Dnata to make 1,000 employees redundant

written by Adam Thorn | September 21, 2020
Dnata press shot
Dnata fears its exclusion from JobKeeper will harm its chance of surviving the coronavirus crisis (Dnata)

Dnata is set to make around 1,000 workers redundant, Australian Aviation can reveal.

The business has yet to publicly confirm numbers but said in a statement on Monday afternoon the job losses would, “where possible”, come through a combination of voluntary redundancy and flexible working.

However, a memo sent to staff obtained by Australian Aviation reveals the numbers will be “in the order of 1,000 roles from our workforce”.

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Dnata has been unable to claim JobKeeper – which provides struggling Australian businesses with $1,500 per employee, per fortnight – because it’s owned by a “sovereign entity”. Dnata is controlled by the Emirates Group, which is in turn run by the state government of Dubai.

TWU national secretary Michael Kaine said Prime Minister Scott Morrison should explain to redundant dnata workers why they were unable to claim JobKeeper payments.

“It is up to him to explain why he chose to shut them out of JobKeeper and why he refused to allow them to maintain a connection to their employer, like millions of Australian workers have been able to do through JobKeeper,” said Kaine.

“What was done to dnata workers is a disgrace and what is happening today is what we warned would happen but the Prime Minister refused to listen.”

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In a cagey statement that didn’t confirm the 1,000 figure, dnata blamed the cuts on COVID-19 causing a 90 per cent reduction in its revenue.

“Considering this operating environment, and like so many other organisations that have been impacted, we have had to take steps such as standing employees down,” it said.

“We now need to right-size our business and ensure it is fit for purpose. We have therefore made the very difficult, but necessary, decision to reduce our permanent workforce.

“Where possible, this will be through voluntary redundancy, along with flexible work arrangements such as part-time work and unpaid leave.

“We strictly comply with all relevant regulations and will provide all possible support to employees throughout this process.”

In May, dnata warned that the Treasury’s decision to exclude dnata from JobKeeper payments put 4,500 jobs at risk.

The catering and ground handling business claimed the Tax Office originally said it could apply for the aid, but then reversed its decision because the company is owned by a foreign government.

A dnata spokesperson said then, “The application of the scheme was critical to the company’s Australian employees, as it meant that we could reinstate previously stood down workers, and keep the rest of the workforce employed.

“We are surprised and disappointed by the government’s decision to retrospectively amend the JobKeeper legislation. This change, at short notice and backdated to 30 March, excludes dnata, an employer of 6,000 Australians, from the JobKeeper scheme.

“The exclusion puts over 4,500 jobs at risk, while leaving employees and their families without income with extremely short notice. As a result, we are also forced to review medium, and long-term viability of dnata’s various Australian businesses including catering, cargo, ground handling, retail and hospitality.”

The JobKeeper package was introduced to provide coronavirus-effected business with an initial $1,500 per employee, per fortnight.

Companies are then legally obliged to pass that payment onto workers in a bid to keep the economy active during the pandemic.

However, the scheme has proved problematic for much of the aviation industry.

Many airport workers, such as those at Newcastle, are also locked out of the financial package because their firms are council-owned, which is another ineligible criteria.

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8 Comments

  • Paul

    says:

    Once again the TWU bringing up a subject that was discussed and finalised months ago. It is a different world today compared to 6 months ago. Unfortunately the unions haven’t made any change.

  • Gary

    says:

    Sorry DNATA, but your hysterical bitching against the PM will not fix the Corona Virus issue. Facts are facts, the taxpayer cannot prop up jobs in a marketplace where the future of long term employment is totally questionable. It’s a very sad situation but lets be realistic, the jobs in aviation before Corona may not return for many years.

  • Steve A

    says:

    Yes, remember that a lot of dnata workers were transferred over time from Qantas as it sold off its businesses to get in cash. So, if Qantas hadn’t done that then those workers would still have been eligible. But the idea of propping up a business owned by one of the wealthiest Emirates in the world, with taxpayer’s money doesn’t sit well with most Australians. It’s really a travesty for those workers and their families.
    It’s another consequence of the AJ “sell off the kitchen sink ” and get in the cash, short-term thinking syndrome.

  • Nicholas Paul

    says:

    No point blaming the PM, the main culprits are the state Premiers.

  • Adrian P

    says:

    So what will be the consequences of Dnata taking over QANTAS ground servicing?
    Also because the Dnata is owned by a foreign government it makes a mockery of the 51% ownership requirement of QANTAS if a significant part of QANTAS operations is under the control of Dnata.
    If Swissport get the contract then the operations would be under the control of a subsidiary of a Chinese Company HNA Group.

  • LC KoolG

    says:

    It must never be the burden of Australian taxpayers to support the businesses of wealthy foreign governments.

  • Paul

    says:

    The PM of this Country, does NOT have to explain his actions, Kaine.
    All that TWU is good at is b#@$&ing, moaning, & getting its’ TWU members to go on strike.
    They should get off their collective rears & provide financial help to their members.
    Fed up with their bullying tactics’, which have gone on for decades’.
    They’re a mob of thugs, who’ve no respect for others’ privacy.

  • Paulo C

    says:

    AJ sells assets to keep the company going on one hand and then takes huge bonuses on the other.. it doesn’t make any financial sense no matter how we look at it.. so why don’t the board members see this as a failing action.

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