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Asia-pacific

Qantas dispute enters arbitration as talks fail

Text by News Wires

Latest update : 2011-11-21

An industrial dispute between Qantas Airways and its pilots, baggage handlers and caterers will go to arbitration, after talks failed on Monday. All sides will now have to accept a settlement imposed by Australia's industrial umpire.

REUTERS - Talks between Qantas Airways and its pilots, baggage handlers and caterers have broken down and all sides will now have to accept a settlement imposed by Australia’s industrial umpire, which could help the airline in its bid to slash costs.

The airline remains locked in talks with the engineers association in a bitter fight over pay and moving jobs to Asia and indications are this could also head to arbitration. The two sides face a midnight (1300 GMT) deadline to reach a settlement.

“I think Purvinas was saying in relation to the engineers, a lot of the items would be agreed before it goes into arbitration. Maybe one or two items have to go to arbitration,” Qantas chief executive Alan Joyce told reporters.

He was referring to Steve Purvinas, federal secretary at the Australian Licenced Aircraft Engineers Association.

Qantas and the unions have said the arbitration could take many months with the pilots association expecting it to be up to six months. The industrial umpire’s settlement can be binding for up to four years.

However neither side can take any industrial action while the arbitration is ongoing, a key factor giving the airline comfort that it will not face any more travel disruptions.

“We asked for a 21-day extension. We thought a negotiated outcome was possible, but they (Qantas) turned that down,” said Anil Lambert, spokesman for the Australian and International Pilots Association.

Qantas said it, the pilots union and the Transport Workers Union had concluded they could not reach a deal and the dispute would now be resolved through binding arbitration.

“Qantas rejects claims that it terminated negotiations,” a spokesman for the airline said, adding the two parties concluded they could not reach an agreement.

The Transport Workers Union, representing baggage handlers and caterers, said the dispute would now go before arbitration after Qantas did not want to renew talks for another 21 days.

“Our fear is that Qantas will drag this out for as long as it can,” a spokesman told Reuters.

The unions’ main concerns centre on the airline’s attempts to cut costs and set up two airlines based in Asia to stem A$200 million ($201.09 million) a year in losses on its international business.

Qantas says customers returning

“We haven’t been able to reach a new agreement with the Transport Workers Union through negotiations so we will now let the independent umpire decide,” Qantas CEO Joyce said in a statement.

He said customers had returned “in large numbers” since the airline resumed flying after Qantas grounded its planes in late October in a drastic move aimed at ending disruptive industrial disputes.

The Australian and International Pilots Association has been demanding that all pilots on a flight with a Qantas code or sold as a Qantas ticket should be paid as much as Qantas pilots.

Shareholders and analysts said by not extending talks for a further three weeks and submitting to an imposed settlement by the Fair Work Australia commission, Qantas was clearly trying to reach a settlement as soon as possible.

“They’re going to be better off than they have been. It’ll be a more rational process,” said Sondal Bensan, who helps manage BT Investment Management’s stake in Qantas.

A year of talks

Qantas and the three unions were ordered on Nov. 1 by the industrial umpire, Fair Work Australia, to reach an agreement by Monday, after a weekend grounding of planes by Qantas.

Joyce and Qantas chairman Leigh Clifford have taken a hard line against unions after failing to agree on a deal following more than a year of talks over pay and conditions.

“It looks like Qantas believes they will get the better outcome from deferring to a decision by Fair Work Australia rather than continue negotiations,” said Scott Marshall, an analyst at Shaw Stockbroking.

Qantas said just ahead of the October weekend grounding of its entire fleet that the cost of industrial actions had totaled A$68 million ($68.4 million) and led to a collapse in forward bookings, a factor Qantas cited for grounding the fleet.

Qantas shares, which have fallen about a third so far this year, ended down 1.2 percent on Monday, underperforming a 0.2 percent fall in the broader market.

Date created : 2011-11-21

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