An ironic Qantas victory: Kohler

It’s pretty ironic that Leigh Clifford, one of the driving forces behind the introduction of individual contracts in Australia, has become the first to trigger the return of compulsory arbitration. But I guess you do what you have to do, within the law at the time.

Qantas, whose chairman is Leigh Clifford, insists that the grounding and lockout announced on Saturday night was not part of a carefully planned strategy to end the EBA dispute with the engineers, pilots and baggage handlers and their unions through the compulsory arbitration provisions of the Fair Work Act.

Right. It came to them as a vision on Saturday morning. Actually, the weekend action has probably been coming for three years, ever since the last enterprise bargaining agreements were battled out with the pilots, engineers and baggage handlers in 2008.

In 2009, the then two-year-old Labor government passed the Fair Work Act and established Fair Work Australia as the successor to the Australian Industrial Relations Commission, including the functions of the Workplace Authority and the Australian Fair Pay Commission.

But in empowering the unions again, the ALP also empowered the old AIRC again. It was given another name, but Howard government appointees were left in charge as a sop to the employers – Geoff Giudice as president, Graeme Watson as vice president and Jonathan Hamberger and Peter Richards as deputy presidents.

The new law meant Clifford and Qantas chief executive Alan Joyce could not bypass the unions and deal directly with the workers, as Clifford and others did in the WA iron ore mines and the New South Wales collieries. To bypass the unions they had to go to Giudice J.

Division 6 of the Act gives FWA the power to overrule the unions’ right to strike by suspending or terminating protected industrial action. Suspension doesn’t end the dispute, but termination does.

Division 3 says FWA must (not can, but must) make a “workplace determination” if the parties haven’t come to an agreement 21 days after a termination.

Clifford and Joyce have probably known for two years that this process would have to be triggered, the question was how.

You don’t need to be a lawyer to know that it’s hard to get a termination declaration if Justice Giudice and his colleagues had to take evidence all day yesterday and work well into the night considering their decision, even though Qantas planes were sitting on the ground all over the world causing massive disruption to tens of thousands of people.

The unions were arguing for a 120-day suspension, which would have kept the dispute alive and, in effect, kept Giudice J and his colleagues out of it.

Saturday’s grounding ensured that the political pressure was such that the Labor government was forced to argue against the unions and with Qantas for termination, not suspension.

Would it have gone the other way if the fleet had not been grounded? We’ll never know, but even with the fleet grounded it seems to have been a close run thing in the Exhibition Street hearing rooms of FWA yesterday.

So at a guess I would say that Leigh Clifford suspected all along there would have to be a lockout to ensure that the government did not back the unions and that compulsory arbitration took place.

Unlike Rio Tinto and the stevedore, Patricks, Qantas is a consumer brand so a shutdown and lockout is a vastly more damaging thing to do.

It’s a measure of Clifford’s and Joyce’s determination to break the unions’ hold over the workforce that they took Saturday’s drastic action to make sure Fair Work Australia ended the 2011 EBA negotiations with a compulsory determination.

Peter Reith, the Howard government’s architect of Work Choices and of the 1998 Waterfront dispute, tweeted this morning: “Termination of union and employer industrial action obviously positive but return to compulsory arbitration not good for Aussie economy.”

Maybe, but let’s see what comes out of it.

This article first appeared on Business Spectator.