Are Australian Unions Right To Challenge Qantas Pay Incentives?

Even before Qantas CEO Alan Joyce announced the airline’s stunning turnaround last week, some union leaders called it a ‘PR Stunt.’ Despite Qantas offering pay rises in line with national guidelines and hefty bonuses on top of existing agreements, one union leader vowed to “draw a line in the sand and fight this every step of the way.”

Last Thursday, Qantas forecasted it would return an underlying profit of between AU$1.2 billion to AU$1.3 billion ($752.9 – $815.6 million) for the six months ending December 31st. For the past three years, Qantas has posted total losses of more than AU$7 billion ($4.39 billion) and saw its net debt peak at AU$6.4 billion ($4 billion).

Photo: Vincenzo Pace | Simple Flying

Profits lead to wage claims

At one point, there was serious talk that the airline would have to go into bankruptcy, a disaster it averted, and it’s now well on the road to recovery. That’s the past, but with profits on the horizon, it is inevitable wage claims would surface, although perhaps less emotionally than the ones made last week.

Three of the unions representing Qantas workers, the Flight Attendants Association of Australia (FAAA), the Transport Worker’s Union (TWU) and the Australian Services Union (ASU), issued a joint statement on Thursday. While the three union leaders had their say, the statement essentially accused Joyce and Qantas of all manner of misdemeanors, including bribing workers to accept pay deals that leave them far behind the skyrocketing cost of living increases.

The flight attendants union had already filed applications for protected industrial action, including strikes, in the lead-up to the peak summer holiday period. The FAAA federal secretary Teri O’Toole encapsulated the mood by saying:

“Throwing an extra 1% at workers while forecasting $1.2 billion underlying profits and making every attempt under the sun to avoid collective bargaining and bully workers into accepting deals that severely decrease their entitlements and work life balance is an insult. We will continue to challenge this appalling behaviour by Qantas and get workers a better deal.”

So, what is the offer that has drawn so much ire from these three union leaders? Qantas said it would increase wages from 2% to 3% for around 20,000 employees, in addition to the AU$10,000 ($6,225) already promised by way of a bonus and share rights. It also expanded its staff travel program and said it would award the share rights to 3,600 employees who had joined after the original cut-off date. The airline said this amounted to a single-year pay increase of more than 10% for this year’s performance.

Photo: Getty Images

Right of reply from Joyce

In the interests of balance, Simple Flying reached out to Qantas to seek its comments on the union claims. Qantas provided us with the answers Joyce had given to various media platforms and briefings when asked about the pay deals. While there are pages of his comments, one of the key messages from Joyce is that a 3% pay rise is in line with government policy and paying AU$10,000 in cash and shares outside of pay agreements is something “no other company is doing.” When asked about union unrest and the threat of widespread strikes, Joyce replied:

“There is a disagreement with a couple of different union leaders, there isn’t disagreement with our employees, and you need to separate the difference out. Are there one or two union leaders who have a grudge against Qantas? Absolutely. Are they creating a lot of noise? Absolutely. But don’t misinterpret that as a general feeling across the company because that is not right and not appropriate.”

The issue with the flight attendants is around rostering and conditions, largely brought about by the impending arrival of longer-range aircraft like the Airbus A321LR/XLRs. Put simply, Qantas wants crews to extend their duty time to 12 hours, which Joyce says has already been agreed upon with Qantas subsidiary Jetstar and competitors Virgin Australia and Rex. He said:

New aircraft need new rosters

Photo: Jetstar.

According to ch-aviation.com, Qantas and Jetstar have 26 A321LRs and 56 A321XLRs on order, so getting the crew rostering matched to the aircraft capabilities will be an issue in the future. Joyce added that the pilots have already agreed to new arrangements, and he does not believe the current noise will lead to industrial action or strikes.

After 14 years at the helm of Qantas, Joyce has become the target of many attacks, taking the wrap for everything from mishandled bags, long call center wait times, rubbish food and coffee and airport queues. The Qantas he leads out of COVID is a very different one from three years ago, but it is still here and employing thousands of people, a feat its rival Virgin Australia could not achieve without severe restructuring. Perhaps Qantas, and its CEO, deserve some credit for that.

We would love to hear your comments about Qantas and where it is headed.