Virgin has agreed to a 13.5 per cent pay rise for engineers at its fly-in, fly-out service in an 11th-hour deal that has forced it to retract a bid to arbitrate the dispute using Labor’s new “intractable bargaining” laws.
The airline’s West Australian-based Virgin Australia Regional Airlines (VARA) had been the first employer to test the Albanese government’s unilateral arbitration laws that came into effect last month. It was set to argue its case before a full bench of the Fair Work Commission on Friday, against strong union opposition.
The union says the deal should “set the tone” for engineer pay negotiations at Virgin’s main arm. Getty
However, on Thursday afternoon, VARA advised the commission it was discontinuing the case because it had opted to put a revised deal to a staff and there was “little to be gained” from pursuing the application.
About 50 VARA engineers have been taking industrial action for the past six months to support catch-up pay after they were dealt wage freezes during the pandemic despite the FIFO service being Virgin’s only profitable business during that time.
Australian Licensed Aircraft Engineers Association (ALAEA) secretary Steve Purvinas said on Wednesday night the parties had reached a deal for an “immediate” 6 per cent pay rise backdated to July 1, a 6 per cent all-purpose allowance and another 1.5 per cent allowance for two years.
“The allowances totalling 7.5 per cent compensate workers for the loss of backpay and a two-year wage freeze,” Mr Purvinas said.
“[VARA] had to convince themselves the union hadn’t been successful and in order to do that they called the wage increase something else.”
A Virgin Australia spokesman said that “following matters raised as part of the proceedings, further discussions have taken place between VARA and the ALAEA”.
“This has resulted in an intention for the company to put a revised agreement out to vote shortly. In those circumstances, we discontinued the application for an intractable bargaining declaration,” the spokesman said.
VARA had initially proposed a 14.75 per cent pay rise over four years, but the union said that failed to account for the two years of wage freezes.
Mr Purvinas said the three-year deal ending June 2025 should “set the tone” for Virgin’s 350 licensed engineers taking industrial action in support of a 7.8 per cent pay rise at the airline’s main arm.
VARA’s lawyers initially told the FWC that its two years of failed bargaining with ALAEA meant the dispute was “intractable” and opposed further conciliation with FWC as futile.
The ACTU and the Australian Chamber of Commerce and Industry also intervened in the case, which was expected to set the threshold for what cases could go to arbitration.
However, VARA and ALAEA were still locked in negotiations after the airline made its arbitration application at the end of last month.
The subsequent wage outcome, which will go to a vote of the engineers over the coming weeks, meant Virgin lost grounds to argue the dispute was “intractable”.
On Wednesday, VARA’s lawyers sought to adjourn the arbitration case for at least a month to allow time for the ballot to proceed “in interests of a final attempt to determine whether employees are prepared to approve an enterprise agreement”.
But ALAEA opposed any adjournment “on the basis that the fact of a revised position indicates that the entire application is misconceived and should be discontinued or dismissed”.
While VARA then agreed to discontinue its application, it indicated it would make a further application on similar grounds if the vote was unsuccessful.
Mr Purvinas said “we think our members will be satisfied with [the deal] which itself made the intractable issue vanish”.
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