Qantas and the Unions

Hi everybody.

This is the first post of a series in which look at the Qantas dispute and its effect on the wider economy. I will look at it from several different angles, from the implications for other employers, to the political machinations that come from it.

Today, I will start with a bit of an overview of the background to the dispute and how the whole industrial system works in these situations.

Remember this is an informal blog and I don't intend to cover the issues in significant detail. Any implications for the business you are in should be the subject of specific advice whether from us, or some other trusted professional.

For starters, Qantas has for years had collective agreements(also know as EBAs, enterprise agreements, collective bargaining agreements and others) in place covering most of its employees. There are actually many collective agreements covering the workforce as they cover different tyes of employees from pilots, to engineers, to ground staff such as baggage handlers and others.

These collective agreements have fixed terms which are usually between 3 and 5 years.

The dispute is being fought on 3 different fronts by Qantas, based on 3 different collective agreement negotiations, with 3 different unions. The concerned employees are the long haul pilots, engineers(maintenence) and the baggage handlers/ramp services employees.

The important thing to understand here is that all 3 groups have had their collective agreements expire and the parties are in negotiations for new agreements. The fact that they are in negotiations and the collective agreements have expired allows them to take what is called protected industrial action. They have taken such action as stop work meetings, bans on overtime (meaning services are disrupted) and general go-slows. It also allows Qantas to do what they did - announce a lockout, meaning all staff were banned from coming to work with no pay.

For Qantas, such industrial action has been going on for most of this year, which led in their view, to a situation where they were losing significant amounts of money because of the uncertainty of the services that could be provided. Customers were using competitors and they came to a decision to "cut to the chase" and bring things to a head with a full lockout.

This had the desired effect, as the Government stepped in and requested the industrial umpire(Fair Work Australia) to make an order that both parties terminate industrial action and return to negotiations. If no agreement is reached within 21 days, FWA will then arbitrate and make a decision themselves which will be binding on both parties.

The basis of the intervention is important, as it serves to illustrate why most employers will not be able to rely on similar action in their disputes. The Government used section 424 of the Fair Work Act which allows them to seek an order to terminate where the dispute may cause significant damage to the Australian economy.

So with this in mind, what does this mean for employers, regardless of what industry you are in?

If you are an employer that has a collective agreement that has not expired, you need not fear this type of action being taken. Whilst the collective agreement is in place, employees are barred from taking any form of protected industial action.

If you are an employer that is in a similar position to Qantas (expired agreement), industrial action can be taken against you whilst employees are negotiating a new agreement. The problem for most employers is that it is highly unlikely that the Government will intervene, as they did with Qantas, because it would be unlikely that it could be successfully argued that the industrial action is causing significant damage to the economy. Whilst the employer can make such an application, history has shown that the bar is extremely high for such applications and most fail to reach it.

Lastly, if you do not have a collective agreement in place, your business may be exposed to industrial action. If this is a possibility (many industries are nowhere near as unionised as others), you should consider implementing one.

Next up, I will look at what the reason behind the dispute, in effect what they Qantas and the Unions are fighting about.