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What matters in Qantas confrontation


The Qantas industrial dispute has generated enormous controversy and is likely to make a major contribution to the history of Australian industrial relations.

As in many other industrial disputes, all sides will claim some kind of victory. The broader implications for Australian industrial relations and the future of national regulation are already being debated.

We have a politically-charged debate in which some who usually oppose the use of an industrial umpire have criticised the Commonwealth Government for being too slow to send the dispute to the industrial umpire, Fair Work Australia (FWA). If we are to cut through the spin and politics, we need to understand the operation of the current system of industrial regulation.

When the Howard Government introduced its Work Choices legislation in 2005 it did away with a century of national industrial regulation, based on the conciliation and arbitration power in the Australian Constitution.

Work Choices abolished the general ability to have an industrial dispute conciliated and, if needed, arbitrated. This was replaced by a more robust system of collective bargaining, sometimes called an industrial 'law of the jungle', where appropriately notified industrial action was 'protected' and where safety valve arbitration was only available in carefully defined exceptional cases.

This part of Work Choices was continued under the Fair Work Act, introduced by Labor in 2009. Under the current provisions, protected industrial action can be suspended or terminated where there is a threat to life, personal safety, health or welfare, or where it would 'cause significant damage to a significant part of the Australian economy or a small part of it'. 

So the Qantas dispute is not really about the respective merits of the current and previous legislation, but about the way in which our collective bargaining system has operated under both sides of politics. The dispute, more than any other under the new regime, demonstrates what we lost when the conciliation and arbitration system was all but abolished in 2005. 

The essential facts of the Qantas dispute are reasonably straightforward. For some months during 2011 various unions with Qantas membership had taken protected industrial action in support of negotiations for new enterprise agreements. These legal actions had put substantial pressure on Qantas, consistent with the operation of a robust system of collective bargaining.

While there was economic pressure on Qantas itself, it was far from clear that it was sufficient to justify the suspension or termination of the protected action.

Qantas argued publicly that the uncertainty in its operations (the threat of future stoppages) was impacting on tourism, but the fact that it did not call for the end of protected industrial action and the use of conciliation and arbitration recognised the stringency of the statutory provisions.

Furthermore, the unions were showing that they would continue to apply pressure without providing the grounds to suspend or terminate their protected actions. Qantas appears to have taken the view that it could probably get better industrial outcomes by arbitration than through the wringer of industrial bargaining.

Qantas was between a rock and a hard place. But such a position is perfectly acceptable under this new system of industrial relations.

Qantas cut the Gordian Knot by taking an action which, if followed through, would lead to significant damage to the Australian economy. On Saturday it gave notice that it would lock out a major part of its workforce from 8pm on Monday. The lockout would shut down its entire operations. It was legally entitled to take this protected industrial action.

The Qantas lockout opened the door to the cessation of industrial action and arbitration. This is the critical passage in the FWA decision given in the early hours of 31 October 2011:

It is unlikely that the protected industrial action taken by the three unions, even taken together, is threatening to cause significant damage to the tourism and air transport industries. The response industrial action of which Qantas has given notice, if taken, threatens to cause significant damage to the tourism and air transport industries and indirectly to industry generally because of the effect on consumers of air passenger and cargo services.

However, it was Qantas' decision to shut down the entire airline from 5pm on Saturday until the start of the lockout period that has generated most public debate. It was not protected industrial action and many believe it to be unjustified.

This is where Qantas' reputation is most at risk. No doubt, more than a few lawyers are contemplating a class action on behalf of those affected throughout the world. In due course a court, here or overseas, may tell us whether the shutdown was justified.

The important issue here is whether Qantas should have been required to threaten substantial damage to itself, and enormous collateral damage to the national economy, before it could gain access to arbitration.

The transition to the new industrial relations system deprived Australia of a system of industrial regulation that served the country well for a century. The dispute will generate debate about whether we should return to this earlier system which, by the way, delivered great national productivity improvements from the late 1980s until the early years of this century.

A more limited question is whether the provisions for conciliation and arbitration should be relaxed.

The Catholic Church has been an advocate for the conciliation and arbitration system. For example, in his address to the Transfield workers in 1986 Pope John Paul II said:

Australia has a long and proud history of settling industrial disputes and promoting cooperation by its almost unique system of arbitration and conciliation. Over the years this system has helped to defend the rights of workers and promote their wellbeing, while at the same time taking into account the needs and the future of the whole community.

In its submissions to the Senate inquiry into the then Fair Work Bill, the Australian Catholic Council for Employment Relations argued that the proposed 'safety valve' provisions were too limited:

The provision depends on disruption, not merit. There will be no prospect of arbitration for those workers, and employers, who cannot sustain the harm that the proposal requires ... This is particularly disadvantageous to low paid and vulnerable workers.

The Qantas dispute demonstrates that the Commonwealth's forthcoming review of the Fair Work Act 2009 should include a review of the extent of the conciliation and arbitration power available to FWA. As John Paul II noted, that system was based on cooperation, not confrontation. We must look to a system in which a party to an industrial dispute does not need to generate the level of disruption seen in the Qantas dispute before the industrial umpire can help resolve the dispute. This is the real message of the dispute.

Brian LawrenceBrian Lawrence is Chairman of the Australian Catholic Council for Employment Relations. 

Topic tags: Brian Lawrence, Qantas, Fair Work



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Existing comments

Thank you Brian for clearly pointing out the costs that we,as a nation, are incurring as a result of the ditching of our time-honoured conciliation and arbitration system by Howard and Reith (and Abbott) and the failure by Rudd and Gillard to restore it.

Howard and Reith wanted the law of the jungle because they thought that employers would do better in that environment and they could thereby destroy organised labour and put individual employees in a subservient position. It was intended as a return to the Master/Servant relationship. Reith is still arguing against arbitration, even in this present case, because he wants the unions involved destroyed whatever it might cost the community.

It was attitudes like those of Reith and Joyce (and the bloody-mindeness of some unions like the present-day TWU) that led to the disastrous industrial disputes of the late nineteenth century that persuaded the Commonwealth government to legislate for a system of compulsory conciliation and arbitration to bring order and equity to the employer/employee relationship.

Ginger Meggs | 31 October 2011  

Slowly but painfully we are being shown the new world laid before us as the natural outcome of the legislative agenda of the Howard years.

graham patison | 01 November 2011  


The Pope does not support the right of labour to withdraw itself from work at all, which has to be a primary human right.

Where else in the world has the Vatican ever promoted the old style IR system?

Nowhere at all!

Funny though that everyone supports the bosses ability to have a strike of their capital.

Also, it is no good blaming Howard for this situation. He is not the PM and has not been in government for a while.

Gillard wrote the Fairwork rubbish, with the assistance of all Howard's public servants that Rudd failed to kill off.

What this does show, is that Gillard failed as an education minister AND as the work place minister too.

The truth is, many in the ALP, like Martin Ferguson who was bleating his support for Joyce very early on, no longer have any right to be regarded as 'labour' supporters.

The decline started under Hawke, continued under Keating, who hated unions, was kicked along by Brereton, the great DLPer, and was fully embraced by Rudd and Gillard after Howard, when they could have brought about some 'reform', a word that nowadays is linked to going backwards not forwards.

Harry Wilson | 01 November 2011  

I suppose in an article limited to the industrial relations of the Qantas dispute it would be unreasonable to expect much comment on the commercial aspects of running an international airline.

The commercial question behind this dispute is how is Qantas going to survive in a globalised market.Qantas has little option but to cut costs wherever it can if it is to compete against airlines that get their fuel cheaper, have lower maintenance costs, and pay their crews less. There is no point in Qantas making promises of job security to its staff (company wide), if it wants to have the flexibility of finding staff elsewhere at a cheaper price. That's business.

Uncle Pat | 01 November 2011  

Brian makes an important criticism about access to arbitration under the present legislation, but I question the premise that Qantas was 'required' to "threaten substantial damage to itself, and enormous collateral damage to the national economy". That view assumes that the difficulties in gaining access to arbitration justified a very deliberate decision by a powerful corporation to gain a tactical IR advantage by damaging its passengers, its staff, and the Australian people through direct ("collateral"?) damage to tourism, the economy and the reputation of the 'national carrier' and the nation.

Peter Johnstone | 01 November 2011  

Though I totally agree with your message on the dispute of cooperation rather than confrontation,the million dollar question remains who should tone down their concerns to foster cooperation?

Qantas to me seem to have boxed themselves into a corner. They have negotiated a wage bill up to unsustainable level under the prevailing industry conditions. For example, with pilots reportedly earning up to AUD500,000 p.a well above the countries prime minister's pay, it beats business logic to negotiate further increment under cut throat competition.

Put it this way, if Qantas bows to pressure and negotiate further wage increment that is not supported by the business performance; then a few years down the line the company winds up, who is the loser? of cause both share holders and the unsuspecting employees.

In the mean time, perhaps a "champion" trade union boss will have made his name to the top of politics happily wowing the same jobless former employees to vote him into some office with the promise to solve their unemployment woes. The paradox of people collective power.

Hillan Nzioka | 01 November 2011  

Uncle Pat raises a good point. The omission of the international aspect of running a business was a major fault with Brian Lawrence's article. Gerard Henderson examines it in an opinion piece today in the SMH. Here is the link.


Patrick James | 01 November 2011  

I stopped teaching The Politics of Industrial relations a long time ago--in fact when we stopped having 'industrial relations'. Brian Lawrence is on the money here. While the old C & A system didn't stop strikes it generally kept them brief, because there was clear access to a tribunal which had appropriate powers to settle disputes.

Brian Costar | 01 November 2011  

Uncle Pat and Patrick James have made an important point, but it's not a new problem. The inevitable ends of un-regulated competition were addressed by Engels in 1845 in the chapter on 'Competition' in his polemic 'The Condition of the working class in England in 1844'. It's not irrelevant to the condition of the employed in Australia in 2011.

Ginger Meggs | 01 November 2011  

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