This is the first time in Qantas’ history that it has sought to terminate an enterprise agreement. It follows six months of negotiation with the Flight Attendants’ Association of Australia (FAAA) and other bargaining representatives for a new enterprise agreement that was rejected by both the union and 97 per cent of crew who voted.
The rejected four-year deal included a pay increase and increased allowances. It also sought to simplify complex and historical rostering conditions that meant around 20 per cent of more than 2,500 long haul crew could only be used on a single type of aircraft – which is unworkable as the airline seeks to recover from COVID.
The need for change to rostering processes was recognised by the Fair Work Commission in an earlier decision[1] relating to bargaining for the agreement.
The FAAA’s counter-offer represented a $60 million cost increase over four years – which is also unworkable.
CEO of Qantas International, Andrew David, said: “Asking to terminate the current agreement is the last thing we want, but we’re stuck between a rock and a hard place. Our best offer, which incorporated several union demands, was rejected by 97 per cent of crew who voted.
“We’re seeking termination because we can’t effectively run our business without the rostering changes we desperately need to properly restart our international network in a post-COVID world.
“The challenges facing airlines are pretty obvious and, even though we’re flying internationally again, it’s clear that we have to operate in a more agile and flexible way than we did pre-COVID in order to recover and match customer demand. The level of complexity we’re dealing with is huge.
“The FAAA ran a scare campaign against the new deal, claiming it would mean redundancies and offshoring despite the fact that we’re currently hiring new crew in Australia. The union’s default position is that the company can’t be trusted and should always give more. That’s simply wrong.
“Termination of the agreement would see crew revert to the modern award, which is the safety net for the industry, while a new agreement is negotiated. Given both the current agreement and the offer we put on the table have pay and conditions significantly higher than the modern award, we clearly don’t want to cut people’s pay. Unfortunately, the process doesn’t let us pick and choose which bits of the current agreement are terminated in order to get the crucial rostering flexibility we need.
“I know our people will be disappointed that it has come to this and so are we. We’re open to putting the same deal that was rejected back on the table, but that would require a change of heart from a union that has continually misrepresented the facts.
“We have sold land, mortgaged aircraft and raised money from shareholders to get through this pandemic. The government has provided hundreds of millions in direct funding to our employees while they were stood down. We don’t think the flexibility we’re asking from our international crew is unreasonable given the challenges we continue to face,” added Mr David.
The Fair Work Commission is expected to start dealing with the termination application over the coming weeks, with Qantas requesting the hearing be expedited.
Qantas’ international flying is expected to remain at around 20 per cent of pre-COVID levels for the next few months, increasing from April onwards as Omicron-related restrictions ease overseas.
This is the third time the FAAA and Qantas have been before the Commission regarding this round of bargaining.
BACKGROUND ON KEY ROSTERING CHANGE
- Airlines around the world are switching to far more dynamic schedules, where different aircraft types are used at short notice to deal with spikes in demand for passengers and freight. (For instance, shifting between an A330 and an A380.) This has been a key response to the instability of the past two years and likely represents a permanent shift for the industry.
- Under the current enterprise agreement, Qantas International crew are limited to working on Airbus A330s only, or on Airbus A380s and Boeing 787s only.
- The change Qantas seeks would enable all crew to be trained to work across all three wide-body aircraft types. In practical terms, this significantly broadens the different destinations crew can travel to and increases flexibility for both Qantas and its crew.
- An added complexity of the current agreement is that it has two different rostering systems, which Qantas wants to rationalise to one that already applies to 80 per cent of crew.
- Overall, these changes would give Qantas more flexibility in how it manages its international operations and competes with airlines that are already doing this.
BACKGROUND ON TERMINATING ENTERPRISE AGREEMENTS
Under Section 226 of the Fair Work Act, the Commission must terminate an expired agreement if it:
- is satisfied that it is not contrary to the public interest to do so, and
- the Commission considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
- the views of the employees, each employer, and each organisation (if any), covered by the agreement, and
- the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.
[1] As part of this decision, Fair Work Commissioner Ryan said, “I accept [Qantas’] evidence regarding Qantas’ position that it requires greater flexibility in [the proposed new agreement] to respond to the uncertainty of international travel”. The same decision found that Qantas had acted in accordance with good faith bargaining in its dealings with the FAAA and employees.