Saturday, October 29, 2011

QANTAS' potentially unlawful action: a brief analysis

Today, QANTAS has decided to ground all of its fleet, both domestic and international, in response to the continuing industrial dispute between QANTAS and unions.  In response the Government has intervened by applying to Fair Work Australia (FWA) to suspend all industrial action (both union and QANTAS) under s424 of the Fair Work Act - FWA will be hearing the matter of suspending action tonight.

Outside of this initial action in FWA, there are other issues arising from QANTAS' actions that may be scrutinised in further subsequent actions in FWA, some of which could find QANTAS in breach of the Act.

There are a few ways that this dispute could play out and QANTAS may actually be significantly worse off by taking this action. However, much of this law is yet to be tested and it is difficult to predict how it will turn out - particularly in regard to the action that QANTAS has taken.

Industrial action, which includes employer response action, is only protected if it meets the criteria in Part 3, Division 2 of the Act. Employer response action (such as lock-outs) is governed by s411 of the Act.

s411 states:

Employer response action for a proposed enterprise agreement means industrial action that:
  1. is organised or engaged in as a response to industrial action by:
    1. a bargaining representative of an employee who will be covered by the agreement; or
    2. an employee who will be covered by the agreement; and
  2. is organised or engaged in by an employer that will be covered by the agreement against one or more employees that will be covered by the agreement; and
  3. meets the common requirements set out in Subdivision B.
The action is indeed in response to industrial action by those  classes of people in s411(a)(i) and s411(a)(ii), however it is much broader than that with the potential to affect a much broader class of employees. The breadth of this action may not reasonably be seen to be action only in response to industrial action in 411(a) - if the action is too broad, it could be that the action is unprotected.

The "Common Requirements" referred to in s411(c) are defined in s414 of the Act. These too, may have been contravened by QANTAS.

S414(5) gives the notice requirements for employer response action:

Before an employer engages in employer response action for a proposed enterprise agreement, the employer must:
  1. give written notice of the action to each bargaining representative of an employee who will be covered by the agreement; and
  2. take all reasonable steps to notify the employees who will be covered by the agreement of the action.
Considering the extremely sudden nature of the lock out, it appears that the notice requirements in s414(5)(i) may not have been met (the AWU has claimed that they had no notice). It  also appears unlikely that the notice requirements in s414(5)(ii) would have been met either. If these notice requirements have not been met then QANTAS' action in grounding its entire fleet, would be unprotected.

Taking unprotected industrial action may make QANTAS liable for fines or civil action. Tests of these sections will undoubtedly require examination by higher courts than FWA, potentially even up to the High Court. Whatever the result, it is likely to change the industrial relations landscape in Australia by significantly curtailing or expanding an employer's ability to take industrial action against its own employees.


  1. I think that the lockout from 8PM on Monday is the employer response action, right? Grounding the planes is just a commercial decision?

    In that case, the notification requirements would easily be met?

  2. I'm sure that's what QANTAS will argue, but industrial action can be quite broad. s19 of the Act defines what constitutes industrial action which includes s19(1)(d): "the lockout of employees from their employment by the employer of the employees."

    A lockout is further defined by s19(3): "An employer locks out employees from their employment if the employer prevents the employees from performing work under their contracts of employment without terminating those contracts."

    I would imagine grounding the fleet would prevent the employees from performing work under their contracts and potentially constitute industrial action. It will be interesting what FWA decides.


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