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Qantas outsourcing was long-term plan, argues TWU in court

written by Adam Thorn | April 13, 2021
Pristine Qantas Link DHC-8 VH-TQG approaches YSSY from Lord Howe Island 21.11.20
Pristine Qantas Link DHC-8 VH-TQG approaches YSSY from Lord Howe Island 21.11.20 (Justin McCoy)

The TWU presented evidence in the Federal Court on Monday that suggested Qantas used COVID as an opportunity to speed up pre-existing plans to outsource staff.

Qantas denied the accusation, arguing that the decision to make more than 2,000 ground handlers redundant was due to the “extremely severe” financial impacts of the pandemic.

The union is attempting to force the airline to rehire more than 2,000 staff, arguing 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.

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On the first day of proceedings, the court heard a report by Qantas chief operating officer Paul Jones, dated 27 April 2020, that said the operating environment presented a chance to speed up change through the outsourcing of ground handling operations.

It discussed the “challenges of ASU (Australian Services Union) rates” it claims were 25 per cent above the market rate.

Qantas executive manager airports Colin Hughes said the document was merely a “problem statement” designed to consider a number of outcomes.

The TWU’s barrister, Mark Gibian SC, cross-examining, said, “The heading is ‘Providing a pathway to ­implement third-party labour supply’ — that’s what was being contemplated.”

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“I think it was contemplating a number of things,” Hughes replied.

Qantas’ barrister, Neil Young QC, said the decision to outsource the staff by Domestic and International chief executive Andrew David was based on the difficult financial conditions created by the pandemic.

“The immediate and ongoing financial impact to the Qantas Group of the pandemic has been extremely severe. There was a combined revenue loss of $11 billion from March to December, a 91 per cent reduction in underlying profit for the 2020 financial year, a $2.7 billion tax-free loss for the fiscal year and a $1.5 billion statutory loss,” Young said.

“Because of those circumstances, each business unit was tasked with delivering significant cost reductions and restructuring savings.”

Young said that the airports division was tasked with a number of cost-cutting targets, including reducing costs by 72 per cent in the 2021 financial year. Managers decided only outsourcing met all of their strategic objectives.

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 case continues.

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3 Comments

  • Mitchell

    says:

    This is another case TWU will lose. Giving people supposed ‘hope’ is disgusting, but hey, they’re unions’.
    So much money wasted.

  • Dave

    says:

    So what? Any business is entitled to outsource a division that could cost less to run externally than internally.

    Part of the problem with any former government run entity is they retain a quasi-government hangover where the cost of doing something sometimes comes secondary. Qantas is in a highly competitive industry where those hangovers aren’t possible to maintain. Any new entrant can outsource their ground handling, so can any existing entity.

    The union should focus on ensuring all QF handlers move across to the new contractor and they get good rates of pay and conditions, but they’ll hitch their wagon to the old anti-qantas story and will likely lose.

  • Brendan

    says:

    Great work from the TWU for sticking up for working people of Australia.

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