Qantas Relations Dispute - Case Study Example

QANTAS RELATIONS DISPUTE By Student’s Name Code + Name of Course Professor/Tutor Institution City/State Date Qantas Relations Dispute The industrial relations issue assumes workers and employers are inherently in disagreement (Lawrence 2011, 16). Ultimately, the major concerns of industrial relations depend on the terms and conditions of resolving the dispute. A request by the National Minister for Workplace Relations, Fair Work Australia dismissed the industrial action by Qantas starting 2 am on October 31 2011. Given the possible negative impact on the economy, the federal government arbitrated in the issue through the Fair Work Australia and used unique provisions stipulated in the Fair Work Act of 2009 to terminate all the industrial action by Qantas and three unions representing its workers. The differing parties were to seek and negotiate a settlement within the next 21days; with the likelihood that a settlement would be imposed upon them in case, they failed to agree. Important lessons can be gained from the dispute such as the need for undertaking deliberate efforts towards legislative reforms over the issue. By analysing the whole situation, some potential shortcomings in the process of enterprise bargaining can be established for employers. This essay will provide a brief background of the industrial dispute by identifying the parties involved, the intervening parties, the major contentious issues, and how the involved parties used the various alternatives provided by the FWA Act to advance their concerns. This essay finds that the issue was ultimately resolved through FWA’s action. Moreover, the essay will compare and contrast several work relations perspectives in reference to this case. Background of the Qantas Dispute The Qantas dispute started in late 2010, during the start of negotiations between Qantas and three unions for new enterprise arrangements (Hurley-Smith 2012, 545). Hurley-Smith (2012, 546) continues to posit that this bargaining grew more intense when the airline declared its intents to cancel operations in Asia. During the negotiations, baggage handlers, licensed engineers, ramp staff as well as International and Australian pilots engaged in several ‘protected industrial actions’, climaxing in the resolution by Qantas airline, on 29 October 2011, to ‘lockout’ those workers (with the repercussion that the whole Qantas leading fleet would be stopped). On that day, the media release delivered by Qantas continued documenting that aircraft presently in the air would finish their operations in certain sectors. However, there would be no more Qantas international departures or domestic departures anywhere else in the globe. Qantas pointed out that the lockout would remain until the appropriate unions being ALAEA, AIPA and the TWU dropped their ‘hard demands, which made it difficult for settlements to be attained” (Govindasamy and Dunn 2011, 8). This would see the airline laying off many of its workers. These acts made the unions to term the proposed lockout as deplorable. Qantas perceived the shut down and therefore, plotted a lockout, which would shield itself from imminent industrial action towards and after the Christmas period of 2011. The public differed in its opinion and the clients were not too content. The impasse is regarded a bona fide “response action by employer" lawfully conveyed by the FW Act. For lawful purposes, all the three unions pursued it in reaction to “protected action.” These “protection action” responses comprised one-hour stoppages suggested by the ALAEA, numerous stoppages and work bans (proposed by TWU), and a prohibition on fulfilling Qantas’ in-flight proclamations as requested by the AIPA (Govindasamy and Dunn 2011, 10). In actuality, the lockout was a reaction to a scheme developed by the TWU and ALAEA. The approach was to inform Qantas of an awaiting slowdown after Qantas’ rearranged schedules and cancellation flights. The costs shouldered by Qantas due to this approach hit 68 million dollars and about 15 million dollars per week in revenue loss. About 600 flights were cancelled thereby affecting 7,000 passengers (Sarina & Lansbury 2013, 437). Human Resources professionals and practitioners in aviation would then be attuned to the significant labour cost instructions in the industry. Due to the significant difference in the unit price of labour between airlines (even in bordering airlines within one conti­nent), labour cost remains an important aspect in distinguishing costs between rivalling airlines. These professionals reinforced that the reduction of labour costs was critical because they comprised the greatest distinct cost and the fact that they are a vast cost differentiator between airlines. According to Sarina and Lansbury (2013, 439), Sue Bussell, the then industrial relations group manager of Qantas stated that instead of any particular political or ideological perspec­tive, Qantas’ industrial relations policy is the driver of the airline in addressing how to best work under the regulations that apply on any specific day. He further intimated that the objective of the airline is to uphold a competitive edge and to present a maintainable rate of return to finance investment, reward investors, and maintain job security. Parties to the Dispute Qantas Management Facing increasing competition from competitors like Virgin Blue and rising costs, Qantas management pronounced its five-year proposal in August 2011 (Gleeson 2012, 1). The airline’s management was attempting to restructure the firm in order to minimize expenses for them to accrue more advantages over their competitors in the local and world markets. The cost-reduction strategy employed by Qantas would culminate into a low wage level and fewer employees additionally to the ‘offshoring’ of the airline’s businesses to the Asian market (Bray & Stewart 2013, 330). Due to these challenges, Qantas restructured its workers to cut costs. Nevertheless, this strategy was not encouraged by the unions representing the workers. The result was that the Unions began bargaining with Qantas taking serious measures in protest of the firm’s decisions. The Unions The protected action reaction by the union parties towards the supposed lockout was in search of the previously mentioned issues such as job security. The involved unions pursued the action in several ways: In connection with the ALAEA: This union demanded that Qantas established a fully staffed and tooled heavy maintenance facility. It also required that third party providers of labour be restricted and controlled (Gleeson 2012, 4). ALAEA also required the restriction of Qantas’ access to production improve­ments, comprising those deliberated by regulatory and technology changes. Moreover, this union wanted the exclusion of other competing unions’ members from assuming certain roles. In connection with the TWU: This union agitated for the control and restriction of third party labour providers. In connection with the AIPA: Here the demands were the regulation of the conditions and terms of employment of workers who work for other firms (whether linked bodies of Qantas or not) (Bailey & Peetz 2014, 316). The union demanded the overriding or supplementation of the conditions and terms of other Qantas workers including those who stay by the arrangement at hand. Considering the extensive magnitude of these claims, their probable negative effect on Qantas’ profitability and flexibility, as well as the uncertain legal authenticity of several of them, it is not a surprise that Qantas enthusiastically opposed their addition into the agreements in the entire 14 months of bargaining (Bailey & Peetz 2014, 317). Viewed in this perspective, it is reasonably clear that Qantas prompted the lockout to compel a termination that would ensure that the arrangements could be mediated by the FWA where it reasoned better results could be attained instead of negotiating with the unions. The Government The executive was a significant element in this industrial relations dispute. As a federation, the power of the executive is administered at all federal levels. In this particular industrial strike, the coverage is state-wide. At the level, the Minister of Workplace Relations and Employment and the Prime Minister have statutory rights to arbitrate in industrial relations disagreements before the FWA (Orr 2012, 8). Nevertheless, in the Qantas’s industrial action, the executive did not use the power conferred to it by the FW Act to call off industrial action, rather they left the issue for the industrial umpire to resolve. The federal government’s inaction generated mixed reactions from the public (Orr 2012, 10). However, Julia Gillard Australia’s Prime Minister proclaimed the government's action as appropriate in the dispute. She deliberated that the reason of the government failure to act directly as stipulated in the Act was that it would not use a section it has never used before, as it would cast the issue into legal doubt. Intervention by the FWA The Federal Government’s aim in connection to industrial negotiations is to minimize the destructive effect, which long heated and running disputes between employees and employers can portend on the entire Australian economy (Sangkuhl 2011, 158). By reviewing the Fair Work Act of 2009 (Cth) union groups, industry groups, as well as other associated parties can make submissions to the act in line with the powers the act confers to dealing with negotiating (Bray & Stewart 2013, 326). In a scenario, which presented the FW Act’s negotiating provisions, Qantas grounded its international fleet in October 29 2011, and outlined its plan to ‘lock-out’ its employees two days later as trials to end its persistent with its employees’ unions. Under the act, a ‘lock-out’ constitutes the only available form of action, which an employer can use as industrial action, and which occurs in situations where an employer avoids some or all of its workers from attending work and thereby rebuffing their chances of earning their wages. The magnitude of Qantas’ acts had been censured as being inconsistent to the disagreements with the three unions given that Qantas’ ‘industrial action’ involved less more than adorning red ties instead of the standard ties issued by Qantas (Sangkuhl 2011, 159). Moreover, the grounding affected nearly all Qantas workers in their jobs, not only workers who comprised the bargaining disputes. It was the National Government’s intent when writing the FWA Act that the approaches to prompt the industrial arbitrator Fair Work Australia’s involvement in long running disagreements would only be stimulated in exceptional or extreme circumstances (Todd 2012, 344). FWA can only terminate or suspend industrial action in situations where industrial action causes substantial economic damage to the negotiating parties themselves under sec. 424, (1) (d) (Bray & Stewart 2013, 327). This would also apply where the industrial action threatens the safety of the community, risks a third party or harms the Australian economy. Moreover, industry action under the provision would be where there is highly likelihood that “cooling off period” or suspension of the negotiations would be instrumental in resolving the dispute (Catanzariti & Kane 2012, 312). Pertinently, the FW Act cannot be a tool for the FWA to handle in bargaining dispute especially where, after extended industrial action periods, the parties have merely been incapable of reaching an agreement. Qantas’ activities in grounding its international fleet and the noteworthy harm to the Australian economy, which followed established an illustration of the degree of the exceptional or extreme circumstances needed to prompt FWA’s power to arbitrate (Bussell & Farrow 2011, 392). The Tertiary Education, Jobs, Skills, and Workplace Relations minister made a submission to the FWA via the FW Act to dismiss the industrial action being involved in (or threatened to be participated in) by the involved parties. There were augmented pleas for the government to dismiss the industrial action straight away under a power bestowed by the FWA Act on the Minister. Nevertheless, this power had never been implemented before. Instead of direct intervention, the Minister opted to apply to the FWA intimating that it applies its power to prevent all parties to the dispute from participating in industrial action. The direct involvement of the Minister would probably have drawn the public impression of Australia that the government had hidden intentions of ‘interfering’ or that it ‘owned ‘the process of negotiating (Catanzariti & Kane 2012, 313). FWA heard substantiation from representatives of the Federal Government as to the significance of airline facilities to the economy of Australia as well as the approximated effect the persistent grounding of Qantas main fleet would portray on tourism. FWA pointed out that the worth of inbound tourism was approximated at 24 billion dollars every year. Other companies currently use the capability of ‘locking out’ workers under the FW Act in attempts at deliberately triggering the arbitration powers of FWA. It was provided to the review panel of the fact that the FW Act had to embrace a mechanism to activate FWA’s involvement, which does not necessitate such extreme situations to occur, and which the current FW Act demands (Hubbard 2012, 18). FWA should be able to arbitrate and end long running disputes in situations when it is clear that more negotiations between the employees and employer are unlikely to reach a resolution in the dispute, therefore averting a repeat of the dealings of October 29 2011(Hubbard 2012, 20). The aftermath Enterprise bargaining is currently the primary approach whereby employees and employers secure conditions and terms of employment different from or beyond those found in modern settings. Significantly, to forward their claims, workers are entitled to assume protected industrial action, as long as certain procedural stages have been undertaken. Protected industrial action in the reinforcement of entitlements for an enterprise plan, as approved by the FW Act, is the lone lawful approach available to workers to attain improve­ments in conditions and wages that a company is not prepared to affirm to (Todd 2012, 345). By finding the dismissal, Qantas was able to end the protracted dialogues and triggered mediation of the agreements. From that time, the ALAEA and Qantas were able to find an agreement, which was regarded as a consent-based work resolve at the mediation hearing before the Full Bench (Cooper 2012, 369). Unsurprisingly, the ALAEA did not attain many of its bargaining goals, and the determination of the workplace more or less repeats the previous Qantas-ALAEA arrangement (Gleeson 2012, 18). During the writing, the AIPA and TWU had yet to resolve the issue with Qantas. FWA was expected to intervene in the Qantas-TWU resolution in March 2012 as well as the Qantas-AIPA arrangement in April 2012 (Catanzariti & Kane 2012, 316). Nevertheless, AIPA appealed the decision by FWA to dismiss a Full Federal Court, claiming that lockout of Qantas did not comprise a “protected action” employer as provided in the FW Act. AIPA affirmed that the lockout of Qantas was not proportional to the ban of members of the AIPA on conforming with Qantas’ announcements on in flights, and as such, it was unprotected action, and in the process disentitling the order of the FWA to terminate (Todd 2012, 346). While unique, such an analysis is not immediately clear within the scheme ratified by the FWA Act, and it is uncertain that a proportionality test is generated within the legal connotation of "in response.” At the time, it was very early to infer if Qantas had exhilarated other employers to use their capacity to ‘lock-out’ in reaction to ‘protected action.’ Analysis of Qantas Pluralist Work Relations Perspective in comparison to the Radical Approach An analysis of the Qantas work relations provides an insight of workplace relations. The outcome of this analysis interprets events such as conflict at the workplace, unions’ roles, and job regulation. Qantas approach tends to perceive conflict as a characteristic in workplaces. The organizations in this dispute are perceived as divergent and divergent sub-groups, each having its own legitimate devotions and with their individual set of leaders and objectives. In this case, the two major sub-groups in the pluralist approach are the Qantas management and the three trade unions (Schofield 2011, 69). Consequently, Qantas management has less affinity for controlling and enforcing, but shows more gravitation to co-ordination and persuasion. The trade unions involved are considered as legitimate representatives of workers. Conflict is dealt through collective negotiation. Ultimately, proper management of the conflict leads towards positive change. On the other hand, the radical approach perceives the capitalist society’s nature, where there is a vital split of interest between labour and capital, and views workplace relations besides this background (Schofield 2011, 69). This approach views inequalities of economic wealth and power as having their origins inherent in the capitalist economic system. Thus, conflict is seen as unavoidable and trade unions are an ordinary response of employees to their use by capital. Conclusion For most workers, there would be no need of the Federal Government to arbitrate in its dispute and have the industrial action be called off on grounds of substantial harm to the Australian economy. Thus, employers will be compelled to adhere to rules, negotiate in good faith and they can only opt for a lock out when their employees undertake an industrial action. Workers may threaten several dissimilar industrial actions and thereafter withdraw at the last moment. On the other hand, employers have one option only. The Qantas dispute discloses faults in the negotiating process. The dispute validates the necessity for legislative transformation to ease the application for cooling-off or suspension of ‘protected action’ by an affected party. Bibliography Bailey, J & Peetz, D 2014, ‘Australian unions and collective bargaining in 2013.’ Journal of Industrial Relations, Vol. 21, no, 11, pp. 8-18. Bray, M & Stewart, A 2013, ‘From the arbitration system to the Fair Work Act: the changing approach in Australia to voice and representation at work.’ Comparative Labor Law and Policy Journal, Vol. 323, No.12, pp. 326-32. Bussell, S & Farrow, J 2011, ‘Practitioner Review: Continuity and Change: The Fair Work Act in Aviation.’ Journal of Industrial Relations, Vol. 53, no.3, pp. 392-401. Catanzariti, J & Kane, C 2012, ‘Major tribunal decisions in 2011.’ Journal of Industrial Relations, Vol. 54, no. 3, pp. 312-325. Cooper, R 2012, ‘Testing Fair Work: Australian Industrial Relations in 2011.’ Journal of Industrial Relations, Vol. 54, no.3, pp. 267-276. 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