Qantas Case Study, Qantas Dispute

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QANTAS DISPUTE

On October 22nd, 2001, the Industrial dispute between QANTAS and its employees was initiated with the offering of a new Enterprise Bargaining Agreement. This proposed an 18-month wage freeze for employees plus a sliding scale profit share scheme. Ten out of twelve unions under QANTAS accepted the terms of the agreement, barring the unions of manufacturing employees (AWU and AMWU). They were holding out for a 4-6% pay rise. On the 8th May 2002, some ten months later, the dispute was resolved when QANTAS agreed to an across the board 6% pay increase. This essay provides an in-depth analysis into the dispute, including causes, the resolution process, the role of stakeholders, and costs and benefits for all concerned.

The industrial dispute occurred primarily because of two reasons, wage demands, and management policy. In both areas of conflict, there was contradiction between the aims of QANTAS management and manufacturing employees.

The wage demands occurred as a conflict between two major stakeholders, employees and employers, as established in both plural and radical views on conflict. QANTAS proposed that all employees accept an 18-month wage freeze, in order to obtain bonus levels if profit margins reach certain targets. They believed that this was in their best interests as the business had the goal of minimising costs in order to maintain international competitiveness. Competitors were entering the market with lower cost structures, which QANTAS could not match, so they had to reduce costs, which in this case was wages. They justified their cause with the fact that 83% of Unions accepted this. The manufacturing employees, on the other hand, wanted to maximise their wages. In this case, they wished only to maintain wage levels, demanding a 4 to 6% increase in wage levels in order to match the increase in cost of living. They argued that QANTAS was unfairly asking them to take a pay cut, as they were highly skilled workers and the poorest paid.

The second cause of the dispute was less significant although still important - management policy. QANTAS had already outsourced three Boeing 767 planes to Singapore for maintenance and proposed outsourcing another seven, costing $14m. The Unions opposed this, contending that QANTAS was exploiting cheap overseas labour and consequently getting lower quality work

These were the two causes of the industrial dispute, which provoked fierce negotiations as well actions over the next ten months.

Both parties believed they had a legitimate case, and neither would budge from their original demand. The conflict would advance through four main stages over the course of its settlement - the negotiation stage, mediation, industrial action is taken, and then conciliation. The process took place within the confines of the law, in particular the Workplace Relations Act 1996.

The first stage - negotiation - is the beginning of the conflict. After QANTAS management proposed the new agreement, and staff discarded it, they began bargaining for a settlement. At this stage, external bodies cannot interfere, apart from the Unions who negotiate on behalf of employees. Negotiations eventually escalated until the CEO of the QANTAS became involved. Under the WRA 1996, this is where the main responsibility for settling the dispute lies. After it became clear that the vehement negotiations would not produce a resolution, both sides began using more extreme methods.

The first use of Industrial action by Unions occurred on the 12th November 2001, when workers held a 48-hour strike, followed by rolling stoppages and work bans. On more than ten occasions after that day, Unions conducted overt industrial action. This included strikes, work bans, rolling stoppages, overtime bans, workers walking off the job, snap strikes, picket lines blocking the entrance to Melbourne Airport, and employees marching on QANTAS' domestic terminal. QANTAS responded with overt industrial action...
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