Sunday, 20 November 2011

Qantas - Bungle or Heroes, and what's this got to do with retail.

Well this blog is bound to get the biggest reaction of all to date. Many people have passionate opinions on the recent Qantas dispute, especially those who were actually stranded during the airline's shut down including one fellow writer, a professional it would seem who commented it was like being invited to a BBQ by a mate and having the door slammed in your face, very Un-Australian. REALLY ???

I am really surprised by the division of opinion over this and, not being one to sit on the fence, I just have to say it was one of the bravest corporate decisions of our time. As a traveler who was stranded in the USA for a week and possibly who should be more emotional about the impact this had on my ability to run my business, I have never been more happy to be stranded because it was about time that business stood up and did something about the unions and the antiquated working practices of the past; and this sure was something.

The problem with freedom of speech is it is often used by ignorant people with very little information at hand. Whilst Qantas did massively disrupt passengers for a week the fact is that the unions and it's members have been interrupting services for 10 months now and let's not forget they vowed to also strike over Christmas, potentially leaving us all stranded at this peak period when travelers want to be reunited with their families. The choice to take action now and ensure that we were not stranded over Christmas was brave and really the only sensible decision to make.

Be you an international airline or a retailer big or small we are all facing challenges never before seen in this country due to the Labour government’s introduction of Fair Work Australia. In Qantas’ case this meant enabling the unions more power in the bargaining process forcing tougher negotiations and making unreasonable and untenable requests of the business that could have lead to the ultimate demise of the airline in the long term.

In the retail space our special gift from Fair work Australia was the modern award which funnily enough is anything but modern. The modern award was implemented to simplify all of our awards, which did need to be done, and to then provide us with a standardized approach or one-size-fits-all approach. However, one size simply does not fit all.

 At a time when retailers are facing declining sales and reported slumps in consumer confidence, retailers have been slogged with increased costs that are in many cases more significant than the business can handle. Whilst we have seen many retailers go under we know that many others would have, if they had not been bailed out by their overseas parents.

Some of the main cost impasse centered around an increase in penalty rates for what the government titled "unfriendly working hours". Again, how can a one size fits all approach work when some industries working Thursday nights, Saturday or Sunday is a rare occurrence but in retail it is the main trading period, so to suddenly load costs to these working  periods of time is both extreme and unfair.

Another contentious issue was the increase of the minimum shift from 2 hours to 3 hours. Whilst many see this as fair it was a blow to retailers and hospitality businesses who were one of the few industries that offered after school jobs, this extra hour across all after school jobs would add significant costs to the retailers wage cost. In effect over 50% of retailers said they would need to stop offering after school jobs and rework the roster to utilise full time staff better. This is very evident when we see that whilst the unemployment rate has fallen to 5.3 % the youth unemployment rate has actually risen to around 16 %

The bottom line is that whilst Qantas may be an extreme case they have led the charge and stood up to the unions and the government and have been the voice of all Australian businesses. If something does not change we will see more and more businesses  closing under the pressure of these increased costs through the antiquated employment practices of the past, the world has changed and employment policy needs to change with it to ensure the viability of all Australian businesses.

From a retail stand point we have not even seen the full effects yet as many retailers were still operating under old enterprise agreements or collective agreements but as they expire and more are forced to adopt the modern award we are sure to see more victims fall under this new and ill thought out regime.

God bless you Mr Joyce it was an honour to be stranded for this cause.

- John Caldwell

1 comment:

  1. It's about time we got a balanced view of the whole qantas debate, I too was inconvenienced and nearly didn't make it to the Melbourne Cup. But someone has to stand up to the government, we dont want to go back to the dark old days of labour leadership and union control. We have to stimulate business by providing incentives for business to employ staff. Modern Award, what's modern about it, its archaic and taking us back to the bad old days of labour rule