Qantas and industrial conditions in the air

The 2011 dispute which led to Qantas management’s lock-out of staff, causing grounding of planes and disruption of travellers’ plans, centered on whether jobs should be retained in Australia rather than be sent offshore. The question was, in the end, whether Qantas should maintain industrial standards of work conforming to expectations of Australian workers and fair determinations of Australian industrial tribunals and workplace agreements, or avoid them.

Under the Howard government’s ‘Work Choices’ workplace standards were downgraded, the argument being that Australia must be able to compete in a global market and that notions of staffing, wages and conditions of work once accepted as ‘fair’ in Australian workplaces operate against global competitiveness. For the Howard government, competing in economic terms meant reducing industrial conditions to the lowest common denominator. If workers are exploited in Malaysia, Singapore, Thailand or the Middle-East, then,  runs the argument, Australia can compete only if workers’ conditions in Australia are lowered to the levels experienced in those countries.

The alternative is for jobs to be exported, so that companies and their shareholders can profit from lower standards of pay, poor industrial conditions, lesser health and safety requirements: indeed, standards against which Australian trade unions, and British trade unions before them, have struggled since the industrial revolution.

With the repeal of ‘Work Choices’ and the coming of the Labor government’s industrial policy, the notion now guiding some corporate heads appears to be that of taking the latter path: seeking to undermine the Australian industrial relations system by removing jobs from Australian workers or demanding that Australian workers should themselves go offshore to recover their former jobs at lesser pay and absent industrial rights and protections.

Is this the answer to competition in the airline industry?

Deregulation of the airline industry has meant service standards and workers conditions have come under challenge. Airlines have been able to avoid the standards that guided Qantas, and that had made Qantas the safest airline in the world. Now Qantas has slipped from that exalted status, aircraft ‘incidents’ alleged to have arisen from mechanical failures consequent upon off-shore servicing of aircraft.

Deregulation meant the market was opened not only to companies adopting the ‘fly on the cheap’ strategy, such as JetStar, Regional Xpress and others but to airlines such as Etihad, Emirates and Qatar, designed to attract a more up-market clientele yet able to sustain lower fares, ‘specials’ and fare offers. The suggestion is that these companies are vanity or boutique airlines, run by oil-rich states having access to such extensive resources that they can sustain operations without the same pressures as Qantas. Nor do they need to pare service delivery and standards, by basing their operations in Vietnam and Singapore, as with JetStar, so as to (it is claimed) maintain a ‘workable’ profit margin. Worker rights and conditions in their region of origin are not based on the principles and practices pertaining in Australia. Along with the ACTU, the International Labour Organisation (ILO) raises regular concerns about worker and trade union rights in the GCC, which includes the United Arab Emirates and Qatar as members.

Should we then simply stand by, allowing Qantas to collapse in the face of this unfair competition, or watch silently while Qantas piece-by-piece transfers its staff and operations to JetStar, to take advantage of JetStar’s freedom from the requirement to remain at least 51 per cent Australian-owned? Artificially complying, in this way, to the statutory limit setting foreign-ownership of Qantas to 49 per cent, Qantas would be an ‘Australian’ company operated not only from outside Australia, but by its ‘subsidiary’, JetStar. Alternatively, Qantas sets up companies outside Australia, without any Australian-ownership requirement, and runs operations from a foreign base. Once again, it escapes Australian industrial standards, operating on cheap labour and denying its workforce the rights and protections accruing to Australian-based workers.

Surely the time has come to set industrial requirements on all airlines entering Australian airspace, all airlines seeking to enter the Australian market, all airline companies using Australian airports?

A reflection on sea and shipping protocol is not inappropriate here. In the 1920s, government regulation and particularly the cost of labour set shipping companies into avoidance mode. Instead of registering their vessels in the United States, they registered them in Panama, where labour was cheap and government regulation miniscule. Forty years on, Liberia became the world’s largest register of shipping. By 2010, ‘flags of convenience’ flew on more than half the world’s merchant ships, the vast majority flying Panamanian, Liberian or Marshall Islands flags, while the International Transport Workers Federation (ITWF) lists thirty-two countries as ‘declared FOCs’. Admiralty law operates so that should any of these vessels be involved in collisions or other shipping disputes, they claim coverage under the law of the flag under which they sail.

Yet should this mean that sailors or other shipping staff who are subjected to substandard conditions are left to endure perilous health and safety rules, or a total lack of them? Are workers to make do with inadequate food and sleeping accommodation? Are they to be subjected without relief to lengthy shifts leaving them tired and in danger of long-term health problems, accidents or causing harm to themselves or fellow crew through lassitude or inattention?

While ships lie in harbour, in ports of countries having good industrial conditions, health and safety regulations, and liveable wage requirements, are crew denied recourse to or protection of the port-country’s laws? Not so. In shipping, inspections of vessels in port can be undertaken. Ships that do not come up to standard can be detained.

In 1982, sparked by the MV Amoco Cadiz disaster, the PMOU or Paris Memorandum of Understanding on Port State Control was brought into effect upon the agreement of fourteen European nations. Flying the Liberian flag, the MV Amoco Cadiz had sunk, causing major environmental damage. It was time for the ‘flag of convenience’ regime to be called to account. The PMOU now comprises 27 ‘participating maritime Administrations’, extending over ‘the European coastal States and the North Atlantic basin from North America to Europe’. The PMOU lists its mission as being ‘to eliminate the operation of sub-standard ships through a harmonized system of port State control’, with annual inspections numbering over 24,000, ensuring that ships ‘meet international safety, security and environmental standards, and that crew members have adequate living and working conditions’.

The problem in the airline industry is not that airlines are operating under ‘false’ registration, flying flags of convenience. However, by being incorporated in countries not of their origin, as with JetStar (assumed by many to be an Australian airline, wholly located in and operating out of Australia), or being located in a country of origin having lesser industrial standards, airlines avoid Australia’s industrial regime. For some, it is deliberate circumvention. For others, it is happenstance: their home-base countries do not sustain industrial relations in terms Australians take for granted. Worker conditions do not or do not necessarily conform to those supported by Australian workplace principles and practices.

Thus, foreign-owned airlines are able to undercut Qantas, promoting a climate where Qantas management asserts the airline can be profitable only if it resists union and worker claims for wage rises and improved industrial conditions – and if this resistance proves untenable in Australia, remove its operations elsewhere.

How to challenge this?

Rather than conform to the ideology of lowering workplace standards and conditions of work, pay, health and safety in Australia and endorse these poor standards and conditions elsewhere, why not adopt a policy promoting their maintenance in Australia and their upgrading around the world? Why not require adherence to Australian industrial standards by any airline transporting passengers to and from Australia?

Would requiring airline companies to conform to Australian industrial standards in their employment of aircraft staff, pilots, flight attendants, and ground staff located in Australia including mechanics, clerks, and managers, lead to a withdrawal of airline companies from the Australian market? Not so.

If the market is sufficiently lucrative for them to challenge Qantas’ former supremacy, it is hardly likely that foreign-owned airlines will withdraw because Australian law requires them to pay their staff at levels deemed fair, or obliges them to incorporate Australian health and safety standards into their operations, or expects them to adopt Australian industrial conditions in their operations generally. If some do withdraw, this will not harm the travelling public, for safety standards are a protection not only for workers, but for travellers, too. And boutique or vanity companies will continue to operate in the Australian market: these airlines have aimed attention solidly at the U.K-Australia flight path, providing travellers entre throughout the world.

Australia is signatory to United Nations and International Labour Organisation (ILO) treaties and agreements. These set industrial and worker standards and rights, and employer standards and responsibilities. Their aim is to ensure that in Australia and around the world employees and employers conform to standards protecting worker safety and wellbeing and promoting industrial peace and harmony. These treaties and agreements recognise that employers do not have a right to exploit workers or make profits at the expense of fair industrial conditions. Australia can implement these treaties and agreements within its own boundaries, and in so doing ensure that where foreign corporations come onto Australia’s runways and into Australia’s airports, these treaties and agreements do not fall by the wayside but apply equally to those entities’ employees and operations.

The Task Force on ASEAN Migrant Workers points out that ASEAN countries, such as Singapore and Vietnam, where JetStar has established its operations, have registered reservations to U.N. and/or ILO standards, or have not ratified them. Vietnam ranks as ‘one of the worst’ in ASEAN for ILO Core Conventions ratifications, while Singapore is one of those emphasised as failing to implement Core Conventions.

The time has surely come for the Australian government to live-up to its own industrial relations policy and its international commitments, making it possible for Qantas to remain an Australian company based on Australian soil. Qantas ought not be allowed to become an empty shell, its planes registered elsewhere and wearing tailfins bearing kangaroos no longer legitimately able to fly skywards to the tune of  ‘I still call Australia home’.