It is labour negotiating season at Qantas Airways with several major agreements up for renewal.

Qantas has reached deals, subject to ratification, with two of its major unions, but negotiations continue with two others. Key elements in the two pacts reached so far with the Australian Services Union and Flight Attendants Association of Australia are a 3% annual pay rise and increased pension contributions.

The services union deal covers 25% of Qantas' Australian staff while the cabin crew deal covers the 3,000 flight attendants working in the carrier's long-haul ­operation. The latter deal retains a 25% cap on foreign crews, a past point of contention, but allows Qantas to create a second tier of Australian-hired attendants. The airline regards this as a significant breakthrough.

All new long-haul crew will be hired through a subsidiary called Qantas Cabin Crew Australia, which will pay 25% less and require them to work 30% more hours than current crews. This will put second-tier attendants at Qantas on a par with the long-haul crews at its low-cost unit Jetstar.

Separate talks are still underway with Qantas engineers, which are balking at the 3% standard wage offer. Their union argues that 3% "isn't good enough when the Australian average wage has been increasing by 4.6% per year". It has called for a strike vote if Qantas does not sweeten its offer.

Negotiations have also started with Qantas pilots, who have considerable leverage because of a growing worldwide pilot shortage. The pilots are offering to boost their productivity by 10% in exchange for a slice of profits.

Meanwhile, new Australian prime minister Kevin Rudd is vowing to roll back legislation adopted in 2006 that allows companies to ignore collective bargaining and require employees to sign individual labour contracts. Jetstar has used these so-called "workplace agreements" extensively, but could be forced back to more traditional negotiations if this law is changed.

All new long-haul crew will be hired through a new subsidiary

Source: Airline Business