Some Final Thoughts — For Now — On The Qantas Dispute

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.

Qantas Dispute: Now We Wait

Pursuant to my post last night, both the Gillard Government and Qantas have made application to Fair Work Australia for a termination of all industrial action in the matter of Qantas’ dispute with three of its unions.

The unions, in turn, have sought a suspension — “most likely” according to reports close to the proceedings until just after Christmas.

I’ve monitored coverage of this issue in the last 24 hours extremely closely; opinion in the mainstream media seems divided fairly evenly between favouring the union position or the Qantas position, as is reaction from directly affected people at airports around the world.

We’ll come back to that.

Fair Work Australia, having sat late into the night last night, resumed its hearings in this matter at 2pm AEDT today (3am GMT) and we wait with breath that is bated for a decision.

In the meantime, there are a few issues I want to address.

  • The Gillard government didn’t even use the right clause of its own Act in its application to Fair Work Australia; it has come to light today that a Ministerial Declaration terminating the action could have been issued; instead, the Government application was made under a different clause that allowed up to five days for a determination to be made. Given its desired outcome and the economic consequences of the alternative, the incompetence of the government — yet again — is on clear display.
  • Qantas management has stated today that the shutdown in operations is designed to bring the dispute with its unions to a head. I’m inclined to sympathise; the rolling strikes and industrial stoppages — some bordering on wildcat action — have been going on for months, and to continue is clearly in the interests of nobody associated with the issue.
  • TWU head Tony Sheldon appeared on the ABC’s 7.30 programme tonight, with the laughably misleading (but factually correct) claim that the campaign of the unions has thus far resulted in eight days of stoppages. That’s technically true, but many times in recent months, the unions have cancelled other scheduled industrial action at the last minute, after contingency plans (and flight cancellations) were already set in motion. Mr Sheldon, your eight days in effect better resembles two weeks.
  • Much has been made today of the pay rise Qantas CEO Alan Joyce received at Friday’s shareholders’ meeting, and quite rightly so. In my view, as I intimated last night, it was an act of corporate idiocy to announce that one day and to ground the airline the next. But that doesn’t alter every other aspect of this dispute, which boils down to union greed and industrial bastardry.
  • And, last, much has been made of the grounding of the Qantas fleet being a “premeditated act.” Well…Qantas says it had advice that a lockout was an option open to it, and to action it would never have been a decision made in five minutes flat. It would have been canvassed with Qantas’ economists, industry analysts, lobbyists and PR people at the minimum. If Qantas took ten days as some reports suggest to arrive at a decision to ground its fleet, then as far as I’m concerned Qantas has treated the matter with great care and diligence.

Returning to the experiences of directly affected travellers, it’s understandable their feedback is as varied as has been played out in today’s media coverage.

Some say they have been well looked after by Qantas, and some are scathing; some are philosophical whilst others are angry and/or upset.

My view is that Qantas probably took the best of a small number of equally unpalatable options by grounding its fleet.

This has already dragged on for months (and already disrupted tens of thousands of booked-and-paid airline travellers).

There was no guarantee, and no prospect, of any meaningful resolution other than Qantas management caving into union demands.

For reasons we have previously discussed on this site, caving in was no option.

A few days’ disruption now, rather than another year of industrial espionage by the unions (and a question mark growing over the viability of the airline), however unpleasant or inconvenient, would seem the best choice from a bad hand of options.

OK, it wreaks havoc on the Spring Racing Carnival here in Melbourne, but is there ever a good time to do these things?

Last month it was school holidays. Next month it’ll be nearing school holidays again, and Christmas, and New Year…

…and if the unions’ application for a suspension of action rather than a termination were to succeed, there’s no guarantee this crap wouldn’t simply resurface around Easter and Anzac Day.

Interestingly, I saw Dave Oliver — National Secretary of the AMWU, a union not involved in the dispute at Qantas — at the Fair Work Australia hearings, in media coverage of the dispute today across multiple media outlets.

I’ve met Dave and I think he’s a pretty good bloke, but in this case I’d wonder if the presence of such a senior AMWU figure — in a dispute the AMWU has nothing to do with in a direct sense — is indicative of a more co-ordinated union campaign against large employers in Australia, with Qantas being the bunny and the guinea pig.

It would certainly lend weight to my observation in last night’s post that “someone” was bound to try it on, under the Fair Work Australia regime, and that (surprisingly) it was the aviation unions who got in first.

The Qantas dispute involves the TWU, the AIPA, and the ALAEA…if anyone can see the AMWU in this list, please let me know so I can make an appointment at the optometrist.

But for now…we wait. I’d held off posting tonight because there were indications Fair Work Australia might have handed down a decision prior to this, but at 11.50pm (AEDT) I think it’s time to say we’re going to have to wait until tomorrow.

Keep your comments coming (and use the blog site if you can…no emails…let’s keep the discussion in one place).

The Qantas Issue: Something Has To Happen. Now!

I never — never — thought I would see the day that I’d advocate government intervention in an industrial dispute. But it’s here; the Gillard government must sort out the mess at Qantas, and quickly. The government needs to sort out the mess its own dumb laws created.

News this afternoon that Qantas is grounding its entire fleet in the face of the industrial action it is confronted with means that one of three things now happens: the unions back down, the government orders them back to work, or Qantas goes out of business.

Qantas management is unlikely to back down, and nor should it; the demands it faces from its unions are ridiculous.

Clearly, the time for screwing around and causing trouble for the sake of it is over.

But a finger needs to be pointed at the ALP and the current federal government which, ultimately, is responsible for the mess by creating the circumstances in which this could occur in the first place.

The Rudd/Gillard government, as we all know, came to power in 2007 with little real mandate (aside from slogans like “Education Revolution”) other than to undo the WorkChoices legislation enacted by the Howard government.

But rather than simply repeal those amendments to the Workplace Relations Act, it went further, and created the most pro-union legislative environment in nearly thirty years.

And that environment has come back to bite — at least insofar as the dispute at Qantas is concerned.

It was only a matter of time before someone in the union movement tried it on, and — a little surprisingly — it’s been the aviation unions.

Between the raft of protected strike action provisions conveniently afforded by the Fair Work Act, and its general allowance of a return to pattern bargaining, unions are holding Qantas to ransom by simply refusing to budge an inch on their stated — and generally unreasonable — demands.

Those demands include pay rises of 15% over three years; well above inflation, and on top of the already-generous pay conditions they enjoy compared to engineering staff at other airlines.

Compared to engineering staff at Virgin Blue for that matter, too, with which the very same unions made a deal that saw their members earn considerably less than their brethren over at Qantas.

Those demands include conditions for contractors being made the same as those of their members who are employees of the airline, and that includes guarantees of job security — something which, by their very nature, a contractor can’t be given.

And those demands include guarantees of job security generally for union members who are employees of Qantas well beyond what is reasonable to expect any employer to provide; not least in light of the restructuring that is to commence at Qantas and the changes to its labour requirements such a restructure will necessitate.

The unions also say their campaign is designed to ensure Qantas remains a fully Australian-based airline and that they will “fight” moves to relocate operations and/or jobs to bases in Asian countries.

Never mind that management runs Qantas — not the unions some of its staff belong to.

Now that Qantas management is parking its planes on tarmacs around the world, let’s look at what is at stake and what the lie of the land really is.

Qantas International is already running at a heavy loss; the figure (depending on the source) is between $150 million and $220 million each year.

Yes, the other arms of the business are holding the overall entity in profit; last financial year the Qantas Group posted nett profit of some $550 million. But any business with a division haemorrhaging $200 million-odd per year has a serious underlying problem that requires urgent redress before it infects and drags down the remainder of the company.

The aviation industry is one of the most sensitive in the world to shocks on the cost side; terrorism, economic downturn, rises in the price of oil, plane crashes, government policies and taxes, and supply issues generally are all items on a much longer list of factors that can destroy airline businesses and send them into history.

Qantas has thus far made one major, major strategic blunder in its fight with its unions: the rather large pay rise its board endorsed yesterday for Chief Executive Officer Alan Joyce.

Not a good look, not smart timing, and damned silly tactically.

Still, the airline has lost $68 million so far from the present protracted industrial dispute, a figure widely accepted by economists, industry analysts, and aviation industry journalists.

It probably wasn’t smart for the unions, yesterday, to assert that this $68 million had been spent “on advertising.”

Indeed, it was probably the final wave of the red flag at the bull.

The 15% pay rise claim over three years mightn’t be so obscene if it weren’t for the fact that many of the engineering staff in question are already paid several times the average weekly wage of about $60,000 per year; factor in that the claim is for double the inflation rate, pressures in the aviation industry generally and problems in segments of the Qantas business specifically, and it’s outrageous.

One of the things Qantas management has said in the course of this dispute is that its engineers want to hold jobs and to be paid for maintenance work that no longer exists.

A process which has already — and belatedly — started is the retirement of Boeing 747-400s, Boeing 767-300s and older Boeing 737-400s from the Qantas fleet.

These planes represent half of the 200-odd units in the Qantas fleet, and those retiring planes have an average age of 20 years.

They are being replaced with brand new Airbus A380s, Boeing 737-800s, and the soon-to-be-introduced Boeing 787 Dreamliner — all of which will require little heavy maintenance for 6-9 years.

That’s the market law of supply and demand; if Qantas doesn’t need to maintain the workforce it has because fleet renewal makes positions redundant, it has no obligation to keep staff on its books just to be nice.

On the other side of the coin, the skills these engineering people have are not only prized, but sought around the world; indeed, given the exponential growth in the aviation industry expected in the next 20 years — not least in the Asia-Pacific region — those portable skills offer licensed engineers and other engineering professionals the opportunity to work across the world.

Not, perhaps, in Australia, at least not in the immediate future; and not, indeed, in a regime where they can regularly tell their boss — to put it indelicately — to bend over.

They wouldn’t get away with it in Dubai or Singapore, for example.

And any industrial claim to put contractors on the same level of entitlements as permanent, long-term employees is so offensive (and abusive of process) that it doesn’t warrant or merit response.

Any airline business operating today needs to find cost savings; it’s the nature of the industry, the world over.

It’s why half the airlines in the US are in government bankruptcy protection; it’s why, for example, airlines in the UK (one of which Alan Joyce once ran) are looking at things like charging for use of toilets, or silly ideas like flying twice as many people standing up to maximise flight yields.

None of this has even been hinted at in Australia.

But if the price of maintaining Qantas as the Spirit of Australia (or, indeed, the living spirit of anything) involves some operations in Asian countries, then that’s better than the alternative.

Indeed, former CASA head Dick Smith — who ought to know about these things — was broadcast on Melbourne radio today, saying that if the current industrial action against Qantas doesn’t stop, the airline will either go broke or become a purely domestic carrier.

Just think about that…if Qantas goes broke, 40,000 people instantly lose their jobs; and air travel in Australia becomes something you save up for over a period of months or years like it was 15-20 years ago.

I can remember saving for six months for my first airfare from Brisbane to Melbourne as an 18-year-old in 1990…some people couldn’t even afford to do that.

This dispute is already affecting hundreds of thousands of travellers; it is placing tourism-based businesses under great strain; it is diluting what inbound international traffic is still coming here despite the high dollar and economic problems abroad; and it is impacting businesses across the country who require access to reliable air travel at short notice in the daily course of their operations.

And were the end result simply to be that Qantas became a purely domestic operation, every foreign carrier would look at us here, and say to anyone wanting to fly much further than Auckland or Bali — again — to bend over. The price of flights would rocket.

The economic damage to Australia of a partial or full collapse of Qantas would be horrific.

This isn’t Ansett, where a poorly run (and much smaller) parent company presided over a subsidiary in which management standards were abysmal and aircraft maintenance, service bulletins and compulsory fleet inspections were routinely and systematically ignored.

No, this is a business being held to ransom by a militant, unionised minority, endangering the whole business in the process, and potentially inflicting incalculable economic damage on Australia generally if it all goes pear-shaped.

It’s well-known that as a rule I’m generally contemptuous of unions, largely as a result of the type of thuggery and bastardry we’re seeing played out here.

But from a philosophical point of view I think workers are entitled to this type of representation if they want it — provided the organisations offering that representation don’t abuse it.

And they are here.

Completing the circle, Julia Gillard and her government need to intervene in this immediately.

It is ALP-sponsored law that has emboldened the unions down this path, and it is now incumbent on the government to shut this down.

It goes against every fibre of my being to advocate a government intervention, but in this case the government is as much at fault as the unions trying to put Qantas over a barrel are.

Neither side is perfect, but on a “points decision” or balance of probabilities or whatever euphemism you like, Qantas is right and the unions are wrong.

Now it’s grounded.

The longer it stays on the ground, the more it will cost the economy generally; and if this isn’t cleared up quickly — and once and for all — there’s a real danger of vast and permanent damage not just to the Australian economy, but to international confidence in Australia.

And that’s a hell of a price to pay for union thugs trying to hang “the boss” out to dry.

Shut it down, Julia.

This is a chance for the Prime Minister to deliver something other than rhetoric, or policies people despise and never voted for.

It’s time for the Labor Party to put the labour movement in its place. For the national good.

And for God’s sake, be quick about it…

Striking Out: Union Thuggery And Industrial Bastardry At Qantas

If anyone really wonders why unions face dwindling membership in this country, or why trade unions are increasingly held in such low regard by the Australian public, look no further than the disgusting antics of elements associated with the unions involved with Qantas.

For those who’ve been in Antarctica on safari for a while, there’s a pay dispute going on over at Qantas: a big one.

The unions want a 15% pay rise over three years, and various guarantees relating to the job security of their members (many of whom are contractors, not employees), whilst maintaining a weather eye on a coming restructure that could see hundreds of jobs made redundant.

Management says they can’t afford to meet the claim, citing tough conditions internationally for airlines generally, and pressures on Qantas specifically such as the price of oil, competition from airlines operating from countries with far lower labour costs, and so forth.

(And before anyone mentions the $500 million-odd profit it made last financial year, just remember Qantas is embarking on an overdue renewal of most of its ageing fleet at a capital cost of several billion dollars, which is where most of those profits will go for the next five to ten years).

On the one hand, I understand the unionists want a pay rise.

On the other, I understand that Qantas, like most businesses with an eye on costs, is baulking and — like many airlines around the world — is operating in a difficult economic environment.

And so the stoush has played out: in private, in public, behind closed doors in meeting rooms, and on the front page of the country’s newspapers, for months.

And it has affected the travelling public: literally dozens of Qantas flights have been delayed or cancelled, disrupting the travel plans of thousands of people, as a result of industrial action.

And that’s notwithstanding the fact that on some occasions the unions have cancelled their planned stoppages for certain reasons; for example, to minimise disruptions at the end of recent school holiday periods in some states.

The subtext of the dispute essentially boils down to this: the unions are floating the spectre of overseas maintenance as linked to substandard workmanship and a safety risk, combined with what they say are the best interests of their members; Qantas denies the safety accusations and says it is simply prepared to pay what it can afford.

Being fair, the arguments on both sides have some merit, and the actual reality most likely lies somewhere in the middle.

And aside from the fact that most of us will lean toward the position of either the airline or the union, from an overall perspective, so far so good: it’s the typical argy-bargy of a collectivist bargaining campaign by a union against a large industrial employer.

There’s where it gets ugly.

Really, really ugly.

Revelations that senior Qantas executives — including its Chief Executive Officer, Alan Joyce — have received death threats in the context of the current negotiations are appalling.

The threat received by the Irish-born Mr Joyce referred to him as “foreign filth” and “Paddy” (not his name, clearly) is both repugnant and an oxymoron; it ignores the fact many of Australia’s largest and best companies are run by foreign-born executives, and it ignores the fact that many Australian nationals run (or have run) comparable foreign companies.

Would these people have described Sir Rod Eddington as “foreign filth” on account of his time at the helm of Cathay Pacific or British Airways?

What I think is even worse is the fact that Qantas workers who have opted not to take part in strike action have been harassed and bastardised: stories that the houses of workers refusing to strike have been damaged, or their car windows smashed in retaliation for turning up to work, are disgraceful.

And these non-striking workers have — predictably enough — been denounced within the rank-and-file workforce as scabs, traitors, dogs, and so forth.

The type of language that everybody expected from militant unions 30-odd years ago.

As someone philosophically distrustful of unions in any way, and politically opposed to the leftist nature of most unions’ agenda, I am prepared to take at face value the statements of some of the transport unions’ leaders and especially those of the Australian Licensed Aircraft Engineers Association federal secretary, Steve Purvinas.

These are hard men who drive a hard bargain; indeed, so hard the airline is calling their bluff and the travelling public is now beginning to bear the brunt.

Purvinas emphasises that he and his executive have implored their members to “play it legally” on the basis their demands were mostly met last time this situation arose and his members did not break the law.

And Purvinas himself is a reasonable bloke.

This points to elements in his ranks that he can’t control and who may never be conclusively be identified.

Death threats don’t appear out of thin air; car windows don’t spontaneously shatter; houses don’t self-immolate.

I’m reminded a bit of Arthur Scargill’s leadership of the National Union of Mineworkers (NUM) in Britain in the early 1980s; Scargill was a thug and a brute whereas I trust Purvinas is neither, but there the differences end.

Scargill called his miners out on strike without a ballot; Purvinas’ members got one. In both cases, those workers refusing to strike were vilified, bastardised, and terrorised.

Indeed, some of Scargill’s minions were so enraged that “scabs and traitors” should dare to cross picket lines and go to work that they started murdering them — literally.

And does anyone remember the notorious Builders’ Labourers Federation (BLF), run by the late Norm Gallagher, and which was deregistered by the Thompson Liberal government (Vic) and the Fraser Liberal government (federal) in part due to systematic illegal and violent conduct?

The problem someone like Steve Purvinas — a salty, straight-shooting, and generally honest bloke — has is that as much as he has faith in “his men” he can’t control them.

And so from the protracted and increasingly checkmated industrial dispute between Qantas and its unions, the uglier side of the union mentality has reappeared out in the ranks.

It’s not good enough to dismiss these events as the conduct of a rogue element or misguided few; they go to the heart of the culture of the union itself.

If Alan Joyce — publicly or privately — were to let it be known that unions were filth, and that consorting with unionists would result in significant damage to the property or person of those daring to associate with “union filth,” the outcry — and uproar — would rightly be horrendous.

So with the boot on the other foot, let’s call a spade a spade.

The conduct of unionists in the case of the industrial dispute with Qantas is despicable.

It makes no difference whether the union case is sound or not — threats of violence and intimidation supersede any case that may be put.

And it makes no difference whence the threat comes from: Purvinas and other transport union leaders like him may be responsible for their men, but it is a regrettable fact of human nature that they can’t control them all.

The unions in the Qantas case, therefore, do themselves no favours.

They do, however, strike at the core of what damaged credibility their individual unions — and the union movement in this country generally — retain in the eyes of the Australian public.

Little wonder only about 15% of Australians belong to a union these days, as opposed to about 50% 35 years ago, if this is the example the unions set.

What do you think?