STUDENT ACTIVITY - NOW Economics Issues
Argument about allowed action accelerates
In this activity you will:
• learn when industrial action is allowed under the Fair Work Act;
• analyse data to determine the impact of the Fair Work Act on dispute levels;
• understand that evidence from such data is not necessarily conclusive.
Before completing the activities, you would benefit from knowledge of enterprise bargaining and enterprise
bargaining agreements.
The Qantas dispute has focused debate about the government's Fair Work Act on
its provisions related to allowable industrial action.
When Qantas management, under the leadership of CEO Alan Joyce, grounded its fleet
through a lockout of its staff in late November, opinions varied on the suitability of the
action. Discussion has since moved to the legislation that covers industrial action of this
sort, the Fair Work Act (2009).
Joyce argues that he had no choice but to take this course, as months of action by
three unions representing Qantas employees were badly affecting the company. 1
The union action was prompted by a number of concerns, such as equal pay for Qantas
and Jetstar pilots and the movement offshore of some of the company's operations.
Joyce claimed the on-going disputes were costing Qantas $15 million dollars a week. 2
'Trade unions need to explain why they continue to trash the Qantas brand and are
opposed to changes which will protect the long-term jobs of the majority of their members,'
he said. 3
To end the cost and the uncertainty, Joyce brought the issue to a head by grounding
aircraft with the aim of having the government make Fair Work Australia intervene by
ordering a termination, or at least a suspension, of industrial action. The Authority did
make a ruling that industrial action by both Qantas and the unions must be suspended.
The parties were given 21 days to reach an agreement as part of the enterprise bargaining
round. As the deadline passed without agreement, Fair Work Australia will now have
to arbitrate on the matter.
Disputes in other industries have also highlighted the laws governing industrial action. In
November, nurses in Victoria went on strike, demanding more pay and better conditions. 4
As a result of these and other disputes, some have argued that the provisions of the Fair
Work Act are causing an increase in industrial action, leading to negative impacts on the
economy and disruption to the public.
According to Peter Anderson, the Chief Executive of the Australian Chamber of Commerce
and Industry, recent trends in industrial disputes 'provides evidence that new union powers
in the Fair Work Act have had a damaging economic impact'. 5
Despite the government challenging this interpretation of the trends, the new Minister for
Industrial Relations, Bill Shorten, has announced that the government will continue with its
plan to review the Fair Work legislation. 6
Based on the outcome of the Fair Work Authority's arbitration of the Qantas dispute, many
will form their own opinion on the merits of the legislation.
30 December, 2011
1. Cleary A. 'I had no choice: Joyce' (October 30, 2011), Financial Review @
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http://afr.com/p/national/had_no_choice_joyce_xZPad5JoOF4KkwBRBs02KI Retrieved December 30, 2011.
2. 'Joyce welcomes order to end dispute' (October 21, 2011), ABC News @ http://www.abc.net.au/news/2011-10-31/joyce-reacts-tofair-work-decision/3610038 Retrieved December 30, 2011.
3. AAP 'Unions "trashing" Qantas brand: Joyce' (August 17, 2011), SBS World News Australia @
http://www.sbs.com.au/news/article/1579099/unions-trashing-qantas-brand-joyce Retrieved December 30, 2011.
4. Betts M. 'Nurses gather for march to parliament in fight for better pay' (November 23, 2011), Herald Sun
@ http://www.heraldsun.com.au/news/more-news/nurses-remain-defiant-as-beds-close/story-fn7x8me2-1226204100069 Retrieved
December 30, 2011.
5. Hannan E. 'Strike surge under Fair Work with days lost to industrial action highest since 2004' (December 2, 2011) The Australian
@ http://www.theaustralian.com.au/national-affairs/industrial-relations/strike-surge-under-fair-work-with-days-lost-to-industrial-actionhighest-since-2004/story-fn59noo3-1226211816206 Retrieved December 30, 2011.
6. Department of Education, Employment of Workplace Relations - Media Release - 'Fair Work Act Review announced' (December 20,
2011) @ http://ministers.deewr.gov.au/shorten/fair-work-act-review-announced Retrieved December 30, 2011.
Industrial Action Under the FWA
Industrial action
Industrial action can take a number of forms - including strikes, work bans and lock-outs. It is always preferable for
employers and employees to attempt to settle workplace disputes without resorting to industrial action.
If bargaining for a new enterprise agreement is unsuccessful, protected industrial action may be able to be taken.
Protected industrial action can only be taken when it is in pursuit of a proposed enterprise agreement, and the existing
enterprise agreement or workplace determination has gone beyond its nominal expiry date.
For the action to be protected, a protected action ballot (following a protected action ballot order by Fair Work Australia)
must be held. At least 50% of the eligible employees must vote, and a majority of those must authorise the industrial
action in order for it to be protected. Alternatively, it must be in response to industrial action by the employer. An
employer can only take protected industrial action in response to employee action.
Importance of protected industrial action
The significance of industrial action being “protected” is that it provides protection from legal liability, such as being sued
or being fined, to those engaged in such action.
However, you will not be protected from any legal liability for any action that has involved or is likely to involve personal
injury, or unlawful, wilful or reckless property use or damage.
If an existing agreement covers the employees who'll be covered by the new agreement, industrial action will only be
protected if the nominal expiry date of the existing agreement has passed.
Employers can only take protected industrial action in response to employee industrial action.
Examples of industrial action may include:

when employees don't come to work

when employees put a ban on or limit the amount of work they perform

when employers lock employees out of a workplace.
Note: Workplace safety is everyone’s responsibility and employees have a right to a safe workplace. Stopping work
because of a reasonable concern about an imminent risk to health or safety is not industrial action.
However, the Fair Work Ombudsman may still need to investigate the reasons for a work stoppage to understand if
health and safety issues were present.
(Source: The Fair Work Ombudsman @ http://www.fairwork.gov.au/employment/industrial-action/pages/default.aspx)
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Consider the following scenario. Using the information about industrial action in the box,
identify three problems with the actions of the employees.
The employees of Coco’s Cab Co. were unhappy. They had negotiated their current
enterprise agreement with the employers over a year ago but they still weren’t satisfied
with their leave entitlements and arrangements for part-time work. With two years still to go
until the next enterprise agreement was up for negotiation, some of the more militant
employees decided to strike. They informed their colleagues that they should either stay
home or come to a protest in front of the business headquarters. Most did so, but a few
were not willing to strike and commenced work as usual. This enraged the protest
organisers and as tempers boiled over considerable damage was done to the windows
and other parts of the building’s façade.
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Data on Current Prevalence of Industrial Action
(Data Source: ABS Cat. No. 6321.0.55.001)
The industrial action laws in the Fair Work Act came into force in July 2009. At the time,
claims were made that the new laws would see an increase in industrial action and hence
be a burden for Australia’s economy. Using supporting data from the graph, comment on
the impact of the Fair Work Act on the level of industrial disputes.
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Opinions on Current Prevalence of Industrial Action
When the ABS released the figures for the September quarter, it prompted comments by a
number of stakeholders:
Comment Group 1
Comment Group 2
"It provides evidence that new union powers in the
Fair Work Act have had a damaging economic
impact…. This is a sign that Australia is returning
to a culture of strike first, talk later."
It’s been "several years since we have seen so
much industrial action taken against multinational
companies and in the public sector…. The
industrial dispute statistics released today should
be a huge wake-up call for the government".
"It is irresponsible to use the few high-profile
disputes currently on foot as a reflection of the rest
of the workforce".
"During the September quarter, thousands of
public-sector workers took strike action to protest
against the O'Farrell government's wages
policy…. These disputes are not related to the
operation of the Fair Work Act and it is
disingenuous to suggest otherwise…. The
increased number of days lost during the
September quarter is also a result of the large
numbers of enterprise agreements expiring during
this period”.
"Labor, in the Fair Work Act's key performance
indicators, point to low levels of industrial
disputation as a sign of the act's success - well
today it's clear there is a failure".
(Source: Hannan E. ‘Strike surge under Fair Work with days lost to industrial action highest since 2004’ The Australian, 2 nd December
2011, @ http://www.theaustralian.com.au/national-affairs/industrial-relations/strike-surge-under-fair-work-with-days-lost-to-industrialaction-highest-since-2004/story-fn59noo3-1226211816206, Retrieved December 31 2011)
I.
The comments in the table were made by the people listed below. For each person,
indicate whether their comment is likely to be in Group 1 or Group 2.
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II.
Peter Anderson, Australian Chamber of Commerce
Heather Ridout, Australian Industry Group
Chris Evans, former Workplace Relations Minister
ACTU spokesperson
Eric Abetz, Opposition workplace spokesperson
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After reading the comments, you may want to change your analysis of the graph.
Explain how the data in the graph alone is not sufficient to make conclusive
comments about the impact of the Fair Work Act on dispute levels.
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