Qantas ordered to resume flights by tribunal ruling

Bill Shorten, Australia's assistant treasurer, welcomed the ruling

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An independent tribunal in Australia has ordered a permanent end to the industrial dispute that has grounded all Qantas flights.

Fair Work Australia issued its ruling after hearing evidence from the airline, unions and government at an emergency session in Melbourne.

Qantas had wanted the ruling and said it expected some flights could now resume within hours.

Nearly 70,000 people have been affected by flight cancellations in 22 nations.

Correspondents say the ruling is likely to be seen as a victory for Qantas, which has been seeking to end long-running disputes with three unions, and for the government, which wanted the stand-off resolved quickly.

A government lawyer said the shutdown had been costing the economy "tens of millions of dollars" every hour.

Analysis

On the surface of things, it looks like a humiliation for Qantas CEO Alan Joyce as his airline is ordered back into the skies - having been unilaterally grounded by the airline's management. But it could in fact be a strategic victory for Mr Joyce.

Having failed to get the main unions at Qantas (baggage handlers, engineers and pilots) to engage in meaningful talks since a massive restructuring plan was announced in August, Qantas's warring sides have now been ordered by the FWA tribunal to do exactly that.

After Qantas's unprecedented lock out, FWA has in effect locked the company and its unions in until such time as they come up with a long term solution to their awful industrial relations record.

While it may be a strategic victory it certainly won't be a financial one for Qantas. Each day that the planes were grounded cost it £13m. That's on top of the £48m that the strikes since August have cost. But the reputation damage inflicted by this dispute on Qantas could be very profound and way more expensive.

Qantas chief executive Alan Joyce said the tribunal decision "provides certainty for Qantas passengers", adding: "We will be getting our aircraft back up in the air as soon as we possibly can. It could be as early as Monday afternoon on a limited schedule with the approval of the regulator."

The trade row had come to a head in August after the airline announced plans for restructuring and moving some operations to Asia.

Permanent end

The Fair Work Australia ruling said: "We have decided to terminate protected industrial action in relation to each of the proposed enterprise agreements immediately."

The ruling requires the unions to return to the negotiating table and come to an agreement within 21 days or face binding arbitration.

Fair Work Australia said its ruling had taken into account its concern for the vulnerability of the tourism industry.

Australia's government welcomed the decision, with Assistant Treasurer Bill Shorten saying: "We are pleased that after 24 hours of turmoil, common sense has been restored."

Mr Joyce had warned Qantas would only resume operations if the tribunal ordered a permanent end, rather than merely a suspension, of industrial action.

He said: "I apologise to all Qantas passengers that have been impacted by the industrial action by unions over the past few months and in particular the past few days."

The unions had wanted a suspension for up to 120 days to allow talks.

Qantas dispute

  • August 2011: Qantas announces restructuring and outsourcing plan to combat annual losses in international operation of about A$200m
  • Unions begin series of strikes, pressing for more job security
  • Qantas says 447 flights cancelled and 68,000 passengers affected, at cost of A$68m
  • 29 Oct: Qantas grounds entire domestic and international fleet - 108 planes at 22 airports
  • 30 Oct: Industrial tribunal orders end to dispute, clearing flights to resume

Secretary of the ACTU union Jeff Lawrence said the ruling had made it clear that union action was not causing harm to the economy and that it was Qantas's actions that had brought the tribunal's intervention.

He said the ruling showed Qantas's decision to lock out its workers and ground aircraft was a disproportionate response to the unions' negotiating position.

Australia's Prime Minister Julia Gillard had earlier said the dispute between the airline and unions needed to be halted.

The airline said its decision to ground all flights was a necessary reaction to industrial action that was costing A$15m ($16m) a week.

A Qantas statement on Saturday said all employees involved in industrial action would be locked out from Monday evening and flights grounded from 06:00 GMT on Saturday.

The announcement came after months of wrangling between the airline's management and unions.

Qantas has a 65% share of the domestic Australian market, but has been making heavy losses on its international flights.

The restructuring is expected to mean the loss of 1,000 jobs from its 35,000-strong workforce.

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