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Background on Industrial Relations

The field of industrial relations has grown over the past century from the shorthand of the relationships between employment and resources in the industry. The major factors leading to the change in the field of labour relations include the labour problems resulting from the conflict between employment and capital over the control of production and the circulation of revenue. Labour challenges were critical in laying the foundation of industrial relations as it provided a rational justification and the growth of social restructurings in the field. The labour problems emanated from the conflict between personnel and their employer, on job security, job soldering, wages, working conditions and employment – management disagreement resulting from uninformed, haphazard and dictatorial approaches of workers management used by the industry (Kaufman, 1993). Industrial relations has been defined as a multidisciplinary study of the professional relationship, with distinct prominence on the link between establishments and their employees. Industrial relations pursues to comprehend the forces of political, economic, social, organizational and psychological nature that affect the working relationship; the practices, goals, behaviours and organizations of proprietors and staff; the foundations and consequences of inadequacies and instabilities in the occupational relationship that negatively affects economic effectiveness, place of work equity and individual welfare; and the practices that can resolve these disputes (Kelly, 1998). This paper seeks to analyses industrial relations issue of Qantas’ labour dispute of 2011 using the relevant theory.

Qantas is renowned Australian airline and one of Australian largest carrier based on fleet size with the most number of international destinations and universal flight records (QANTAS, 2017).  In October 2011, Qantas grounded all of its international and local journeys following a long-running industrial disagreement between the airlines and three Australian trade unions. I.e. transport workers union (TWU), Australian Licensed Aircraft Engineers Union (ALAEA) and the Australian and International Pilots Union (AIPA). The labour dispute was significant in that it led to the fair work ruling that rejected the limitations on outsourcing that made it considerably easy for some of the union’s concerns about existing industrial relations laws in Australia and setting a precedent restricting the union's influence.  After a two-day grounding of its aircraft in response to employee lockout for participation in the workers claim action. The move to ground the flight instigated an instant application by FWC by ending rather than suspending the industrial standoff resulting in the commencement of operations by the carrier on October 31st, 2011 (Parliament of Australia, 2012).The dispute was resolved with Qantas winning the right to manage the airlines as the fair work Commission (FWA) arbitrated on the conflict after the 21 work days allowed between AIPA and Qantas management to negotiate failed to reach an amicable agreement vindicating the employees. However, FWC defended the union's reps right to be consulted before outsourcing and agreed on the provision in the determination allowing Qantas staff to be granted time-off to improve and bring forth cost saving alternatives if the carrier sought to subcontract their labour (ABC, 2012).

Overview of Qantas Airline

Following Qantas airlines industrial dispute, different parties held different positions on the issue. Qantas management argued that the Unions demand would adversely impair the carrier financially. Qantas held that the arbitration was crucial to the future of Qantas and the welfare of its 35,000 employees in the Qantas group including those in LHPSs was intricately connected to the success of Qantas. Further, in their submission, Qantas argued that there was a robust public interest that the workplace determination should uphold and not subdue Qantas capacity to respond to the competitive pressure amounting from Virgin Australia and Emirate carriers and stay successful. Moreover, Qantas submitted that substantial enhancement in productivity was the only feasible way out to achieving a higher level of returns from existing assets base. Also, by cutting on unit cost in situations where there is slight or no room to increase air ticket with the current cost base standing at 20% higher than most of its competitors, Qantas viewed this as a concern to address inadequacies (CAPA, 2013). The Fair work Commission (FWC) formerly known as Fair work Australia (FWA) passed an order under section 4214 of the Act to end industrial action in connection with a suggested enterprise contract to substitute all of Qantas aircrew (long-haul pilots). However, AIPA appealed the verdict, but the Federal Court of Australia dismissed the appeal where AIPA sought to have the decision by FWC suppressed and had FWC ordered to hear and pass a ruling according to law for the application. AIPA, TWU and ALAEA position was on job security provisions and pay increment. The unions were against the management decision to outsource ground work at the expense of Australian jobs and making profitability a priority, hence the move to engage in industrial action targeting to cripple the airlines overseas operations that would hurt their job security (CNN, 2011).

Qantas labour dispute has grown into a recognized reference to the happenings of 2011 following the grounding of Qantas entire air fleet and threatening to lock out its employees to end any industrial action by employment movements. Key legal aspects in the Qantas labour dispute include whether Qantas acted within the legal framework when they threatened their staff with a lockout, and grounding the airplanes for two days and consequently use it as a way to end any industrial action. Further, by Qantas pushing what was a negotiation dispute and turn it into a mandatory arbitration process. The existing Australian laws were reviewed on how they have handled the current labour dispute posing a question could it be done differently? Also, further analyse the fair Work legislation (The University of Adelaide, 2011). The Qantas industrial conflicts could have sparked grave economic implications. The industrial dispute could cripple the tourism industry which lost over eighty million Australian dollars (PRI, 2011). The Qantas dispute injured social relations between the management and its employees.  Further, by grounding the entire fleet without notice adversely affected the relationship between the airline and other stakeholder’s hence disregarding uninterrupted view of CSR (Corporate Social Responsibility).

The labour dispute and key legal aspects

Being a neutral consultant, I would evaluate the demands by the three labour unions against the position of Qantas management.  The labour unions took on a protection action through the following; the ALAEA wanted Qantas to construct a fully equipped and staffed heavy upkeep facility, restrict and control third-party labour disputes and that Qantas access to efficiency enhancements inclusive of those conferred by the technology.  AIPA, on the other hand, demanded regulation of terms and conditions of employment of Staff who worked for other corporations regardless of them being controlled by Qantas or not. Further AIPA required Qantas to cover the staff living outside Australia in their demand. The announcement to restructure the Airline in Asia pushed the labour union into the Industrial action with the aim of safeguarding their jobs against the move that would result in one thousand job cuts in Australia. By the expansion into Asia, the management could have sought a balance between its plans and what was ethically fair to its employees. Joyce Allan, the CEO of Qantas Airways Limited, should have considered all the stakeholders and avoid further provocation by grounding their fleet to push the labour unions into arbitration rather than on negotiations. By integrating the Qantas management claim that included the sudden growth of 6th Freedom courier in Asia, high fuel cost, high Australian dollar, competitive antagonism from Virgin Australia in the local market and increasing growth in LCC (ICFI, 2014).   

By evaluating each particular claim by both parties, alternatives can be sought that would not injure the relationship between the parties. By giving the staff, a voice superior customer service would be offered to the clients and at the same time avoid any industrial tussle. Further by advocating that the Qantas management and the Labour unions work together by listening to the grievances of their employees would not have resulted into the grounding of the planes for two consecutive days. Further, Joy Allan should have extended an olive branch to the employees by taking same pay rise equal to that of the employees would have been an indication he values the employees and is ready to treat them fairly. Also, the management should not have taken such a stern stand but instead embraced the opportunity to learn from Southwest and adopt strategies by Southwest which have never fired any of its staff yet have grown and remained successful.   The southwest being a Competitor to Qantas should have offered the carrier management a workplace relationship enhancement lesson. Southwest have a culture radiating teamwork and a two-way engagement between the corporation and the employees hence improve industrial relations resulting into a win-win situation for both the union and Qantas Airlines Limited management.

By adopting a pluralistic approach to industrial relations that encourages the importance and legality of collective bargaining between trade unions and management, the theory is most suitable to explain the case of Qantas labour dispute. The method is effective in large organizations like Qantas. The failure by the management to embrace negations and engage their workforce in decisions that directly affect them led to the standoff culminating into the grounding of Qantas fleet. By actively engaging and addressing the needs of the unions and offering alternatives would have resulted in less cost being incurred and a healthy management workforce relationship maintained.

In conclusion, Industrial relations should at all times engage the management and their workforce to avoid conflict of interest.  Further, in case of disagreement, the management as well as the unions should be willing to engage in negation upholding utmost good faith.

References

(ICFI, 2014. World Socialsit Web Site. [Online]
Available at: https://www.wsws.org/en/articles/2014/03/01/qant-m01.html
[Accessed 12 May 2017].

ABC, 2012. ABC News. [Online]
Available at: https://www.abc.net.au/news/2012-08-08/qantas-wins-most-in-fair-work-determination/4185488
[Accessed 12 May 2017].

CAPA, 2013. CAPA Centre For Aviation. [Online]
Available at: https://centreforaviation.com/insights/analysis/qantas-wins-right-to-manage-the-airline-as-fwa-ends-industrial-dispute-with-international-pilots-95113
[Accessed 12 May 2017].

CNN, 2011. CNN. [Online]
Available at: https://edition.cnn.com/2011/10/30/world/asia/australia-qantas/
[Accessed 12 May 2017].

Kaufman, B. E., 1993. The Origins and Evolution of the Field of Industrial Relations in the United States. 25 ed. London: Cornell University Press.

Kelly, J., 1998. Rethinking Industrial Relations Mobilization, Collectivism & Long Waves. 2 ed. London: Psychology Press.

Parliament of Australia, 2012. Parliament of Australia. [Online]
Available at: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2011-2012/ChronQantas
[Accessed 12 May 2017].

PRI, 2011. PRI. [Online]
Available at: https://www.pri.org/stories/2011-10-30/qantas-dispute-threatening-australias-economy-australian-prime-minister-julia
[Accessed 12 May 2017].

QANTAS, 2017. QANTAS. [Online]
Available at: https://www.qantas.com/us/en.html
[Accessed 10 May 2017].

The University of Adelaide, 2011. The University of Adelaide- Adelaide Law School. [Online]
Available at: https://www.adelaide.edu.au/
[Accessed 12 May 2017].

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[Accessed 17 July 2024].

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