Industrial Relations and Enterprise Bargaining - Essay Example

Industrial Relations and Enterprise Bargaining: 2011 QANTAS Industrial Dispute

Industrial relations are one of most complex problems of the modern times. Typically referring to the relationship between employees and the employers, industrial relations is one of those factors that build or destroy the mutual trust in an industry, which is required for its smooth functioning.

Having its base in the industrial revolution, the industrial relations not only help the worker in claiming a rightful wage, but also empower the worker in demanding for good working (Goloboy, 2008). The importance given to industrial relations these days has changed the face of work culture. It has brought much transparency in the work culture in the recent times and employees these days are much more empowered to put forwards their demands.

In this paper the case of QANTAS, 2011 industrial disputes will be studied and analysed. Also, how the Fair Work Acts, 2009, has played its part in solving the issue will be overviewed.

An industry is a group or individuals or entities, taking a collective effort in manufacturing and producing of goods or services (Fitzpatrick, 2006). The success of an industry depends on the level of cooperation that various bodies involved in the production process have with each other. One of the prime concerns for industries these days, good industrial relations are considered to be the key to uninterrupted functioning of the industries. It has made it much easier for the employers and the employees now to address various issues related to the work place and culture. According to Dale Yoder, industrial relations are the process in which the management deals with unions in order to negotiate and implement labour contract or collective bargaining agreement (Bhatnagar, 2012). V.B. Singh views industrial relations as an important aspect of social relations that are created out of the interaction between employer and employee. Hence, understanding of industrial relationships requires a clear knowledge of state, legal system, organisation, capital structure, compensation of labour force and the study of market forces. There are a few reasons behind organisations being so focused on maintaining a good industrial relationship is (Fitzpatrick, 2006). Maintaining industrial peace is one of the reasons. Employees and employers both discuss the matter and consult each other before discussing the matter. Also, to promote democracy in the industry is another reason for this. Industrial democracy refers to mandatory participation of workers at various levels of the organisation regarding the decisions the affect the workers. Benefit of the workers is another aspect. Industrial relationships protect the workers from mistreatment, exploitation and unethical practices. Also, it provides them with an opportunity to fight for their rights to work under humane working conditions, wage related issues and to address work related grievances. International Relationships provide manager with the authority to handle and address issues related to workers whenever there are some disciplinary issues.

The productivity of any industry depends on the level of understanding and cooperation the employees and the management have amongst each other. Industrial relationship provides them both with an opportunity to grow and maintain this understanding, which in turn helps in improving the performance.

The growth of the organisations in a particular nation is a measure of the growth opportunity that the nation provides. In other words, industrial growth is the reflection of the various growth factors of the country, including economic, social and political. The governments of different nations have taken remarkable efforts to maintain good industrial relations between the organisations. The Australian government, while passing the Fair Works Act, 2009, took one such effort.

The Fair Work Act , 2009 governs the relationship between the employee and employer relationship in Australia. The act covers a bunch of enterprise bargaining regulatory norms, which the industries are expected to abide by and are liable to be penalised otherwise. The act also provides protection against the dismissal of employees on unfair grounds, a balance in the work life and family and empowers the employees with the right to be epitomized at workplace (Bray and Stewart, 2013). This act is one of the ground braking steps towards the protection of the rights of the employees as well as the employers.

Enterprise bargaining is one of the main methods of securing the employment terms and conditions between employers and employees. It gives certain powers to the employees to forward their claims to the management. One of those methods is to take protected industrial actions against the company, which is authorised by the Fair Work Act, 2009, provided the required procedures have been fulfilled by the employees.

For the purpose of study, the disputes between Australian airline, QANTAS (Queensland and Northern Territory Aerial Services Ltd) and trade unions during 2011 has been selected. The series of disputes is known as 2011 QANTAS industrial disputes.

QANTAS Airways limited is an Australian flag carrier airline, which was founded in the year 1920 in Queensland. The collective efforts of Sir Hudson Fysh, Paul McGinness, Sir Fergus McMaster and W Arthur Braid, led to the establishment of one of the biggest names in the aviation industry today. These men believed in the potential of aviation to bring the incredible level of connectivity to the people of Western Queensland, Australia. This provided them with the inspiration to start QANTAS, which would soon be shaping the future of aviation industry (Our Company, 2016).

Being one of the largest airline by, international destinations, international flights and fleet size, it is the third oldest airline in the world. The main business of the QANTAS Group is transportation of passengers, by the means of two airline brands, QANTAS and Jetstar. The group also operates in other businesses, which include airlines and in specialist industries such as Q catering. Having a long history in the industry, QANTAS boastfully links itself to the evolution of civil aviation in Australia. Starting with the fragile biplanes which could carry hardly one or two passengers, to the airbus A380 which carries around 450 passengers at a time, Qantas has come a long way since its establishment (The QANTAS Story, 2016).

Being one of the best names in the industry, QANTAS has been part of many controversies, including sex discrimination, price fixing and the most notable one being the industrial dispute in 2011 (News, 2014; ABC News, 2010).

The airlines giant has pleaded guilty for its involvement in a cartel which fixed the price of air cargo. In 2007, QANTAS pleaded guilty for price fixing in the United States. Again, in the year 2008 in Australia, the airline was charged with breaches of acts involved with protection of consumers (News, 2014). In the year 2005, a policy that QANTAS had was revealed, which included not letting a male passenger sit next to an unaccompanied child. The policy received widespread criticism for considering all men to be abusers and for being considerate towards female abusers. This issue surfaced form time to time when male passengers were asked to swap seats with female passengers due to the presence of unaccompanied children. The male passengers in question expressed their discomfort and felt violated in front of other passengers (ABC News, 2010). In 2011, there was dispute between QANTAS and members of three trade unions, consisting of engineers, baggage and catering staff and pilots who consisted almost 18% of the company workforce. The issue was over betterment of working conditions and increase in wages (Smith and Howard, 2012). The company, in 2011, announced major structural changes due to financial looses and turn down in the market share. Also, it announced an expansion plan for tapping the market of Asia and Japan. Though it was expected to increase the market share of the airline, up to 1000 jobs were expected to be lost due to restructuring. It was the first time since, 1966, that protected industrial action against the airline had been taken.

The 2011 QANTAS industrial dispute is typically, an outcome of human rights violation by the airline over a period of time. The pilots and the ground staff had the following demands which needed be addressed:All the pilots operating QANTAS code share flights, including the Jetstar pilots, wanted an equal pay to that of the QANTAS pilots. They were getting much less pay than the QANTAS pilot (News, 2011; Neill, 2012).

QANTAS excuse for not agreeing to this demand was that it would lead to an increase in the passenger fare and would also risk the jobs of other employees. The engineer’s association had a concern about the relocation and outsourcing of jobs overseas. It claimed that QANTAS is trying to base new entities offshore to escape the Australian Labour Laws and principles of aircraft maintenance. An increase in wages and allowance by 3% every two years was demanded. Also, an annualised pay was demanded rather than wages, so that they don’t lose money when they are sick. Also, shift penalties were demanded so that people would not take long leaves. It also claimed that QANTAS had agreed to these demands in 1998, but never delivered on it (Neill, 2012; The Australian, 2011).The ground staff primarily wanted job security, which included protection for existing employees’ terms, conditions and earnings. Also, it wanted a wage increase of five percent per annum claim. After negotiation, QANTAS agreed to a wage increase of 3 percent per annum. The union also wanted protection of terms and conditions regarding safety, training and standards to apply to QANTAS Staff and contractors. In the month of October that year, the airline agreed to not compulsorily repeat due to the use of contractors. Also, an agreement with TWU (Transportation Workers’ Union) would be mandatory for the contractor.

All these issues lead to a widespread disagreement between the employees and the management of the airline. The 2011 QANTAS issue is one of the most significant incidents in the history of global airlines industry, which had posed a severe threat to the economy.As a result of the continuous industrial action against the company, QANTAS had lost A$ 68 Million due to the delays caused by the disruptions. In order to tackle the issues, it decided to ground its entire staff.

The grounding affected 68000 flights and 448 flights were delayed. It cost the airline an excess of A$ 20 Million each day (ABC News, 2011a). The grounding directly affected the tourism industry, which contributed $33.9 Billion to the economy and employed 500000 people (ABC News, 2011b).

This was a significant blow to the Australian economy. Also, there were many political and legal aspects to this issues which affected the whole country.

The competitors utilised the fleet grounding as an opportunity to grow their own business, by offering the passengers a discount on air tickets.

The tourism industry and the airlines industry were the ones to experience the greatest impact of the grounding. Already the industry was battling with the rising value of Australian Dollar, fall in the number of inbound travellers and increasing number of Australians travelling abroad. This issue was an added blow to the economy. Tourism industry uses many informal employees. Grounding of the staffs by QANTAS had raised the unemployment level. Many significant business deals were also affected at the same time sue to the cancellation of the flights. Though the airline had 20% contribution to the international flights and airfreight, grounding of the staff brought a significant damage to the financial health of the airline (Neill, 2012).The whole issue of the 2011 Industrial dispute of QANTAS was raised due to the violation of several human rights. The airline has been fined on several occasions, where it has been proved guilty of breaching any human right (Guest, 2012). It was found that in February, 2011, that QANTAS subjected an employee to adverse working conditions when overseas postings were suspended. The manager was fined, when found guilty of breaking the Fair Work Act (Guest, 2012). The issue raised the eyes of many politicians, regarding the fact that economy of the country was at stake. The issue of restructuring and the Announcement by CEO Alan Joyce, regarding the grounding of the staff, stirred a political discussion of how this issue could be solved. The whole anarchy led the hand of federal minister to intrude and look into the matter. The ministry along with the Department of Infrastructure and Department of Resources, Energy and Tourism, evaluated the damage that the economy was likely to incur in case the lockout was continued. Collectively they agreed that it was best to terminate the Industrial action against the airline.Due to the immense loss that was being caused to the economy, the Fair Work Australia handed down orders to withdraw the industrial action and asked the airline to call back its announcement of locking out the entire staff (Smith and Howard, 2012). The action was taken keeping in mind the damage being caused to the tourism and airlines industry. There was never a doubt about the bad impact of the QANTAS 2011 dispute on the economy. The dilemma was if the company should suspend or terminate the action. Deciding on termination of the action proved to be helpful in settling the never- ending disputes between the parties, which was going on for months. Also, it helped the parties reach to a point where their mutual interests were kept unbroken. Not all the demands of the unions were accepted, but the parties appreciated the remarkable turn in the dispute after arbitration by Fair Work Act.

Steps can be taken by the organisations to build an environment of mutual trust and understanding and avoid turmoil in the industries.The industrial relations have been given a lot of importance in the recent times by the governments of various countries. There are many regulations and acts passed by the governments, to protect the rights of the employees and the employers. Few such examples are, The National Labour Relations Act of 1935, USA, The Industrial Relations Act, 1971,UK and The Fair Work Act, 2009, Australia (Mundlak, and Finkin, 2015; Corrada and Goldman, 2011). Care should be taken to implement these regulations effectively in their respective countries, in order to avoid industrial disputes.

Industrial relationships depend on the employers and employees respecting the mutual trust they have on each other. The understanding of their respective responsibilities and obligations will make that relationship stronger.

The employers should be more understanding towards the employees, and try to understand the problems from their (employee’s) point of view. This is help the management in understanding the problems that the employees are going through, which in turn will guide them in taking a rightful judgement about the whole situation.

The employees should try to understand the obligations that the management has behind taking a particular decision. This will help them in making justifiable demands, which can be fulfilled.

An industry involves many people who depend on it for their livelihood. When there is a dispute, many lives get jeopardised and it affects the nation as a whole. There should be provision of arbitration in every nation, to arrive at a conclusion, if there is a situation of industrial dispute. The matter should be solved as soon as possible, without causing much damage to the economy in the process.

The paper gave an overview of industrial relations and why it is important to maintain good relations between the employers and employees. Also, an overview was provided about the Fair Work Act, 2009, passed by the Australian government, which settles industrial disputes through enterprise bargaining. We also looked into the case of QANTAS, 2011 Industrial Disputes and understood how the dispute was solved with the interference of the Fair Works Act. We looked into the situations of different parties involved in the disputes and tried to understand the management’s stand on the whole situation. Also, we tried to understand the economic, political and legal impact that the dispute had on the nation. Finally, we tried to comprehend what can be done to avoid major industrial disputes, in order to have a sound and functional economy in the nation.

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