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Qantas cut staff to reduce union influence, says TWU in court

written by Adam Thorn | April 14, 2021
A Qantas Boeing 737-800, VH-TJO, shot in June 2011 (Craig Murray)
A Qantas Boeing 737-800, VH-TJO, shot in June 2011 (Craig Murray)

The TWU argued in the Federal Court on Tuesday that Qantas outsourced the roles of more than 2,000 workers to reduce union influence.

Its lawyer pointed to language in reports such as “window of opportunity” and also to documents that suggested negotiating with the union to make savings “appeared difficult”.

The TWU is taking legal action to force the airline to rehire the redundant staff. Its central argument is that the decision to remove them contravened the Fair Work Act because employees at the new companies will now no longer be entitled to terms secured through enterprise agreements. Qantas denies the allegations.

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The TWU’s barrister, Mark Gibian SC, cross-examining, cited a report by industrial relations consultant Justine Oldmeadow that highlighted the strong union membership of the affected workers.

“Ms Oldmeadow speculates why that might be the case and then indicates that the TWU has not been able to organise significant membership among third-party providers,” said Gibian.

“So… having read that, your understanding was that third party or outsourced suppliers had or were less likely to have high levels of union membership.”

Qantas executive manager airports Colin Hughes said in response he “had no reason not to believe it to be true”.

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Gibian then suggested the phrase “window of opportunity” mentioned in reports to Qantas executives implied the airline had to act quickly before workers could take industrial action.

The court also heard evidence that Qantas management prepared a list of “pros and cons” relating to outsourcing the workers, which included brand damage, poor publicity and a negative effect on government and industrial relations.

Both Qantas and Jetstar removed ground handling operations this year at the Australian airports where the work was done in-house, which included Sydney, Melbourne and Brisbane, shifting them to businesses including Swissport and dnata.

The final decision was eventually taken by Qantas’ head of domestic and international, Andrew David, which resulted in savings of more than $100 million a year.

Qantas said earlier this week that COVID meant it had to make major changes in order to survive.

“We recognise that this was a difficult decision that impacted a lot of our people but outsourcing this work to specialist ground handlers who already do this work for us in other cities across the country is not unlawful,” it said in a statement.

The case continues.

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7 Comments

  • Steve A

    says:

    Previous posts indicate that the savings were $100 million over 4 years, not per year, as stated above.
    This includes savings for not having to purchase new ground equipment, which is a substantial amount of that total.
    So, the savings from reducing staff is not as great as Qantas management imply.
    Compare this saving over 4 years compared to the more than $3 billion spent by management on share buy backs.
    It’s infinitely miniscule by comparison.
    Who is actually costing Qantas shareholders the most losses, the ground staff or the management?

  • Ben

    says:

    It would appear that the lack of union participation in the third party providers is a TWU problem not a Qantas one! They are desperate to avoid the massive lack of income that is incoming from all these folks leaving the union! TWU contracts were excessive and not even remotely in line with the market. Even 10 years ago baggage supervisors at QF were on 100+K! Additionally as staff they get staff travel and if the airline is to provide ground handling they also need to provide the GSE (and the maintenance of same) which is a significant cost in itself. The TWU is trying to paint the case as ‘Qantas v Unions’ when realistically what is on trial is ‘big unions living outside reality’.

    Qantas has been losing contracts to provide for international carriers in Australia, which only compounds the ineffiencies. The ‘union influence’ is only a mere symptom. TWU forced through unrealistic pay for their members with their heavy handed tactics, which was great for their members but it also lit the fuse on when that was going to blow up in their faces. No airline in the world can afford to offer several thousand dollars/pa over market rate to their employees. Otherwise thats right into the ‘full pay to the last day’ scenario, and the last day arrives much faster than it needed to.

    • Vannus

      says:

      Yes, Ben, through the various unions’ Strike actions’, most notably Aug-Oct incl 2011, they lost QANTAS 100’s of millions’ $ Income.
      They didn’t care about the employees’, never have, it’s just about keeping themselves, & their puppet-masters employed.
      In this covid age, companies’ must do what they can to stay afloat.
      The unions’ can go jump if they don’t like it. They’re still living in the ‘70’s, which are no long relevant, neither are unions.

    • Anna Tsiamis

      says:

      Ben, Qantas has been asking for extra money when it bids for the international carriers that is a (Management fee). Were is other companies bids include this in their bid!

      • Murray

        says:

        What? Your comment makes no sense. You were trying to say what, exactly?

  • James

    says:

    Adam.
    That’s not an 800 series 737….

    You guys should know that.

  • Graham Haxell

    says:

    It may not be unlawful, but it certainly is without candour and any thought for the employees.

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