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”.
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.”
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.