The Qantas Airways And Union Dispute: Causes, Consequences, And Resolution

Loss of Market Share in the International Market

Discuss about the Took Place Between Qantas Airlines And Three Union Parties In 2011.

The great dispute that took place between Qantas Airways and its three union parties was visible in the aviation environment for a longer period causing various effects to the parties as well as the company. Qantas has a very strong hold in its domestic airlines market and it has been unstable in its position in the international market. This was due to the continuous loss of market share that the company incurred in the international market. It was seen in 2010 that that the share of the company in the international market fell drastically by 15 percent that is it fell from 34 percent to 19 percent compared to last year. This also led to a decrease in the equity share of the company. Thus, due to these problems the company was suggested to give up its international market. However, all these problems led to the dispute in 2011 by the unions that raised issues for the long-term operations (The Conversation 2017). The paper discusses about the dispute that took place between Qantas and its three union partners. Further, it discusses about the parties involved and intervened in the disputes. The report also analyses the steps taken to resolve the dispute and the likely chances to resolve the dispute if any.

In October 2011, Qantas airways faced a huge dispute from its three unions named Australian Licensed Aircraft Engineers Association, The Transport Workers union and the Australian and International Pilots Union. The dispute was raised by all the staffs of the airlines together, which led to the lock out of the company. Just after the dispute started, it was declared that the Qantas Airways would not depart any domestic o international flights from that day. The flights that were already taken will be completed soon in the respected sectors. The dispute was due to the actions taken by the employers in this ground, which was soon put under the Fair Work Act (Heraldsun 2017). All the three unions has their own demand as reason for the dispute such as ALAEA demanded for at least one hour stoppage, while TWU proposed work bans as well as stoppages and AIPA wanted a ban on compliance with the in-flight announcement of the Qantas airways. The dispute was mainly due to the slow bake put forward by the ALAEA and the TWU. This was due to continuous cancellation of Qantas flights and cancellation of stoppages and halts in between the flights. This led to huge loss of customers and reduction in revenue. In turn, the wages of the workers and employees of the airways was hampered. Thus, the labor unions formed by the workers demanded job security from the airline company Qantas. The dispute had a bad effect on more than 70,000 domestic as well as international passengers due to sudden cancellation of 447 flights due to the lock out. The company witnessed more than 3000 employees getting involved in the dispute demanding the lock out of Qantas Airways (NewsComAu 2017). However, the company ensured the safe landing of the flights that already took off before the dispute took place. The people involved in the dispute that carried out the bargaining activities are engineers, baggage handlers and the pilots. These people carried out a number of industrial action leading to the dispute. In continuation of this, the company decided to terminate the staffs, which was prevented by the Fair Work Australia in the end of October 2011. The dispute led to 200 meetings including all the members in the union parties that resulted in a great loss for the company. Thus, the dispute was huge and affected a lot of employee, their lives, resources as well as the reputation of the company as a whole (Morton 2017).

The Dispute Raised by Three Unions

There were various claims made by the union parties as well as the Qantas in the time of the dispute. These claims were made by them to meet their desired interest and problem faced in the organization.

The union consisting of pilots claimed that they do not want the company to move to Asia or any other country and operate in Australia itself so that they are not deprived of jobs. They put forward some claims related to payment and condition at work. They demanded same pay structures for pilot flying in the domestic regions as for pilots flying abroad. Further, the pilots demanded a 2.5 percent increase in their wage rate every year. In case of extra facility they demanded two extra tickets for the staffs in a year for the economy class in the international flights. Further, the unions also demanded that the company funds at least two union members in a year by giving $1 million. The AIPA union is involved in the dispute put forward by other unions is because the company wants the pilots to be in the Qantas flight (pilots 2017).

Over the claims made by the pilots and unions, the Qantas Airways company also justified their claims by stating that the pilots of Qantas company are the best paid pilots in the world reviving 30 percent more salary than any other airlines. Thus, on this ground and with some more justification the company rejected the claims made by the pilots (Gutierrez et al. 2013).

Other than the pilots, the engineers and other staffs of the airlines also made claims or their benefits. The initial claim made by them was the rise in the pay structure according to the rising inflation and a proper job security. They want the engineers of the airlines to stick to the maintenance regimes. However, Qantas did not accept their claim and said that the engineers are sticking to the past (Claytonutz 2017).

Looking at the consequences of the dispute put forward by the workers of the company forced Federal minister to intervene in the dispute to control the situation and to reach to some solution. The Federal minister intervened in the dispute on October 2011 to take care of the dramatic circumstances. The Fair Work Act put the matter forward in front of the Full Bench and discussion took place for more than 12 hours. Other parties that intervened and played an active part in the resolving and analyzing the urgency of the dispute are New South Wales, Queensland governments, Australian Council of Trade Unions. These parties intervened in the dispute and joined the minister and the three unions to make submissions about the dispute. The minister that intervened in the dispute bought various evidences to prevent the lock out from Department of Infrastructure and Transport and Department of Resources, Energy and Tourism. These departments was met by the minister to establish a report stating the amount of loss the economy of Australia would suffer due to the lockout of the company. The ministers further claimed for termination of the lockout and issuance of ninety-day suspension to the company. The Queensland Government accepted this claim. The FWA claimed that the demand of the three union parties are difficult to be accepted and it is creating a lot of damage to the future of the company. The claims and opinions of every member both in the union as well as in the parties differ from each other according to their own interest and the interest of the society. The dispute has already led to a lot of loss for the company as the passengers suffered and the flights were stopped from flying. The customers lost trust in the company as many were asked to go back just after boarding the flight while many got stuck in the flight that already boarded due to sudden dispute by the workers and employees (ph.gov 2017).

Claims Made by the Union and the Company

The decision was taken by the Fair Work Act of 2009 not to fully terminate and end the dispute. It gave a temporary solution that would be value in the future. The FWA wanted to give a proper justification for its findings to the parties and people involved in the dispute rather than just publishing the order. It has been said by the Full Bench that the dispute has already caused a lot of damage and loss to the company in these days. Thus, a suspension of the company for some period put in accordance with the unions’ protected actions will not be succeeded (Fossum 2014). The Full Bench further was of the opinion that the bargaining has always been visible in the industrial sector and there is no reason t stop the bargaining activity as protected industrial action is allowed under the system. Thus, other than the suspension there are other alternative solution to the claims and demand made by the union parties. The Full bench realized the loss that the dispute caused to the Qantas Airways, its customers, tourism business and the industry as a whole. Thus, according to them, just a temporary solution is not enough and no party supported that. The principle issues put forward by the unions were some difficult to resolve while other matters were possible to get resolved. Thus, the FWA decided to take steps further that would be beneficial for the company as well as for the unions (Spencer and Hardy 2014).

The bitter dispute that started between Qantas and the three unions ended with the help of Fair Work Act that started in 2011. The commission was handling the last three claims put forward by the international pilots that have to halt for longer time. Qantas and the pilot union have provided the Fair Work Commission a document stating their decision regarding each matter and also an approval or disapproval regarding few matters. These documents were provided to the FWC until February 2013. Further, FWC witnessed that the document that was put forward by the company in January 2013 was biased towards the Qantas Airlines, which is a wrong case. In that particular document, the company cancelled the job security claim made by the pilot association AIPA. Moreover, FWC also issued a document on 2012 regarding the negotiation placed by Australian Licensed Aircraft Engineers Association and Transport Workers Union.

The dispute also came to an end with the company drawing peace line between them and the aircraft engineers. FWC also intervened in this situation and supported the agreement made for three years for the aircraft engineers, which will help them to retain the flexibility and compete globally. According to the agreement the licensed engineer were entitled for a three percent rise in their wage rate every year and consists some other facility related to long hour works ad retirement benefits. The CEO of the company was also happy that the issues with the aircraft engineers are resolved which led to the past disputes. However, along with these solutions the dispute still exists from the ground workers and the pilots. The company has initiated a restriction on the two unions from causing further industrial issues. These solutions offered a sign of relief that there will be no further dispute from the engineers and customers were certain to get good service from the company. It can be seen that the decisions made by the FWC regarding the dispute did not have any power on the hands of the unions to cause further problems in future. The decisions of the Fair Work Australia resulted in a solution to the dispute caused in the Qantas Airlines of Australia. The company was now expected to negotiate with the unions regarding their claims until 21 days until the final decision is not reached. The company is expected to give a solution in favor of the employees in order to prevent the loss that has already been caused because of the dispute. Government was also of the notion that the dispute will come to an end after the worst system has been formed. Thus, a solution to the dispute has helped the tourism industry of Australia to recover the losses that it has incurred.

Intervention of Federal Minister and Other Parties

Such types of disputes in Australia between the Qantas and its pilots, engineers and workers cause a lot of loss to the industry as well as to the economy. Such types of disputes and rights given to the unions to commence such disputes will never help the company to grow on its own grounds. On the other side, the dispute is also beneficial for the workers to get a suitable working environment for themselves. Even though Fair Work Commission has helped the company to solve some of its disputes by fulfilling the demand made by the pilots and the engineers, yet there are few other demands that are unmet and might lead to several disputes in future (Howe 2017). The demand made by the workers was not met by the company, which might discourage the ground staffs to perform for the company. These ground staffs are as important for the airlines business as the pilots and the engineers of the flight. Thus, Qantas should consider some of the demands made by these workers as well. This will not only save them from further disputes, it will also help them get good ground performance and better customer satisfaction, which it lost during the disputes. Further, the union system in these companies should be banned or their power should be reduced for some reason or the other. The union should be given the right to raise their issues in front of the owners of the company; however, they should not have the right to shut down the business of the company this is because such actions by the unions lead to huge losses for the company and in turn affects the whole economy. These steps will help the company to prevent such disputes from coming up in future and the business to lose their resources and revenue (BC News 2017).

Conclusion

From the above analysis, it can be concluded that the dispute that was started in 2011 between Qantas Airlines and three Unions consisting of pilots, ground staffs and aircraft engineers lead to damage of lot of resources, revenue, loss of customers and downfall of tourism industry in Australia. The dispute was regarding the working condition, wage and rights of the workers. Pilots on the other hand started the dispute to prevent Qantas Airways to shut down its business sin Australia and move to Asia. However, the dispute led to a lot of problems and loss of revenue by the company. The passengers boarding the flights at the time of the disputes got harassed a lot as they were asked to return back with their luggage. However, after such chaos and issues, the dispute got resolved to some extent in some way or the other by the intervention of Fair Worked Commission that negotiated the demands and set one single document benefiting both the company and the union parties. However, the demand of the ground staffs remained unaddressed by the Fair Work Commission, which might lead to further problems. Thus, their demand should also be fulfilled to prevent future disputes and further losses.

References

BC News. 2017. Qantas to fly again after Fair Work terminates dispute. [online] Available at: https://www.abc.net.au/news/2011-10-31/qantas-action-terminated-fair-work-rules/3609158 [Accessed 12 Oct. 2017].

Claytonutz.com. 2017. The Qantas dispute: employer’s lockout, ministerial intervention and Fair Work Australia’s decision – Knowledge – Clayton Utz. [online] Available at: https://www.claytonutz.com/knowledge/2012/may/the-qantas-dispute-employer-s-lockout-ministerial-intervention-and-fair-work-australia-s-decision [Accessed 12 Oct. 2017].

Fossum, J.A., 2014. Labor relations. Mcgraw Hill Higher Educat.

Gutierrez, A.L.C., Panuwatwanich, K. and Walker, A., 2013. Learning from the past: analysis of factors contributing to construction project disputes in Australia. Law and Dispute Resolution.

Heraldsun.com.au. 2017. Pay agreement ends Qantas dispute. [online] Available at: https://www.heraldsun.com.au/business/pay-deal-ends-qantas-dispute/news-story/76b9270cafd2b58a82789e92a81120d8?sv=33b8946d4fef491c2d9f900c988b13ac [Accessed 12 Oct. 2017].

Howe, A. 2017. Fair Work at work. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/federal-politics/political-opinion/fair-work-at-work-20111030-1mqdj.html [Accessed 12 Oct. 2017].

Morton, R. 2017. Qantas, unions and industrial disputes. The cheat sheet you need.. [online] Mamamia. Available at: https://www.mamamia.com.au/qantas-unions-and-industrial-disputes-the-cheat-sheet-you-need/ [Accessed 12 Oct. 2017].

NewsComAu. 2017. AIR WARS: Heroes, villains in the Qantas crisis. [online] Available at: https://www.news.com.au/travel/travel-updates/qantas-crisis-who-won-and-whos-to-blame/news-story/e9f50c9b21eaa19eb4a26fe98a1ea77f [Accessed 12 Oct. 2017].

ph.gov.au. 2017. The gods must be crazy: chronology of and issues in the Qantas industrial dispute 2011 – Parliament of Australia. [online] Available at: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2011-2012/ChronQantas [Accessed 12 Oct. 2017].

pilots, Q. 2017. Qantas wins “right to manage the airline” as FWA ends industrial dispute with international pilots. [online] CAPA – Centre for Aviation. Available at: https://centreforaviation.com/insights/analysis/qantas-wins-right-to-manage-the-airline-as-fwa-ends-industrial-dispute-with-international-pilots-95113 [Accessed 12 Oct. 2017].

Spencer, D. and Hardy, S., 2014. Dispute Resolution in Australia: cases, commentary and materials. Thomson Reuters.

The Conversation. 2017. How Qantas can take the heat out of its union disputes. [online] Available at: https://theconversation.com/how-qantas-can-take-the-heat-out-of-its-union-disputes-933 [Accessed 12 Oct. 2017].