Disagreement between Three Union Partners of Qantas and Qantas Itself - Case Study Example

Introduction The industrial disagreement between three union partners of Qantas and Qantas itself can be observed from the context of attempts by Qantas airline to stay viable in a more competitive international as well as domestic aviation environment (O’Neill 2012). This study details the 2011 bargaining disputes of the enterprise between Qantas and involved parties that comprised of three unions. The industrial dispute between Qantas aviation and its major unions had been taking place for a couple of months. According to the (O’Neill 2012), various actions by ground crew workforce, engineers and pilots had collectively and individually made sure that people charged with managing the Qantas could not run it with certainty. In addition, management could not guarantee that flights booked by customers would depart and land at designated destinations as scheduled. Sypher (2006) states that the parties that were involved in the dispute of 2011 included Qantas airline and three of its union partners: Australian and International Pilots Association for international pilots; Transport Workers Union for Qantas ground staff; and Australian Licensed Aircraft Engineers Association for licensed airline maintenance engineers. The position of Qantas aviation on international market was highly precarious as compared to the domestic market that made Qantas airline to incur losses and lose market share on its operations on international market (O’Neill 2012). International market share of Australian Qantas airline, which was determined by the size of international travelling customers, almost fell by fifteen percent in 2010. It actually dropped in the year 2000 from thirty four percent to nineteen percent in mid 2010. Moreover, it was observed that return of Qantas airline on equity was particularly low. Numerous prominent airline analysts pointed out that based on current trends, Qantas aviation would make a positive move if it quit the international operations (Kennett, 2011). In contrast, a major commitment to international operation was underway with the buying of Boeing 787 along with Airbus A380 aircraft. For the engineers together with pilots, to a greater extend, the late 2011 industrial dispute sought about realizing long term maintenance and operation of aircraft’s ‘new generation’ (Flynn, 2011).  To put operation of Qantas aviation in force, the Qantas airline Group of businesses included a staff of thirty five thousand and a maximum of forty eight collective agreements as well as sixteen union partners. The dispute surfaced in October 2011 when Alan Joyce, the chief executive of Qantas airline announced his decision of grounding the international and domestic fleet of Qantas aviation(Flynn, 2011). The grounding was in response of employees’ action. He wanted to lockout all employees that had participated in the workforce claim action. To some extent, that was not a good way of conflict resolution. Especially, given that not all enterprise employees nor all Qantas Group staffs were involved directly in the October disagreement. That action by the Qantas’ CEO essentially affected over seventy thousand international and domestic passengers who found their flights had been cancelled without being warned (Flynn, 2011). A total of four hundred and forty seven flights were cancelled from 4 pm on October 29 2011. As of two days later that month, around three thousand workers involved in Qantas disputes were to be kept off. However, as public opinion argued, safety could have been ensured by grounding the fleet before implementing the effects of lockouts (Flynn, 2011). The purpose of that action was to realize termination of actions by union industrial. Fair Work Australia had authorized actions by union partners following the stipulated procedures in Fair Work Act 2009 for starting respond actions in 2011(Flynn, 2011). In the incident, the actions were stopped as Qantas airline became aware of the Act’s need of re-involvement in the dispute without industrial action. In situations where employees’ claims were not effectively resolved, they were arbitrated by Fair Work Act 2009. In that event, Qantas aviation thought it would rely on the conventional reluctance way of industrial tribunals whenever they wanted to mediate on issues of management. The dispute came after the Qantas CEO’s salary had been increased. Mr. Joyce was to start taking home $2m per month. On hearing that, the unions were surprised and promised to carry on with more disruptions. The Australian Licensed Aircraft Engineers Association’ national secretary, Steve Purvis, was the first person to openly issue his threats (Flynn, 2011). Tony Sheldon, a member of Transport Workers Union, threatened to escalate further actions for industrial disputes. That created a longer period of uncertainty for Qantas aviation and its travelling public. Qantas airline and its passengers remained in a hopeless situation for quite some time. According to Mohan et al (2005), the Qantas CEO unfavorably communicated that event to the workers. The decision by the Qantas CEO only demonstrated that Qantas airline only aimed at fighting for its survival at international levels. And it neglected to realize that Aussies needed to focus on lowering air travel cost. Citizens of Australia were left to start using other cheaper airlines that were available. It is very bad and irrational to be emotional when making management decisions. Qantas CEO, Alan Joyce, had two decisions to make: To his shareholders and his customers. Both decisions were dependent upon each other (Flynn, 2011). On that occasion, the actions of Alan Joyce were to respond to three things: Competition which had persuaded majority of Australians to resort to using other airlines instead of Qantas aviation whenever they travelled overseas; some staff amongst his employees that only looked for unaffordable terms and conditions in other international airlines; finally, to realize that Qantas shareholders wanted more returns on their enterprise investment (Flynn, 2011). On several occasions, good leadership and management style calls for ability of making difficult and tough decisions (Mohan et al 2005). While some people will vilify you as a leader after decision making, others will not. It should also be remembered that introduction of reforms in organization in early part of 1990s, it was difficult. Reforms were necessary and yet they displeased many employees. But those reforms brought the new base that provided several opportunities that brought about changes in organization today (Mohan et al 2005). Public opinion indicated that actions by Qantas airline prompted an instantaneous application to Fair Work Australia. Senator the Hon Chris Evans, Workplace Relations Minister, terminated instead of suspending industrial action which consisted of foreshadowed lockout of some employees by employers and union bans. Fair Work Australia issued these orders on 30 October 2011. Thereafter, Qantas planes started flying again on 31 October 2011(Flynn, 2011). The implications of CEO’s decision to ground employees were various fallouts in Australian Qantas airline. There has been considerable fallout from the aircraft grounding and the aviation dispute. Most significant was the public perception of the manager‘s instigated industrial action and the complexity of dealing with it (Mohan et al 2005). In many contexts it represents a rather a different set of reasons to the dispute of pilots in 1989. In that time, the pursuit of salary increases which was outside the constraints set by the Australian Labor Party - Australian Council of Trade Unions Accord made the Government of Hawke to be in opposition to the Australian Federation of Air Pilots (Mohan et al 2005). Related to the reaction of the public to the aircraft’s grounding has been the regard of the public for the termination of the industrial action by Fair Work Australia that allowed the return of Qantas airline scheduled flights (Sypher, 2006). An opinion poll that rated the performance of all groups that took part in the industrial dispute showed mixed reactions. Only Fair Work Australia came out well with an approval of fifty five percent (O’Neill 2012). There was a disapproval of twenty one percent from many parties - Prime Minister Gillard and the Government, Qantas workers, Qantas CEO Alan Joyce, Leader of Opposition Hon Tony Abbott, union leaders and Qantas management. Besides, there has been a zest given to the Australian Government on place of work relations with public opinion indicating that place of work relation is considered policy strength by Prime Minister Gillard as a matter of rebuilding the support of the Government in its heartland (Sypher, 2006). That was not the usual case in the past. In entire part of 2011, the Government of Australia had neglected all calls from employers for key reforms in the Fair Work scheme. On the other hand, after the industrial actions of October 2011, Mr. Evans, a Minister, had stated that in the Fair Work Act 2012 review of aircraft schedule, the Government would take into consideration whether “bargaining code” should be integrated into the Fair Work Act for unions, employers and workers (Sypher, 2006). Another factor to be considered was the Prime Minister’ views of providing added weight to including job security provisions in enterprise agreements (O’Neill 2012). The fleet grounding jeopardized the future course of action for an Australian icon. After a closer observation, one discovers the decision by Alan Joyce to ground all airline fleet was aimed at saving Australian icon (Sypher, 2006). Many people had worked with great pride of Australian icon for years. Aussies had grown up with that icon and accepted it as part of Australian fabric. Many citizens of Australia had been angered and saddened with the loss of a number of Australian icons previously. Lately was the Foster's loss, an icon of Australia that merely changed water into beer. The loss of that Australian icon was caused by management incompetence and sheer board. The efforts of Alan Joyce, as a CEO can be seen. Even if he did not succeed in the end, he gave his best shot (Kennett, 2011). Australians need to accept that the world has undergone various changes since the 1950s. Thus, they should be prepared to lead so as to have their own industries. Bibliography Mohan T. et al (2005) Communicating as Professionals, Thomson Learning Australia. Sypher, D. (2006). Management Communication Quarterly, Australian Journal of Communication, Case Studies in Organizational Communication, 22 (4), 642-647. O’Neill, S. (2012). The gods must be crazy: chronology of and issues in the Qantas industrial dispute 2011’, Parliament of Australia – Research Publications, accessed on 19 May 2012. Obtained from: http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parli... Kennett, J. (2011). QANTAS CEO Alan Joyce upset many Australians by grounding flights, but at least acknowledged he has eliminated uncertainty to protect our Aussie flagship, Herald Sun. Accessed on 25 May 2012. Obtained from: http://www.heraldsun.com.au/opinion/cmon-aussie-lets-grow-up/story-e6frfhqf-1226185129838. Flynn, D. (2011). Qantas shutdown: CEO Alan Joyce's statement in full, Australian Business Traveler. Accessed on 19 May 2012. Obtained from: http://www.ausbt.com.au/qantas-shutdown-ceo-alan-joyce-s-statement-in-full. Read More