Why Virgin Australia Had To Defend Its New Employee Terms

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If Virgin Australia was looking for some clear air following its sale and re-launch, unhappy employees might put pay to that. Virgin Australia is buckling down to negotiate new enterprise workplace agreements. But employees and their unions are not pleased with what the airline is proposing. On Wednesday, the unions took their displeasure public.

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Virgin Australia is in the firing line from unions over proposed changes to work conditions at the airline. Photo: Virgin Australia

Unions take aim at Virgin Australia employee deal

The airline has new owners, a Boston-based private equity firm. It looks like they want to bring some US-style workplace conditions to Australian airspace. There are claims pilots will only get paid for the hours they fly. In the cabin, flight attendants would work for up to 15 hours straight.

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On Wednesday, eight Australian unions signed a joint letter savaging Virgin Australia and their new owner, Bain Capital.

“We have seen some worrying changes at Virgin since Bain Capital secured the sale of the airline,” said one of the co-signatories, the Transport Workers Union.

“We want a collaborative future at Virgin, based on cooperation rather than private equity suits trying to steamroll decisions and fracture relations which have helped build up the airline.”

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There are claims Virgin Australia flight attendants will work up to 15 hours straight. Photo: Virgin Australia

Suggestions pilots will get paid on basis of flying time

According to a report in Thursday’s edition of The Australian, proposed new enterprise agreements could involve a radical restructuring of working conditions at the re-launched airline.

Virgin Australia pilots who worked international routes would earn far less following redeployment onto the surviving domestic network. The newspaper report cites a Virgin Independent Pilots Association spokesperson. He says Virgin Australia wanted a pay deal that set a guaranteed minimum number of flying hours. Alternatively, to pay pilots based on flying time. The union spokesperson said this could see some pilots’ salaries drop by 40%.

Flight attendants are also unhappy. There are reports flight attendants could work up to 15 hours straight for less pay.

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“Workers are also concerns at the shift in attitude towards negotiations which is steering away from the culture of collaboration which has always underpinned talks at Virgin. The workforce won’t tolerate their working conditions being cut to the bone permanently because of a temporary crisis,” says the Transport Workers Union.

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Unions are unhappy with suggestions of a shift towards US-style pay and conditions at Virgin Australia. Photo: Virgin Australia

Virgin Australia says it is seeking the best possible outcome and to preserve jobs

How much of this is lurid worst-case scenario speculation and how much is grounded in fact is difficult to determine. So far, Virgin Australia is digging its heels in.

“We are not alone in needing to reduce our cost base and remain competitive in our industry,” said Virgin Australia in a statement. While the TWU raises the issue of collaboration, or rather the lack of it, Virgin Australia says it continues to work with the unions to get the best possible outcome.

“We are targeting all areas of our business to reset our cost base,” the airline said.

“The changes we are seeking will shape a future for our airline that is sustainable for the long term and will mean we can save more jobs.”

The airline’s new owners have a focus on the bottom line. The CEO has extensive experience in the IR battlegrounds of rail and stevedoring. Virgin Australia is well positioned to imitate the IR negotiating tactics of competitor Qantas.

Virgin Australia’s rival is famously hardnosed when it comes to dealing with unions. It has a reasonable degree of success in doing so. The re-launched Virgin Australia has said it won’t be a mini-Qantas. But IR is one area where Virgin Australia could play by the Qantas playbook.

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