Qantas Airways' pay dispute with the Transport Workers Union (TWU) is undergoing compulsory arbitration before Fair Work Australia (FWA).
The Australian national industrial court has stepped in to determine a new workplace agreement for around 3,800 transport employees including baggage handlers, ground, catering and freight staff after both parties failed to resolve their dispute.
The union is demanding pay increases of around 10% over two years, and a new pay structure that would result in significant wage increases for many of its members, says Qantas. It adds that TWU is also making it "uncompetitive for Qantas to use labour hire companies".
The airline, meanwhile, is proposing a pay increase of 3% per annum over the next three years and for flexibility in its operations.
"The union is sticking by the claims that were central to the dispute which would see the union dictate how we run our business. This would prevent us from the sensible use of contractors and having a flexible workforce while our competitors are free from these constraints," says Qantas group executive Lyell Strambi, adding that this is the first time in 20 years that Qantas is having a pay dispute resolved through compulsory arbitration.
TWU's national secretary Tony Sheldon says that since employees have been barred from taking industrial action, hundreds more jobs have been outsoured and more will be lost because of "incompetent management".
"Qantas senior management has refused to fairly negotiate with their workforce, as they are driven by a clear ideological agenda. Qantas management is determined to outsource; to replace workers with Qantas skills, wages and conditions with outsourced workers on substantially reduced wages and conditions," he adds.
While Qantas says that the union only lodged its latest claim a week ago, continuing to demand unsustainable pay increases, TWU counters that it did so to reduce the scope of the arguments to be decided upon by the court.
"Willful misinterpretation of our position by Qantas does little to achieve a resolution and simply adds another chapter to their book of lies, lies, lies," says Sheldon.
The Australian government referred the matter to FWA after months of industrial action by the TWU and other unions which culminated in Qantas grounding its fleet in October 2011.
Industrial action by the three unions cost Qantas A$68 million ($70.8 million), leading to the grounding that added an approximate A$15 million per week in revenue lost. About 70,000 passengers were affected and more than 600 flights cancelled.
Qantas, however, has reached a new agreement with around 3,000 cabin crew and settled its dispute with the Australian Licensed Aircraft Engineers Association.