The gods must be crazy: chronology of and issues in the Qantas industrial dispute 2011

Employment Industries Australia

The industrial dispute between Qantas and three of its unions can be seen in the context of Qantas’ attempts to remain viable in a highly competitive domestic and international aviation environment. This note details the background to the enterprise bargaining disputes in 2011 between Qantas and three of the unions with traditional membership coverage in respect of: international pilots, the AIPA (Australian and International Pilots Association); licensed aircraft maintenance engineers, ALAEA, (Australian Licenced Aircraft Engineers Association) and ground staff in Qantas, the TWU (Transport Workers Union).

Qantas’ position in the international airline market is more precarious than in the domestic market, with Qantas losing market share and incurring losses on its international operations. According to the Bureau of Infrastructure, Transport and Regional Economics, Qantas’ share of the international market (to/from Australia, as measured by the number of international passengers) fell by almost 15 percentage points from 34 per cent in 2000 to 19 per cent in 2010. Also, Qantas’ return on equity is low. A number of prominent aviation analysts have argued that in light of these trends, Qantas would be better off quitting the international sector.

On the other hand, a significant commitment to the international sector is well underway with the purchase of Airbus A380 and Boeing 787 aircraft. For the pilots and engineers, in many respects, the October 2011 dispute has been about the long term operation and maintenance of these ‘new generation’ aircraft.  To put the Qantas operation in context, the Qantas Group of businesses has 35 000 staff and up to 48 collective agreements with 16 unions.

On 29 October 2011 at 2pm, Qantas chief executive Alan Joyce announced the grounding of the Qantas domestic and international fleet in advance of employer response action (a lockout of those employees involved in the employee claim action) in response to industrial action of certain of its employees. However, not all parts of the business nor all of staff of the Qantas Group were directly involved in the October disputation. This action potentially affected 70 000 domestic and international passengers caught without warning through the cancellation of 447 flights, starting at 5pm on 29 October 2011. From 8pm Monday 31 October approximately 3000 employees involved in disputes with Qantas were to be locked out. However, as Qantas argued, the fleet needed to be grounded before the lockout could be effected for safety reasons.The aim of this action was to achieve termination of union industrial actions, which had been authorised by Fair Work Australia (FWA) under the procedures stipulated in the Fair Work Act 2009 for initiating such actions over 2011. In the event the industrial actions were terminated. Qantas was aware of the Act’s requirement to re-engage in bargaining (without industrial action) and where matters were not resolved, to have these arbitrated by FWA. In this event, Qantas was hoping to rely on the traditional reluctance of industrial tribunals to intervene in managerial issues.

Qantas’ actions prompted an immediate application to FWA by the Workplace Relations Minister, Senator the Hon Chris Evans, to terminate (rather than suspend) industrial action (comprising union bans and the employer’s foreshadowed lockout of certain employees). Orders to this effect were issued by FWA on 30 October 2011 and Qantas planes commenced to fly from 31 October 2011

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