In the early hours of this morning, Fair Work Australia ordered the termination of the protected industrial action that has impacted Qantas in recent months following the move by the Federal government to make an application to Fair Work Australia asking that it resolve the issue. Whilst the decision is important, it is unlikely to signal an increase in the ability of employers to restrict their employees’ ability to take protected industrial action during negotiations for new enterprise agreements.

What happened

Following months of protracted negotiations and employee industrial action, last Saturday 29 October 2011 Qantas announced the immediate grounding of its entire fleet before a staff lockout (which was to commence at 8pm this evening).  The action was taken in the wake of months of negotiations for new enterprise agreements intended to cover Qantas pilots, ramp, baggage handling and catering employees and aircraft engineers (during which strikes had caused an estimated $70 million in damage).

Qantas indicated that the lockout would continue until the unions representing these employees (namely, the Australian Licensed Aircraft Engineers Association, the Transport Workers’ Union of Australia and the Australian and International Pilots Association) dropped demands which it said made it impossible for agreement to be reached, and which Qantas believed would seriously impair or destroy its commercial viability if granted. The action was a bold move which prompted the Federal government to intervene in the dispute by using its power under the Fair Work Act 2009 (Cth) (Act) allowing it to intervene in protected industrial action where it is in the public interest to do so, including where it threatens ‘to cause significant damage to the Australian economy or an important part of it.

Under the Act, the Minister for Workplace Relations had one of two options.  Either:

  • apply to Fair Work Australia for an order suspending or terminating the protected industrial action (in which case, Fair Work Australia must be satisfied that the industrial action threatens to cause damage to the Australian economy or a part of it) (see section 424); or
  • on his own accord, make a written declaration terminating the protected industrial action (see section 431).

Ultimately, the Federal government chose to apply to Fair Work Australia under section 424 of the Act, seeking an order from it to terminate the protected industrial action.  

Fair Work Australia’s decision

In its decision, Fair Work Australia found that while it was unlikely that the threat of industrial action taken by the three unions was sufficient to require an order suspending or terminating industrial action, Qantas’ proposed staff lockout (which necessitated the grounding of its entire fleet) threatened to cause significant damage to the tourism and air transport industries, as well as industry generally. 

The parties now have 21 days to reach agreement, failing which Fair Work Australia will arbitrate and impose an outcome.

What does the decision mean for employers?

The decision is no doubt a watershed win for Qantas, because it forces the unions to revisit their claims which have to date prevented the parties from reaching an agreement, while removing a key bargaining tool - the ability to take protected industrial action.

However, it is unlikely that the decision signals an increase in the ability of employers, when negotiating new enterprise agreements with their employees, to stifle the ability of employees to take protected industrial action. 

As Fair Work Australia noted in its decision, the encouragement of bargaining (including the ability to take protected industrial action) is a key part of the Fair Work Act’s enterprise bargaining regime.  Therefore orders which suspend or terminate the taking of protected industrial action are only likely to be made in extreme circumstances and only where it is in the public interest to do so, which is a high threshold to satisfy.