Three key unions at Qantas are pressing demands for job security and above-inflation pay rises.

Pilots, aircraft engineers and ground staff, like baggage handlers, catering staff, ramp handlers and refuellers, are all negotiating new enterprise agreements. They are covered by three unions—the Australian and International Pilots Association, Australian Licensed Aircraft Engineers Association and the Transport Workers Union (TWU).

A war of words erupted between Qantas and the unions in March and April.

The 1500 member engineers union has already balloted it members, who responded with a clear majority for industrial action. However, the leadership rushed to say it would not strike over Easter.

Job security is a major issue for the unions. For the 1700 pilots, the worry is that the company is setting up subsidiaries to employ pilots on lower wages and conditions. This happened in 2004, when Qantas set up Jetstar and then Jetstar Asia. Now Qantas talks of more subsidiaries in Asia and New Zealand.

The TWU wants provisions in their new agreement that mean outside contractors get the same wages and conditions as the unionised workforce, thereby discouraging Qantas from outsourcing work and undermining wages.

But Qantas has flatly refused any negotiations on this. Chief executive Alan Joyce has been belligerent, saying the pay and conditions claims are “kamikaze”, “vandalism” and “damaging the Qantas brand”.

Qantas management’s actions have done more to damage “the brand”. The top nine executives gave themselves a 58 per cent pay rise at the end of last year. Qantas has been convicted of a freight price-fixing cartel (see box) and has cutback on maintenance and safety.

In the past Qantas has beaten the unions. If things are to be different this time, it’s important to understand why.

Firstly, it uses divide-and-rule tactics. With 13 unions in Qantas, the CEOs have traditionally taken on one union at a time. The unions, to their detriment, have continued to allow this to happen.

Qantas recently signed off on a deal with the ASU, which covers 8000 employees in telesales, administrative and check-in jobs.

The pilots and engineers EBA talks are open now, while the TWU talks open at the end of June.

Secondly, during every round of negotiations Qantas whines about the parlous state of its profits and the unions agree not to fight for their full claim. In the year the last EBA was agreed, 2008, Qantas made a record $969 million profit.

True to form, Joyce emailed staff recently saying, “It is disappointing that our unions do not understand the severity of our current position.” Qantas’ net profit for the first half of 2010-11 was $241 million.

Giving the lie to its “parlous state” line, in April Qantas announced more flights to London and Los Angeles after its tenth super jumbo began service. It bought three more new planes early this year.

Finally, the company intimidates the unions. The TWU has been threatened with the use of “strike-breakers” trained in Los Angeles. In 2008 it made the same threat about “strike-breakers”, without actually using them. Qantas and Fair Work Australia are currently taking the TWU to the Federal Court for fines, $1 million compensation and unspecified damages for “brand damage” for four-hour strike action it took in 2009.

The tough talk from Qantas shows unions will need to fight, with strike action and solidarity across the workforce, in order to win a decent EBA.

By Tom Orsag

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