Armed with the day off and the curiosity of a cat, I drove out to Melbourne Airport this afternoon to watch Qantas’ return to the skies, starting with a flight to Sydney — QF438, operated by Boeing 737-800 VH-VXI — which took off a little after 4pm.
Clearly the issues affecting Qantas in its dispute are far from finalised; indeed, there’s life in this story yet. But it seems that with the return to service of the Qantas mainline operation today, at least one chapter in the book draws to a close.
And of course — given The Red And The Blue is primarily concerned with Australian politics, it’s reasonable to assume other issues will present for discussion, although I will certainly be continuing to follow developments at Qantas and discussing these as indicated.
It’s with some apprehension and disappointment that I heard today that the TWU is considering appealing the decision to terminate all industrial action handed down by Fair Work Australia in the small hours of yesterday morning in Melbourne.
Such a move would hardly be made in good faith; whilst I loathe the idea of government intervention in industrial disputes (and said so here on Saturday) this is an exceptional case.
The intervention was warranted (however hamfistedly it was made) and the resulting process should be approached in good faith by all parties — including the TWU.
Grounding the Qantas fleet, quite obviously, was a measure undertaken to engineer (no pun intended) a resolution of the conflict with the three unions involved in this dispute.
I would have thought those unions would have welcomed the opportunity to finally, and belatedly, put these matters to bed.
But it seems the TWU at least isn’t happy that its ability to lead Qantas on a merry dance (and cause all sorts of disruptions in the process) has met with an abrupt end.
It seems the concepts of finally agreeing to a resolution, or of having an independent industrial umpire impose one, are not that union’s cup of tea.
Which is probably not much of a surprise when it is remembered that 20 years ago, the TWU played a pivotal role in the crippling tram strike in Melbourne that, quite literally, brought the city to a standstill, and which at the time was held up by anti-unionists across the country as a festering, rancid example of everything that was wrong with trade unions in Australia.
I don’t propose to go through the minutiae of the ruling by Fair Work Australia, although I gather there is a spirited debate going on between some of my readers in the “Comments” section of the previous articles I’ve posted regarding this issue.
But I do want, briefly, to talk about the Commission’s point that the industrial action undertaken by the unions, on its own, would have been unlikely to have been grounds for Qantas to obtain termination of those actions on “national interest” grounds.
Clearly, the planes had to be grounded for that to happen.
But virtually nobody involved in this dispute — including most of the union players — denies that Qantas has been losing money as a result of the protracted saga that has been played out.
One of the reasons I’ve been so quick to point the finger at the unions involved as ultimately responsible for the entire fracas is that they seem to think Qantas is a bottomless, endless pit of money.
I have also been emphatic that the pay rise given to Qantas CEO Alan Joyce on Friday was sheer stupidity in the context of everything else that has been going on.
The industrial action that has been undertaken against Qantas over the past nine months has cost it money; its international operation lost some $200 million last financial year; and a hefty portion of its fleet is in urgent and desperate need of replacement at a cost of some $10-$12 billion over the next five years.
Viewed that way, the pre-tax profit Qantas made overall last financial year of $500 million doesn’t look like a mountain of money given the capital expenses and structural problems the airline faces.
It underlines the lunacy of the Joyce pay rise.
And it means there is a limit to what the unions can “get.”
Were Qantas to go broke and follow Ansett into history, there would be no boss to screw, no pay rise to manipulate, no passengers to hold to ransom, no job security for rather obvious reasons, and no airline.
It’s true that Qantas has flagged possible retrenchment of up to 1,000 jobs in its coming restructure.
But the airline must change if it is to survive, and that change, inevitably, will hurt some people. But the overwhelming majority of its operations and staff will remain Australian-based, and whilst nobody likes job losses or firing people (and at times along the journey, in different roles, I’ve both lost my job and had to fire staff in the past), even if 1,000 jobs are lost, 34,000 Qantas jobs will continue.
I’m highly critical of the federal government’s handling of this matter: faced with Qantas’ high-stakes move in the dispute to ground the fleet, its own Fair Work Act equipped it with the power to circumvent the stoppage and issue a ministerial directive terminating all action on both sides and ordering the involved parties to conciliation and — if necessary — arbitration.
Instead, it acted under a different section of the Act, which meant the grounding — and the consequent chaos suffered by passengers around the world — ensued.
Having kicked that colossal own goal, it’s completely unacceptable for Julia Gillard and her ministers to now blame Qantas for causing the disruption in the first place; not least because the same outcome — conciliation and arbitration — has been reached, only with a lot more heartache in the process.
Once again, the incompetence of the federal Labor government has been writ large for all to see; this time, on this issue, it couldn’t even use its own laws properly; and this time, there’s not a Green or an Independent in sight onto whom responsibility can (or ought) be dumped.
And Qantas — a large Australian company and employer of 35,000 people — has endured the industrial mischief of some of its unions for the past nine months and took what it saw as the only measure open to it to resolve matters once and for all.
My hope now is that the four parties involved — Qantas and the three unions involved in the stoush — will recognise that a line needs to be drawn, and that they enter the conciliation process in the next few weeks in good faith and strike what should be a relatively straightforward deal in which everyone gets some of what they want, but nobody gets everything, and in which all parties have to give a little ground to make the whole damned thing go away.
On a final note, during the few hours I was at Tullamarine Airport this afternoon, I left the passenger terminal to have a cigarette; there were two Qantas workers there smoking also who belong to one of the unions involved in the dispute.
Eavesdropping (as you do when people standing right next to you don’t care who hears what they say) I ascertained that their view — and presumably those of their colleagues — was that given Alan Joyce had the termination order he sought, their union bosses would cave in to Qantas management (and sell everyone out).
Is it any wonder each side in the dispute has so little faith in the other, if that’s the way the union workers feel about their own union bosses, let alone about Qantas…
As I said, we’ll follow this and discuss it further as need be.
Keep the comments and opinions coming; and for the (vast, vast) majority of you who haven’t commented, please be assured that posting comments under a pseudonym will keep your privacy — and anonymity — intact.
Good post, Yale. It is unfortunate that we have a such a legalistic IR system, so out of sync with the rest of the world, where the parties have to resort to the (pseudo-)lawyers. Kudos to Alan Joyce for taking a stand instead of taking the easy option and just banking his pay cheque.
And I say this in spite of the fact that my wife was inconvenienced by the lockout. She was scheduled to fly Qantas yesterday morning, and had to re-schedule her flight from Singapore to Sydney. I suspect she’ll book directly with Singapore Airlines next time.
Wake up, Australian unionists. We can’t afford the self-indulgence in our 19th century-era IR laws. The world does not *owe* us a higher standard of living. Businesses need to be efficient. And if you don’t like the pay and conditions on offer, maybe you ought to think about working elsewhere, like the rest of us have to.
Higher standard of living ? They are asking for 2.5% to cover cost of living increases. Work elsewhere, oh thats right their is a huge over abundance of aircraft engineers and pilots jobs in Australia isn’t there.
Good comment David – Steve, well, what can I say.
It is no surprise to me that the TWU is about to appeal, there is not a shred of honour amongst them.
We all should have expected that they would behave like spoilt brats not getting their way.
Steve, it is not merely the 2.5% pay rise that is an issue here – there are a number of demands that are just not negotiable for Qantas to be able provide and still have a viable business.
Would these unionists all be better off and happy with Qantas drowning???
If they keep this up they may well get their wish.
There would be even fewer Engineeer and Pilot jobs to go around in that event, wouldn’t there.
This type of behaviour takes me back to when the Unions ruled the roost and there were so many strikes and disruptions all of the time.
We simply cannot let Australia slide into that abyss ever again.
Yes Steve, higher standard of living.
http://en.wikipedia.org/wiki/Human_Development_Index
Something we won’t have if large companies go belly up. Sometimes it comes down to hard choices. Do you cave in now and watch the company slide into oblivion costing 35,000 jobs in the process, or do you fight now and those 35,000 have jobs in the future?
Steve, it’s not just about the pay, it’s about giving the unions a say in management. Generally union organisers or members are simply not qualified to have a say, so why should they get one?
JohnB, asking for EBA increases is about keeping your a standard of living not increasing it. They aren’t asking for more than inflation and therefore there is no net gain.
Who said they are going belly up? They just recorded their biggest profit in some time. The argument about new planes is also suggesting they are buying the planes when clearly they are not, like all big enterprise they lease their major assets which need to be renewed Sure there is a cost but it’s not like they need cash up front to pay for them, https://www.qantas.com.au/agents/dyn/qf/info/201102/0221.
From the Unions perspective it isn’t about running the company, thats a ridiculous old chestnut. What unions and their members (don’t forget Unions are democratic organisations which take their direction from their membership) want is to sustain their standard of living, to ensure that as many jobs as possible stay onshore. As workers in the company I think its pretty bad management anyway that they don’t seek input from their workforce on their operations, especially when, seeking ways to cut costs. In many countries like Japan and Spain, workers are involved and even rotate positions on the board to allow management the views of those who actually undertake the workplace roles rather than theoretical decisions of management. In the companies that undertake that they have higher profits, higher productivity and a happier workforce (no of which is mutually exclusive).
Steve, a portion of Qantas recorded a high profit – but that is levelled by the huge loss sustained on the other arm.
You have to have experienced running a company to realise that some things are not correctly interpreted in the form of a balance sheet.
To coin a phrase, it is not always black and white.
Your suggestion to have the rank and file involved in major corporate decisions is simply ridiculous.
There is a reason they are rank and file and not upper Management.
Most (99%) don’t have the knowledge or drive to successfully perform Managerial roles and quite simply don’t even purport to wanting the responsibility of such.
The decisions made by Management are not “theoretical” – most people in those positions are the 1% who have worked their way into that role in some form or another thereby having the hands on experience to accurately pinpoit what needs to be done to ensure the Company’s continued success and strength.
Let’s all move on – the Qantas dispute is old news now.
Unfortunately Qantas isn’t old news , this dispute will be ongoing, its a stalemate for industrial action from Unions AND the employer (yes what they have done is industrial action) only for a period and if no resolution between parties arguments will be have to be considered by the tribunal. Sorry far from over.
As for your view of who management are, really , does anyone actually believe that? Sure in your local newsagent there will be some self help books or biographies that may suggest that but the 99% (like your reference BTW) make up little of the 1%.
Steve, it might seem fine to only ask for a cost of living increase at first glance. However, when your payrate is alrady 20% (at least) higher than the bloke beside you doing the same job for Jetstar, you can’t claim to be hard done by. $20/hour base rate + penalties + overtime + cheap air fares + 5 weeks annual leave + “User friendly” rosters that give 5 day weekends is not a bad lurk by any stretch.
The simple facts here is that Qantas International is losing money at about $4 millionper week. When one part of a group of companies is losing money there are 3 and only 3 options;
1. Close down the loss making area.
2. Restructure the loss making operation into a profit making one.
3. Subsidise the loss making one with money from the profitable ones.
I’ll assume hat 1 is out, nobody wants QI to close. So that leaves 2 and 3.
If you take option 3 then you are taking money from those people whose work produces profits. This means less money available to increase their pay and improve conditions and/or buy new aircraft. How would you feel if you were a Jetstar baggage handler being told you can’t have a pay rise because all excess profits have gone to Qantas to pay their handlers 20% more than you get? Or you can’t get new servicing equipment because the money has gone to Qantas for their new servicing hangar?
Wouldn’t you expect them to pay their own bloody bills? And not expect you to go without for their sakes?
A company has to make a minmum profit so that it can return money to shareholders, otherwise the share price slumps and many other bad things happen. Airlines aren’t a high profit margin industry. $500 million sounds like a lot, but when taken as a return on multiple billions in investment, it’s not that much.
Let’s say that you want Jetstar to make up half of the shortfall. So now you want Jetstar to meet all it’s obligations, be efficient, return to investors, etc and make an extra $2 million clear to be handed to Qantas. You just can’t do it.
The last company I worked for tried it and went broke. We in the Qld division couldn’t get pay rises and new equipment and bonuses because we were sending $6,000 per week to Sydney to prop them up.
Option 3 is both unfair to those who actually do operate well and create profit and deserve pay rises and bonuses and is a method of very slow and painful death for a company.
So that leaves option 2.
If moving some servicing overseas is what it takes, then that is what must happen. If some aussie jobs go in the process, then that is unfortunate but is a hell of a lot better than all of them going. Nowhere in the union arguments is there a single thing about how they will help the division move from the red to the black. And that is what must happen if QI is to survive.
Extra costs and extra restrictions on workplace practices will not add to profitability and that is the basic problem. QI is not profitable and must be made so to survive.
Just to add.
Baggage handling isn’t rocket science, it’s a labouring job. It requires no qualifications besides an ability to read labels and lift objects weighing up to 25 kg.
Without even knowing how many of them there are at BNE, I guarantee I could fill their entire roster with 4 phone calls and a couple of newspaper ads. There are a lot of labourers working for far less for whom baggage handling would be a walk.
Bravo John B…couldn’t have said it better myself.
John, Qantas subsidies Jet Star now by paying airport fees etc… That is why it is profitable and QI isn’t (in part) , saving the company aims to make by leasing not investing in new aircraft can deliver some of the cost efficiencies they are aiming for. The other clear piont to make here is that airlines are different, they fulfil different segments of the market, Jet Star is budget competing against other budget airlines, Qantas is high end of market catering for business users/frequent fliers (a very large proportion of their business) therefore they rely on their safety record and service delivery which means greater costs, awages are only part of thatr senario as air fees to airports, catering costs, etc….as extra restrictions on work practices, there isn’t any just cost of living increases and hopes for greater job secuirty in a company already off shoring many jobs even before their planned offshore move.
http://www.thepowerindex.com.au/power-move/joyces-choice-how-far-can-he-go/20111103663
As for baggage handlers, well two things here, many, many labourers get paid more tahn them $38k base salary (five days weekends come from long shiftas so the hours are the same as anyone else, hardly ‘cushy’ as is donme in many industries these days). They also have to pass security and criminal history checks and there are safety implications to their work on and around the tarmac. So it isn’t run of the mill brain surgery and they ain’t paid that well, go to a construction site and offer the labourers $38k, then run !