Industrial Relations at Qantas Airline - Case Study Example

NAME OF THE UNIVERSITY QANTAS AIRLINE INDUSTRIAL RELATION NAME OF STUDENT ADM. NO. COURSE NAME: COURSE CODE NAME OF LECTURER 9/8/2012 A REPORT ANALYSING THE INDUSTRIAL RELATIONS PRESSURES EVIDENT IN AN INDUSTRY Introduction Industrial relations refer to the relationships in the midst of employers, government, employees, management and trade unions. It encompasses any kind of associations be it formal or informal in the organisation. Industrial relations form a key component in the present industrial society. Industry today is not viewed as a business of employers alone nor has a sole aim of making profit, it’s considered to be a business enterprise established on decisive cooperation between management and labour (Bray et al 2011). As such, production and social good is considered as its eventual success is contributed by management and employees. Dynamics of Industrial Relations in Contemporary Society The dynamics of life nowadays has made work to become a basic to the human coexistence, though, labour these days is no more unorganised group that is ready to obey without detest or protest on terms of employment (Dabscheck, 2009). Management has to handle workers at present as individuals with conscious minds as well as members of organized social groupings, which are well-informed on their working rights and possess strong bargaining power. Work establishes what we ought to do in our daily life and preoccupies much of our thoughts. It enhances our interactions and aid in defining our sense of identity as it offers us with material necessities of life and attainment of civilisation. Bray et al (2011) emphasises that work allocation and remuneration, together with its organisation and management are of significance importance, how these are carried out in any gainful employment explains much more about the perceptions and ideals we embrace as a society. For this reasons, the aim of changing and keeping sound industrial relations is not only to focus in resolving disputes but also to safeguard the cooperation among the workers in the ways of industry. In any industry, the issue of maintaining smooth industrial relation is not an easy task. Most industrialised nations and leading corporations around the world find themselves struggling to establish and maintain effective management of the workforce relations in their systems. Each country and industry has sought to find a working solution, based upon its economic, social and political environment. For example, in Australia, government formulated a Fair Work Act as governing frameworks of its labour market. The statute is perceived to be pertinent means of balancing the play grounds between the workers and employers, therefore promoting the most favorable functioning of Australian labour markets. However, industrial conflict still arises and thus formation and upholding of acceptable work relations forms a significant position in the human resources policies of contemporary organisation. Significance of industrial relations Upholding of satisfactory industrial relation practices is significant for the effective operation, survival and growth of any industry. Good industrial relations leads to increased efficiency in work operations and hence success to the organisation. The importance of industrial relations is summarized below; a) It creates industrial democracy. Industrial relations entail solving of workers disputes through collective bargaining and mutual agreement. This helps in creating a social equality in the organisation which motivates employees toward a common goal that result to growth and development of organisation. b) It contributes to economic growth. Good industrial relationships results to increased efficiency, earnings and productivity, which leads to economic growth and development. c) It improves workforce morale. Collective bargaining leads to better working conditions and increased income. This motivates workers because of job satisfaction. d) It ensures optimal utilisation of scarce resources. Pleasant-sounding industrial relations build a sense of belonging among workers and minimise cases of industrial unrest. This will eliminate wastage leading to optimum use of resources at the workplace. e) It contributes to ratification of favourable labour legislation. Industrial relations lead to enactment of certain labour laws that promote and protect welfare of employees and interest of employers. For example, the ratification of Fair Work Act in Australian labour market (Bray et al, 2011). f) It facilitates change. Sound industrial relations assist in improvement of team work, performance and general productivity and thus taking full advantage of latest innovations and technology. It aid employees to adjust easily to changes. Scope of industrial relations The scope of industrial relationships comprises all characteristics of affairs like creating cordial and healthy labour management relations, promoting peace in the workplace, and developing industrial democracy (Alexander and Lewer, 2003). Cordial relations are brought in by safeguarding the interest of employees, fixing realistic wages and salaries, provision of good working conditions and keeping of healthy trade unions. The industrial peace is achieved through setting up of dispute resolution system such as Board of Conciliations for mutual agreement. While, industrial democracy could be realised by allowing employees to participate in decision making on issues affecting them as well as recognising their human rights. Role of government in industrial relations At the present time, governments of respective countries and States have played a key role in controlling industrial relations. But the extent of their involvement has been based on the social and economic status of its people in conformity with the political system in place. For example in the case of Australia, The National Employment Standards (NES) as stipulated in Part 6 section 761 of Fair Work Act 2009, encloses some employment terms conditions that should be observed by the employers. This helps in defining expectations of different interest groups in a labour market. For example, the maximum working hours in every week is supposed to be 38 hours plus any realistic extra hours that attracts bonuses. Flexibility in working arrangements is also allowed to allow parents with school going children to fit into work schedule as they also meet their parental duties like child care. Parents are accorded up to 12 months unpaid parental leave by their employers in addition to maternal or paternal leave. There is also annual leave of four weeks that is paid for every employee and additional one week for some shift workers. Public holidays will earn employees paid leave unless agreed upon by the two, which is between employee and employer. In section 767, there are modifications on how NES and agreements provisions are governed or implemented. Mostly, power, control and authority lies with the employers but will always be regulated by policymaker, which is the Federal State to avoid exploitative relations in the workforce (Fair Work Act 2009). Role of management in Industrial relations The management has a vital role to play in ensuring sound industrial relationships, for positive development of their relations with workers. The management should maintain good personnel relations and handle employees with dignity and respect. Workers should be given a listening ear on matters affecting them at the workplace and where possible be accepted to participate in decision making. Management must create good working conditions, and make employees feel accepted at work. They must conceive a proper remuneration system, for a satisfactory wage and salary plan that fits into the efforts of employees. Trade Unions According to Burgess and Macdonald (2003), prescient employers recognize unions as the freely chosen representative of their employees. Many people have perceived trade unions differently, but majority sees them as a means of improving both the social and economic wellbeing of employees. This has been through the advocacy of trade unions to better working conditions, reasonable pay, fair treatment and so on. Labour bargains have helped to restore some balance in the labour market through the stoppage of exploitation of employees by powerful employers as it viewed during the industrial revolution. Prescient unions go beyond defending workers rights to partnering to ensure business success. Mutual gain, not tenuous compromise should be the joint objective of employers and unions. A corporation at loggerheads with its employees and their representative cannot be a winner in this contemporary society. The Fair Work Act 2009 is friendlier to majority of trade unions, as it allows union staffs to enter any workplace where their members work or perceived to be, and where their members need their representation to negotiate with the employer, then employer will be compelled to work with the union. Besides being friendly, the statute has barred unions from organizing any industrial action, as more broad consultation is needed to find a solution to any dispute that may arise between the employers and employees. INDUSTRIAL RELATIONS EVIDENT IN QANTAS AIRLINE Qantas Airways is Australian leading airline which operates an average of 450 domestic flights in Australia daily and around 540 international flights per week, serving more than 125 destinations in 35 nations. The key business for the firm is transportation of passengers and freight. Its subsidiaries such as QantasLink operate in regional specialist markets which encompass in-flight catering, holiday operations and information advancement. Recent industrial relations at Qantas Qantas has faced several criticisms from its employees and government for its failure to enforce some labour regulations as stipulated in Fair Work Act. On the other hand pilots and cabin crews have expressed their dissatisfactions on prevailing labour relations. The airline announced about 500 job cuts and intention to reduce its remunerations, a move that led to public outcry and unrest in the company. This news came after the Qantas C.E.O announced the financial performance of the first half of the year, where net profit dropped by 83% and about $ 194 million losses from industrial battle (Qantas Airline Official Website). The conflicts between the Qantas and its employees has escalated, right to point some refers to “knock-out blow”. With most intervention of attrition seemingly exhausted, the switch has been made to litigation. The issues of industrial relations at Qantas appear to be complex and stakes are large and each side has declared to defend rigid positions. Advisors have called for conciliation between the parties but others believe settling on this will be a poor compromise. Many people think flying is a glamorous as it may seem, but flight attendants perceive it different based on what they encounter while onboard. Working at high altitude in a pressurised cabin hours is really exhausting, unbalance effects of odd sign-on times, besides flying in different time zones and climatic condition at stopovers makes them too tired. This operation goes on daily for years, because cabin crew work even during public holidays, weekends and sometimes on their leisure time, hence not as stipulated in employment statutes to work for 8 hours. This too disrupts their social and family lives during their flying career. Because of the nature of work, managing crew pose great challenges to industrial relations not found in any industries. Sound industrial relations that have been instituted at the Airline Cabin Crew Working Conditions Qantas Cabin Crew is in charge of ensuring everybody onboard has a safe and comfortable journey. It’s the condition of employment for flight attendants at Qantas to belong either to Long Haul Crew division or Short Haul Crew division, but it’s upon them to relocate, to any location of their preference (Qantas Airline Official Website). Long Haul Flight Attendants operates within aircrafts to major cities around the world and Short Haul Flights Attendants operates within major Australian destinations. For proper industrial relations in airline, Cabin Crew work into two different Enterprise Agreements (EBA) and this reflects on industrial relations development in Australia. The provisions of Long Haul EBA vary from the Short Haul EBA and each division is represented by different branches of the Flight Attendants Association of Australia (FAAA). Cabin crew work with different management teams, each time they operate, ranging from customer services to cabin services. While onboard, still passengers absolutely depend on flight attendants for food, comfort, information and safety. Considering all this factors in a ferociously competitive airline industry, high service standard for customers and good industrial relations for cabin crew are essential. Qantas management must be sensitive and sympathetic to their employees in all working situations. Cabin Crew like other employees, come from diverse backgrounds, should also be treated fairly and their rights be respected. Intervention for sound industrial relations at Qantas Airline Qantas is well known worldwide for service excellence. It’s absolutely to do with good relations between its management and employees, and between employees (cabin crew) and customers (passengers). Besides the escalating problems, a number of industrial relations issues have contributed to the satisfaction of customers and employees of Qantas, which includes provision of quality service, flexible working arrangements, good remunerations package, and collective bargaining power and so on (Qantas Airline Official Website). Innovative practice to advance women The Cabin Crew managers together with human resource department have established alternative duties to fulfill the normal duties of flight attendants to help them balance their family and life demands. Women in this docket have not been left out; several programs are initiated in helping them advance their careers. Some with satisfactory education have ended being absorbed in management team while others have been trained as co-pilots. Flexible working arrangements Qantas has always endeavoured to support workers who have family or other personal commitments elsewhere such as career development by introducing rewards like parental leave, personal career leave and examination leave. The flexible working conditions have motivated a number of staffs who have contributed to its success. The airline believes that an effective work, life and family program is paramount in the wellbeing of any person, hence positively responds to the needs of its staffs. This has been geared towards keeping a competitive edge in the airline industry. Process for Requests for Flexible Work – Cabin Crew Request from crew member to Performance Development Manager/Line Manager or Cabin Crew Manager Can request be accommodated using existing flexibility of QF Policies and EBA? (Performance Development Manager assesses using guidelines provided & consults with Cabin Crew Manager Yes Performance Development Manager makes appropriate arrangements and updates base records No Request is referred to the Alternate Employment Committee via Cabin Services Human Resources using standard form to ensure all relevant details are provided and the Committee then able to make an informed assessment. Request must be forwarded to the Committee within 7 days of receipt. Committee makes recommendation (or contacts applicant for further information) HR advises Performance Development Manager of outcome & drafts letter to crew member Performance Development Manager makes appropriate arrangements/updates base records Case is closed OR review date set in Committee Minutes and by Performance Development Manager in Base records. HR advises Cabin Crew Manager of need to review Cabin Crew Manager reviews & advises Committee of status Transfer to Part Time The airline introduced a framework how job transfer could be tackled, for example permanent staffs can transfer to part time positions in different job categories, including managerial levels. Outcome / Assistance Provided Number Roster Assistance for the individual – reduced trips, bidding assistance etc. 55 Base Relocation or Transfer to Short Haul 25 Transfer to Part Time 10 Ground Duties 1 Allowing access to leave pool outside of entitlements 56 Withdrawn 8 Other 3 Unable to accommodate request due to operational requirements 4 Ongoing 9 Total 171 Source: Qantas Airline Official Website Leave entitlements Qantas has a well managed leave system under the provisions of the EBA. The leave is scheduled based on rostering and operational needs. Given the nature of work, cabin crew are required to apply for leave at specific periods of the year. The leave entitlements are managed by Alternative Employment Committee (AEC). Also women are entitled to maternity leave whereas men get paternal leave. Call for solutions Both the shareholders and staffs at Qantas have vast shared interest in the viability, sustainability and indeed prosperity of the airline. Their shared interest easily outweighs their conflicting ones, hence need to resolve the present problems and set sound industrial relations between them. Those representing the shareholders and staff (trade unions) should search for common goals and reconcile competing ones, as they manage the conflict wisely along the way (CCH, 2009). Conclusion The recipe for high performance workplaces is also perceived as the recipe for productive bargaining (Burgessand Macdonald, 2003). The labour market and employment relations in Australia have greatly been influenced by the National Employment Standards as stipulated in the Fair Work Act 2009. NES have tried to minimize the disputes that were frequently exhibited in the labour market. Even though, the harsh economic conditions and external forces have sometimes shortchanged the labour market thus affecting the friendly industrial relations. For instance, the economic slowdown, which was experienced around the world, impacted negatively on the labour market forcing the trade unions and government to come in and try and stabilise the market. Bibliography Alexander, R. and Lewer, J. (2004), Understanding Australian Industrial Relations, Harcourt Brace, Sydney, 5thEdition. Bray, M., Waring, P. and Cooper, R. (2011), Employment Relations: Theory and Practice, McGraw-Hill, Sydney. Burgess, J. and Macdonald, D. (2003), Developments in Enterprise Bargaining in Australia, Tertiary Press, Croydon Victoria. CCH (2009), Australian Master Human Resource Guide 2009, CCH Australia Ltd, Sydney. Dabscheck, B. (1995), The Struggle for Australian Industrial Relations Oxford University Press, Melbourne. Easson, M. and Shaw, J. (1990), Transforming Industrial Relations, Lloyd Ross Forum, Labour Council of NSW, Pluto Press, Leichardt NSW. Guest, D. and Peccei, R. (2001). Partnership at Work: Mutuality and the Balance of Advantage’, British Journal of Industrial Relations, Vol. 39 No. 2, June, pp. 207-236. Kaufman, B.E. (2005). The Social Welfare Objectives and Ethical Principles of Industrial Relations. Champaign, IL: Labour and Employment Relations Association, pp. 23-59. May, R. (2004), Trade Unions and the Employment Relations Act. Auckland University Press, Auckland, pp.159-172. Ostenfeld, S., Lewer, J. and Burgess, J., (2001), The Third Way, Employment and the Workplace In Australia’, Economic and labour Relations Review. Vol.12, pp.174-192. Price, R. (2007), Employment Law in Principle, Thompson Law Book Company, Sydney. Journal of Industrial Relations (2011), Vol. 53, No. 3 (Annual Review Issue). Qantas Airline Official Website. Waring, P. (2000). The Future of Bargaining Structures in Australian Employment Relations Work Futures Conference, Cardiff Business School 15th Annual Employment Research Conference Cardiff, Wales September 6-7th. 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