meaningfully between the airlines, even though neighboring Air Company on equal continent. Labor cost is considered as the major factor in varying the costs between rival airlines. In other words, it was difficult to reduce the labor cost because this cost was the highest single cost and because this cost was the major cost differentiator between the airlines (The conversation, 2011).

As stated by the Sue Bussell, group general manager of the Industrial relations for Qantas define the labor cost:

Instead of any specific ideological or political view, policy related to Industrial relation of the Qantas as the airline addresses how to operate in best possible manner under those rules which applied on any given day. The main objective in this regard was to maintain the competitive advantage and also to ensure adequate return to those who invested fund. This objective also includes surety of the job safety and provides return to the investors. The protected action conducted by the parties of the union result in proposed lockout in context of the above stated job security. As stated by the Qantas, it was followed by the three unions in different ways and all these ways are stated below (SMH, 2011):

ALAEA- in context of this union:

• Completely tooled and staff heavy maintenance facility was built by the Qantas.
• Qantas controlled and restricted the third party labor providers.
• Qantas access to the improvements related to the productivity, and this also includes those strategies related to the technology and regulatory changes, must be limited.
• Some additional associates of the union which were in competition with the ALAEA must be restricted to conduct some particular functions.

TWU- in context of this union:

• Third party labor providers must be controlled and restricted. 

AIPA- in context of this union:

• Terms and conditions related to the employment of staffs who also work for other companies (no matter whether these companies were associated with the Qantas or not) must be controlled by the Qantas.
• Terms and conditions related to the other employees of the Qantas, and it also include those who resides in other countries must be superseded or supplemented by the agreement at hand (Creedy, 2011).

After considering the broader scope of above stated claims, and also the negative impacts of these claims on the flexibility and profit ability of the Qantas, it was clear that why Qantas strictly oppose the inclusion in the agreements during the 14month period of negotiation. In this regard, it was completely clear that lockout was prompted by the Qantas for forcing the end of these agreements were arbitrated by the FWA where it can lead good results instead of bargaining with the unions.

Lockout conducted by the Qantas and its negative impacts on the economy imposed pressure on the Federal minister to interfere in these situations on the 29^th October 2011. This matter was listed by the FWA before a full bench on the same day. Judgment in this context was given on 30^th October 2011. In this matter, evidences was led from the Mike Mrdak, Secretary, Department of Infrastructure and Transport and Drew Clarke, Secretary, Department of Resources, Energy and Tourism for the purpose of establishing the amount of damage occurred to the economy of Australia and this cause more damage if this lockout continued. On collective basis these above stated secretaries testified that:

• Qantas accounted for almost 65% of the capacity of domestic aviation, 20% of the capacity of international aviation, and 80% of the airfreight delivery services.
• Almost 50000 Australians employees were directly employed by aviation sector and negative effects of the employment in the aviation industry which represents almost 0.5 million employed Australians in the tourism and some other sectors (Smith & Howard, 2013).
• In bound tourist contributes almost $24 billion to the economy of Australia per annum.
• Any decrease in the capacity of aviation has negative impacts on all the economic sectors.
• If proposed lockout was continued then the complete tourism sector get affected because of the decrease in the national and international bookings (SMH, 2013).

Impact on the Economy

However, this evidence presented by the minister was not challenged, and the consequence of the economy damage in the Australia was not an issue. The actual dispute was whether FWA should suspend or terminate the lockout and also the protected action of the union. Argument related to suspension of 90 or 120 days was made by the parties of the union. Submission made by the Federal minister in lieu of end or postponement for 90 days was also supported by the government of Queensland (Wilson, 2011).

Findings of FWA: decision made by the FWA for publishing the reasons while stating the judgment instead of giving an order and later publishing the reasons, which means reasoning and legal analysis in the decision was simple (Creedy, 2012).

Firstly, conclusion was provided by the first bench, that the three unions had conducted the protected action, even this action was taken together than it causes to the both aviation and tourism industry. Because of this Qantas bear loss of revenue amounted to $68 million and $15 million per week, this was accompanied with the cancellation of the 600 flights which directly affects almost 7,000 passengers and this did not amount to damage of the required meaning. Therefore, doubt grounded on the protected action of the union which unaccompanied would not get success. In context of provided hollow with Woodside, and for this Full Bench opined:

It was important to equilibrium this issue beside the detail that protected industrial action was allowable under our system, and from last few years this action had been taken on frequent basis in aviation industry. It must be noted that reassurance of initiative haggling was also considered as the important part of the system.

Lockout conducted by Qantas and its impact on travellers, actually pleased the Full Bench that noteworthy injury was being endangered in the industry of tourism, aviation, and other general industries. Jurisdiction of the FWA was invigorated to end this action under section 424(1)(d) (Bleby, 2012):

“It is ostensible that suspension of complete action on temporary basis was not right and in last not even single party supported that action. Some of the important issues related to the negotiations were difficult to resolve, and some other matters were very easy to solve”.

In context of proof there is important doubt which was arising at initial stage of the unions but in actual it arise because of the lockout and also because of the foundation of the airline. Authority must take action which was possible to avoid the harm caused to tourism industry. Authority makes the decision that in some certain situations of this case, which on the evidence included the specific vulnerability of the tourism industry to uncertainty, and suspension of the protected action will not be considered as thee sufficient protection against the risk of the important damage to the tourism industry and especially in aviation industry. Suspension was necessary, and it also left the open possibility that there may be a further lockout (Parliament of Australia, 2012).

After taking the termination, It becomes possible for Qantas to terminate to the protected dealings and also the activate arbitration of the agreement. From that time, both Qantas and the ALAEA were able to conclude agreement, which was treated as the consent-based workplace determination before the arbitration hearing conducted by the Full Bench. As predicted, ALAEA fails to achieve number of its aims and the determination at workplace in this context more or less duplicated the previous agreement signed by Qantas with the ALAEA.

Both TWU and AIPA failed to conclude an agreement with the Qantas. It was expected from FWA to ensure in lieu of-TWU agreement in March 2012 and the Qantas-AIPA agreement in April 2012. However, appeal was conducted by AIPA to the FWA in context of decision to terminate to a Full Federal Court. For this purpose, they argued that lockout of Qantas was not considered as “protected” response of the employer under the Fair Work Act (Skulley, 2011).

It was contending by the AIPA that lockout conducted by the Qantas was completely disproportionate to the AIPA member’s prohibition on fulfilling with the inflight announcements made by the Qantas and as such it was considered as the unprotected action which disentitling the termination order passed by FWA. Such interpretation was not an immediate proof under ratified structure of the Fair Work Act and it is completely unsure that proportionately test falls under the legal denotation of the response (Keane, 2011). 

It is important to regulate whether further companies were encouraged by Qantas to use their aptitude to lockout for responding the protected action, instead of such claims. This can be said on the basis of lockout shadowed by an request to end and this happen in the Schweppes Australia v United Voice, almost after 1.5 month of the Qantas Lockout. In this case, termination of lockout was sought by the Schweppes for forcing the workplace determination of a prolonged dispute regarding shift timings, and this resulted in different types of protected actions conducted by the employees. After this case, it is clear that other employers were encouraged by Qantas to use their capability to lockout for responding the protected action, instead of such claims (NEWS, 2011).

This dispute carried for two years between the Qantas and other three workers unions, and this dispute was resolved in 2013 when last three arbitration decisions are handed down by the Australia’s Fair Work Commission related to the employment contract for international long-haul pilots. In their decision FWC mainly consider points in the favor of Qantas in which they reject the job security claims made by the Australian and International Pilots Association (AIPA) representing 1,600 long-haul pilots (CAPA, 2013).

Conclusion:

Industrial dispute of Qantas is historical not only because they found themselves talking predominantly about this matter during the second half of 2011, but because it result in historic and important decisions and it also help in changing the dynamic around the complete system of labor regulation because it provide both opportunity and excuse to the present Federal government for ensuring more clear changes in the legislation.

References:

Bleby, M, 2011, ‘Flying roo jumps back into the air, The Australian Financial Review, https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F1242050%22.

CAPA, 2013, Qantas wins "right to manage the airline" as FWA ends industrial dispute with international pilots, https://centreforaviation.com/insights/analysis/qantas-wins-right-to-manage-the-airline-as-fwa-ends-industrial-dispute-with-international-pilots-95113.

Creedy, S, 2011, Qantas grounds all flights over pay disputes with unions, https://www.theaustralian.com.au/business/aviation/qantas-grounds-all-flights/news-story/2aabe0e51902dca90771d607f2c27d23?sv=95fbfd0fd233eee09213b78759749b77.

Creedy, S. 2012, Law changes threaten Qantas, may force sale of Jetstar: Joyce, https://www.theaustralian.com.au/business/aviation/law-changes-threaten-qantas-may-force-sale-of-jetstar-joyce/news-story/650e315eefbdbc2adf214b13a669d9f7?sv=34f93574386a0c5a3d22bdc5d7880fb7.

Keane, B, 2011, ‘Essential: Qantas divides voters, Fair Work Australia the only winner’, https://www.crikey.com.au/2011/11/07/essential-qantas-divides-voters-fair-work-australia-the-only-winner/.

NEWS 2011, No deal: Qantas, unions headed to arbitration, https://www.abc.net.au/news/2011-11-21/qantas-pilots-no-deal/3684392.

NEWS 2011, Qantas grounds entire fleet,     https://www.abc.net.au/news/2011-10-29/qantas-locking-out-staff/3608250.

P Wilson, P, 2011, It was time to ask the umpire, The Australian Financial Review, https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F1226468%22.

Parliament of Australia, 2012, The gods must be crazy: chronology of and issues in the Qantas industrial dispute 2011, https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2011-2012/ChronQantas.

Skulley, M, 2011, Bargaining code on review agenda, The Australian Financial Review, https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F1212315%22.

SMH, 2011, Qantas to lock out employees, https://www.smh.com.au/national/qantas-to-lock-out-employees-20111029-1mpar.html.

SMH, 2013, Qantas' happy flights of fancy, https://www.smh.com.au/business/qantas-happy-flights-of-fancy-20130402-2h537.html.

The Conversation 2011, The Qantas disputes: one agreement made, two to go?, https://theconversation.com/the-qantas-disputes-one-agreement-made-two-to-go-aveller, 4863.

The Conversation, 2011, The Qantas dispute: What next and a recap, https://theconversation.com/the-qantas-dispute-what-next-and-a-recap-4411.

Traveller, 2011, Live coverage: Qantas ordered back in the air, https://www.traveller.com.au/live-coverage-qantas-ordered-back-in-the-air-1mqtm#ixzz5EJfEJdlq.

Smith, G, & Howard, L, 2013, The Qantas dispute: employer's lockout, ministerial intervention and Fair Work Australia's decision, https://www.mondaq.com/australia/x/234664/employee+rights+labour+relations/The+Qantas+dispute+employers+lockout+ministerial+intervention+and+Fair+Work+Australias+decision.