Custom «Qantas Airline Dispute vs. the Unions» Essay Paper

1.      Introduction

Qantas airline is one of the top 20 airlines in the world. Qantas airline is second oldest airline in the world. The airline was founded in Queensland in 1920 and currently operates approximately 5,500 domestic flights weekly. In October 29th, 2011, the company decided to lock out all employees involved in the protest and all flights in order to pressurize the union to come up with an amicable agreement. According to the company management, the unions were trashing the company’s brand name and making inconsiderable demands. Mr. Joyce and the company management claimed that the unreasonable demands made by the unions were in an attempt to hurt the company. Thus, airline decided to have an emergency lockdown. The management further claimed that the ball was in the unions’ hands, and they had to be willing to end the dispute amicably before any progress could be made. However, the airline offered stranded passengers accommodation, refunds and also alternative flights to their destinations. (Fairbrother et al 2001).

By Sunday, 30th October, the management had offered all employees the ultimatum to either report to work on Monday or lose their jobs. The situation was entirely deadlocked with neither of the parties barging from their stand, so that, eventually, government intervention was inevitable, and the tribunal ordered the airline to resume flights and find another way to resolve the conflict.

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2.      Background Study

Summary of the Article

The article was published in the “New York Times”, in the global business sector. The article was discussing the troubles that were rocking Qantas airways, which was the result of the dispute with the unions representing its employees. A Qantas airway, which is ranked among the worlds top 20 carriers, kept its fleet grounded and declared a lock down for all its employees involved in the strike down. This left almost eighty thousand passengers grounded in their respective areas. Moreover, air transport was immensely paralyzed since Qantas is Australia’s leading airline.

Hundreds of flights were cancelled without notice crippling air transport. This forced the country’s prime minister, Julia Gillard’s government to intervene in the situation. An emergency tribunal meeting was called, and after overnight meetings, the panel still could not come up with a solution. In the meantime, the number of passengers stranded, and in order to ease their situation, the airline offered to give them accommodation, as well as rebook them to other flights. In other scenarios, the airline offered refunds to the passengers. Allan Joyce, the chairman of the company, was on the receiving end of angry passengers, who felt inconvenienced in the situation. However, Joyce, in a press conference, stated that the union had forced his hand by their unreasonable demands and that their strike offs were costing the airline a fortune, each week. This was the outcome of the reduction in the number of flights taken by airlines in a week. Furthermore, Joyce claimed that the union was out to tarnish the company’s brand strategy. (Fairbrother et al 2001).

One of the key grievances of the employees was that the airline was relocating them outside Australia, which was triggered by the company’s decision to open an airline in Asia. The workers felt that the airline would force them to relocate to these areas away from their friends and families. In addition, they were demanding better working conditions and improved wages. These are some of the grievances that were highlighted openly. Thus, when the two groups came together to find a solution, they both deadlocked and could not, come up with a solution.

Most of stranded passengers, which were asked for comments, openly stated that they would never want to fly with the airline, again. For example, one passenger, Samantha Palmer, told the Australian Broadcasting Corporation that he was surely never flying Qantas again. Mr. Joyce had threatened to keep his fleet of 108 aircrafts in 22 world countries grounded until the issue was resolved, since the airline was already losing potential customers and investors lost a lot of money, which was a result of the workers refusal to work overtime, as well as the regular strikes by the workers.

The fact that the airline failed to give any prior notice as required by law before their industrial action raised a lot of controversy. According to the Australian Workers Union, the action had left not only the passengers but also the workers stranded as according to the law, Qantas was supposed to give a 72 hour prior notice. According to the law, the airline's management threatened to lay off any employee who failed to report working on the Monday following the disastrous weekend. Thus, some people claimed that Qantas had literary hijacked the nation. (Benns 2011).

This was true in the sense that the airline was used to transport business people, among other influential individuals, and they remained stranded because of the action. In addition, politicians, especially, the leader of the opposition feared that this move would reflect negatives on the country as fewer people would be willing to travel until the dispute was resolved. This move forced the governments’ involvement, and although, initially they did not intervene, this time the government had to force both parties to appear before a tribunal. The rest of the article contained comments by some of the passengers describing the ordeal and airing their views regarding the issue.

History of the Dispute

The dispute between Qantas and the trade unions representing its workers started

in the end of 2010. This was not just one dispute, but rather a series of disputes that remained unsolved for a while. The dispute started when the airline initiated to launch an airline in Asia. This raised a lot of issues for parties as some staff feared that they would be relocated. Thus, the unions began to bargain for enterprise agreements. When the bargaining was in progress, the workers carried out a number of protected industrial actions, which would not only cost the airlines millions but also culminated in the decision by Qantas. Thus, on 29 October 2011, the airline locked out those employees until they came up with reasonable demands. However, the industrial action after an application by the Federal Minister for Workplace Relations resulted in the termination of any industrial action between the warring parties thanks to Fair Work Australia. This move was to be implemented as from 2 am on 31 October 2011(Benns 2011).

The company employees’ were bargaining for a guarantee that the airline would improve their working conditions as well as their wages. Over the next few months preceding the lock down, a total of 200 meetings were held in a try solve this problem. Hence, the company encountered massive disruptions in their schedule as well as flight delays that cost the company approximately AU$68 million. For example, in July 11th last year, the airlines long-haul pilots unanimously voted to take protected industrial action against the airline in order to ensure they could not be transferred to Asia. Joyce further accused the union of destabilizing the company and trashing their strategy. These constants actions by the employees and their refusal to work overtime forced the airline change their schedules, constantly. This was a key factor that angered the airline because they lost considerable sums of income on a daily basis and, moreover, they lost some loyal customers, due to their inconsistencies in flight timetables.

3.      Discussion

The dispute was between the airline and unions representing pilots, engineers and ground and catering staff. The parties were in disagreements regarding the workers pay and working conditions. The airline staff was afraid that since the company was planning to open an airline in Asia that some of them would be transferred there. In addition, the staff felt their working conditions were deteriorating and needed improvements. Finally, the workers were demanding wage increases. This led to 200 meetings held between the airline management and the union in a span on 9 months that still failed to yield results. As a result, the airline ordered a lockdown for all its employees involved in the dispute. This led to remarkably many passengers getting stranded. However, the tribunal court ordered the airline to put an end to lock down. The tribunal also ordered the two partiers to resolve the dispute promptly. The industrial relations commissions were thus involved in settling the dispute amicably since bargaining was not successful.

The dispute was initially solved through amicable negotiations. In the course of nine moths, both parties held over 200 meetings to negotiate their deal. However, the negotiation process failed, because it did not yield results and both parties were deadlocked. Hence, the airlines decision to ground all their flights and lock out its employees. Throughout these negotiations, the government was never asked to intervene in any way. However, after the stunt the airline pulled, the government ordered the parties involved to solve the dispute immediately. Through the tribunal, they were able to pressurize the airline to resume flights and resolve the conflict without interrupting the transport system (Fairbrother et al 2001).

However, there are other verified ways of resolving disputes that the parties would have applied. Initially, collective bargaining was applied in the Qantas airlines dispute, where employers and employees came together to come up with agreeable terms and conditions of employment in workplaces. These workplaces are either unionized or in a lockout and are usually in the need for exceptional provincial intervention. The Labor Relations Code requires the parties to meet and bargain until a solution is found.

Another method the partied would have applied is mediation. This is where the parties in dispute ask for a mediator. This may not necessarily resolve the conflict as either party can reject the recommendations offered by the mediator. However, a mediator acts as a neutral force in any dispute and is not supposed to be biased in any way. The mediator offers fresh insight on the issue, and in most cases, they yield results. However, the parties must both agree to either follow or reject the mediators’ recommendations, but there is no law that states they have to accept it (Moffit & Bordon 2005).

Labor Tribunals are also extremely common for resolving disputes, in the workplace. This could either be voluntary or involuntary. Voluntary Interest Arbitration is an option available during the collective bargaining negotiation process. It could either be private or public; however, both parties in the dispute must consent to this process. Unlike in mediation, arbitration is binding. In addition, the parties must be willing to foot all associated costs for the process. Tribunals can also be non voluntary, where the parties do not have the right to stroke or lock out. These are also applicable where a public emergency occurs, in order to avert further disaster. For example, in the case of Qantas, the closure of the airline disrupted many economic activities that rely on the smooth operation of the air transport. Thus, it was inevitable for the government to intervene as other innocent bystanders were getting directly affected by the inability of the parties to solve their issues. An example of these compulsory tribunals is the compulsory Arbitration Board. However, this is limited to occupations that provide various public services, for example, fire workers and health workers. This is because, if they go on strike, the consequence would be devastating as human life would be put at risk. Thus, this method is strict, and it determines its own process. This includes deciding the method of arbitration to be used. This means that the tribunal must come up with a solution in a given time span. A Disputes Inquiry Board (DIB) gets established when parties need a neutral third-party assistance to resolve the solutions fast within a given stipulated time line determined by the ministry. Finally, under the arbitration, the government can order a public emergency tribunal, which is a form of compulsory arbitration. This is applicable where people outside the dispute are likely to undergo unreasonable hardships as a result of the dispute. The government offers a timeline in which the dispute must be solved (Moffit & Bordon 2005).

Lawsuits and litigation are also another way of solving a dispute between warring parties. Here, parties air their grievances in a court in front of a judge and a jury. Both parties defend themselves by giving evidence and listening to witnesses and eventually, the court decides on the outcome of the dispute. This way, the parties are forced to abide by the court ruling, and any party that is not pleased with the outcome has the option to appeal. In the case, where the party has sufficient evidence to appeal the case, then another court process is undertaken. However, lawsuits and litigations tend to be stretched over a long time, and many companies do not like having their fate decided by a group of people with little knowledge how the business world operates.

In the case of Qantas airline vs. the unions, the best resolution would be a labor tribunal. This way, both parties would be forced to agree and prevent further disruption in the transport sector. The compulsory arbitration would be necessary since both parties were not willing to soften their stand and make reasonable demands. Since the grounding of the aircrafts and the locking out of employees had caused an immense public disaster, it is my opinion that a public emergency tribunal would also be the best option. This way, both parties would publicly clear their name, and the public would feel more confident that the issue has been resolved. Thus, the people’s confidence in the airline would be restored, and also the process would educate other employees on the importance of joining trade unions (Moffit & Bordon 2005).

In order to restore their customers’ faith in them, the airline had to offer lower prices and compensations to restore their former glory. However, the standoff around the airlines profoundly affected the Australian economy. The move would also affect the image of the country before potential investors. Hence emergency meetings were held by Fair Work Australia, but still both parties maintained their stands; the union wanted the tribunal to suspend the standoff so that they could resume their strikes while the airline maintained that they would ground their fleets indefinitely. Thus, the government was calling for a permanent termination of any industrial action by either party to give more time to settle the dispute.

4.      Conclusions and Recommendations

The dispute between the airline and the union had an extraordinarily tremendous effect on the economy and life, in general. The two parties failed to agree and solve their disputes, and as a result, over seventy thousand travelers were disoriented for at least two days. Some lost business deals, others missed out on family and business events while others missed out on their day to day life. All these people were innocent by standers of two dominant groups having a dispute; these people lost two days of their lives because of poor dispute resolution techniques that were applied by both sides. This should act as a lesson and governments should intervene in such vital disputes since the entire economy is affected, and people suffer, too.

It is my recommendation that companies should practice wage flexibility in order to accommodate changes in wages. They should also strive to motivate their employees since they determine the success of the company. In addition, unions ought to be flexible since if they make oppressive demands on companies, eventually the companies collapse and become bankrupt, hence the employees they were protecting end up unemployed. Finally, the government should implement fiscal policies that protect the organizations from extortion by malicious unions. The policies will protect the rights of employees from abuse by their employers, at the same time. This way, none of the parties will feel oppressed and require harsh actions, like the lock off and the grounding of flights, which resulted in paralyzed air transport in most parts of the world.