Last Saturday my memory, listening on NewsRadio, is that Gillard was conducting a media wrap-up session at the CHOGM Conference in Perth around the middle of the day. The last thing she needed with 54 heads of government and/or foreign ministers plus thousands of delegates about to leave for home after a successful conference which brought considerable credit to Australia was for some clown to ground the Qantas air fleet. If I’ve got the timing right, Joyce’s announcement at 2 pm AEDT would have been at 11 am Perth time. At noon Perth time three soldiers were killed in Afghanistan.

I understand that Gillard was able to confer with the relevant senior ministers during lunch about the Qantas dispute.

Joyce’s timing could scarcely have been worse.

I heard on the radio that Labor ministers were incandescent with rage over Joyce’s stunt. The Australian Financial Review yesterday reported that the Government believes it was deliberately blind-sided. They say that the Government had previously played down the notion that there may be a problem flowing from Qantas’ Asian plans. Now Albanese has said:

“We will not countenance any breach of the act.

“We have a watching brief, and as Qantas makes announcements or makes its position clear as issues develop with regards to plans for restructuring, the government will seek advice as that is made.”

According to the AFR:

The act, designed to ensure the Australian character of Qantas is retained, prohibits the airline from flying international passenger services under a name other than Qantas and requires the majority of Qantas International’s maintenance, administration, training, catering and flight operations facilities to remain in Australia.

There was a press report that Gillard had failed to take a call from Joyce. He corrected that, saying that he hadn’t thought it necessary to bother her because he knew she was busy with CHOGM and he made contact with the relevant ministers. She may have taken this as an insult. Would he have not bothered to contact Howard, kaeting or hawke under similar circumstances? I’m speculating, but on Monday Laura Tingle’s article told us:

One thing is sure, a prime minister deeply angered by what she clearly sees as an attempt by Qantas to blindside the government, was on the warpath on Monday, confident of her ground and not taking any prisoners.

Also:

Gillard was unapologetic on Monday about the wider grounds for dispute. She says that job security – “of course” – should be something workers should be able to entitled to discuss with employers.

Yesterday the front page lead was Gillard takes unions’ side:

Prime Minister Julia Gillard has unapologetically asserted workers’ right to bargain on job security, in the face of employer arguments that management must be free to manage without interference.

Gillard has also said that it is “not appropriate” for workers to agree on pay with their employers and then find contractors given the work at cheaper rates, making the workers redundant. This is a specific concern of the baggage handlers.

Apparently a scheduled review on the fair work Australia act is coming up next year. One specific change expected is a requirement on employers to give adequate notice of lock-out action. It’s noteworthy here that Andrew Stewart, an expert in industrial law, said the other day that Qantas could have arrived at the same place by giving a week’s notice of such action. Joyce’s “nuclear option” was in his view unnecessary overkill.

Qantas and employers generally must now be wondering what other changes to the FWA Act will be put forward, especially with an alienated Government dependent on cross-bench support.

… And it should have entered the negotiating fray itself, helping bang heads together.

Leaving that aside, though I think there is an element of piling on Julia Gillard at work, Bandt makes a number of claims, one based on a factual error, and the other encompassing a confusing elision between claiming the “government shouldn’t be taking sides” (which the government itself has claimed not to be) and an apparent belief that a suspension of the bargaining period, as opposed to a termination, would somehow have resulted automatically in industrial victory for the unions. Or perhaps Bandt is making or implying an argument that it’s undesirable, generally, for ‘third parties’ to intervene in industrial disputes.

Let’s get a number of facts on the table, first:

(a) The government, represented at FWA on behalf of the Minister, Chris Evans, argued either for a termination of the bargaining period, or for a 90 day suspension. That’s clear from a reading of the decision by Guidice J, Watson SDP and Roe C, right at the outset. The government was actually being consistent with the thrust of its own Act, that such matters ought to be subject to judicial determination, and, like the other parties involved, was following normal industrial practice by envisaging a range of outcomes which the tribunal might give effect to. It’s important to recognise this, and as far as I can see, it’s been completely overlooked, because it is highly pertinent to the Tony Abbott line that the Minister should have used the powers available to him under section 431 of the Fair Work Act.

(b) Bandt says:

Ever since John Howard’s WorkChoices, the spirit of which still lives in the current legislation, many unions have sought to bargain for an outcome and avoid arbitration. Why? Because the outcomes you’re likely to get in an arbitration are widely thought to be less than what you might get in bargaining. Especially over matters that impinge on managerial prerogative. Like job security clauses, a key claim of the unions in the Qantas dispute, because they are concerned about ‘offshoring’ and contracting out of their work.

Partly, this is wrong, and partly, again, it’s confused. FWA gives greater scope for arbitration than WorkChoices in the case of low paid workers, in particular, and where both parties consent to conciliation and arbitration. It’s true that the provisions regarding the availability of arbitration to settle disputes are not substantially changed from WorkChoices (with a very important exception, which I’ll come to). But this gives the lie to his logic. How could unions have been seeking to avoid arbitration, when arbitration has not been a legal option except in exceptional circumstances such as would trigger the termination of a bargaining period? It doesn’t make any sense, and in fact, the whole thrust of the reforms since, arguably Paul Keating’s Industrial Relations Reform Act 1993, and certainly since the Peter Reith/Cheryl Kernot Workplace Relations Act 1996, has been to de-emphasise and radically restrict arbitration.

Certainly, from WorkChoices onwards, the choice has simply not been there for unions. So it’s hard to know what he’s saying here. That’s why various analysts of Australian industrial relations have characterised the system we had as ‘voluntary collective bargaining’. One of the most important changes ushered in by the Fair Work Act was to remove the right of management to refuse to negotiate with unions. So we have probably returned, not to a regime which offers a choice between conciliation and arbitration and bargaining, but to one of compulsory collective bargaining. The enhanced provisions for union recognition, and for good faith bargaining, are precisely what business has been screaming about. So I think Bandt’s claim that “the spirit of [WorkChoices] still lives in the current legislation” needs heavy qualification.

Under WorkChoices, the most likely outcome would have been freer rein for Qantas to pursue a naked strategy of de-unionisation. Peter Reith’s very vocal calls for ‘free collective bargaining’ are exposed for what they are by his references to Margaret Thatcher in the same breath.

What I suspect Bandt actually has in mind, and this is taking us closer to the crux of the matter, is the degree to which unions in strong bargaining positions have been able to influence (but not determine) managerial strategy through “job security clauses” and restrictions on contract labour, or agreements that contractors be paid the same as employees. Typically such agreements have been reached in labour intensive industries where time constraints (and penalties for non-completion) are a factor, and where competition is minimal. Construction is the obvious one, and mining is another.

But I’m unclear as to why Bandt thinks, or could be read as thinking, that issues regarding job security may go more in Qantas’ favour under arbitration. I don’t see any reason why they wouldn’t fall within the scope or ambit of the dispute, because they are “employment matters” (and Australian industrial jurisprudence has always sought to wall off management prerogative). Certainly the Act envisages the distribution of labour between full time and other employees and the role of contractors as matters that can be subjects for an enterprise agreement. Another very significant change between WorkChoices and the FWA was the removal of the severe restrictions of matters on which parties could bargain. Given that there are few disputes in recent times which have reached the point of arbitration, I can’t see any reason on the face of it why there would be an assumption that job security clauses would not be matters on which FWA would make a determination.

It may be that he is thinking of the very strong line in the sand business is drawing in resisting these clauses, which is, again, one of the key planks of the anti-FWA campaign.

The assumption by some, such as Dr_Tad, who have seized on Bandt’s rather confused remarks (and he does a nice line in trying to be happy and shiny and appealing to everyone – “reach a negotiated outcome by supporting the whole of the airline, management and employees, with an eye to the country’s long-term interests”) that a suspension of the bargaining period would somehow lead to a victory for the unions seems to me to be highly questionable. Syndicalist sentiment aside, sometimes, sadly, the workers united are defeated. It’s not clear to me that the interests of pilots, baggage handlers and engineers are identical, nor that they would not become separable during a 90 day bargaining period (and let’s not forget, 42 days are potentially available under the FWA decision). But, more broadly, I’m unable to see:

(a) that the industrial muscle exists to produce an outcome favourable to workers’ desire to restrict the company in its pursuit of its strategy of offshoring, cost-shifting and outsourcing;

(b) how, in the absence of arbitration, Alan Joyce would be shifted from his stated intention to again lockout the workers. All he would have to do is endure negotiations for 90 days before the bargaining period recommenced, and there’s no legal lever to exert pressure on Qantas to negotiate on job security, which it’s made clear it does not want to do. With arbitration, there is. Or, at least, there potentially is. It needs to be remembered, and FWA took note of this, that Qantas could also, and probably would, lockout its workforce again on the resumption of a bargaining period. I doubt there’s much, if any willingness, on Qantas’ side to reach agreement on job security issues, which are what remain in the air, not pay.

In short, I don’t think Bandt has much warrant for saying this:

As it is, a Labor government has tipped its hand and sided with Qantas. Whatever Fair Work Australia decides, Qantas now knows the government will help it get to arbitration.

However, he is right about one thing. In a statement today, he writes:

“Now that the government has done what Qantas wanted and removed the workers’ capacity to protect Australian jobs, the government has a responsibility to outline how it will prevent Qantas from off-shoring its workforce.”

The first bit is wrong, for the reasons outlined above. The second is right, because it’s only through political rather than industrial action that a serious challenge can be posed to Qantas’ aim of effectively closing down its international operation in favour of joint ventures and subsidiaries which would offshore jobs and radically drive down labour costs.

“Job security clauses” would be a useful restraint on this form of aggressive management strategy, but the Australian industrial relations regime simply doesn’t empower workers to determine or even co-determine management strategy. Nor are the industrial interests of the various workers and unions identical with a political strategy to maintain airlines as providers of an essential public good (which is why, of course, Qantas should never have been sold in the first place). The specious rhetoric of Qantas management about competition and cost needs exposing for what it is (and one benefit, incidentally of arbitration is that it would allow the claims by unions that it has been cost-shifting to make its international operations appear unviable to be tested).

Similarly, we need a debate on whether or not we, like other countries, need to get back into the realm of owning airlines, precisely so that management thuggery can be curtailed and so that public goods can be provided publicly (and no one disputes the financial viability of Qantas’ competitors which are government owned). In other words, we need to resist the logic of the market and contain and constrain it through politics. We need to start reviving the idea central to the social democratic project of de-commodification, of progressively challenging and removing the inexorable logic of the market through collective action, including through action which seeks to utilise and reshape the institutions of the state.

That option exists, and it exists precisely because public suspicion of corporate behaviour and the excess involved in capitalism is fast reviving. It may well be that these hopes are incapable of fulfilment by the Australian political class. But it’s a disappointment that The Greens, in the persona of Adam Bandt, are chasing a rabbit down a bolthole by trying to score political points against the Labor government. Much more worthy of highlighting would be the mechanisms I mentioned in my post on Saturday which Bob Brown himself has sponsored, through amendments to the Qantas Act, which might usefully and fruitfully challenge corporate power.

By contrast, the argument that the bargaining period should be continued (and the Dr_Tad corollary that this would necessarily lead to victory for the unions) seems to me not making the perfect the enemy of the good, but the unachievable the enemy of the ambivalent. That ambivalence is best ended by continued political action around the central issues at stake here: the need to rein in and constrain aggressive market capitalism in the interests of workers and the public good.

Update: Adam Bandt responds in the thread and I respond in turn. I’d also observe that there’s a fair amount of extremely valuable and useful information in the thread from some commenters on the precise context of the use of various powers available to FWA under the Fair Work Act, which has been helpful to me in further informing my understanding of what is still relatively unsettled territory under a bargaining regime and legal framework that is, in some ways, novel. It adds nuance and substance to the debate, but I’m yet to be persuaded that I should shift from the broader political points made in the original post.

NB: Comments strictly on topic, please. All general comments about the Qantas dispute can go on the recent roundtable thread. All comments I regard as being unresponsive to the post will be removed without warning, and correspondence won’t be entered into. Please note that I won’t be moderating constantly, but I reserve the right to return and remove comments retrospectively.

Bernard Keane encapsulates Joyce’s strategy:

Alan Joyce’s logic is the elegant reasoning of a terrorist.

If the result of his massive disruption of the Australian transport system is the further shredding of the Qantas brand, which began under Geoff Dixon and which has accelerated rapidly under his Irish successor, and leads to further service cuts as Australians turns their back on the airline, that’s fine.

It will merely expedite his plans to offshore-by-stealth Qantas, wrecking the Australian-based operation while he sets about establishing lower-cost, more competitive foreign-based services.

To this end, a furious reaction against the airline for its act of malice toward Australian travellers is a price well worth paying; indeed, it may be part of the longer-term plan.

Joyce’s actions and motivations are almost a parody of the globalising logic that profits are all, workers, customers and any notion of public service or good nothing. And it’s in that quality of excess, in the gamble for high stakes, that his house of cards has the real potential to come tumbling down.

It shouldn’t escape notice that the Chair of the Qantas Board, Leigh Clifford, hails from Rio Tinto, a company long known for its overt deunionisation strategy. There is undoubtedly an element of union busting in all this, as well as a broader push from the more militant elements of the Australia corpocracy to smash the Fair Work Act. Peter Reith’s high profile interventions have to be seen in this context.

Hence, Qantas’ other play here, through keeping its cards close to its chest and failing to inform the government of the planned lockout (let alone passengers), was to force the government to bring the dispute before Fair Work Australia. Hence, too, Anthony Albanese’ fury.

But, as Bernard Keane also observes, there is real opportunity for the government.

There is no doubt that Qantas’ public relations offensive has failed. Essential Research found last week that 43% of respondents supported renationalisation of the airline, a large number blamed Qantas management rather than workers, and very large majorities opposed offshoring and thought Joyce’s remuneration too high.

The polling is not unambiguous, but there’s a plethora of pointers to how Joyce’s sneak attack has resonated, from a Facebook protest page which garnered almost 4000 likes in less than 24 hours, to the reaction on Twitter. The timing, coming on top of his huge pay rise on Friday, and the massive disruption and frustration caused to passengers on a Saturday afternoon, is so stupid as to beggar belief.

Joyce has exemplified the mindset of the 1% at a time when the Occupy X movement has successfully put systemic critique back on the agenda.

So, how does all this have the potential to backfire on Joyce?

First, it’s being discussed by many as the most spectacular example of management aggression since Patrick’s locked out its workers on the docks in 1998. Unlike the waterfront dispute, the impact on the public is much more palpable and much more direct.

Secondly, as Ben Schneiders correctly observes in the Sydney Morning Herald today, there is the potential for Fair Work Australia to arbitrate the dispute, a power now rarely used, and only available to the tribunal in the case of significant disruption to the national economy. The Minister, Chris Evans, could also make orders to both sides to cease industrial action, though that would be a last resort. The Fair Work Act emphasises bargaining in good faith, and it may well be that the tribunal will find that Qantas has not been. Then, there are legal questions over whether extending the lockout to employees who were not engaging in industrial action, and standing down others, is lawful.

Given that Qantas is seeking to put FWA on trial, and that the legislation is so closely identified with Julia Gillard, the arguments put by the Commonwealth will repay close watching. It would also be surprising if there were not pressure to tighten the provisions whereby management (unlike unions) does not have to give genuine notice of its intent to pursue industrial action. Qantas’ actions in grounding its fleet immediately, and alleging that the lockout would not begin on Monday, are specious in the extreme.

It’s crucial to remember that Joyce, far from pulling his fleet from the sky as a “response to union action”, has himself, according to the legal definition, taken industrial action.

More broadly, as Schneiders comments, there may be momentum for a broader use of the arbitration power, to protect the public interest.

Thirdly, Qantas faces some pointed questioning over its obligations under the Qantas Act which enabled privatisation. There are specific provisions, reflected in the airline’s own constitution, which require it to maintain its operations in Australia, and restrict it from flying internationally under another name. The unions have corresponded with Qantas about this, and the management line has been that subsidiaries are not bound. But Senate hearings have been examining legislation introduced by Nick Xenophon and Greens Leader Bob Brown which would close off this option. If such amendments were to be supported by the government, we would be in a very interesting place indeed.

And finally, as Bernard Keane writes:

Voters, it seems, just want their old Qantas back. In the view of Joyce and the Qantas board, they can’t get it back in the airline’s current form, not given continuing strong competition from government-subsidised foreign airlines and the high dollar. The only way to get the old Qantas back may indeed be to nationalise it and subsidise it, or to return to the days when competition from foreign airlines was even more tightly restricted than it is now.

And no one in federal politics is pushing those options. Well, not yet.

In a climate when the recklessness and contempt of corporate power reveals its naked face, the government would have little to lose, and much to gain, from reining it in. We shall see.

Alan Joyce is being crazy brave. So, too, should Julia Gillard be.

NB: To keep comments focused, please leave your response on Helen’s open thread. Comments on this post are closed.

Update: Laura Tingle.

Spurred on, this time, by the release of 1980 Cabinet papers (resources boom #1) and remarks by Howard government Reserve Bank appointee, Donald McGauchie, we’ve had a fresh round of dire warnings of a “wages breakout”.

This, on top of the usual shrill demands for “reform” in workplace relations – it’s a given, apparently, that the Fair Work Australia Act empowers unions.

Oh really? In a very useful post at We’re All Dead, Matt Cowgill does some myth busting on the current state of play in labour market hysteria.

Among other stats, Cowgill shows that the wages share of national income continues to head downwards, and is at its lowest point since 1964.

A reasonable observer might surely think:

(a) There’s a fairly pure case of ideology in the strict sense of the word in all this hoo-hah – “common sense” which is completely contradicted by facts;

(b) Fair Work Australia actually does incorporate a lot of the thrust of WorkChoices.

Recent figures from the Australian Bureau of Statistics show Australian women earned just 82.5% of the average male rate of pay across the country in 2009. On average, a female worker would have earned more in 1985?—?and will be $1 million worse off over their lifetimes than their dads, brothers and partners.

That rather understates the size of the problem, because that differential refers to full time earnings, and 57% of women in work were full time, with 43% being part time or casual in 2009. As the recent House of Representatives Standing Committee Report on Equal Pay, Making It Fair, observed:

In August 2007, the average mean earning from all jobs for women was $680 per week (compared to $1022 for male employees) partly reflecting women’s greater participation in part time employment. On a comparison of full time employment earnings, women on average earned $910 per week and men earned $1131 weekly.

The point I’ve been making in my commentary and analysis of the Abbott parental leave plan is that there seems to be a perception that women in the workforce are much better off than they actually are. Otherwise it would be impossible to conclude that income replacement was ‘generous’ or ‘fair’. My argument has been that the Coalition’s approach would further entrench existing inequalities. In that context, it was interesting to note the comments from Eric Abetz on the 7.30 Report tonight. Abetz was responding to a case which starts tomorrow in Fair Work Australia seeking to revalue the work performed (very largely by women) in the community sector.

To say that Abetz was hardly filled with enthusiasm for a case which would raise women’s wages by around $100 a week would be an understatement. Pay equity was a principle no one would disagree with, he observed, but it appears that in practice, it’s never the right time to do anything about it.

This, of course, is the whole problem. The principle was accepted in Australian law in 1972, but the practice has lagged behind, and is now trending backwards.

The method by which the ACTU, the ASU, and the Equal Pay Alliance are proceeding is by a test case based on principles of work value. The Coalition removed the power of FWA’s predecessor, the AIRC, to hear such cases, opposes anything but minimal safety net awards, and rejects the principle of industrial tribunals determining pay rates by an assessment of the skills and values worked.

So, if they were still in government, this campaign could not succeed. And it they return to government, it will not succeed. The Labor government, by contrast, is intervening in the case in support of the union position, and Julia Gillard made a cogent argument as to the timeliness of properly valuing community sector workers’ skills and experience tonight.

The audacity, and gross hypocrisy, of the claim that the Coalition cares about working women has been exposed for what it is, only two days after Tony Abbott’s IWD speech.

Elsewhere: Useful background and context at Business Spectator.

However, Gillard and Kevin Rudd might themselves bear some of the responsibility for this decision, which will – rightly – be a political problem for the Labor government. The Commission was heavily criticised by Labor in opposition, and next year it’s due to be abolished, its functions rolled into the AIRC’s replacement – Fair Work Australia. If the criticisms made of the process and of the narrow economic orthodoxy of its chair, Professor Ian Harper, have merit, it surely should have been open to the ALP to hand back the wage setting powers to the AIRC earlier. The ‘softly, softly’ approach to IR reform is full of contradictions, one of which will unfortunately now impact on those least able to afford to shrug their shoulders at the political game. It isn’t a good look for a Labor government.

Elsewhere: Via Andos in comments on another thread, a link to a useful interview on ABC Radio with ACOSS. The point is made that research from the OECD (and from other sources, I might add) debunks the notion that there is a strong correlation between small rises in minimum wages and unemployment.

Update: Matt C notes in comments that the FPC’s own modelling of its previous decisions shows only a minimal effect on unemployment of a decision not to increase the rate.

Elsewhere: Rob Corr.

Update: New post.

It certainly appears that Malcolm couldn’t resist taking the bait laid out for him in Kevin Rudd’s now notorious Monthly article. And can’t resist being the centre of attention.

And it certainly appears that the spectre of the Overshadow has dragged Turnbull and his party to the right.

But can he really be about to die in the ditch over unfair dismissals at a time when people are very concerned about job security? And reject the bill that overturns WorkChoices?