25/08/2022
Qantas underlines expectation of strict adherence to wages policy.
Thursday, August 25, 2022, 5:02pm
Qantas chief executive Alan Joyce has today rejected an "untenable" 12% pay claim by the airline's licenced engineers, while he is meanwhile contending that the Albanese Government's signature IR policy of "same job, same pay" doesn't fit the aviation industry's business model.
He told journalists after the release of the airline's 2021-22 results in Sydney that the ALAEA's claim is "just something that the company could not afford".
"We would have to be fair to every group across the company if there was ever a pay increase like that, and that would just be untenable for the company coming out of the worst pandemic its history," he said.
ALAEA members are planning protected action in pursuit of the 12% under a one-year agreement, which they say equates to a rise of 3% annually after taking into account their four-year pay freeze (see Related Article).
Qantas has imposed a group-wide policy that requires its workgroups to accept a two-year pay freeze followed by increases of 2% a year for two years, plus a one-off $5000 bonus and about $5000 in shares.
The airline today revealed an underlying pre-tax loss of $1.86 billion due to COVID-19-related border closures and travel restrictions, but said it experienced a sharp second-half lift in travel and bookings as these measures were wound back.
It said flights for the year averaged 33% of pre-pandemic levels, but finished the financial year at 68% of pre-pandemic levels, with a strong performance in air freight operations offsetting the hit on international passenger operations.
Joyce said the airline has signed 13 agreements covering 5000 employees under its wages policy, and expects to spend about $50 million on increases for employees covered by them as deals are finalised in the current financial year.
This would take the average non-executive salary at Qantas to more than $100,000, on top of about $200 million set aside for a $5,000 "recovery boost" payment and 1,000 share rights for more than 17,000 workers.
But other aviation unions, including the ASU, are also gearing up for contested rounds of bargaining, while the FAAA says domestic fight attendants employed through labour hire arrangement are facing ultimatums (see Related Article).
Qantas says it had cut 9800 jobs (beyond its target of 8,000) over the last year three years, with redundancy payments of about $1 billion and the same in cost savings.
On Sunday, Qantas announced $50 flight vouchers, loyalty status extensions and lounge passes to frequent flyers, plus an apology flight delays, cancellations, lost baggage and staffing issues in recent months.
It has also cut back its domestic capacity from earlier forecasts due to widespread staff shortages at airports, high rates of crew illness this winter and higher fuel prices.
The airline said today it is delivering a record amount of training with more than 1500 people joining the organisation and about 1000 internal appointments made since April 2022.
But Joyce told the media conference that most of the recruiting related to two factors:
bringing the A380 aircraft back into service after a lengthy periods in storage at desert locations during the shutdown in international flights; and
surging employee "attrition" due to the "hot labour market" which, included a 25% loss of cabin crew in Western Australia, where they have been leaving for higher-paid jobs.
"So all of that is why we're recruiting today and [the ground services outsourcing] is not why we're having the problems we've had."
"The issues we have is. . . there's been a spike in COVID that I don't think anybody was predicting over the last few months."
Joyce said that sick leave is up by an average of 50%, with 320 pilots a day in isolation or calling in because they are ill.
The airline's contentious decision to sack almost 2000 ground crew and to outsource their jobs did not receive any detailed attention in the media conference or the written results.
Qantas has applied for the High Court to overturn a Federal Court ruling that it took unlawful adverse action against its former ground crew employees, arguing some of the Fair Work Act's workplace rights are "time bound" (see Related Article).
The airline recently co-opted managers to work in baggage handling and its preliminary financial report said it is working with key suppliers to address the labour shortages driven by the influenza season and recent spike in COVID-19 cases, coupled with the ongoing tight labour market.
"The Group has implemented dedicated account management protocols with structured engagement and Group governance to provide oversight of third-party service providers’ performance to enable the uplift of the Group’s performance and meet customers’ expectations," it said.
Qantas said the airline's "mishandled bag rate" reached 11 in every one thousand in July but is now down to 6 in a thousand and would return to pre-COVID-19 levels next month.
Cancellations reached 7.5 % in July but fell below 5% in August and would be back to pre-COVID levels next month.
On-time performance, which fell to 52%, has now rebounded to 66% and was forecast to reach the mid-70s in September on the way back to pre-COVID levels of 80%.
The preliminary financial report also said that any significant enterprise bargaining dispute could disrupt the Qantas Group's day-to-day operations and adversely affect business performance, potentially leading to reputational damage, and it had "developed business continuity planning arrangements, including testing and rehearsal (to the extent possible), to provide continuity of operations in the event of an industrial action".
Travel benefits "silence" Qantas workers: TWU
Qantas said it is now offering improved staff travel benefits, including better access for family members, and is expanding "already significant" fare discounts, but the TWU blasted the results announcements as "empty promises, tactics and trickery".
The TWU said the airline predicts on-time performance to rebound to 80% without any plan to lift wages or create more secure, full-time jobs through its contracts with labour hire companies struggling to recruit workers into essential ground-handling positions.
The union said the discretionary staff travel benefits silenced workers from speaking out about serious workplace issues, including safety.
It said the airline's claim that workers are earning on average more than $100,000 painted a false picture, with Qantas Ground Services workers currently on a base salary of $45,157, or less than half the airline's figure.
"The deception that Qantas has invested in higher wages in FY23 enterprise agreements is another form of trickery.
"Workers have faced threats of outsourcing, agreement terminations and payment bribes to pressure them into accepting two-year wage freezes followed by just 2% increases, far below the cost of living."
Joyce hopes for progress on bargaining reforms at summit
Joyce told the media conference that addressing skill shortages and re-starting immigration at next week's Jobs and Skills summit will help the overall economy, and he is hoping for "good dialogue on how we can progress the enterprise bargaining system".
Asked how the Albanese Government's pledge to introduce "same job, same pay" for labour hire workers, he said that Qantas is "obviously like everybody talking to the government about it".
"But can I ask, so how do you define that?"
"Does somebody flying a Dash 8 [propeller aircraft] get the same pay as somebody flying an A380?
"Because it's the same job, it's a pilot.
"If you do that, you've going to destroy regional airfares in this country and it is the nature of aviation, it's the nature of the business models that some jobs are paid differently."
"That's the nature of it and that's why it works."
Asked how he felt about being the target of union ire, Joyce said unions "were lining up for my blood" when he grounded the airline in 2011 and against in 2013 over a major restructuring.
"I've had more resignation requests than any other CEO or probably any other public figure out there because the unions typically do this at different times."
