Qantas Defends Labour Hire Strategy Amid Senate Inquiry and Insolvency Threats


According to Qantas, the Australian airline, their survival depended on their ability to utilize internal labour hire to maintain a competitive edge. Faced with the threat of insolvency without this strategy, the company’s representatives voiced this concern during a senate investigation into the government’s hotly disputed industrial relations legislation. They stressed that it was necessary for their survival to employ personnel via independent corporate bodies.

The acting executive manager of industrial relations, Nathan Safe, explained to the inquiry that Qantas’ longstanding terms and conditions remain the highest in Australia and compare favorably to virtually every foreign carrier operating within the nation. However, given that domestic rivals typically pay award or slightly above award rates, the preservation of these terms and conditions could have ultimately forced the airline to close its doors.

To circumvent expensive legacy conditions built into union agreements, Qantas devised and deployed internal labour hire strategies. This involved the creation of various employing entities, although they continued to honor these legacy conditions for their preexisting workforce.

During the senate inquiry, Qantas expressed dissatisfaction with the federal government’s endeavours to abolish a labor-hire “exploit” via an extensive bill introduced to the parliament in September. The projected reforms, depending on decisions dictated by Fair Work, could trigger significant surges in costs without any consequent enhancement to productivity, cautioned Mr. Safe. Consequently, this could jeopardize the sustainability of services, particularly those in regional areas, compromise job security, and cause market distortions.

The contentious “exploit” comes into effect when an employer negotiates a workplace agreement for specific pay rates for particular work, but hires additional workers via labor hire, resulting in lower pay rates. The proposed alterations will enable employees, employers, or unions to petition the Fair Work Commission to ensure that labor hire workers at least receive the wages stipulated in the workplace agreement.

The trade union movement has accused Qantas of consistently undermining workers’ wages and conditions by hiring personnel through different entities under lower pay and conditions. Mr. Safe defended Qantas by asserting they are a traditional enterprise functioning in a fiercely competitive global market with few barriers for the entry of new competitors.

He added that the airline has adapted its labor model over several decades, and although comprehensive, it has been formulated legally and is consistent with the enterprise bargaining system. Rather than undercutting legacy agreements, Qantas’ new workplace agreements “effectively grandfather legacy conditions for long-serving employees while ensuring a sustainable future for a low-margin, trade-exposed, capital-intensive business.”


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