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Fair Work ruling sets timeline

QANTAS and the three unions involved in the airline industrial dispute have until November 21 to settle their differences and thrash out a new enterprise bargaining agreement.
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By InvestSMART · 1 Nov 2011
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By InvestSMART ·
1 Nov 2011
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QANTAS and the three unions involved in the airline industrial dispute have until November 21 to settle their differences and thrash out a new enterprise bargaining agreement.

The termination ruling which took effect from 9am yesterday is unprecedented and is the first time Fair Work has been asked by the government to step in on an industrial dispute. With Qantas and the unions now forced back to the negotiating table, Fair Work will act in a mediating role, but will not interfere in the bargaining process.

If both parties agree they are close to a deal at the end of the 21 days but need more time to resolve the dispute, an application can be made to Fair Work to extend for a further 21 days.

But if there is a stalemate, Fair Work will step in and rule on the outstanding matters.

The employment agreement will then be binding for at least three years and any further industrial action relating to pay and work conditions will be unlawful.

Key differences will need to be swiftly resolved between the airline employer and its employees if there is any hope of meeting Fair Work's deadline.

The Transport Workers Union has called for a 5 per cent pay rise per year, with an additional 1 per cent in superannuation protected against a rise in CPI. The Australian and International Pilots Association is petitioning for a 2.5 per cent pay increase, each year, for three years. The Australian Licensed Aircraft Engineers Association wants a 5.33 per cent pay rise to cover wages plus allowances, every year, for three years.

The three unions are united that there must be no outsourcing of jobs.

The rolling campaign of work stoppages began in August, after Qantas posted a $249 million profit and announced a major restructure that included setting up two new subsidiary carriers in Asia, with 1000 jobs made redundant and replaced by cheaper labour.

The unions are demanding reciprocal conditions and job security guarantees for employees of any Qantas subsidiary businesses overseas.

But Qantas chief executive Alan Joyce remains defiant, claiming it "will kill the airline".

Qantas has to date rejected the unions' demands, saying that TWU members are paid 12 per cent higher than their equivalents at Virgin, pilots earn 50 per cent more than peers at Virgin and that union members want to be paid to do work that no longer exists with advent of new aircraft.

Transport Workers Union national secretary Tony Sheldon said he hoped to resolve the dispute with Qantas.

"If the company negotiates in good faith, which is what we're expecting the company to do, the next 21 days we will not be taking industrial action," he said.

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Frequently Asked Questions about this Article…

The article says Fair Work issued an unprecedented termination ruling (effective from 9am the day before the story) that forces Qantas and the three unions to negotiate a new enterprise bargaining agreement within 21 days — until November 21. Fair Work will act as a mediator but won’t interfere directly in bargaining.

If there’s a stalemate, the article explains Fair Work will step in and rule on outstanding matters. Any employment agreement it imposes would be binding for at least three years, and further industrial action relating to pay and work conditions would be unlawful.

Yes. The article states that if both parties agree they are close to a deal but need more time, they can apply to Fair Work for a further 21‑day extension.

According to the article: the Transport Workers Union (TWU) wants a 5% pay rise per year plus an extra 1% in superannuation protected against CPI; the Australian and International Pilots Association (AIPA) seeks a 2.5% pay increase each year for three years; and the Australian Licensed Aircraft Engineers Association (ALAEA) is asking for a 5.33% pay rise (covering wages plus allowances) each year for three years. The unions are also united in opposing outsourcing of jobs.

The article reports the rolling stoppages began in August after Qantas posted a $249 million profit and announced a major restructure that included creating two new subsidiary carriers in Asia, making 1,000 jobs redundant and replacing them with cheaper labour. Unions oppose outsourcing and want job security and reciprocal conditions for subsidiary employees overseas.

The article says Qantas CEO Alan Joyce warned the demands "will kill the airline." Qantas has rejected the unions’ demands, arguing TWU members are paid 12% more than equivalents at Virgin, pilots earn 50% more than Virgin peers, and some union members want pay for work that no longer exists with newer aircraft.

The article quotes TWU national secretary Tony Sheldon saying that if Qantas negotiates in good faith, the unions will not take industrial action during the next 21 days. However, if negotiations stall and Fair Work does not extend the period, Fair Work could then rule and make an agreement binding.

Based on the article, investors should note the fixed 21‑day negotiation window (with a possible 21‑day extension), the unions’ specific pay and no‑outsourcing demands, Qantas’ rejection of those demands and warning from its CEO, and that a Fair Work ruling — if required — would produce a binding agreement for at least three years and make further pay‑and‑conditions industrial action unlawful.