C2003/1972, Transcript of Proceedings [2003] AIRCTrans 1851 (16 May 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 60-70 Elizabeth St SYDNEY NSW 2000
DX1344 Sydney Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER RAFFAELLI

C2003/1972

AUSTRALIAN LICENSED AIRCRAFT ENGINEERS ASSOCIATION

and

QANTAS AIRWAYS LIMITED

Application under section 170LW of the Act
for settlement of dispute re renegotiation of
agreement

SYDNEY

11.30 AM, FRIDAY, 2 MAY 2003

PN1

THE COMMISSIONER: Could I have the appearances please?

PN2

MR C. RYAN: I appear for the Australian Licensed Aircraft Engineers Association with MR D. KEMP.

PN3

MR D. MILLS: I appear for Qantas Airways Limited with MR I. OLDMEADOW, MR B. DEAHM and MR D. RATCLIFFE.

PN4

THE COMMISSIONER: Thank you, Mr Mills. Yes, Mr Ryan?

PN5

MR RYAN: Commissioner, I should also indicate that there are a number of other Federal Executive members of the ALAEA present in the Commission room this morning and should we move into conference, obviously I will be indicating that I would wish those people to participate in those conferences.

PN6

THE COMMISSIONER: Yes, thank you.

PN7

MR RYAN: Commissioner, this matter comes before you today by way of a section 170LW application by the Australian Licensed Aircraft Engineers Association under the application of what is known as EBA5, which is the Licensed Aircraft Engineers (Qantas Airways Limited) Enterprise Agreement 5, specifically under the dispute settling procedure contained within that agreement which is clause 16 and over the application, the dispute in question, over the application of clause 17 of that same agreement, ie EBA5, which is titled Renegotiation of Agreement.

PN8

The brief background for this matter is the ALAEA and Qantas have been negotiating for some time. However, the negotiations have not resulted - that is have failed in achieving an agreement prior to the expiry of EBA5. That date being 31 December 2002, therefore, we note the terms of the renegotiation of agreement clause contained within the EBA5 that the parties would renegotiate an agreement by that date.

PN9

The assistance of the Commission is therefore being sought to remove, or to endeavour to remove, the obstacles and the barriers to the parties complying with the terms of EBA5 and we would be submitting that it may be appropriate this morning to move into conference fairly speedily in order to examine the specific matters which have prevented the parties from meeting the terms of EBA5 in terms of that particular clause. So if the Commission pleases, that is the initial submission of the ALAEA.

PN10

MR MILLS: Commissioner, our submissions will be a little bit more lengthy but not particularly lengthy. I am able to go to some background information for you.

PN11

In relation to the application under section 170LW the company at this stage will reserve its position in relation to whether an application made under that section of Act, in effect, you have a jurisdiction to hear that, and in particular one would only have to give consideration to the application with section 170N as a precursor, but we reserve our position on that, we don't particularly want to go into any significant debate about that matter today.

PN12

We, of course, have made an application under section 170NA of the Act which is to get the Commission to involve themselves in some form of conciliatory proceedings in relation to the making of an agreement. So I think, in effect, the parties are trying to achieve the same outcome at this preliminary stage. So once again we just reserve our position in relation to any debate around the application or the appropriate application of section 170LW of the Act.

PN13

Just by way of background - the company received a log of claims from the ALAEA dated 17 October 2002, it is not of an insignificant nature and it obviously an agreement - it is a document that most people familiar with industrial processes would reasonably understanding. There were numerous meetings as a result of that log as you would understand, in fact, there are a total of eight separate meetings up until 19 December 2002. The parties were fairly committed to try and reach an agreement prior to the expiry date of EBA5 which, as you would be aware, Commissioner, was 31 December 2002.

PN14

An offer was made that in effect was close to a final offer on 19 December 2002 and the ALAEA undertook to go out and in a sense get a view or a feel of how the membership would receive that offer. The ALAEA went to the membership and they came back to the company in February 2003 and indicated that the membership were not accepting of what had been put to them. A vote wasn't put to them at that stage, in effect it was briefing sessions and that there needed, in effect, to be a bit more from the company for it to be acceptable to the membership.

PN15

The company was receptive to that, obviously, nobody wants to give any more if they can avoid it but appreciated the bona fides of what was put to us by the ALAEA negotiating group and the company adjusted the initial offer and, in a sense, increased the value of the package for the individuals. I mean, in conciliation at this stage, Commissioner, we can get into the nuts and bolts straight off unless you particularly want to hear the details of it at this stage.

PN16

The ALAEA indicated to us that they couldn't agree that the offer should go out to the membership with a recommendation to support but they were prepared to put the document out to the membership by way of, in effect, let the members decide. So they were going to be silent on whether the offer was a good one or not and let the members make their decision.

PN17

Now that document went to the membership in the beginning of March of this year, in or around 4 March, or that week 4 March of this year. That offer was rejected by the membership. There is some suggestion that there was a good deal of misinformation put out to members of the ALAEA in relation to that and that may very well be a moot point, but no doubt there will be some discussion about that at a later stage and that, in itself, may have created some confusion.

PN18

In relation to that, the company on the view that there had been misinformation and had been a degree of confusion and, in effect, that subsequent to the offer going out in March, that there had been a worsening of the crisis in Iraq, there had been the onset of the SARS virus, that the position that the industry, and in particular the company, were in in March was going to slip quite significantly going into the rest of the year and therefore it was viewed that the ALAEA should go back out to the membership and talk to the membership about how the offer may sit in relation to a greater amount of information provided, more accurate information that the management group themselves were able to deliver to the membership and obviously also information in relation to the extraneous circumstances affecting the industry itself as we previously mentioned, such as the SARS virus and the war in Iraq.

PN19

The union and the members were also advised both through meetings with the executive and through discussions between management and their employees and a notice that was sent to all employees by the Group General Manager, Maintenance Services, that in the event that the ALAEA executive did not come back with the position prior to Easter, which was Thursday, 17 April, that they would be prepared to endorse the package, that is the Federal Executive endorse and recommend the package for a further vote, that the company would take a couple of components of the Enterprise Agreement deal that had been previously offered to the licensed aircraft engineers, in effect, off the table.

PN20

Those two components were a lump sum back payment from 1 July 2002 to 31 December 2002 which was, in effect, reflective of a commitment that the ALAEA gave to the company for an 18 month enterprise agreement in EBA5 for a wage freeze. Other unions agreed to 12 months so there was recognition of a six month lump sum payment and also that the company would remove from the membership the offer of an increase in the onload category for staff travel. So those two items were advised would be taken off the table, the ALAEA cam back to us after Easter in the period between the Easter Anzac Day break in or around I think you will find would have been 22 April advised that they would be prepared to put to us a 12-month agreement with everything that we had offered previously for a 2-year agreement, the company advised that that would be clearly unacceptable to us and that therefore, those two items that we had previously advised would lapse, that is, the lump sum payment and the improvement in staff travel would be taken away from the offer as it currently stands.

PN21

The current position of the industry is really one of the things that is compounding on for the parties and I don't really need to go into great detail. We have a number of documents here that we don't particularly want to tender at this stage but we certainly want to have available for all parties to consider during the conciliatory proceedings that I think will take place. In particular, I would just like to remind everybody that on 28 March 2003 and this was in effect whilst the vote had gone out, so the document had gone out for a vote.

PN22

On 28 March the company went to the Stock Exchange and to its employees in relation to a statement on bookings and capacity and made it quite clear that the proposal or the suggested profit forecasts that had been forward in certain discussions would now be unlikely to be reached due to the impact of the war in Iraq and the impact obviously of the SARS virus and what that was doing to forward bookings and the amount of travel, particular business travel on international routes. There was discussion about the reduction in services and all employees were made aware of that through obviously numerous groupings but also, through direct information to employees.

PN23

Then on 9 April 2003 the company formally announced that the position in relation to the company's profitability was further impacted upon by those two extraneous issues that we have discussed which is the war in Iraq and the SARS virus which again, has an significant impact on forward bookings. Therefore we would be looking to implement a programme of redundancy and that programme is approximately 1000 redundancies across the entire organisation.

PN24

Obviously the parties have had numerous meetings about that issue separately to the Enterprise Agreement negotiations. But it's a clear indication that the position within the industry and the company's profitability as a result of the factors impacting on the industry has changed significantly, even in the period between when the final offer that the company made at the beginning of March 2003 as opposed to where we are now, two months later in May 2003.

PN25

The fundamental position is the company for those reasons is not in a position to entertain any increase in the offer, it simply cannot do that, particularly at a time when the industry is struggling so significantly the company's profitability is decreasing and diminishing at quite a rapid rate. More importantly, at a time when people across the organisation are being faced with the prospect of redundancy, it's a nonsensical position to suggest that the company would be in any way able to entertain any possible increase in what has already we believe, a reasonable offer.

PN26

We would certainly recommend and suggest that the Commission assist the two parties into entering into some sort of conciliation proceedings. May it please the Commission.

PN27

THE COMMISSIONER: Mr Ryan, are you happy to go into conference as you sought and not put anything further on the record?

PN28

MR RYAN: I'll just make a few more comments, if I may, Commissioner, I note Mr Mills reserving his position with regards to the 170LW and the 170NA application, we too would reserve our position with regards to arguing formally the position with regards to those matters at an appropriate time. However, I think at this stage it's common ground between us that today's proceedings are moving ahead on the basis of the ALAEA section 170LW application which is, as I indicated in my preliminary comments, an application with regards to settlement of dispute clause and the application of a clause under EBA5.

PN29

There are obviously a number of problems, barriers if you like, or obstacles which have arisen before the parties in terms of meeting the requirements of that particular clause and the ALAEA has sought the assistance of the Commission in order to identify what those problems and barriers are and to assist the parties to remove those barriers, so it may move forward and meet the terms of that particular, clause of that particular agreement.

PN30

So, as I indicated initially, if the Commission so pleases, it may be appropriate to move into conference so that we can discuss in a bit more detail some of those issues.

PN31

THE COMMISSIONER: Yes, okay, I propose to adjourn into conference.

OFF THE RECORD

NO FURTHER PROCEEDINGS RECORDED