How far can Joyce go?
Paul Barry

If you want to discover how Alan Joyce and Qantas can shift jobs offshore – with the blessing of Fair Work Australia – you need look no further than New Zealand operator Jetconnect.

Jetconnect was set up in 2001 as a wholly-owned subsidiary of Qantas to run domestic air services in New Zealand under the Qantas flag. Naturally, it employed local pilots and staff on local rates, 30 per cent to 40 per cent below Australian awards.

In 2003, it began flying "a small number" of Qantas services on the trans-Tasman route. As Fair Work Australia explained in its September judgement, passengers would not have seen any difference, because the pilots and staff were trained by Qantas, they were wearing Qantas uniforms and Qantas ID numbers, and the planes had Qantas livery.

As time went by, Jetconnect took over more and more of the trans-Tasman service from Qantas. By January 2011, it was operating 70 per cent of the flights in and out of New Zealand and employing 92 pilots and 600 staff.

Then Qantas announced even more services would be handed over to the cost-cutting cousins, whereupon the Australian and International Pilots Association dug in their heels and asked Fair Work Australia for permission to represent the New Zealand pilots and get them on the same award.

FWA refused the application for a number of reasons, but firstly because Jetconnect's operations and jobs were based in New Zealand and therefore out of FWA's jurisdiction. This bodes extremely well for Qantas in the current dispute between management and unions.

FWA also refused to accept the pilots’ argument that Jetconnect was simply a division of Qantas, even though it accepted that Qantas paid the New Zealand pilots' wages, set the schedules, provided the planes and ran the operation from top to bottom, and even though Jetconnect did not have its own bank account.

But one of the three FWA commissioners dissented from this majority view. In a scathing minority opinion, senior deputy president Lea Drake – who has been arbitrating industrial disputes since 1994 – branded it all "smoke and mirrors".

"Jetconnect has no control over its operations, its finances or its industrial relations," Drake said. "Jetconnect's chief executive officer decides nothing significant. He decides no business strategy. He consults and then is directed concerning all decisions except the most insignificant. His ignorance concerning Jetconnect's financial affairs is staggering."

According to Drake, the purpose of the exercise was to "reverse the base from which (trans-Tasman) flights are dispatched”, to take advantage of the lower labour costs.

Qantas now has a green light from Fair Work Australia to duplicate these arrangements elsewhere by, for example, employing cabin crew and pilots in Singapore or Bangkok for flights into Europe and Australia. So, how far could it go in rolling out this model? And how far has it already gone?

Could Qantas set up a new base in Singapore?

There is nothing to stop Qantas setting up a new base in Singapore or Malaysia and using it to hire Qantas pilots and cabin staff at lower rates. The Qantas Sale Act 1992 might provide basis for a legal challenge, but lawyers reckon it would be unlikely to succeed unless Qantas shifts so many jobs offshore that its "principal operational centre" is no longer in Australia.

Singapore girls ... fly Jetstar

Qantas' budget airline, Jetstar, also uses a New Zealand subsidiary to hire crews for its trans-Tasman routes at lower rates. It has long done the same in Vietnam and Singapore to run local feeder airlines, but now uses foreign crew (at half the cost) on some of Jetstar's domestic and international routes. One third of Jetstar staff are now hired offshore, according to the unions. Pilots and cabin crew on Jetstar's Perth-Djakarta, Perth-Singapore and Melbourne-Singapore routes are based in Singapore and paid 50 per cent less than their Australian counterparts. Jetstar's Bangkok-based cabin staff are reportedly paid as little as $258 a month (plus $7 for every hour they fly). They work shifts up to 20 hours long and get no sick pay. Jetstar told The Power Index these rates are far higher than local market rates. Here's Jetstar's
reply to our questions.

Same work, different rates

Remember those graphics showing how passengers on a plane pay different prices for the same seat? Now flight attendants on the same Jetstar flight can be paid at different rates. Jetstar's Darwin-Ho Chi Minh, Darwin-Singapore, Darwin-Manila and Melbourne-Singapore routes sometimes mix Australian and Asian-based crews, pilots say, so some cabin crew are paid twice as much as others.

New Zealand pilots fly Aussie planes
http://www.businessspectator.com.au/bs.nsf/Article/Qantas-offshore-jobs-pilots-u...

The Unions are driving Qantas off shore.