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Qantas has claimed victory in the airline's long-running dispute with its baggage handlers and other ground staff, after Fair Work Australia rejected claims by the Transport Workers Union for a limit to be put on the outsourcing of work.
The judgment from the industrial umpire puts an end to the second of three disputes between Qantas and its staff. Labour law expert Andrew Douglas says the case shows FWA is sympathetic to the need for business to have flexible work forces.
The dispute between Qantas and its staff culminated in the grounding of the airline's entire fleet last October, disrupting 70,000 passengers and cancelling 600 flights.
The TWU, which represents Qantas' 3,800 baggage handlers and other ground crew, had wanted lower-paid contractors to be capped at a fifth of the Qantas workforce.
But FWA found the union's claim failed because it had been unable to show that the use of contractors over many years had adversely affected the airline's other employees.
''To interfere with management's decision on such a matter would require clear and strong evidence of unfairness,'' the judgment said. ''No such case has been established.''
The FWA found in favour of Qantas' offer of wage rises of 3% a year, rather than the TWU's push for 5% a year, on the basis that a 3% rise had ''due regard to the current circumstances of the employees and Qantas''.
The FWA commissioners also ruled against the union's attempt to restrict overtime hours for permanent workers.
But the FWA agreed with the union's call for Qantas to be prevented from resorting to compulsory redundancies should it decide to hire more contractors.
Qantas claimed the FWA judgment "mandates that Qantas is entitled to run its business free from union control".
Qantas Group spokesperson Olivia Wirth said the union's claims were "out of step with what is fair and reasonable for a union to demand of an employer".
Wirth said the decision by FWA prevents the TWU from taking industrial action for at least the next two years.
"Importantly, Qantas is free to run our business as we see fit and not be dictated to by union officials who do not have the airline's best interests at heart," said Wirth.
She said industrial action by three unions last year, including the TWU, cost Qantas $68 million.
After the judgment, the TWU hit back, criticising the "militant anti-worker agenda of Qantas-Jetstar management" but claimed the FWA judgment had some positives for union members.
TWU national secretary Tony Sheldon said Qantas workers would welcome the 3% per year salary increase and new job security protections that will stop Qantas from making employees redundant in order to replace them with cheaper, outsourced labour.
"I want to pay tribute to Qantas workers who stood up for their jobs, their communities and fairness in Australia by taking on this militant employer," he said.
Douglas, partner at M&K Lawyers, told SmartCompany the decision showed FWA was sympathetic to the strain business is under at the moment.
"The real issue here is the TWU has failed to properly evidence its case. For all employers there's a heartfelt understanding by FWA that business is in trouble and they are going to provide business with flexibility," he says.
"It's basically saying 'We are aware industry is at risk' and 'We are aware that it has to survive' and the FWA is not going to fetter its capacity to use flexible labour."
Douglas says the union had been "trying to up the ante on the use of contractors". He says using contractors is "pretty well accepted" in the airline industry and in other industries, so the FWA full bench was not going to impede the practice.
"But the FWA have provided some good safety checks in there in relation to the critical outsourcing risks that are a concern of the union, so there is a stipulation that there can't be redundancy around that."
The dispute between Qantas' long-haul pilots and Qantas is still before FWA.
This article first appeared at SmartCompany.