- by Anna Pha
- The Guardian
- Issue #2069
Photo: tripletrouble – flickr.com (CC BY-NC-ND 2.0)
As the stench around Qantas grows stronger, CEO Allan Joyce has made a hasty retreat, abruptly resigning on 5th September, his $10.8 million pay-out firmly in his grasp. Under his leadership Qantas has provided an example to fellow exploiters of how a robber baron can operate in the 21st century; a mean machine making a record profit of $2.47 billion (pre-tax) sourced from the company’s vicious treatment of its workforce and contempt for its passengers.
Anger has been boiling for some time with thousands of cancelled flights causing huge stress and disruption for passengers, flight delays, lost luggage, understaffing at airports, and most recently a whopping hike in fares.
It all came to a head on 31st August when the Australian Competition and Consumer Commission (ACCC) took Qantas to court alleging the airline had “engaged in false, misleading or deceptive conduct, by advertising tickets for more than 8000 flights that it had already cancelled but not removed from sale.”
“The ACCC alleges that for more than 8000 flights scheduled to depart between May and July 2022, Qantas kept selling tickets on its website for an average of more than two weeks, and in some cases for up to 47 days, after the cancellation of the flights,” ACCC Chair Gina Cass-Gottlieb said.
“The investigation … identified that Qantas cancelled almost 1 in 4 flights in the period from May to July 2022, with about 15,000 out of 66,000 domestic and international flights from airports in all states and mainland territories in Qantas’ published schedule being cancelled. These proceedings relate to more than 10,000 of those cancelled flights.”
To take one example cited by the ACCC: Qantas flight QF81 was scheduled to depart from Sydney to Singapore on 4th June 2022. On 8th February 2022, Qantas made the decision to cancel the flight. Despite this, Qantas did not remove the flight from sale until 27th March 2022, and did not inform existing ticketholders of the cancellation until 28th March 2022.
The maximum penalty for each breach of the Australian Consumer Law for a corporation before 9th November 2022 is the greater of: $10 million, three times the total benefits that have been obtained and are reasonably attributable, or if the total value of the benefits cannot be determined, 10 per cent of the corporation’s annual turnover.
The reputation of Australia’s national carrier is in tatters, and deservedly so.
Under immense pressure the airline scrapped the expiry date on $570 million of flight credits within hours of the ACCC’s court action.
Adding to the furore, Joyce was granted $10.8 million in shares on 1st September under a pandemic-era retention scheme and for long-term bonuses from 2020, 2021, and 2022, which he had previously deferred.
The company allowed Joyce to sell $17 million of shares in early June while a share buy-back was under way, which has raised criticism from some investors. The share buyback was in lieu of dividends. Fewer shares on the market can be expected to make the remaining shares more profitable than they would have been.
Qantas is also due to pay Joyce his short-term bonus of up to $4.3 million and his long-term bonus of shares worth $8 million for the last financial year.
WAR ON WORKERS
Joyce won’t be short of a dollar after exiting Qantas but his former and existing workforce are not so lucky. They are in the midst of a cost-of-living crisis and it’s Qantas’ exploitation of these workers alongside hefty ticket prices – some doubling – that have lined Joyce’s pockets.
At the start of the pandemic Qantas embarked on a pre-planned savage cost-cutting program which included axing of almost a third of its workforce, including baggage handling, aircraft cleaning and other crew work.
The work of its sacked workforce was outsourced to labour hire outfits, some of them internal to Qantas – in effect Qantas outsourced to itself.
The aim of the outsourcing was to de-unionise the workforce and slash wages and working conditions. At the time Qantas estimated it would save $100 million per annum through outsourcing. That saving illustrates just how much workers lose when they are not directly employed on union-negotiated enterprise agreements, but exploited by unscrupulous labour hire outfits.
The process of outsourcing to labour hire companies is a manipulative and exploitative weapon for employers. Some workers are employed directly by the labour hire company but many are treated as “self-employed” subcontractors. According to the ACTU, about 84 per cent of labour hire workers do not have paid leave entitlements and 81 per cent work full-time hours despite the lack of full-time employment. In addition, the work is insecure.
The outsourcing of baggage ground handling which resulted in 1700 redundancies was found to be illegal by the Federal Court but Qantas did not reinstate the workers, instead appealing the decision in the High Court.
Someone working for the Qantas subsidiary Jetstar on its international routes could be working for one of four different employers, each paying different wage rates. If the employer is Australian-based, then they might be paid $26 an hour. But if they are based in Singapore, then it would be $6 an hour, and for Thai-based crew $2 an hour.
Or on an international flight from London via Singapore to Sydney, crew could also be working alongside each other on different rates of pay and conditions, with different employers. Some of these employers could be Qantas labour hire subsidiaries.
At Sydney’s Qantas Freight facility there are six different employers each offering workers different pay and conditions for the same jobs.
“It is time the government closed loopholes to protect Australian workers against Alan Joyce’s business model. If two workers at the same company are doing the same job, they should be paid the same amount – nothing could be simpler or fairer than that,” ACTU President Michele O’Neil said.
During the pandemic Qantas received $2.7 billion in subsidies from the Coalition government, which it has steadfastly refused to pay back. The JobKeeper component of those subsidies was supposed to save jobs, not fund redundancies.
Federal Treasurer Jim Chalmers has ruled out requiring Qantas to repay the $2.7 billion. Michael Kaine, the National Secretary of the Transport Workers’ Union (TWU), which took Qantas to court, accuses the airline of rewarding Joyce for “crucifying the spirit of Australia.”
Qantas was initially a private carrier, but was nationalised in 1947 by the Chifley Labor government to become Australia’s national carrier. The role of a national carrier is important. It is used in emergencies, to fly aid into other countries, bring home stranded Australians, etc.
The re-privatisation of Qantas commenced in 1993, with further tranches of shares sold off in the following years. By law 51 per cent of Qantas must be Australian-owned. The largest shareholders are financial investors like the Pendal Group, Blackrock, First Sentier Investors, and the Vanguard Group.
As Australia’s national carrier it should be publicly owned, and managed in accordance with a democratic charter that puts its workforce and passengers before profits.