Qantas pilots are moving closer to direct industrial action as the management puts its hopes in disinterest by the Gillard government to save its tax and cost reduction strategies for off-shoring jets and jobs.

The Australian and International Pilots Association is holding back on filing for a ballot of members to approve resorting to protected industrial action pending last-ditch negotiations over a new EBA.

However, Qantas isn’t negotiating on claims for job security in return for a new suite of workplace efficiencies,  meaning the sham arrangements under which the Qantas and Jetstar jobs have begun shifting to bases in Singapore and New Zealand  are still being pursued.

(These were recently exposed on Crikey and Plane Talking as involving sending cadet pilots to Auckland to open local bank accounts and obtain an NZ tax file number but work in Australia, for less than Australian rates while also saving on the superannuation levy.)

Taken to its logical conclusion by a management not known for restraint in such matters, Qantas can in theory put all of its Australian payroll on foreign labor agreements, assuming what it is doing in New Zealand and Singapore is legal.

An industrial relations authority not involved with the parties to this dispute says: “This is a classic exercise in disengagement by the employer. It is hoping that if it keeps its head down this will all blow over, and in that respect it has the obvious support of the mainstream media and the Gillard government and the opposition, none of whom will challenge Qantas.”

In fact, the Gillard government and Abbott opposition have been as quiet as mice in the cheese pantry in the Qantas Chairman’s Lounges,  the feeding trough offered free to all federal and state politicians, senior judges, arbitrators, newspaper executives and key public administrators and trophy celebrities.

This is what the Qantas strategy involves.  Its  full-service and Jetstar budget flights between Australia and New Zealand are in full or part respectively staffed by Australians given a NZ tax file number and a NZ bank account and who are paid at lower NZ rates, which also save the Qantas group the superannuation levy, even when they continue to live in Australia.

These employees no longer have recourse to the rights found in Australian industrial law.

In Singapore, Qantas has already based two Australian-registered wide-bodied Airbus A330-200s painted in Jetstar livery, which operate services between Melbourne and Singapore using staff on Singaporean labour agreements and rates.

If unchallenged by the government, there is no reason why the entire mining resources sector can’t do the same things, and change from using fly in-fly out charters from Australian cities to deals in which the workforce is flown in and out on rotation from Jakarta, Singapore or Manila.

The savings in pay and superannuation and Australian taxation and industrial law compliance would also cost the ATO and government revenues substantial sums.

The merger of the Australian Stock Exchange and the Singapore Stock Exchange would allow the same hit on finance sector jobs in Australia, significantly downgrading the business relevance of Sydney and Melbourne, and removing high wealth jobs from the Australian economy.

The principles of off-shoring by Qantas are supposed to come in for more questions at this Friday’s hearings by the Senate inquiry into pilot training and airline safety (and now extended to maintenance as well), however sources indicate that Qantas and Jetstar executives are seeking secrecy.

These are matters for the government and opposition to chew on while they are troughing it in the Chairman’s Lounge, but it’s only a massive loss of revenue for the Australian economy  if the strategy prevails so, why would they bother.

Heads down into the trough again.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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