Qantas Group Submission to the Review of the Fair Work Act
1. BACKGROUND
This submission is made on behalf of the Qantas Group. The Qantas Group comprises a
number of companies the most prominent of which are:
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Qantas Airways Limited;
Jetstar;
Qantaslink;
Qantas Catering;
Qantas Freight; and
Qantas Frequent Flyer.
The listing of all the controlled entities is provided at pages 94 to 97 of the Qantas Annual
Report 2011.
The Qantas Group has over 32,000 (full time equivalent) employees (Qantas Annual
Report 2011) of which over 90% are employed in Australia.
The Qantas group is highly unionised. It has 48 Enterprise Bargaining Agreements
(EBAs) and regularly deals with the following unions:
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AIPA (Australian International Pilots Association)
AFAP (Australian Federation of Airline Pilots)
ASU (Australian Services Union)
ALAEA (Australian Licensed Aircraft Engineers’ Association)
AMWU (Australian Manufacturing Workers’ Union)
AWU (Australian Workers’ Union)
CEPU (Communications Electrical & Plumbing Union)
FAAA Long Haul (Flight Attendants Association of Australia Long Haul)
FAAA Short Haul (Flight Attendants Association of Australia Short Haul)
United Voice (formerly LHMWU)
NUW (National Union of Workers)
TWU (Transport Workers Union).
A list of EBAs is included at Attachment A.
This submission is made in response to a number of questions raised in the Fair Work
Act Review Background Paper, January 2012 (Background Paper). The questions
addressed in this submission are based on our experience of the operation of the Fair
Work Act (FW Act) to date.
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Qantas Group Submission to the Review of the Fair Work Act
2. RESPONSE TO SPECIFIC QUESTIONS
2.1 General
Question 2. Can the Fair Work Act provide flexibility for business and is this being
achieved? If so, how? If not, why not?
In our experience the Fair Work Act (FW Act) has had the effect of limiting business
flexibility. This is particularly because of the operation of the following features of the FW
Act:
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Adverse Action provisions;
Transfer of business provisions; and
Removal of prohibited content from enterprise agreements.
Our experience with these provisions is set out in more detail in response to specific
questions. A number of the questions dealing with productivity have been answered as a
set.
2.2 Bargaining and Agreement making
Question 5. Has the Fair Work Act’s focus on enterprise collective bargaining
helped to achieve productivity and fairness?
Question 6. What has been the impact if any, of the Fair Work Act on labour
productivity?
Question 20. Does the bargaining framework promote discussion and uptake of
measures improves productivity?
Question 21. How have employers pursued productivity improvements during
bargaining for a new enterprise agreement? Are there any obstacles to achieving
productivity improvements in bargaining legislation? How do these obstacles
differ from the situation that existed prior to the Fair Work Act?
Question 23. What has been the impact of allowing a wider range of matters to be
included in enterprise agreements by removing the “prohibited content” provided
under the Workplace Relations Act? What has been the impact on bargaining and
productivity? What has been the impact on the employees’ capacity to be
represented in the workplace?
The Qantas Group is not in a position to comment on the impact of the FW Act on
productivity at a system wide level. However, we can comment on the issue so far as it
applies to the Qantas Group.
The Qantas Group has a long history of enterprise bargaining with unions. Qantas
Airways Limited was an early adopter of enterprise bargaining when provisions
formalising bargaining were first introduced under the then Industrial Relations Act 1988.
We have some 20 years of experience in enterprise bargaining with a variety of unions.
The major focus of Qantas Group enterprise bargaining has been to negotiate fair wages
and conditions in a highly competitive industry with significant exposure to the global
economy.
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Qantas Group Submission to the Review of the Fair Work Act
Our approach to enterprise agreement negotiations is to ensure that the outcomes take
account of the challenges facing the airline industry, are fair to our employees and do not
undermine our competitiveness.
Our competitiveness relies upon strong fiscal
management including providing a sustainable return on invested capital to underpin fleet
renewal, maintaining our investment grade credit rating (Qantas is one of only two
airlines in the world to have this rating) and protecting the capacity of the business to
improve productivity and respond flexibly to changing circumstances.
The key issue for Qantas is not how to use the provisions of the FW Act to enhance
productivity but rather how to resist the attempts by a number of unions to use the
provisions of the FW Act to control business strategy and to obstruct change. This has
come about as a direct result of the ‘prohibited content’ provisions being removed in the
FW Act.
In practical terms this has meant that over the last two years Qantas has been faced with
three strategically positioned unions (TWU, ALAEA, AIPA) using protected industrial
action (PIA) to attempt to prevent Qantas using contract labour and or to use Qantas
enterprise bargaining to set the rates in labour hire firms (‘site rates’). It has lead to
industrial action seeking to influence investment decisions and to industrial action
seeking to use workplace agreements in Qantas to set labour conditions in related
entities regardless of whether those entities already have their own workplace
agreements. In addition, at least one union (AIPA) has lobbied for further legislative
change that would directly interfere in the labour arrangements made within the Group in
accordance with current legislation. This experience is detailed further in the case study
below.
It should be noted that this negative experience relates to a small number of powerful
unions that represent a minority of Group staff. This is in contrast to previous enterprise
bargaining experience, and recent experience with most unions representing Group staff,
under the FW Act and the previous Workplace Relations Act 1996 (WRA) Industrial
Relations Act 1988 (IRA), where the Group has successfully negotiated workplace
agreements, covering a traditional range of terms and conditions, usually without
industrial action.
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Qantas Group Submission to the Review of the Fair Work Act
Case Study
Qantas in 2011 faced three major industrial disputes, the most intractable components of
which were union bargaining claims that sought to regulate, control and reduce Qantas
access to third party labour and or business services and to control Qantas business
strategy and the opportunities for the business to improve productivity. As these claims
could not be conceded by Qantas without putting the business at risk, the outcome was
an intractable dispute with damaging industrial action that left Qantas with no choice but
to respond to the union’s industrial action with a proposed lock out. Qantas believes that
these union claims owed their genesis to the removal of the prohibited content provisions
from the FW Act.
The ALAEA, representing licensed aircraft engineers made claims that included the
building of a fully tooled and staffed new heavy maintenance facility, restrictions on third
party labour providers and restrictions on Qantas access to productivity improvements,
including restricting access to the benefits conferred by technological and regulatory
changes. The claims also sought to exclude other unions’ members from undertaking
certain new functions.
The TWU claimed explicit controls and constraints on Qantas’ use of contractors to
provide labour.
Qantas long haul pilots sought to use the current legislation to in effect regulate the terms
and conditions of employment of employees who work for other companies, whether
associated entities or not. The relevant triggers for the application of the clause would be
the use of a codeshare number by an associated entity, or the use of a Qantas designator
or livery by any company.
The long haul pilot claim also sought to:
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Over-ride or supplement terms and condition conditions for persons not covered
by the proposed enterprise agreement, even though such terms have already set
under applicable agreements approved by FWA or its predecessor;
Override or supplement terms and conditions set for employees of other
companies who are engaged in and reside in another country and who work under
contracts set in accordance with the country of residence and citizenship
(including New Zealand, Singapore and the USA).
Qantas believes that the purpose of the claims made by each of these unions is to restrict
Qantas’ freedom to implement its business strategy including the development of multiple
differentiated brands. Its actual economic and business impact if conceded would be to
weaken Australian based airlines relative to their international competitors and partners.
In addition, AIPA claimed Company payment for officials performing union duties.
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Qantas Group Submission to the Review of the Fair Work Act
Question 29. How have the good faith bargaining requirements affected enterprise
bargaining agreement negotiations?
a. Are there ways in which the good faith bargaining requirements could be
improved to better facilitate bargaining?
b. Are the powers possessed by FWA adequate to remedy breaches of good faith
bargaining requirements?
Other than addressing the issue of a union notifying and then cancelling industrial action
as a form of ‘industrial action’ in its own right (see below), in the view of Qantas the good
faith bargaining provisions in the current FW Act do not need to be supplemented by
further prescriptive rules regarding.
The Group has some experience with bargaining in overseas jurisdictions. In particular
our experience of the more prescriptive good faith bargaining provisions under the
otherwise simple and flexible New Zealand legislation has been that these provisions
tend to lead to a focus on process at the expense of expedition and outcomes. The good
faith obligation also, prior to the recent amendments to the New Zealand legislation,
seriously inhibited an employer’s ability to communicate directly with its employees.
2.3 Transfer of Business
Question 34. Does the new broader definition of transfer of business help to clarify
when a transfer occurs?
Qantas provides a good example of the bureaucratic hurdles facing large companies that
seek to provide employees with opportunities across a range of related entities. Qantas
had long standing arrangements, in some cases included in industrial agreements, for
staff to apply for positions between entities that each have their own workplace
agreements. This includes pilots moving from Qantas to Jetstar, pilots and cabin crew
moving between QantasLink and Qantas and customer service and engineering and
supervisory staff moving between entities. Under the FW Act Qantas has been required
to make numerous costly and resource intensive applications to Fair Work Australia
(FWA) for case by case orders to prevent the transfer of instruments in these
circumstances. In some cases staff have lost opportunities as a direct result of these
provisions because of the time periods involved in seeking union cooperation in any
approach to FWA. No Qantas application has been rejected; equally each application
takes considerable resources to process for what, in all cases, are voluntary moves.
In the view of the Qantas Group there should be no transfer of instruments where an
employee voluntarily transfers his or her employment between related entities (that is
there should be no requirement in this circumstance for either an application to FWA for
an order waving the transfer of instrument, or for a three month break in employment).
Question 35. What has been the effect of the new transfer provisions on corporate
restructuring activities such as in sourcing and out sourcing?
The provisions have created a difficult environment in which to make these decisions
Qantas supports the BCA submission on this issue.
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Qantas Group Submission to the Review of the Fair Work Act
2.4 General Protections
Questions 37 – 40.
We note that none of the questions is structured to elicit an answer on whether or not the
protections are necessary or operate in an inappropriate way for business decisionmaking.
Qantas supports the BCA recommendation to restore the sole and dominant test.
The current adverse action provisions are an impediment to business transformation for
established firms within Australia. In our observation these provisions do far more than
protect individuals from discrimination on the basis of union or non-union membership.
These provisions in effect favour new market entrants or the provision of goods or
services by overseas companies over established companies seeking to become more
competitive onshore.
2.5 Industrial Action
59. What has been the effect of the removal of the mandatory four-hour minimum
deduction of pay for protected employee industrial action?
Qantas considers that the removal of this provision has significantly changed the balance
in bargaining, especially for service-based industries. Qantas’ view is that the four hour
minimum deduction for an employee engaged in any form of industrial action should be
reinstated.
Taking Qantas as an example, a one hour stoppage by engineers, ramp employees,
pilots, cabin crew or customer service staff has a direct and significant impact on
operations, schedules and customers, requiring adjustment to schedules and often
causing ‘knock on‘ delays throughout the network that extend well beyond the period of
the stoppage. In short, the impact on the employer and on customers is out of all
proportion to the one hour deduction from pay that would occur under the current rules.
Likewise in service based industries bans that do not involve stoppages can also be very
damaging to the business without any real countervailing consequence for employees.
The ALAEA during the 2011 dispute in Qantas provided an extreme example of how the
current rules can be exploited. In this dispute the union notified a one minute stoppage,
knowing presumably that the administrative cost of making the required one minute
deduction from pay would exceed the actual amount of the deduction, while also
exposing the employer to the risk of prosecution for any error in calculating the numerous
deductions involved.
Another tactic used by both the ALAEA and the TWU in Qantas in 2011 was to
repeatedly notify a stoppage and then cancel the action at the last minute, after
schedules had been recut, passengers advised and other staff disrupted from their
normal rosters. Such capricious behaviour caused significant cost to the employer,
inconvenienced customers and other staff and came at no cost to the union or its
members directly involved in the ‘action’. As one example of this tactic, the TWU notified
a two hour stoppage for all airports to take place between 16:00 to 17:59 on 7 October
2011. The notice was subsequently withdrawn, but the timing of the notification and
withdrawal still meant that this ‘action’ by the TWU still affected 4,343 passengers and
resulted in the cancellation of 17 flights and the rescheduling of 19 other flights. As a
second example, the ALAEA provided separate notices of four hour stoppages at
17 February 2012
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Qantas Group Submission to the Review of the Fair Work Act
different times of the day in Brisbane, Sydney and Melbourne. Each of these notices was
subsequently withdrawn but this ‘action’ by the ALAEA still affected 8,318 passengers
and resulted in the cancellation of 38 flights and the re-scheduling of 27 flights. The
average delay for re-scheduled passengers was 95 minutes.
In the 2011 disputes this ‘reversal’ action was also coupled with public threats of more
significant action in the future causing a loss of confidence in Qantas’ reliability and a
reduction in forward bookings. Lists of the short duration and notified and then cancelled
notices of PIA are included at attachments B (ALAEA PIA) and C (TWU PIA).
The scope for some unions to use the current provisions of the FW Act in these ways
supports an argument for both reinstating the minimum four hour deduction for PIA. In
this context Qantas also supports the BCA recommendations that employer claim action
be available in circumstances where employee claim action has been authorised by a
protected action ballot.
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Qantas Group Submission to the Review of the Fair Work Act
Attachment A: List of Qantas Group Workplace Agreements
ENTERPRISE BARGAINING AGREEMENT TITLE
Australian Services Union (Qantas Airways Limited) Agreement
Qantas Flight Catering Limited Enterprise Agreement
National Union of Workers Qantas Airways Limited – Enterprise Agreement
Qantas Airways Limited(CEPU,CPSU)Enterprise Agreement
Qantas Airways Limited (CEPU) Brisbane Heavy Maintenance
ETOMS ALHMWU (Qantas Airways Limited) Enterprise Agreement
Licensed Aircraft Engineers (Qantas Airways Limited) Enterprise Agreement
New South Wales Nurses’ Association (Qantas Airways Limited) Enterprise Agreement
Flight Attendants Association Of Australia – Short Haul Division (Qantas Airways Limited) Enterprise Agreement
Flight Attendants Association Of Australia – International Division (Qantas Airways Limited) and QF Cabin Crew Australia PTY Ltd
Qantas Airways Limited (AWU, AMWU) Enterprise Agreement
Transport Workers Union (Qantas Airways Limited) Enterprise Agreement
Professional Engineers (Qantas Airways Limited) Enterprise Agreement
Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement
Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement
Qantas Airways Limited (Technical Salaried Staff) Enterprise Agreement
Australian Services Union (Qantas Information Technology Limited) Managers & Technical Consultants Enterprise Agreement
17 February 2012
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Qantas Group Submission to the Review of the Fair Work Act
SUBSIDIARY BUSINESSES
ENTERPRISE BARGAINING AGREEMENT TITLE
Jetstar / The Australian Municipal, Administration, Clerical and Services Union Agreement
Jetstar Airways Pilots Agreement
Jetstar And Flight Attendants’ Association of Australia Enterprise Agreement
Jetstar Airways Stores Agreement
Jetstar Airways Engineering and Maintenance Agreement
Eastern Australian Airlines Aircraft Maintenance Engineers And Trades Assistants Agreement (Tamworth)
Licenced Aircraft Engineers Eastern Airlines Tamworth Engineering Base Enterprise Agreement
Eastern Australia Airlines – Sydney Aircraft Engineers Enterprise Agreement
Eastern Australia Airlines Pty Limited Flight Attendants Enterprise Bargaining Agreement
Eastern Airlines Pilots’ Enterprise Agreement
Eastern Australia Airlines Pty Limited and Australian Service Union Agreement
Eastern Australia Airlines Pty Limited Group 2 Ground Staff Enterprise Agreement
Licenced Aircraft Engineers / Sunstate Airlines Enterprise Agreement
Sunstate Airlines (Qld) Pty Ltd Flight Attendants’ Enterprise Bargaining Agreement
Sunstate Airlines (Qld) Pty Limited Pilots Enterprise Agreement
Sunstate Airlines (Qld) Pty Limited and Australian Services Union Enterprise Agreement
Southern Australia Airlines Pty Limited Engineers Enterprise Agreement
Australian Airlines Flight Crew Enterprise Bargaining Agreement
17 February 2012
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Qantas Group Submission to the Review of the Fair Work Act
Flight Attendants’ Association of Australia Australian Airlines Enterprise Agreement
Australian Airlines – Australian Services Union Clerical and Administrative Agreement
Caterair Cairns Enterprise Agreement
Caterair Sydney Enterprise Agreement
National Union of Workers (Qantas Airways Limited) Brisbane Logistics Agreement
Qantas Airways Limited (AMU, AMWU) Brisbane Heavy Maintenance Enterprise Agreement
Snap Fresh Pty Limited Enterprise Bargaining Agreement
Express Ground Handling Pty Limited Ground Crew Agreement
Jet Turbine Services Pty Limited – JTS Enterprise Agreement
QDS Aircraft Maintenance & Refurbishment Richmond Site EBA
QDS Special Purpose Aircraft Maintenance
QDS Amberley Site Agreement
QDS (Aircraft Maintenance and Refurbishment) Aircraft Support Centre Agreement
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Qantas Group Submission to the Review of the Fair Work Act
Attachment B: ALAEA PIA - Short Duration Action and Action Notified and then Withdrawn
Notice#
1
Date of commencement
Monday, 4 July 2011
2
3
Ongoing from Monday, 4
July 2011 and until further
notice
Tuesday, 5 July 2011
4
Wednesday, 6 July 2011
5
Thursday, 7 July 2011
6
Thursday, 7 July 2011
13
Sunday, 17 July 2011
14
Friday, 15 July 2011
16
Thursday, 25 August
2011 to Friday, 16
December 2011
17 February 2012
Time of Action
The first two hours of any
regularly rostered shift that
commences between 0100
and midday of that day
From 2AM.
Participants
Nature of Action
All ALAEA LAME members who
A two hour work
are rostered to commence work in stoppage.
Melbourne Line Maintenance.
Status
Notice withdrawn
(PIA not taken)
All ALAEA LAME members from
all sections across Australia.
Notice withdrawn
(PIA not taken)
The first two hours of any
regularly rostered shift that
commences between 0100
and midday of that day.
The first two hours of any
regularly rostered shift that
commences between 0100
and midday of that day.
The first two hours of any
regularly rostered shift that
commences between 0100
and midday of that day.
The first two hours of any
regularly rostered shift that
commences between 0100
and midday of that day.
2000
All ALAEA LAME members who
A two hour work
are rostered to commence work in stoppage.
PER Line Maintenance.
Notice withdrawn
(PIA not taken)
All ALAEA LAME members who
A two hour work
are rostered to commence work in stoppage.
BNE Line Maintenance.
Notice withdrawn
(PIA not taken)
All ALAEA LAME members who
A two hour work
are rostered to commence work in stoppage.
ADL Line Maintenance.
Notice withdrawn
(PIA not taken)
All ALAEA LAME members who
A two hour work
are rostered to commence work in stoppage.
DWR Line Maintenance.
Notice withdrawn
(PIA not taken)
LAME member Wesley Bell from
MEL
All LAME members Australia
wide.
Line and base maintenance –
different days of the week
according to location.
PIA taken and concluded
(30 mins pay deducted)
PIA taken and concluded
(1 min pay deducted)
PIA taken and ongoing
(1 hr pay deducted).
“Offer’ of covering own PIA
with overtime at penalty rates
1000 AM local time in each
location
At the commencement of shift
for any individual working a
night shift on the designated
day in that location.
11
Partial ban on overtime
30-minute stop work
meeting.
One-minute stoppage.
On hour stoppages.
NOTE: To prevent
disruption of Qantas
flights, ALAEA members
Qantas Group Submission to the Review of the Fair Work Act
24
Monday, 10 October 2011 1600
25
Monday, 10 October 2011 1500
26
Monday, 10 October 2011 1700
28
Tuesday, 18 October
2011
17 February 2012
0800-1200 (midday)
All LAME members who will be
covered by the proposed
Agreement, who are rostered to
work in Brisbane.
All LAME members who will be
covered by the proposed
Agreement, who are rostered to
work in Sydney.
All LAME members who will be
covered by the proposed
Agreement, who are rostered to
work in Melbourne
(Tullamarine).
All LAME members who will be
covered by the proposed
Agreement who are rostered to
work in Adelaide.
12
(primarily those ending
dayshift) will be available
to work overtime to cover
all stoppages. The
ALAEA office will be
available to assist in
coordination of overtime
for this purpose.
A four (4) hour work
stoppage.
not taken up.
A four (4) hour work
stoppage.
Notice withdrawn
(PIA not taken)
A four (4) hour work
stoppage.
Notice withdrawn
(PIA not taken)
A stop work meeting.
Notice withdrawn
(PIA not taken)
Notice withdrawn
(PIA not taken)
Qantas Group Submission to the Review of the Fair Work Act
Attachment C: TWU PIA - Short Duration Action and Action Notified and then Withdrawn
Notice#
Date of commencement
Time of Action
Participants
Nature of Action
Status
1
Tuesday, 20 September
2011 to Thursday, 22
September 2011
7.00am (20 Sept) to 6.59am (22 Sept) EST, Sydney
All TWU members
3.30pm (20 Sept) to 3.29pm (22 Sept) EST, Canberra
employed by Qantas
7.00am (20 Sept) to 6.59am (22 Sept) EST, Melbourne
Airways Limited
7.00am (20 Sept) to 6.59am (22 Sept) EST, Hobart
10.30am (20 Sept) to 10.29am (22 Sept) ADL local time,
Adelaide
6.00am (20 Sept) to 5.59am (22 Sept) DAR local time,
Darwin
5.00am (20 Sept) to 4.59am (22 Sept) PER local time, Perth
6.00am (20 Sept) to 5.59am (22 Sept) EST, Brisbane
8.00am (20 Sept) to 7.59pm (22 Sept) EST, Townsville
9.00am (20 Sept) to 8.59pm (22 Sept) EST, Cairns
7.00am (20 Sept) to 6.59am (22 Sept) (local time), Other
Ports
Higher Duties Bans - Bans
TWU members will not withdrawn.
perform higher duties
for a period of 48
hours commencing, 20
September 2011.
2
Tuesday, 20 September
2011 to Thursday, 22
September 2011
7.00am (20 Sept) to 6.59am (22 Sept) EST, Sydney
TWU members
3.30pm (20 Sept) to 3.29pm (22 Sept) EST, Canberra
employed by
7.00am (20 Sept) to 6.59am (22 Sept) EST, Melbourne
QCatering Limited
10.30am (20 Sept) to 10.29am (22 Sept) ADL local time,
Adelaide
5.00am (20 Sept) to 4.59am (22 Sept) PER local time, Perth
6.00am (20 Sept) to 5.59am (22 Sept) EST, Brisbane
Higher duties ban –
TWU will not perform
higher duties for a
period of 48 hours
commencing at the
times indicated.
Paperwork bans –
TWU will not perform
paperwork required for
the QAD system for a
period of 48 hours
commencing at the
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13
Bans
withdrawn.
Qantas Group Submission to the Review of the Fair Work Act
Notice#
Date of commencement
Time of Action
Participants
3
Thursday, 29 September
2011
Two hour stoppage from:
11.00am AEST
9.00am ADL/DAR
9.00am PER
TWU Delegates
employed by Qantas
Airways Limited and
Q Catering Limited –
listed below: (52
employees
nominated by name)
5
Friday, 7 October 2011
4.00pm and ending 5.59pm local time, all ports.
TWU members
employed by Qantas
Airways Limited and
Qcatering Limited
8
Tuesday, 25 October
2011
TWU members will stop work for a period of one (1) hour,
as follows:
QANTAS AIRWAYS LIMITED & Q CATERING LIMITED
Port
Dom/Int’l/All
Action Commences*
Brisbane
All
7.00am
Melbourne
All
8.00am
*times for each port are local times.
17 February 2012
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TWU members
employed by Qantas
Airways Limited
AND Q Catering
Limited.
Nature of Action
times indicated.
Status
Bans and limitations
on job functions –
TWU members will not
login to the QAD
system for a period of
48 hours commencing
at the times indicated.
2-hour stop work
Withdrawn.
meeting.
Two- hour stop work
Withdrawn
One (1) hour stop
work.
Withdrawn
Qantas Group Submission to the Review of the Fair Work Act
Notice#
9
Date of commencement
Wednesday, 26 October
2011
Time of Action
Participants
TWU members will stop work as follows:
QANTAS AIRWAYS LIMITED & Q CATERING LIMITED
Port
Dom/Int’l/All
Commences
Sydney
All
3 hours
Canberra
All
1 hour
Cairns
All
1 hour
17 February 2012
Action
7.00am
4.30pm
7.00am
15
TWU members
employed by Qantas
Airways Limited
AND Q Catering
Limited.
Nature of Action
Work stoppages.
Status
Withdrawn