Qantas Airways Dispute and Resolution - Case Study Example

Qantas Airways Dispute and Resolution  In October, 2011, Qantas, one of the biggest international airlines, underwent a period of sheer turbulence; when during the bargaining process with unions the management ran into stonewall of no cooperation. The discussions were centred on the new enterprise agreements, when Qantas had announced the start of Asia airlines (ABC News Report, 2011). During the process things took a turn for the worse as employees including pilots, ground staff and engineers carried out a number of protected industrial actions, culminating in the decision by Qantas, on 29 October 2011, to lock out those employees with the consequence that the entire Qantas mainline fleet would be grounded.  After an application by the Federal Minister for Workplace Relations, Fair Work Australia terminated the industrial action with effect from 2am on 31 October 2011 (Yahoo News Report, 2011). The following essay will look at the details of the case in understanding the method behind the madness that could define the employee relations, which ideally should be based on the usage strategic management principles. In the case of an international company like Qantas, whose operations have global repercussions, it is also important that the government play a role in the solving of the problems. The essay will look at the nature of such disputes, and the methods that could be used to come up with a solution to industrial relations problems. This would include steps like collective bargaining, among other things. The Strike: The crux of the problem came from issues of pay, conditions of work and issues of outsourcing. The company, like many others wanted to exploit the cost advantages that come with being able to outsource a chunk of the work to countries where labour costs are substantially lower. The workers revolted with the circular. The three unions that were participating in the discussion with the management said talks broke down completely. Few flights halted mid runway, while some which were airborne when the strike was announced ended up in wrong destinations. The event was one of the worst employee relation management events in recent history. The government ended up stepping in. The strike that ultimately lasted some two days affecting thousands of passengers, causing a further strain on the airlines’ already stretched finances. Employee Relation Disputes: Definitions and Nature Disputes in general could be classified as individual or collective, depending on who initiates, or have the authority to initiate the dispute. Generally, an individual dispute is one involving an individual worker and collective dispute involves a group of workers that are usually represented by a trade union. A rights dispute is a legal dispute and involves the application or interpretation of rights under law or an existing provision set out in a contract of employment or a collective agreement. The dispute involves the interpretation, application, administration, or alleged violation of an existing collective agreement or award. An interest dispute on the other hand, is a dispute regarding the creation of rights or obligations or the modifications of those already in existence. An interest dispute involves settling the terms of a new collective agreement. Issues of interest are open in the sense, for instance, that a party can normally take action to force through a settlement. If no settlement can be reached, a dispute of interest cannot be brought before a court or other public body for a decision and there is a threat of an overt battle of strength between the parties in the form of an industrial dispute. A rights dispute arises where there is disagreement over the implementation or interpretation of statutory rights, or the rights set out in an existing collective agreement. By contrast, an interest dispute concerns cases where there is disagreement over the determination of rights and obligations, or the modification of those already in existence. Interest disputes typically arise in the context of collective bargaining where a collective agreement does not exist or is being renegotiated. The above mentioned dispute would fall under the category of an interest dispute given the fact that there is no consensus on whether the organization is at all concerned with the interests of the affected stakeholders in the context of the workers. There are problems that are associated with the kind of work and pay that are being meted out to the employees. The fact that there is no satisfaction on either side means that there is a lack of trust on the part of the negotiating parties. The problem here therefore is that the workers do not believe that the organization treasures or values them in any way. This breeds dissatisfaction and problems. The simple result of the problem is that there is a lag in terms of what Qantas seems to think is the strategically right step forward for the company and the perception of the employees on the same. One of the reasons the problem has cropped up comes from the fact that there is no strategic integration of the goals and direction of the company in the overall management principles that guide decision making. Dispute Resolution  The first step toward the resolution of the dispute would be to conduct joint working sessions between members of the management of Qantas and the workers, so that there could be an exploration of the perceptions about working relationships and a dialogue could be started on more collaborative ways of working (Forsyth, 2009). The idea should be, in essence to promote a system wherein, there is a facilitation of a change in the organisation’s ethos so that a cooperative approach is used to handle all workplace difficulties (Forsyth, 2009). Where the formula of the European Industrial Relations Observatory, is concerned, the basic idea is that there be a promotion of voluntary conciliation, which be made available so that there could be an assistance in the prevention and settlement of industrial disputes between employers and workers (Forsyth, 2009).” It further recommends that such procedures should include equal representation of employers and workers, should be free and expeditious and that provision should be made to allow the parties to enter into conciliation voluntarily or upon the initiative of the conciliation authority. It also recommends that parties should refrain from strikes or lockouts while conciliation or arbitration procedures are in progress, without limiting the right to strike (Forsyth, 2009). Collective Bargaining Contracts  The first step toward the resolution of the dispute would be to conduct joint working sessions between members of the management of Qantas and the workers, so that there could be an exploration of the perceptions about working relationships and a dialogue could be started on more collaborative ways of working (Forsyth, 2009). The idea should be, in essence to promote a system wherein, there is a facilitation of a change in the organisation’s ethos so that a cooperative approach is used to handle all workplace difficulties (Forsyth, 2009). Collective Bargaining contracts  A collective bargaining agreement would be a contract between the employees who belong to the union and the employer (Gibbons, 2007). As is the case with any given contract, there is a termination date. One would have to understand and accept the fact that in cases such as these, there would always be a suspicion that would be cast on the role of the management that seeks to bring in technological changes. Interestingly, however, in most cases, according to research, it is management red-tapism and resistance to change and not labor unions that form the stumbling blocks to new technological advancements ad higher productivity. It has been concluded by researchers that employer representatives, particularly those in the middle rungs, that often could be cited as constituting the real barrier to the introduction and effective use of technological innovation (Gibbons, 2007). In 1964, in fact the Bureau of Labor Statistics reported that some of the major labor management efforts to protect against the effects of new technology have included: The starters, the unions wanted a three-year enterprise agreement with Qantas. This included a clause for “job security” which would provide for common levels of pay and conditions for employees in Qantas and all its subsidiaries. The idea behind these demands was to ensure the preservation of employment for union members, many of whose jobs were threatened by the outsourcing regime. Interestingly, the idea was not to come up with support for the Asia employees. The strategy in essence, has been to ensure that the management at Qantas and the government became aware of the fact that they were capable of halting work. During the negotiations, the company also agreed to speedups work, allow for more flexibility, but on of the condition that the job cuts and the actual salaries needed to match the offshore cost savings sought by the company. Important, to this strategy of seeking a deal with Qantas, some have argued that the unions were remaining true to their record of class collaboration to their members. The work of the unions for over thirty years, has been to maintain their position a police force for the industry, whose aim has been to protect the defence of working system and their profit motif. The reason has been that this is the source from which the army of union functionaries derives career paths. Some have argued that the methods used by the the methods which have been used by the unions since mid-1980s, under the banner of unions has helped to make the Australian-based employee unions more “internationally competitive”. One of the more important turning points to the methods used by the unions was the crushing of the airline pilots’ wage dispute in 1989 by Prime Minister Bob Hawke’s Labor government. The incident itself, involved the organised a strike-breaking operation that involved the Royal Australian Air Force, international airlines and pilots. The pilots were defeated badly in the case. The process underwent further change in 1996, when in place of collective bargaining, the idea was to get the concession of a pledge wherein workers agreed to work with the management to improve the company profitability linking this to job security. This has since changed with new work models and new markets emerging for the international carrier, which has forced unions to go back to the old style of functioning. Concluding Recommendations: Strategic integration Thus, while there would be a temporary cut in pay, the idea should be project the technology upgrade as an opportunity for the staff to move ahead in terms of hierarchy. There should also be some difference kept between the salaries of the ones that would step down vis-à-vis the ones that were already working on level 2. The approach should be that of mutual investment, wherein from the outset, there has to be a communication of the value of long term loyalty and commitment to not just the task but to the job (Losey et. Al., 2005).    There should be provisions for training and further advancements for the staff demoted ahead of the present level 2 staff as well. The idea behind this focus is not just to improve skills for the current job but also to prepare the employee for future responsibilities. Job rotation and participation in cross functional or cross divisional tasks can get rid of the feeling of stagnation and boredom that seems to have set in (Charvatova and Veer, 2006).   References Charvatova D and Veer C G, 2006, Communication and Human Resource Management and its Compliance with Culture, pub, International Journal of Social Science, Vol.1 No1, pp14-18 Losey M R, Meisinger S, Ulrich D, 2005, The future of human resource management: 64 thought leaders explore the critical HR issues of today and tomorrow, Edition: illustrated, Published by John Wiley and Sons, pp46-55  Gibbons, J. H., (2007). Automation and the workplace : selected labor, education, and training. Diane publishing. pp89-91  Forsyth, A., (2009). Fair Work: The New Workplace Laws and the Work Choices Legacy.Federation Press. pp168-170  Qantas Airways grounds global fleet due to strikes. Retrieved February 02, 2012.  Qantas grounds entire fleet. Retrieved February 02, 2012. Read More