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Issue #1512      3 August 2011

Qantas: slippery slope of privatisation

ABC TV’s Lateline program last week revealed Jetstar crew from Thailand were employed on slave wages, working shifts in excess of 20 hours in fear of huge financial penalties and the sack if they didn’t. Jetstar is a wholly owned subsidiary of Qantas. Jetstar went quickly into damage control, laying the blame at the door of a body hire company in Thailand – a company which is 37 percent owned by Qantas.

Following its privatisation in 1993, Qantas launched an all out war on its unionised workforce. It has tried all the dirty capitalist tricks in the world to cut costs and boost profits: “independent” subsidiaries, individual employment contracts, labour hire firms, low paid overseas labour, offshore maintenance and deunionisation.

It is not surprising that there appear to be an increasing number of flight “incidents”, or that staff in Australia are presently taking or voting on taking industrial action.

In pursuit of higher profits, Qantas set up its “independent” budget airline Jetstar in 2003. Jetstar, like its parent, set about off-shoring labour and maintenance and taking a host of other cost-cutting measures. They paid their Australian-based crew lower wages than Qantas, while Qantas further cut costs by transferring many of its flights to Jetstar.

Qantas directly or indirectly through Jetstar, hires staff based in London, Auckland, Bangkok, Singapore and elsewhere, exploiting non-union workforces on lower wages and inferior working conditions. Through such means it also avoids paying employee entitlements (superannuation, sick leave, annual leave, etc).

It closed its heavy maintenance site in Sydney in 2006 with the loss of 256 licensed aircraft engineer positions and several hundred additional support staff. When members of the Australian Licensed Aircraft Engineers’ Association (ALAEA) visited two overseas facilities maintaining Qantas and Jetstar aircraft, they were appalled. In Manila they found two licensed engineers operating alongside 44 unlicensed engineers. In Singapore, up to 60 licensed engineers were working at one time of which only five were licensed.

In Australia, the engineer ratio was 70 percent licensed to 30 percent unlicensed compared with five percent licensed in Manila and eight percent in Singapore.

The ALAEA concluded that both the Manila and Singapore sites were operating at unsafe levels of licensed engineers.

Qantas earned the well-deserved reputation of workplace bully. It tried to force the Howard government’s individual employment contracts (AWAs) on maintenance engineers and long haul cabin crew. At one point it boasted having 300 strike-breakers on short-term contracts for deployment in the event of industrial action by flight attendants. At the same time it sought to slash wages during negotiations for a new enterprise agreement. The Rudd government, to its credit, blocked attempts by Qantas to import strike-breaker engineers on section 457 visas.

“Slave labour”

Jetstar flies international and domestic routes with cabin crew employed by body hire company Tour East Thailand (TET). Their employment contracts provide a base wage of $258 a month, an extra $7 an hour when flying, no sick leave, half the annual leave of Australian crew and effectively set no limit on hours of duty.

Failure to report for work could entail the repayment of four months’ wages and the sack.

One Jetstar crew member told Lateline, “It was horrible. I felt like a slave.”

The Sydney-Bali and return trip is about 17 hours – a fatiguing trip, sometimes extended to 20 hours or more by flight delays. Under international regulations pilots are given a break and stay overnight for obvious safety reasons. Not the cabin crew.

On April 22, five Thai-based crew pulled out of a flight, citing fatigue after a series of domestic and international flights. They received a blunt letter from their employer, warning: “Whilst illness, etc., is accepted by your employer, poor time management is not ... TET requires from you an understanding that you will not repeat these behaviours in the workplace.”

Jetstar in a statement provided to Lateline, referred to its high standards of “fatigue management”, and said it does not require employees who are fatigued to operate a flight. (emphasis added)

Jetstar tried to distance itself from TET, saying it was “a local company with expertise in employment in the local market.” It tried to play down TET’s relationship to Qantas: “Qantas has a minority share.” Yet, Qantas gives on its website as its contact and address in Bangkok: “Tour East (Thailand), 21st Floor, Charn Issara Tower 1…”

Lateline, asked: “Why does the Thai-based contract for cabin crew say in clause 9.2 that The Planned Limit and Operational Extensions may be extended by the Employer. Doesn’t this, in effect, place no limit on the hours crew can work?”

Jetstar responded: “No, this is not correct. Jetstar has clearly established duty limitations that are consistently applied regardless of where our cabin crew are based.” That might be true, but what are these limitations if 20-hour shifts fall within them?

Jetstar also says it has written to TET informing them that the communication it sent to the five crew was “not supported by our airline.”

Second class treatment

As Senator Nick Xenophon asked on Lateline: “How will a crew be able to cope with an emergency if they’ve been required to work in excess of 20 hours in just one shift? It’s something that doesn’t apply to Australian cabin crew for good reason and it shouldn’t apply to foreign-based cabin crew who are doing work here in Australia.”

Senator Xenophon indicated that he will seek to introduce a private member’s bill that would force Australian airlines to provide the same flight and duty conditions for foreign crews as are currently given to Australian crews. The bill would also apply to international airlines in which an Australian airline owns more than a 20 percent stake.

Lateline also reported that it had obtained over 60 incident reports from at least 37 crew members who had filed complaints this year to Jetstar management about fatigue and exhaustion after flying the Sydney-to-Perth-to-Darwin routes.

If the bill is passed it will thwart any plans Qantas has to use low cost offshore based airlines to avoid its obligations under Australian enterprise agreements and industrial relations law and taxation. These include taxation, superannuation contributions, sick leave, maximum shift lengths, wage rates and other conditions and benefits that Australian workers and their trade unions have won.

Offensive against workers

Meanwhile Qantas continues its offensive against unions and its workforce in Australia. Long-haul Qantas pilots have begun industrial action to protect the conditions of pilots. The action so far is low key, with unauthorised in-flight announcements informing passengers about the Australian and International Pilots’ Association’s campaign.

Baggage handlers, catering, freight and other Transport Workers’ Union members have voted for protected action during enterprise negotiations. Their demands include enhanced safety, job security and a safety net for employees and outsourced staff.

Warehouse staff, members of the National Union of Workers, decided last week to walk off the job for a day over job security and wages. They are also fighting for casual staff to receive the same rights as provided to permanent employees, including superannuation, workplace entitlements and paid training.

Qantas, including its subsidiary Jetstar, is a lesson in privatisation. The Australian government has lost control of its national carrier and lost a significant source of regular income. Safety has been put at risk (fatigue of crew and offshore maintenance), the health of its employees jeopardised, working conditions and wages reduced and quality of services reduced. A large percentage of its workforce is now deunionised with little protection. Thousands of jobs have been lost in Australia. All in the name of private profit.

The Lateline program illustrates the importance of the public media, how the ABC, not beholden to corporate sponsors, can expose the super-exploitation of workers and other unsavoury practices of capitalism.  

Next article – Protest against Max Brenner

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