It’s probably trite to observe that it wasn’t world’s best practice PR strategy for Qantas CEO Alan Joyce to have steered a 71% pay rise for himself through last Friday’s company annual general meeting, given that it appears he was already planning to lock out most of his workforce within 24 hours.
Nevertheless, if Qantas was indeed losing $
20 15 million per week from the co-ordinated “protected industrial action” by pilots, baggage handlers and engineers, then obviously something had to be done to bring the situation to a head. Whether it needed to be quite as drastic as a complete shutdown of the airline as a “safety” measure prior to a protected lockout of the disputing employees is another question.
It’s reasonably clear, however, that this is an “employer response action” as part of “protected industrial action” under the Fair Work Act 2009 (Cth). We can also be fairly confident that the notice requirements of s 414 have been complied with, especially given that it does not specify any particular period of notice. That being the case, Qantas’s actions are reasonably safe from immediate legal attack (except under the FWA itself) as a result of s 415:
(1) No action lies under any law (whether written or unwritten) in force in a State or Territory in relation to any industrial action that is protected industrial action unless the industrial actionhas involved or is likely to involve:
(a) personal injury; or
(b) wilful or reckless destruction of, or damage to, property; or
(c) the unlawful taking, keeping or use of property.
However the real immediate action now lies before Fair Work Australia, which last night began hearing an urgent application by the Federal Minister for Infrastructure Anthony Albanese under s 424. I understand the application has now been adjourned to later today (Sunday). Section 424 relevantly reads:
FWA must suspend or terminate protected industrial action–endangering life etc.
(a) is being engaged in; or
(b) is threatened, impending or probable;
if FWA is satisfied that the protected industrial action has threatened, is threatening, or would threaten:
(c) to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or
(d) to cause significant damage to the Australian economy or an important part of it.
It’s reasonable to suggest that the preconditions for such an order do exist. As such we can also reasonably conclude that Joyce’s actions in closing the airline down without warning are part of a high stakes poker game designed to bring the situation to a head and achieve an urgent resolution rather than Qantas dying the death of a thousand cuts at the rate of $20 million per week. Whether the tactic succeeds remains to be seen.
In a broader sense, I think this article by Ken Phillips in Alan Kohler’s Business Spectator magazine provides one of the better analyses I’ve yet read:
Given its current direction, Qantas as an airline brand will most probably disappear. Its likely future is as an owner and manager of franchised other branded airlines. The transition could happen with a comparative speed that may surprise.
In fact, it’s well underway. Jetstar is the first successful brand. Other brands have been experimented with and more are in development.
The reason is that Qantas as an operational carrier is mired in a business model unable to adapt to the degree necessary to remain competitive. The root cause is its industrial relations agreements and culture from which it is unable to escape. It’s a human resource manager’s worst nightmare.
All attempts at management-worker bonding around a common business cause seem to have crashed. Chris Tipler described this in Business Spectator recently (Qantas’ HR policy crashes to earth, October 6). The current concerted industrial disruption campaign by Qantas’ unions should be understood for what it is. It’s a battle over who runs the airline; management or the workers’ collective.
Both sides (management and unions) are pointing fingers of blame at each other. There’s an enormous public relations battle accompanying the flight disruptions, which have halted nineteen weekly domestic services for at least a month as five aircraft stay grounded due to a backlog of maintenance work.
In reality no one at Qantas is to blame, not the workers or management. Qantas is simple faced with the horrid reality of the competitive global airline business.
It really started with the introduction of Virgin airlines. When Virgin set up it began with workforce agreements that enabled a flexible use of staff in a way not before seen with Australian airlines. In comparison, Qantas runs like a bureaucracy – a hangover from when it was government-owned. People work in job description ‘pidgeon holes’ from which they don’t move. Pay rates and careers are structured accordingly. It’s all made legally binding on Qantas through formal industrial relations agreements.
Virgin threatened the Qantas business. Unable to change their industrial agreements – or the work culture tied to the agreements – Qantas instead set up Jetstar. With a fresh workforce, culture and industrial agreements, Jetstar has matched and even bettered Virgin.
But the success of Jetstar now even threatens Qantas, particularly on international routes. …
The ‘Qantas’ workforce is now furious. Understandably they want to hold onto their career structures, the ability to call the shots on overtime and other ‘industrial relations rights’ entrenched over time. Workers, from pilots and stewards to baggage handlers, feel sold out by management. They’ve accepted big changes such as automated passenger check-in. From their perspective they have a legitimate beef. …
But assuming my analysis above is accurate, this outcome would probably quicken the transition of Qantas out of being an airline, to being a manager of other branded airlines. The highly competitive global environment of the airline business is pushing in this direction. Domestic routes have no immunity.
Arguably the best immediate humorous response to the Qantas fiasco has been provided by Tweeting academic Stephen Downes:
Alan Joyce’s secret ambition is to pursue a merger between
#Qantas and his old airline, Aer Lingus. It would be known as Qanilingus