Qantas and unions continue to trade blows - Can anybody land the killer punch?

Tue, 1 Nov 2011

Qantas returned to the skies yesterday after Fair Work Australia granted a full termination of the protected industrial action against Qantas.

Qantas is eager to create flexibilities in its labour cost structure under its flagship Qantas brand in order to increase its global competiveness.  Two of the three unions see this as a threat to "off shore" their members' jobs.

The FWA decision to terminate bargaining in three separate enterprise agreements has polarised opinions on the merits of the respective approaches to bargaining taken by Qantas, the unions and the Government.  It also raised questions by politicians and commentators on the role of Fair Work Australia. Whilst the public and the stock market have reacted positively to the resumption of flights, an important question still looms as to whether Qantas' and the unions' respective strategies will ultimately provide them with an end that justifies the means.

Yesterday's FWA decision needs to be put into context as round 13 of a 15 round boxing match.  Both boxers are heavyweights and not unfamiliar to industrial disputes.  They have been sparring and fighting without the ability to land a killer blow operationally, legally or in the PR arena. 

The FWA decision now imposes a strict timetable on the parties to resolve the dispute within 42 days (an initial period of 21 days, extendable for another 21 days if a resolution has not been reached but there is still hope of an outcome) or face FWA stepping in and imposing an outcome on them via a workplace determination - this being the final and deciding round of the match. 

Under the Fair Work Act 2009, FWA is compelled to step in and arbitrate if the parties cannot cut a deal.  This obligation on FWA (then the AIRC) also existed under WorkChoices but via a slightly different mechanism.  If the dispute goes to arbitration then FWA must make a determination on the issues that the parties are fighting about.  In doing so FWA can only take into account very broad concepts - the merits of the case, the parties' and public's interests and productivity impacts - which could play out either way. 

Given the strong stances taken by Qantas and the unions it is possible that no deal will be concluded before the 42 day deadline passes.  Indeed it may be a strategy by one of the boxers to await the points decision. 

The outcome of any FWA workplace determination is hard to predict, however one that grants even a partial concession to the unions' onsite rates or job security clauses (which are not an uncommon feature in collective agreements since more than five years) would be seen by the unions as a substantial win and casts doubt on Qantas' strategy from a cost vs benefit perspective. 

The boxing match is not over yet.