Virgin Australia workers asked to accept pay freeze, but promised their jobs won’t be outsourced

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About 6,000 workers at Virgin Australia will be asked to vote on a new workplace enterprise agreement that would see their pay frozen for 18 months to two years as the airline struggles to recover from the coronavirus pandemic.

But workers have been promised that none of their roles will be outsourced in the meantime, like they have been at rival airline Qantas.

Qantas this week confirmed it would be outsourcing more than 2000 ground staff roles due to an expected $10 billion hit to its revenue.

The unions said Virgin Australia’s move to keep roles in-house rather than outsource them to third parties could give the airline a competitive advantage against its bigger rival, after they and the airline’s new owner Bain Capital agreed to the in-principle enterprise agreement deal.

Virgin’s 6,000 workers will, in the coming weeks, have their vote on the proposed new enterprise agreements.

The in-principle agreements were negotiated between Virgin management and union worker negotiators from the TWU (Transport Workers Union), FAAA (Flight Attendants’ Association of Australia), ASU (Australian Services Union) and ALAEA (Australian Licensed Aircraft Engineers’ Association).

Virgin Australia has been one of the biggest corporate casualties of the coronavirus crisis, already making a third of its workforce redundant.

The $3.5 billion sale of Virgin Australia to private equity firm Bain Capital was finalised late last month, following commitments to retain as many jobs and services as possible.

The unions have now reached in-principle agreement on fresh workplace enterprise deals with Virgin’s new management, led by chief executive Jayne Hrdlicka.

‘Critical juncture’ in enterprise agreement negotiation

Ms Hrdlicka said the airline had reached a “critical juncture” in the enterprise agreement negotiations and thanked Virgin’s team and the unions for their efforts during the negotiation process.

“We know we’ve asked a lot of them as a result of the operating environment we find ourselves in, and we are grateful for their understanding and support throughout,” she said.

Ms Hrdlicka said the unions has worked “constructively” with management “to achieve this milestone in the timeframe required”.

“We have all worked together in a very tight timeframe in order to be able to bring certainty to our people prior to the holiday period,” Ms Hrdlicka said.

“We believe the outcome we have achieved working together with the unions will help to create a sustainable future for our airline, and means we can secure more jobs and look to grow again as the aviation market recovers.”

Ms Hrdlicka said the airline would proceed to a vote firstly for the Virgin Australia Regional Airlines Agreements this week, with the remainder of the agreements to proceed to a vote in the coming weeks.

TWU national secretary Michael Kaine said the agreements provide increased job security, by ensuring Virgin workers will carry out the airline’s work as opposed to being outsourced.

Negotiations were difficult, he said, and despite the pay freeze, workers would still have “decent pay and conditions”.

“Workers were able to secure commitments on issues which will protect jobs and set Virgin on a path to becoming a strong competitive airline again,” Mr Kaine said.

“These have been tough negotiations during the backdrop of continuing uncertainty for aviation and upheavals at Virgin.

“The focus of Virgin workers is to build back up the airline that they have fought so hard for during the administration process.”

Virgin’s tumultuous journey isn’t over yet

Virgin Australia has emerged from a tumultuous journey over the past few months, and it has a long way to go until recovery.

The airline went into voluntary administration in April, with massive debts as the COVID-19 pandemic brought the airline industry to a halt.

Since taking on the role of CEO last month, Ms Hrdlicka has promised no nasty changes to Virgin’s Velocity Frequent Flyer program for its 10 million members but has said its business class offering, in-flight WiFi and entertainment are under review.

The unions said the airline has also given commitments to retain its regional and international arms, tiered cabin classes and lounges.

“These wins will ensure standards in service and safety that Virgin passengers have come to recognise,” Mr Kaine said.

FAAA federal secretary Teri O’Toole said their members had “fought hard for the best agreement in the current climate”.

“Pay freezes, even when they are temporary, are never easy, but the commitment and dedication of workers to ensure that Virgin survives is what has made the in-principle agreements possible,” she said.

ASU’s assistant national secretary Emeline Gaske said it was pleasing the airline would keep roles in-house instead of contracting work to outside agencies.

There have long been concerns that outsourcing airline roles could comprise on safety and security, although Qantas has rejected that saying many roles are already outsourced across other airports.

“Virgin workers told us from the very start that their priority was job security, with all the uncertainty around Virgin’s future in the context of a global pandemic,” she said.

“Retaining experienced people at the airline means a safer, better travelling experience for everyone.”

ALAEA federal secretary Steve Purvinas said the agreements would help place “Virgin on the footing it needs to be a strong, competitive airline”.

But he said the Federal Government still needed to step in to ensure the airline’s future survival.

“Workers and the community want to see more from the Federal Government than rhetoric about a ‘market-led solution’ for Australia’s second airline,” he said.

The Senate recently set up an inquiry into the future of the aviation industry. It is due to report back at the end of March.

By business reporter Nassim Khadem (Original ABC Article)