Six key lessons for employers from the Qantas dispute
By John Tuck (Partner)
As the dust settles following the dramatic events of last weekend, some clear lessons for employers have emerged from the many months of disputation over enterprise agreement negotiations at Qantas.
On 31 October 2011, Fair Work Australia (FWA) terminated all protected industrial action being engaged in or proposed by Qantas and the three unions involved in the dispute, under s 424 of the Fair Work Act 2009 (Cth) (FW Act): Application by Minister for Tertiary Education, Skills, Jobs and Workplace Relations  FWAFB 7444.
The Full Bench of FWA granted the Federal Government’s application to terminate protected action, following Qantas’s decision to ground its flights world-wide and its proposed lockout of employees. The application was supported by the Victorian and NSW Governments.
The Full Bench found that Qantas’s proposed “employer response action” (FW Act, s 411) “threatens to cause significant damage to the tourism and air transport industries and indirectly to industry generally because of the effect on consumers of air passenger and cargo services” (satisfying the test for termination of protected action under s 424(1)(d)).
Despite months of work bans and stoppages taken by the TWU and ALAEA, and lower-level protected action by AIPA, the Full Bench considered it “unlikely” that the unions’ protected action “even taken together, is threatening to cause significant damage to the tourism and air transport industries.”
The parties now have 21 days (which may be extended by agreement for a further 21 days) to negotiate agreements resolving the disputes – after which, FWA is empowered to make “workplace determinations” setting employment conditions for the relevant Qantas employees.
So, what are the “take-out” lessons for employers?
- The events at Qantas demonstrate the need for a clearly defined strategy for enterprise agreement negotiations – particularly with a unionised workforce. Considerations in formulating such a strategy include:
- the likelihood of employees/unions organising and taking protected industrial action
- options for preventing industrial action – are there grounds for opposing the making of a protected action ballot order by FWA?
- contingency plans to keep production/services going if industrial action occurs – consider especially the potentially disruptive effect over a long period of intermittent work bans and stoppages
- options for suspending or terminating protected action – given that the bar is set very high for having industrial action terminated on grounds of community or economic harm (s 424), think about the suspension of protected action to allow “cooling off” periods (s 425) or based on significant harm to third parties (s426)
- the option of taking employer response action – would a lockout be effective in advancing your negotiating position? What planning would be required to make this a workable option for your business?
- The termination of protected action in the Qantas dispute was a response to an unusual situation. Apart from industrial action affecting essential services such as hospitals, law enforcement and ambulances, and protracted disputes in critical sectors of the economy, FWA may be reluctant to act under s 424. Instead, consider in advance what role you might want FWA to play in helping you reach an agreement – eg conciliation under s 240 – and the points in the negotiations where this could be particularly helpful. Ensure that you comply with the good faith bargaining obligations in s 228, and consider seeking bargaining orders under s 229 (see also point 5 below).
- Remember that the termination of protected action (if granted by FWA) will ultimately lead to the making of a workplace determination, where parties are unable to reach agreement during the 21 (or 42) day negotiation period. So consider carefully – can you live with an arbitrated outcome?
- Industrial disputes inevitably have an impact on customers, suppliers and other third parties. A well-developed communications strategy can assist in keeping these important stakeholders on side once industrial action starts to bite. Provide as much notice as possible of any anticipated interruption to normal operations. It is also important to have good lines of communication with the workforce, particularly if you are trying to achieve significant changes to work practices or employment conditions in the new agreement.
- Explore the potential of the good faith bargaining obligations (s 228) for developing a more collaborative approach to negotiations – therefore reducing the risk of protected action and its adverse consequences. This should be done before bargaining even begins. Think about developing a “protocol” for how the negotiations will be conducted, including who will be at the negotiating table; how regularly the parties should meet; what information will be provided; and reasonable time-frames for the exchange of proposals and counter-offers.
- The circumstances presented by Qantas’s grounding of flights and proposed lockout justified the exercise of the Federal Minister’s power to make a declaration terminating protected action under s 431, based on a serious threat to an important part of the Australian economy. The Minister’s decision not to exercise this power signals that s 431 is unlikely ever to be exercised by the present Government.
Val Gostencnik and John Tuck represented the Victorian and NSW Governments as interveners in the FWA proceedings involving Qantas.