A PILOTS PERSPECTIVE OF THE

AUSTRALIAN PILOTS DISPUTE OF 1989

Author: Alex Paterson

http://www.vision.net.au/~apaterson/aviation/pd89_document.htm

Last Updated: 11 March 2008


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INDEX

THE AUSTRALIAN PILOTS DISPUTE OF 1989 (This document)

 

APPENDICES (separate Webpage)

 


INTRODUCTION

On the 18th of August 1989, the Australian Federation of Air Pilots (AFAP) embarked on an industrial campaign ostensibly in support of a 29.47% pay claim. As part of this campaign, AFAP Pilots imposed on their employers (Ansett, East West, Ipec and Australian Airlines) a limitation on the hours they were prepared to work in the form of only making themselves available for flying duties within the normal office working hours of 9am to 5pm. 1

This action precipitated one of the worst and most expensive industrial dispute in Australia's history, now known as the 'PILOTS' DISPUTE' of 1989.

The Dispute has been conservatively estimated to have cost the Australian economy well over a billion dollars and resulted in the loss of many thousands of jobs associated with the demise of the many businesses indirectly affected. 2

The Dispute was a significant factor causing Australia to plunge into recession nearly two years earlier than its trading partners.

The Dispute, which has never been resolved, has resulted in nearly 80 % of the pilots involved not returning to their former positions, despite the pay rise allegedly causing the Dispute being well and truly met. This being the case, a number of key questions need to be answered :

The following is a pilot's perspective of the real causes of the Dispute and the reasons why the vast majority of the pilots involved were unable to return to their former positions.

NOTE : Throughout this document, the profession of Airline Pilot is referred to by masculine gender. This is done for convenience only and wherever he etc. is referred to in the context of pilot, it should be understood to mean she/he, his/her etc.

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1. This action is now known as the Pilots' 9 to 5 campaign. The Pilots decided to use this milder form industrial action as opposed to a conventional strike because they were aware of the potential disruption to the rest of the nation that their industrial action would cause.

2. Some commentators have put the cost of the Dispute to the Australian economy as high as $4 billion.

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OVERVIEW

The Dispute witnessed the formation of an alliance involving the then joint Managing Director of Ansett Airlines, Sir Peter Abeles, his close friend, the then Prime Minister of Australia, Mr Bob Hawke and to a lesser extent senior people associated with:- the Hawke Government, the Australian Council of Trade Unions (ACTU), the Industrial Relations Commission (IRC) and senior airline management from both the major domestic airlines. This alliance was aligned against the Pilots. 3

The formation of this alliance led to the unprecedented situation of the extensive resources of two multinational corporations (TNT and Newscorp, the joint owners of Ansett) being combined with the Australian Federal Government's power and influence. This alliance resulted in a significant amount of public resources being made available to a private corporation to fight, what would appear to be, the private industrial dispute of one man, Sir Peter Abeles, the then joint Managing Director of Ansett Airlines.

The consequent tangible and intangible support flowing from this alliance facilitated the occurrence of, among other things, the following circumstances.

The Hawke Government's support for Sir Peter Abeles' actions throughout the Dispute would appear to have been generally unquestioned. To this end, Prime Minister Hawke publicly declared "war" on the Pilots and enthusiastically endorsed Sir Peter Abeles' decisions to:-

In addition the Hawke Government subsequently provided:

The Hawke Government's pervading influence over the supposedly independent Industrial Relations Commission (IRC) facilitated :

However, far more serious was the subsequent arbitration by the IRC of an award based on the airline companies' 'Individual Employment Contracts' which took away from pilots virtually all their previous rights and employee protections. It is important to understand that the ability of pilots to make their day to day operational decisions free of any commercial pressure from airline management is fundamental to airline safety. This basic concept, known as the 'Independence of Pilot' is without doubt the most important factor contributing to Australian aviation's outstanding safety record.

To summarise, the IRC had ratified an award that no responsible professional pilot could work under. Hence the reason why nearly 80% of the Pilots refused to return to work and why the Dispute is still to this day not resolved. 7

In the space of just over a week, Sir Peter Abeles, with the support of his partners had manoeuvred the Pilots into a hopeless industrial position; resigned, locked out and with no industrial award. The only avenue made available to pilots for a return work was for them to individually abandon, not only their colleagues, but also their profession by signing an individual employment contract which contained virtually no rights to exercise their professional skills free of management pressure. The denigration of the Position of Airline Pilot had been completed with no realistic mechanism for a return to work being offered to professional pilots. The dispute was deadlocked within the first week.

And the cruelest irony of all? The Australian public, by funding the airlines with their taxes, were enabling Sir Peter Abeles to prolong the Dispute in his endeavour to industrially crush his pilots. At the same time, the same Australian public were suffering as a consequence, economic hardship and a very real threat to their safety due to the non-resolution of this dispute. All this occurred ostensibly because of Sir Peter Abeles' point blank refusal to negotiate a pay claim alleged to be outside the wage fixing guidelines of that time by being in excess of 6%. Yet, the one positive aspect of the Individual Contracts made available for Pilots to return to work was a 25% pay increase, disguised and presented to the public as 6%. 8

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3. For word economy, this alliance will henceforth be known as 'Abeles' Coalition'.

4. On numerous occasions, when asked by the media if he would take part in negotiations with the Pilots' Federation, Sir Peter Abeles replied "...What Federation?..."

5. The Hawke Government's financial support of the airlines consisted of a moratorium on air navigation charges and charging the airlines below cost price for the use of military aircraft.

6. Military Pilots' training and operating standards are different from Civil Transport Pilots, simply because military priorities are different from civilian priorities. Because of this, the carriage of civilians in military aircraft is illegal under Australian aviation law. Due to the illegal status of these flights and the lack of effective insurance, had an accident occurred in any of the military aircraft the legal ramifications would have been dire.

7. See the 'Analysis of the Individual Contracts' for the reasons why the individual contracts are unacceptable to professional pilots.

8. See the chapter titled 'The Hidden Pay Rise in the Individual Contracts' for clarification.

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THE FORMATION OF SIR PETER ABELES ALLIANCE.

Many aspects of the Pilots' Dispute were extraordinary and unique. None more so than the formation of the alliance opposed to the Pilots centred around Sir Peter Abeles, the then joint Managing Director of Ansett. Other leading members of this alliance included:

The Dispute could never have been prolonged for as long as it was and to have then degenerated into the unmitigated disaster that it finally became, without the coordinated involvement of all the protagonists associated with this unusual alliance.

The minutes of the meeting between Prime Minister Bob Hawke, Sir Peter Abeles, Mr Ted Harris, Mr Peter Morris (a Government Minister), Mr Ralph Willis (another Government Minister) and Mr Bill Kelty (by phone), which occurred in Bob Hawke's office on 15th August 1989 just prior to the commencement of the Pilots' 9-5 campaign, were made public during the Pilots' Immigration Court Case. These minutes provide an insight into the participants' firm determination to focus all their energies on the destruction of the Pilots' Federation instead of attempting to resolve the impending dispute by negotiation. 9

It is important to understand that at no stage had there ever been any negotiations without preconditions with regard to the Pilots' claim. The purpose of the Pilots' 9-5 campaign had been to pressure the companies to commence meaningful negotiations.

The refusal by the Pilots' Federation to give a public commitment to the wage fixing guidelines associated with the 'Accord' prior to the commencement of negotiations, not only facilitated the formation of Sir Peter Abeles' Alliance, but also allowed them to publicly argue via the media that the Pilots' pay claim was "outrageous, a threat to the 'Accord', and just a greedy grab for money". (That the pay claim was none of these things, is discussed later.)

That each member of this alliance was deeply committed to the 'Accord' was publicly well known. However, it is the view of many pilots that the alliance members' deep commitment to the 'Accord' appears to have had less to do with the job creation outwardly associated with the 'Accord' process and perhaps more to do with exercising and ultimately protecting the political power and influence conferred upon them as members of the Accord. 10

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9. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989

10. It is ironical that the dispute was clearly a major factor causing Australia to plunge into recession nearly 2 years earlier than its trading partners and as a consequence many of the jobs created earlier by the Accord process were subsequently lost by the prolonging of the Dispute.

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THE ROLE OF SIR PETER ABELES.

It should be understood that one of the main benefits of the 'Accord' for entrepreneurs such as Sir Peter Abeles was that it provided the unique situation of facilitating the real wage compression of their employees without the threat of industrial disruption.

But in Sir Peter Abeles' case, his membership of the industrial relations club associated with the 'Accord' provided much more. Sir Peter Abeles' personal friendship with, not only the then Australian Prime Minister, Bob Hawke, but also ACTU Secretary, Bill Kelty, together with his early involvement in the initial creation of the 'Accord' in the early 1980's conferred upon him extraordinary political influence and power. It was this power which he used with such devastating effectiveness during the course of the Pilots' Dispute in his endeavour to destroy the Pilots' Federation.

It should be clearly understood that Sir Peter Abeles was ultimately the central character, not only to the formation and function of this alliance, but to the Dispute itself. For in the final analysis this was Sir Peter Abeles' personal dispute.

That Sir Peter Abeles had developed a profound contempt for the Position of Pilot, there can be little doubt. His public behaviour during the Dispute and the lack of any basic rights within the Individual Contracts speaks for itself. It was this visible contempt for the position of pilot that was suspected by many pilots as being one of the major catalysts fueling the Dispute, if not the cause. Without his dogged determination to destroy the Pilots' Federation (and by default the Profession of Pilot) it is the belief of many Pilots that the other main protagonists in his alliance would have sought a negotiated resolution to the Dispute at some stage. 11

It is now clear that Sir Peter Abeles and his alliance were extremely well prepared to tackle and eventually destroy the Pilots' Federation. Negotiations to avert the Dispute were not considered. Their plan was simple; if the Pilots questioned the 'Accord' by embarking on an industrial campaign, they would be crushed. By subjecting the Pilots to the extraordinarily draconian tactics which they had agreed upon prior to the commencement of the Dispute, the planned destruction of the Federation was expected to have taken only a few days. 12

Sir Peter Abeles' decision to shut down the airline system at the beginning of the Pilots' industrial campaign would appear to have been designed to ensure that the Dispute was to be fought entirely on his terms. 13

It would appear the airline shutdown was planned to ensure the industrial isolation of the Pilots prior to exposing them to the maximum amount of industrial, media and political pressure thought possible. This pressure consisted of, among other things:

And a plethora of other tactics including the use of psychologists to conduct a campaign of psychological warfare. This campaign included, among other things, the spreading of rumours through susceptible pilots, countless telephone calls at all hours of the day and night, personal letters from management being hand delivered by courier, entreaties, threats, deadlines, etc.

But most importantly, the Airline shutdown was fundamental to the subsequent introduction of the Individual Contracts. 16

The public justification for this shutdown was that the Pilots' 9-5 campaign had made the Airline System unworkable. Yet, this is despite the acknowledgment by most independent observers that most airline passengers were able to reach their destinations, albeit with some delay. 17

Certainly far more people were able to reach their destinations in a far safer manner during the Pilots' 9-5 campaign than they were in the hotch potch of aircraft and pilots (both military and civilian) scrapped up from all over the world to replace the Airlines' own original pilots following the shutdown. 18

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11. The TV interview with Richard Carlton on the '60 minutes' television program of September 10th 1989 provided a revealing insight into Sir Peter Abeles' ruthless resolve not to negotiate when he said: "I won't give in, because if I give in, I'd rather close the airline forever..."

12. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989

13. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989 for an insight into the planning of these tactics.

14. The Pilot resignations were the subject of a great deal of controversy and were widely misunderstood. See the chapter titled 'The Pilots' Resignations' for a full explanation concerning the reasons why the Pilots resigned.

15. The changes to relevant immigration regulations legalising the employment of foreign pilots were included in the package put together by the Hawke Government to allow Chinese students to remain in Australia following the Tianamin Square massacre.

16. See the 'Analysis of the Individual Contracts' for the reasons why the Individual Contracts are an anathema to profession of pilot.

17. There was considerable media comment at the time about this shutdown.

18. It has been forgotten, that the Pilots did not strike. They exercised the mildest form of industrial action available to them; a restriction on the hours they were prepared to work. (in the form of the 9 to 5 campaign) They took this action because they were acutely aware of the potential disruption to the rest of the nation their industrial action would cause. Sir Peter Abeles' decision to shutdown the airline system prior to the Pilots' mass resignation, caused massive disruption to the rest of the nation.

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SIR PETER ABELES' SUSPECTED REAL AGENDA.

As mentioned earlier, the Individual Contracts made available for pilots to return to work contained a 25% pay increase, disguised and presented to the public as 6%. Despite this hidden pay offer, most Pilots refused to return under the conditions of the Individual Contracts. Given that the pay claim sought by the Pilots was met almost immediately by the Airline Companies, it follows then that pilots' pay was not really the main issue in the Dispute as far as the Airlines were concerned. If this is the case, it prompts the question; what were the real issues behind the Dispute as far as the Airlines were concerned?

A number of clues have now come to light which suggest that not only was the Dispute never really about pay, but that there existed a hidden agenda behind the Dispute. Further, these clues suggest that the person behind this hidden agenda was Sir Peter Abeles himself. This clues include: 19

The frustration felt by pilots associated with this management attitude finally resulted in a ground swell push by the pilot rank and file calling on the Federation's leadership (by 95% secret ballot) to resolve all these issues using conventional industrial tactics if necessary. The resulting industrial action presented Sir Peter Abeles and his partners with a unique opportunity to destroy the most powerful union in the airline industry, namely the Pilots' Federation, and employ their pilots on Individual Contracts.

It is important to understand that pilots' pay at that time represented well under 5% of airline operating costs. Thus, restructuring pilots' pay and conditions was never going to produce any significant cost savings. The key to significant micro-economic reform within the airline industry lay in restructuring the other large airline unions.

Sir Peter Abeles' massive aircraft buying spree, associated with his speculation in airline aircraft during the mid to late 1980s, had put Ansett Airlines in a very difficult financial position, even before the Dispute came to a head. 20

As can be gleaned from the minutes of the tactics meeting held in Prime Minister Hawke's office on the 15th August 1989, Sir Peter Abeles expected the destruction of the Pilots' Federation to be quick and total. ("Will be short - we won't give them anything.") The planned decisive destruction of the Pilots' Federation (clearly the most powerful union in the airline industry) would have provided a very public demonstration to the other unions of Sir Peter Abeles' industrial and political power. Had this scenario unfolded as expected, there can be little doubt Sir Peter Abeles would have been in a powerful position, both politically and industrially, to renegotiate new industry awards with the rest of the airline unions.

Sir Peter Abeles was able to secure the co-operation of the rest of the trade union movement through his close contact and friendship with the ACTU Secretary, Mr Bill Kelty. Further, his ability to have the then Prime Minister, Bob Hawke, ensure the Federal Government agree to substantially fund the Airlines during the Dispute was a master stroke. This aid package was of inestimable value to Sir Peter Abeles. Not only was Sir Peter Abeles supplied with a significant amount of public resources to fight his pilots, but more importantly, the aid package ensured that the Airline Companies did not need to stand down the members of the other unions in the airline industry. This had the effect of ensuring the defacto involvement of these unions in what was to become the total destruction of another union. This ploy was extremely successful, for it not only kept the other unions quiet (no mean feat), but more importantly it placated most of the Airlines' other employees.

It is now clear that the wider ramifications of Sir Peter Abeles' suspected plan to destroy the Pilots' Federation was poorly understood by most of the trade union movement as well as the general public. Yet, this is surprising because both Sir Peter Abeles and the other joint owner of Ansett, Rupert Murdoch of Newscorp, had a long and well documented history of being involved in the radical and ruthless restructuring of other industries with which they had been associated. 21

Whether or not the suspicion of Sir Peter Abeles' hidden agenda proves true or not, what is clear is that Sir Peter Abeles and his coalition partners seized upon the opportunity provided by the Pilots' industrial action to successfully unleash the raft of tactics they had planned prior to the commencement of the pilots' industrial campaign which ensured the successful destruction of the Pilots' Federation and the subsequent employment of pilots on individual contracts.

NOTE: It is not widely known, but a precursor to the Pilots' Dispute was played out on group of Ansett tarmac workers who were members of the Transport Workers Union (TWU) at Sydney airport in April 1986. Without going into the details of the Dispute itself, it would be true to say that Sir Peter Abeles was successfully able to force the workers involved in that dispute into signing individual contracts of employment or lose their jobs. Sir Peter Abeles was able to achieve this because it would appear he had the tacit approval of the ACTU. It may or may not be of significance that this industrial episode occurred within months of Sir Peter Abeles appointing a former senior ACTU industrial officer, Mr Ian Oldmeadow, to the senior industrial relations position within Ansett. However, what is clear is that the significance of Sir Peter Abeles' win in this relatively minor episode of industrial history escaped the notice of most of the trade union movement, including the Pilots.

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19. Clues are not proof. Nothing short of a Royal Commission can really hope to get to the bottom of this issue.

20. Numerous media reports indicate Ansett has not been operating profitably since the Dispute.

21. Newscorp's dispute with the Printers Union at Wapping, England in 1988 is a pertinent example.

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ABELES' CONTEMPT FOR THE POSITION OF PILOT.

Whilst Ansett Airlines' difficult financial position may have been a motive behind Sir Peter Abeles' refusal to negotiate with the Pilots' Federation, it would appear that his personal contempt for the position of pilot was the catalyst fueling his intransigence. That Sir Peter Abeles had contempt for the position of pilot there can be little doubt. His public behaviour during the Dispute and the almost total lack of employee rights within the Individual Contracts speaks for itself. This being the case, it is important to attempt to understand the source of this contempt. 22

It is probable that Sir Peter Abeles' personal contact with pilots may have had at least some influence on his contempt for their profession. The only airline pilots he had any significant and regular contact with were his senior management pilots. In fact it is probably true to say they were the only consistent window he had into airline pilots. And although most Line Pilots would have been loath to publicly admit it prior to the Dispute, in their eyes, outside the cockpit of an aircraft, the management skills displayed by a significant number of Ansett Airlines' Management Pilots were poor. (There were some exceptions.)

Put bluntly, as airline managers they were viewed by many Pilots as not worthy of respect.

In fact, this open contempt of them by a significant number of line pilots may have had some bearing on the decision by some of the management pilots to acquiesce in Sir Peter Abeles' plans for the destruction of the Pilots' Federation.

But it would appear that what Sir Peter Abeles never understood was that inside the cockpit of an aircraft, as Cockpit Managers (i.e. Pilots) most of his senior management pilots were like the vast majority of his line pilots, competent. It must be remembered that they had originally been employed as pilots (cockpit managers), not as airline managers.

And the reason why they were competent was that they were part of an airline cockpit management system second to none in world. A system which they, along with their former colleagues, had helped to professionalise and evolve over the previous 30 years. A system that had transformed them from being raw pilot recruits when they joined the airline into the competent airline captains they were eventually to become. A system which ensured that they were able to operate as responsible professional pilots in one of the safest airline systems in the world. A system that protected them from the more unsafe ideas of a tycoon like Sir Peter Abeles because they worked under a collective employment contract that conferred upon them basic pilot 'rights' and thus ensured the concept of 'pilot independence' pertaining to their operational decisions.

The irony is that by abandoning the system that they themselves were a product of, they ultimately helped to destroy it.

It is open to speculation as to whether their acquiescence in Sir Peter Abeles' denigration of their former profession reinforced the contempt he may have had for them and the profession.

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22. When asked by the media if he would talk to the Pilots' Federation Abeles replied "What Federation?"

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ABELES' EARLY PREPARATION FOR THE DISPUTE.

As mentioned earlier, it is now clear that Sir Peter Abeles was extremely well prepared to tackle and eventually destroy the Pilots' Federation. Further, there is evidence suggesting that the preparation for this dispute was initiated a number of years prior to the eventual outbreak of the Pilots' dispute.

Whilst it may never be known when Sir Peter Abeles actually made his decision to take on his pilots, it is now fairly obvious that the appointment of a number of key outside experienced industrial relations experts, beginning in 1985, signaled the start of Sir Peter Abeles' long term strategy to restructure his airline empire. 23

The 2 significant appointments were:

It would appear that both these people saw no contradiction or hypocrisy of being former trade union officials involved in the ruthless destruction of a trade union.

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23. It would appear to be a trademark of Sir Peter Abeles to employ key trade union officials for industrial relations positions. Other appointments within the airline industry include:- Mary Kinsella, ex Secretary of Australian Flight Attendants Association (AFAA) Sue Bussell-Renn, ex Vice President of the AFAA Barry Robinson, ex (ATOF), a close friend of Ian Oldmeadow. In 1990, ATOF became favoured by Sir Peter Abeles to be the union to represent the pilots employed by Ansett Airlines following the Pilots' mass resignation of August 1989.

24. Len Coysh was subsequently sacked by Ansett in 1995.

 

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THE ROLE OF THE INDUSTRIAL RELATIONS COMMISSION. (IRC)

The nation's peak industrial relations statutory body, the Industrial Relations Commission (IRC), is meant to be independent of Unions, Employers and Government and to be impartial. Further, one of the primary roles of the IRC at the time of the Dispute was to resolve industrial disputes, not to punish recalcitrant parties involved in a dispute.

The Pilots' Federation's insistence throughout the Dispute that the Pilots wished to conduct negotiations with their employers free of any outside interference, diminished the role of the IRC from the beginning. This would appear to have greatly annoyed the IRC commissioners involved in the Dispute and may have made it easy for them to side with Sir Peter Abeles in the destruction of the Pilots' Federation.

As the Dispute unfolded it became apparent to pilots (and some media commentators) that a significant motivation behind the decisions made by IRC in regard to the Dispute appeared to have had less to do with finding a resolution to the Dispute and more to do with punishing the Pilots for having the temerity to question the IRC's relevance.

Yet a civilised nation should expect a far higher standard of behaviour from a body whose primary purpose is to resolve inflamed industrial situations. No matter what the provocation, the IRC's key role, in what was after all the denigration of the position of Airline Pilot, was a national disgrace.

In fact the attitudes and consequent decisions made by the Commissioners ultimately denied any possibility of the Dispute ever being properly resolved.

To this end the IRC cancelled the Pilots' original industrial award in the first week of the Dispute, without allowing any discussion on the merits of the Pilots' pay claim to take place. This process took just over one day. (In contrast, the deregistration of the Builders Laborers Federation (BLF) took over one year.) 25

This extraordinarily rapid cancellation of the Pilots' original award was unprecedented and subsequently enabled the companies to introduce the Individual Contracts. 26

The IRC then effectively removed themselves from the industrial process for 4 weeks during which time the management of the respective airlines attempted to coerce their pilots to return to work on individual employment contracts. During this phase of the Dispute the Companies' campaign of 'psychological warfare' culminated in their penultimate deadline of 5.00 pm, Friday the 22nd of September 1989, in which they insisted that pilots to return to work under the Companies' non-negotiable Individual Contracts or lose their seniority rights. As the deadline approached it became patently obvious, even to the public, that this campaign had completely failed to coerce pilots to return to work on an individual basis.

Six minutes after the expiry of the Airlines' ultimatum the IRC advised the Pilots' Federation by fax that IRC President, Justice Barry Maddern, would be making a statement regarding the Dispute on the following Monday. However, as occurred so often throughout the Dispute, the intervention by the IRC at this late stage of the Dispute appeared to have less to do with finding a resolution and more to do with backroom politics. For on the following Monday the IRC announced that it planned to arbitrate on the Dispute without realistically attempting to resolve the Dispute by a conciliation process, as was available under the Act and as was requested by the Pilots' Federation. 27

The IRC's ensuing arbitration of a replacement award, based on the Companies' Individual Contracts, deprived pilots of, among other things, any rights to exercise their professional skills free of commercial management pressure. To this end, the Pilots' original 200 page collective contract was replaced by a 16 page individual contract.

It is now clear that the IRC commissioners completely failed to comprehend the significance of their actions. Their failure to grasp, despite days of argument, the fundamental importance to the core principles of the profession of pilot and airline safety of a pilot's ability to make operational decisions free from any commercial pressure from airline management is inexcusable. The IRC, by ratifying an award that no responsible professional pilot could realistically work under, had deadlocked the Dispute! Hence the reason why nearly 80% of the Pilots refused to return to work and why the Dispute is still to this day not resolved.

NOTE 1: In view of the appalling way the Pilots' Dispute was handled by the IRC, it would appear that the Pilots' insistence throughout the course of the Dispute that they wished to conduct negotiations with their employers free of any outside interference, was justified. In fact the apparent inability of the IRC to perform its primary function, that is of resolving the Dispute, provides evidence of what had long been suspected by pilots; that the IRC of that time was not an independent industrial relations commission but in reality just another instrument of the Hawke Government's industrial relations policy. 28

NOTE 2: On 22nd of September 1994, IRC Deputy President Hancock handed down his decision regarding the Domestic Airline Pilot Award respondency (known by Pilots as the Section 118 case). In handing down his decision, Commissioner Hancock delivered a surprisingly candid appraisal of many aspects of the Pilots' Dispute. See Appendix 8 for a summary.

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25. AFAP's refusal to return to work in accordance with their award, was used by the IRC as the justification to cancel the Pilots' original award. However, the IRC's action overlooked the fact that practically any industrial action by a union is by definition a breach of the relevant union's award.

26. The significance of the cancellation of the Pilots' original award was generally poorly understood by most independent observers and many pilots. The cancellation of the Pilots' original award was fundamental to the subsequent introduction of the 'Individual Contracts' because the individual contracts could not be introduced unless the Pilots' original award had first been cancelled. Further, the cancellation of the original award also meant that had the Pilots elected to back down and come back into the 'industrial system' they would have had to justify every condition of employment previously negotiated over the previous 30 years, clause by clause. In other words, the cancellation of the Pilots' original award by the IRC left the Pilots without any realistic path of retreat.

27. The IRC used to be known as the 'Conciliation and Arbitration Commission', with conciliation occurring before arbitration. There are many examples of the IRC intervening in industrial disputes and knocking heads together to commence a negotiating process in order to resolve the relevant dispute. This often occurs even when one or both of the parties have previously ignored IRC directives. It should be remembered that the IRC's primary function is dispute resolution, not the punishment of recalcitrant parties involved in a dispute.

28. It is pertinent to remember, that Justice Staples was the only former Conciliation & Arbitration Commissioner not appointed to the IRC when it was formed in the late 1980s, because he publicly insisted on the independence of his position.

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THE ROLE OF BILL KELTY AND THE ACTU

For Mr Bill Kelty the 'Accord' provided a forum to exercise a level of power and influence far in excess of his position as Secretary of the Australian Council of Trade Unions. (ACTU) 29

Mr Kelty's pervading influence over the industrial relations community in Australia in the late 1980's was fundamental to the eventual destruction of the Profession of Airline Pilot. As can be gleaned from the minutes of the tactics meeting held in Bob Hawke's office on the 15th August 1989 involving the members of Sir Peter Abeles' Alliance, Bill Kelty was closely involved in the plans to destroy the Pilots. (This meeting was held just prior to the start of the Pilots' 9-5 campaign) His acquiescence in the use of tactics which, by their very nature, were an anathema to the basic principles of the labour movement and his ability to keep dissent within the union movement to a minimum, were of inestimable value to Sir Peter Abeles. 30

To this end his pervading influence ensured the extraordinarily rapid cancellation by the IRC of the Pilots' original award without any discussion of the Pilots' pay claim taking place. He then, through his silence gave tacit approval for the use of the following tactics:

By acquiescing in the use of these tactics, Bill Kelty, in his role as one of the most senior officials of Australia's peak trade union body, has effectively endorsed the use of these tactics in future industrial disputes. Further, the long term ramifications of Bill Kelty's secret involvement in this dispute has yet to be fully understood by the majority of the trade union movement's membership.

It is open to speculation as to whether Mr Kelty's close friendship with Sir Peter Abeles had much influence on his decision to endorse the use of these tactics. However, it is most likely that the Pilots' Federation's longstanding objection to ACTU interference in previous negotiations between the Federation and their Employers, coupled with the Pilots' historical refusal to countenance an affiliation with ACTU, fanned the flames of a longstanding antipathy towards the Pilots held by some senior officials within the ACTU executive. 33

The rank and file pilots' insistence that the negotiations regarding pilots' pay and conditions involved only the Pilots' Federation and their Employers and did not involve the ACTU through the 'Accord' process, was almost certainly perceived by some members of the ACTU executive as an affront and threat to their position in the industrial relations arena. This perceived loss of face probably made it easy for them to remain silent at the destruction of the Pilots' Federation.

It should be remembered that, by definition, an 'Accord' is an agreement between willing partners. Further, the 'Accord' had no legal standing in industrial law; it was simply an agreement between the Federal Labor Government and the unions affiliated with the ACTU and with the support of some major employers like Sir Peter Abeles. The Pilots were not partners in the 'Accord' by choice.

But as occurred so often throughout the Dispute, the prime motivation behind the ACTU executive's stance appears to have had less to do with allowing a legitimate industrial campaign to take its course and more to do with backroom politics. For within the membership of the ACTU there existed a significant sentiment (particularly by some key large unions) to reject the wage fixing guidelines of that time and to embark on their own wages campaign. This was almost certainly perceived, by at least some members of the ACTU executive, not only to have the potential to lead to a wages blowout, but also (perhaps of more importance) to become a threat to the power and authority of the power brokers within the ACTU themselves. 34

In this context it is clear that Bill Kelty and the other partners in Sir Peter Abeles' Alliance intended to make an example of the Pilots as to the consequences of stepping outside their 'Accord' system. 35

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29. This influence, which is clearly associated with his mateship with Bob Hawke, Paul Keating and Sir Peter Abeles, has even been formally recognised by his appointment by the Hawke Government, along with Sir Peter Abeles, to the board of the Reserve Bank on 29 July 1987. He resigned from the Board on 4 March 1996 following the election of the Howard Government.

30. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989

31. The cancellation of the Pilots' original award allowed Sir Peter Abeles to argue that the Pilots' Federation no longer had the industrial right to represent pilots. This tactic was used to coerce pilots to return to work on the Companies' non-negotiable Individual Contracts without union representation.

32. The result of this court action proved 'legally' what had long been suspected; that the 'right to strike' does not exist in Australia, unlike most Western democracies.

33. The Pilots' Federation's long standing refusal to affiliate with the ACTU, stems from the distaste felt by most pilots towards the backroom politics associated with the political career advancement of its senior officials like Bob Hawke, former ACTU President Simon Crean (who later became a Government minister) Bill Kelty and Martin Ferguson, to name just a few.

34. That the Pilot's claim could have been handled by the 'Accord' partners such that it would not have been a threat to the 'Accord', is discussed later.

35. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989 where Bill Kelty commented that what they planned for the Pilots would " ...teach 'em what its like to be out of system..."

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THE ROLE OF PRIME MINISTER BOB HAWKE.

It is now obvious that Bob Hawke's role in the Dispute was fundamental to the success of Sir Peter Abeles' bid to destroy the Pilots' Federation. For without the extraordinary level of public resources which Bob Hawke as Prime Minister made available "carte blanche" to Sir Peter Abeles, it is most unlikely that Sir Peter Abeles could have succeeded in destroying the Federation. 36

As mentioned earlier, the Dispute witnessed the use of tactics which, by their very nature, were an anathema to the basic principles of the Labour Movement. The irony was that by actively endorsing the use of these tactics Bob Hawke totally corrupted the core principles of his political constituency, the labour movement. (Bob Hawke was President of the ACTU throughout the 1970s.)

Considering the cost of the Dispute, both in human and financial terms, it is important to attempt to discover what motivated Bob Hawke to become so deeply involved in the Dispute in the first place. And the answer probably lies in examining what was at stake as far as he was concerned.

It could be argued that apart from attaining his life long ambition to become Australian Prime Minister, Bob Hawke has actually achieved very little of any real significance in history. 37

However, Bob Hawke's one undisputed claim to fame was that penultimate example of 'consensus and conciliation', the 'Accord' between the Australian Council of Trade Unions (ACTU) and the Hawke Government. In fact it could be argued that the 'Accord' is possibly Bob Hawke's only significant stamp on history. For this reason it would appear that the 'Accord' was of paramount importance to Bob Hawke at the time of the Dispute.

While many of Sir Peter Abeles' friendships with powerful people could be suspected of being strategic, it would appear that the bond of affection between Bob Hawke and Sir Peter Abeles is genuine and extends back to 1969, soon after Bob Hawke became President of the ACTU.

All this puts into perspective Bob Hawke's subsequent behaviour leading up to, and then during the Dispute. For it is inconceivable that the level of public resources that was made available to the Airlines (and that really means made available to Sir Peter Abeles) would have been made available to any one else. (Imagine, for example, if Ansett had been controlled by the business tycoon, John Elliot, a former President of the opposition Liberal Party!)

It is now obvious that the Pilots completely underestimated the bonds of friendship that existed between Bob Hawke and Sir Peter Abeles and the political power that this friendship conferred upon Sir Peter Abeles.

The reasons for Bob Hawke's enthusiasm to be involved in the attack on the Pilots is open to speculation. It would appear that he may have been convinced that the Dispute was a threat, not only to the 'Accord', but also to his friend Sir Peter Abeles. He may have even expected that his perceived public toughness would enhance his image as a decisive leader, both in the eyes of the public and his parliamentary colleagues. 38

The Pilots' historic unpopularity with the general public (i.e. the tall poppy syndrome) was expected to make it easy to portray their pay claim as nothing more than "just a greedy grab for money." But it is suspected by many Pilots that a significant motivation to Bob Hawke was Sir Peter Abeles' clear expectation that the Dispute would be short and decisive. 39

Bob Hawke's apparent expectation of a quick and decisive defeat of the Pilots appears to have fuelled his exuberant enthusiasm to such an extent that he made his now infamous 'over the top' public attack on the Pilots at the beginning of the Dispute. In this attack he not only verbally attacked the Pilots personally, but declared "war" on them. But it was his unwitting denigration of the profession of Airline Pilot itself by describing pilots as just "glorified bus drivers" that had an extraordinary effect on, not only public opinion (which for a time, rapidly came around in support of the Pilots) but much more significantly on the Pilots themselves. For in one fell swoop Bob Hawke had defined unequivocally for the Pilots what this Dispute was really about. Up until this attack the Dispute was still in the eyes of many pilots a pay dispute. However, after this attack, the plan to denigrate the Profession of Pilot in the pursuit of the wider aims of the various members of Sir Peter Abeles' Alliance could not be denied by any pilot.

It cannot be over emphasised just how important to the Pilots' subsequent industrial solidarity was caused by Bob Hawke's attack. For months after this comment Bob Hawke was referred to amongst pilots as 'araldite' because he stuck the Pilots together. It is probably the supreme irony of the whole dispute that this one throwaway comment undoubtedly denied Sir Peter Abeles the decisive victory he expected and so desperately needed. As the Dispute dragged on Bob Hawke became increasingly tied to Sir Peter Abeles. Like the Pilots, Bob Hawke now found himself in a set of circumstances where he had few options. Politically it became virtually impossible for Bob Hawke to back down and as a consequence there was no way back. His only option for political survival became the total destruction of the Pilots.

NOTE: One of the more intriguing aspects of Bob Hawke's involvement in the Dispute was his rather extraordinary declaration of a "national emergency" on 23rd August 1989. While this action may have been used to legitimise the use of the military, it is open to speculation as to whether it also facilitated more sinister purposes. Thus, it may have provided a mechanism to involve the nation's security organisations in a bugging and surveillance operation on the Pilots' Federation and its personnel. For there is no doubt that the Pilots were bugged. This bugging operation was vital to the Airlines, not so much for specific information, but in order for them to maintain a constant 'feel' as to what was causing apprehension amongst the Pilots. It should be remembered that the Airline Companies were continually spreading rumours through susceptible pilots as part of their campaign of psychological warfare in their attempt to coerce frightened pilots to abandon their colleagues and return to work on the Individual Contracts. There is evidence (but not proof) that the security services may have been used in this bugging operation, but nothing short of a Royal Commission can hope to get to the bottom of this affair.

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36. The decision by Mr Hawke to effectively lay the 'Office of Prime Minister' at the feet of a private citizen like Sir Peter Abeles is unprecedented in Australian history. This issue received scant media attention at the time and the true implications of this action has yet to receive proper judicial scrutiny. At least $100 million of public money was made available to the Airlines through a moratorium on aircraft landing charges and the airlines being undercharged for the use of military aircraft. None of this money was the subject of a parliamentary appropriation bill which means it was made available to the Airlines illegally.

37. According to Gough Whitlam, (a former Labor Prime Minister) as reported in the Australian newspaper of 5th Sept. 1992, "Hawke never had any policies except the 'Accord'. He had one objective in public life, and that was to become Prime Minister. And when he got there, he had no purpose...."

38. It has now become clear through television programs such as the ABC's 'Labor in Power' series, that at the time of the Dispute Bob Hawke's position as Prime Minister was becoming increasingly under threat from Paul Keating, who replaced Mr Hawke as leader of the ALP in 1991.

39. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. '89 for Sir Peter Abeles' expectation that the dispute "..would be short"

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THE ROLE OF THE PILOTS WHO SCABBED.

It is now obvious that Sir Peter Abeles and his alliance partners had absolutely no understanding of the underlying principles and ethics associated with the Profession of Airline Pilot and of the Profession's fundamental importance to, not only airline safety, but ultimately to an airline's commercial viability. Had they done so, they would have realised the futility of attempting to coerce professional pilots to abandon their professional guild and embrace an employment contract that deprived them of any rights to exercise their professional skills free of management pressure. 40

However, the personnel within the airline companies who should have had at least some understanding of these fundamental facts were the handful of pilots who were actively involved in Sir Peter Abeles' plan from the beginning. What motivated them to undertake this self serving course of action, whether disaffection with their colleagues, perceived promotion opportunities and/or financial inducements, may never be known and is probably not that important. What is clear however, is that had these pilots behaved as the responsible professional pilots that they were supposed to be and advised Sir Peter Abeles of the eventual and inevitable consequences of his planned action, this dispute may have never occurred. Ultimately these people were more to blame for the eventual destruction of the Profession of Airline Pilot than Sir Peter Abeles himself. For without this handful of pilots, who not only had Sir Peter Abeles' ear, but were to become the core of the Airlines' new Check and Training Pilots, it is clear that Sir Peter Abeles and his partners could not have attempted to replace their original pilots with the opportunity seekers who presented themselves for the jobs that were not theirs.

Without going into a deep discussion on the calibre of the pilots who either returned to work or took up the positions that were clearly not theirs, it would not be a gross exaggeration to say that in the early stages of the Dispute (i.e. the first 3 months) the Companies were so desperate for pilots that almost anyone with a pilot's licence and a beating heart got a job. Further, it is a testament to the calibre of the foreign pilots in particular, that they were prepared to come half way around the world to knowingly steal a job in foreign land and embrace a contract with virtually no rights and in the process earn the title of 'Scab Pilot'. This was despite the fact that at that time of the Dispute there was a world wide shortage of pilots.

In the final analysis, the suitability criteria for employment as an airline pilot was not based on proper psychological aptitude and pilot professionalism, but on whether or not these candidates were prepared to abandon their profession and the standards set by their peers for their own personal advancement.

For these and other reasons the term 'scab' is of far more significance to the profession of Airline Pilot than for most other professions. Put bluntly, by scabbing and acquiescing in Sir Peter Abeles' plans, these pilots not only benefited themselves at the expense of the careers of their aviation colleagues, but more importantly they actively condoned the destruction of the very foundation of their former profession, namely 'pilot independence'. 41

It should be remembered that by using the arsenal of tactics they had planned prior to the beginning of the Dispute, Sir Peter Abeles and his alliance partners had expected the "pilots to split" and the Dispute to be resolved on their terms in a couple of days. It is doubtful that the Airlines seriously intended to replace their original pilots with such an unknown and dubious product as the foreign pilots and others. The visible presence of these pilots was simply intended to pressure the Airlines' original pilots to return to work on the Individual Contracts.

Yet, despite the pay claim allegedly causing the Dispute being well and truly met within the Individual Contracts, the vast majority of their original pilots refused to abandon their colleagues and professional ethics by returning to work under the terms of these contracts.

Within the first 3 months of the Dispute, the only pilots tempted to sign the Individual Contracts were a handful of the Airlines' former pilots attracted by the hidden pay rise within the Individual Contracts and perceived promotion opportunities outside their normal expectations, plus some foreign pilots. (who were being used as the 'bait' to coerce the Airlines' original pilots to return to work.) As the Dispute dragged on into its fourth month, the psychological pressure associated with the increasing presence of replacement pilots (particularly the foreign pilots) began to slowly but surely frighten an increasing number of the Airlines' former pilots to abandon their colleagues and return to work.

However, because the pilots who returned to work at a much later stage in the Dispute were more inclined to feel that they had been forced to return to work under duress ("crushed" was the description used by some media) they were much more aware of the wretchedness of their actions. 42

This subsequently led to the situation of apparently differing degrees of 'scabbiness' between the pilots who had scabbed. Thus, there occurred frequent cases of abusive behaviour between the pilots who had returned, usually based on the simple theme of; "I wouldn't have scabbed, if you hadn't scabbed earlier." This behaviour became so disruptive that Ansett management was forced to officially reprimand their pilots in a written 'Notice to Pilots'. 43

These tensions simmering just below the surface within an airline cockpit environment are extremely dangerous. It is important to understand that effective cockpit management can only be achieved in an environment of mutual trust, respect and cooperation between all the cockpit crew members. The reason for this is that it is not possible for each pilot to effectively monitor the actions of the other crew members all the time, particularly during the most critical and dangerous phases of flight such as takeoffs, landings, instrument approaches and emergencies. Examples of how poor cockpit management associated with ineffective crew coordination has resulted in airline disasters are legion and well documented.

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40. See the chapter on 'The Profession of Airline Pilot' for clarification of this statement.

41. See the chapter on 'The Profession of Airline Pilot' for the full significance of this behaviour.

42. Many of the pilots who returned to work, particularly those in the later stages of the dispute, were ashamed and distressed by their own actions. They were only too well aware that their decision to return to work without their colleagues not only vindicated the behaviour the pilots who had scabbed much earlier, but inevitably contributed to the destruction of the careers of many of their former colleagues and friends. It should be remembered that when the Pilots voted by secret ballot to embark on their industrial campaign, each pilot was in effect making a solemn vow to their colleagues to stick together and not to abandon them. The decision by individual pilots to return to work without their former colleagues broke that vow and invariably destroyed life long friendships.

43. See Appendix 2. Ansett Airlines' 'Notice to Pilots'

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THE ROLE OF THE CIVIL AVIATION AUTHORITY. (CAA)

Pressure from the Hawke Government led to the relaxation of significant civil aviation regulations to expedite the introduction into Australia of foreign pilots and aircraft during the Dispute. 44

This process could not have been effected without the cooperation of senior personnel within the Civil Aviation Authority (CAA) and witnessed sections of the CAA failing to carry out their charter of properly monitoring the operations of the airlines during and after the Dispute.

During the Dispute legal action was initiated against at least two (2) senior CAA examiners (Seegun and Lewino) which effectively restrained them from publicly speaking out about their concerns pertaining to airline safety.

Other CAA personnel appear to have acquiesced in the diminution of standards associated with the temptation of obtaining an airline pilot job. (At least nine (9) CAA officers resigned from the CAA to join the airlines at various times during the Dispute) 45

The shortcomings within the CAA which have arisen since 1989 have been highlighted in at least three separate accident investigations since 1989 (Seaview Air crash, Monarch Airlines crash and Ansett B747 crash) and the organisation has been restructured twice. At the time of writing (1997) the organisation was still without effective leadership and as a consequence remained in crisis. 46

It is the assertion of the author that many of the deficiencies now existing within the CAA are a direct result of the aftermath of the Pilots' Dispute and could not have existed prior to the Dispute because they would have not been tolerated by most of the pilots employed at that time or the Pilots' Federation.

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44. The relaxation of Civil Aviation Regulations included irregularities in the conduct of Australian Air Legislation examinations for foreign pilots and the undue haste in recognising the pilot licenses and ratings held by foreign pilots without a proper process of peer review being put in place.

45. Source: 'Australian Pilots' Dispute of 1989 Scab List'.

46. For the Monarch Airlines crash see BASI report at: http://www.dot.gov.au/programs/basi/pdf/ndusynop.htm and 'The NSW Coronial Inquest Report into Monarch Airlines Crash of 11 June 1993'.

For the Seaview Air crash see BASI report at: http://www.dot.gov.au/programs/basi/pdf/svqsynop.htm and 'The Staunton Commission of Inquiry into the Relations between the CAA and Seaview Air'.

For the Ansett B747 crash see BASI report at http://www.dot.gov.au/programs/basi/pdf/inhsynop.htm  

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THE EVENTS LEADING UP TO THE DISPUTE.

 

AUSTRALIAN AIRLINES.

Historically, the relations between the Australian Airlines Management and their Pilots fluctuated depending on circumstances prevailing at the time. The irony is that in the period just prior to the commencement of the Dispute relations between them had been developing towards a new era of closer cooperation. This was partly due to Australian Airlines' Pilots' cooperation with the 1986 introduction of Australian's new Boeing 737 aircraft. But it was also due to the recognition by the Australian Airlines' Pilots that closer cooperation with management promised significant opportunities for both the Pilots and the Company with the approaching deregulation of the airline industry and the expected privatisation of Australian Airlines. 47

With this new era of cooperation in mind, the Pilots' Federation had expected the negotiations regarding a new enterprise contract between Australian Airlines and their Pilots (which was held at Lorne, Victoria, in late June 1989) to be routine. So routine in fact that Captain McCarthy (the then President of the Pilots' Federation and who was under going command training at the time) did not attend. But after three days of the Lorne negotiations it became obvious to the Federation's negotiators that the Australian management negotiators did not possess the authority to negotiate anything substantial. In response to the question as to what was going on, they indicated that their hands were tied because "Sir Peter Abeles wanted an 'industry award' to cover all airline pilots."

ANSETT AIRLINES.

While this process of closer cooperation between the Pilots and management at Australian Airlines had been developing, the traditional close cooperation between Ansett management and their pilots was deteriorating at an alarming rate. (This deterioration is now suspected by many pilots to be associated with Sir Peter Abeles' growing contempt for the profession of pilot.)

One of the first indications of Sir Peter Abeles' growing contempt for the profession, was the 1988 'sideways promotion' of Ansett's senior management pilot, Captain John Dorward, who was then Director of Operations. This occurred when a senior engineering staff member, Mr John Bibo, was appointed to the same executive level in the corporate structure of Ansett as Captain Dorward.

While Captain Dorward failed to recognise that his new situation was a demotion (he chose not to resign from his management position) many line pilots instantly recognised it for what it was; a demotion of all pilots. As it transpired, this demotion signaled the beginning of an inexorable denigration of the Position of Airline Pilot which culminated in the Pilots' Dispute. 48

Captain Dorward's demotion was followed by a whole series actions, which most pilots at that time perceived as a concerted, if not deliberate attack on the Position of Pilot. 49

To this end, in the 18 months prior to the outbreak of the Dispute, Ansett Management :-

And a profusion of other annoying incidents; some petty, some serious, but all debilitating to pilot morale and fueling a growing frustration within the Ansett Pilots' ranks. This frustration climaxed within the Ansett pilot ranks in August 1988, with an open letter to their colleagues from the author of this document. The author's letters expressed concerns about the then rumoured direction being taken in the negotiations between the Pilots' Federation and Ansett management regarding the 1988 Ansett Pilot Contract renewal. The author was concerned the Federation's negotiators were in the process of giving away significant conditions of employment in exchange for a nebulous pay rise buried in an complicated forced overtime pay formula. (Draft Pay)

The author's letters reflected a significant groundswell of pilot dissatisfaction associated with Ansett management's (meaning Sir Peter Abeles') deteriorating attitude towards the Position of Pilot, coupled to a perception by many pilots that the Federation's negotiators were failing to effectively defend the Position of Pilot from this onslaught.

It subsequently became clear that the Federation's decision not to insist that Ansett meet its obligations with regard to manning levels as per the Contract, coupled to its willingness to freely give up conditions of employment, was done as an act of good faith. The Federation's negotiators had expected that acts of good faith on their behalf would result in a reciprocal attitude from airline management. It is now obvious that the Federation's 'lethargy' on these and other issues probably contributed to Sir Peter Abeles' perception that his pilots were weak and as such, worthy of contempt.

It can not be over emphasised that the Federation's actions during this dispute were not leadership inspired as 'proven' in the Victorian Supreme Court. (Case Number CL421 before Justice Brooking) They emanated from a sense of rank and file pilot dissatisfaction at the perceived attitude by the management of both companies towards their pilots and the 'softly softly' approach that the Federation's leadership had been pursuing at that time in its endeavour to resolve these issues. The author's letters were simply an example of this dissatisfaction.

The culmination of all these pressures and pilot frustration finally resulted in a groundswell push by the pilot rank and file calling on the Federation's leadership (by 95% secret ballot) to resolve all these issues using traditional industrial tactics if necessary.

In other words, Captain McCarthy did not drag the Pilots into this dispute, the Pilots directed McCarthy to take action. 52

NOTE: The Federation's most experienced Ansett Pilot Negotiator of that time, Captain Tony Fitzsimmons, was the focus of interesting saga which provides an insight into Pilot attitudes leading up to the Dispute. In the 18 months prior to the Dispute coming to head, Captain Fitzsimmons was continually 'giving away' significant conditions of employment for no reciprocal benefit to Ansett Pilots and in the process providing Ansett with a significant increase in pilot productivity. As it turned out, he was doing this as an on going act of good faith. This was despite Ansett management's growing and obvious contempt for the Position of Pilot. This cooperation was so much out of kilter with management's attitude towards pilots that a significant body of Ansett pilots (including the author) at that time began to suspect that Captain Fitzsimmons had somehow been 'compromised' by Sir Peter Abeles. 53

As it eventually transpired during the Dispute, Captain Fitzsimmons honestly believed he was dealing with decent people who would remember the Pilots' earlier concessions in future negotiations. "They're just talking tough" he argued during the early stages of the Dispute. It was not until the Federation was deeply involved in the civil damages court case that it finally dawned on him that Sir Peter Abeles "..was trying to finish us off."

For Captain Fitzsimmons this was a shattering revelation!

Incredible though it may seem now, it was simply beyond Captain Fitzsimmons' comprehension that the Pilots' former employers could be such ".. ruthless bastards."

And in particular, his former friend and colleague, Mr Len Coysh. 54

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47. All pilots, in both airlines, realised that any actions they took, must ultimately be in the best interests of the company that employed them. For it is an aviation fact of life that pilot careers can only advance if the company itself grows and prospers.

48. There was much pilot speculation at the time, that Captain Dorward's 'acceptance' of his demotion possibly reinforced Abeles' contempt for the Position of Pilot.

49. Mr Bibo's appointment was associated with a 'new' engineering philosophy within Ansett. This involved extending the 'life' of aircraft components by a process of routine inspections, assessing whether the part was within certain parameters and if it was found to be outside those parameters, then replacing it. (as opposed to a component time expiry replacement system) Of course, the success of this 'on condition' policy was based on the premise that spare parts were readily available. (i.e. in the store.) However, this new 'on condition' policy was accompanied by another new philosophy, that being the 'minimum spare parts in stock policy'. The combined affect of these contradictory policies manifested itself in pilots experiencing pressure (whether real or imagined by the pilot, deliberate or otherwise by management) to fly their aircraft with significant aircraft systems either unserviceable, or more seriously, with intermittent or unknown faults.

50. Ansett Airlines' has a long history of airline purchases.

51. For example, Ansett's Fokker Friendship base in Sydney was so short of pilots, that complete monthly rosters often went unassigned to a pilot.

52. A union leader does not end up with 80% of the union membership still behind him after 6 months 'locked out' if he has had to coerce them.

53. Examples of union officials being 'improperly' compromised or corrupted by powerful business interests are legion. This sort of inappropriate activity often results in the union involved 'allowing' an inexorable decline in the pay and working conditions of the relevant corporation's employees, which in turn allows the corporations involved to gain considerable commercial advantage over their competitors. In the period prior to the 1988 Ansett Pilot Contract renewal, there had been considerable media comment regarding the alleged complicit behaviour between the management of companies controlled by Sir Peter Abeles and key union officials in the transport industry. (The ABC's 4 Corners documentary "Flying High" screened on 2nd November 1987 was but one well researched example.) In this context, Captain Fitzsimmons' unilateral negotiating decisions to freely 'give up' significant conditions of employment (and some of his decisions were of dubious 'legality' under the Federation's constitution of that time) aroused considerable disquiet and suspicion amongst a significant number of Ansett Pilots. Hence the 'Patersons' letters'. As it eventually turned out during the course of the Dispute, these suspicions with regard to Captain Fitzsimmons were completely unfounded.

54. Mr Len Coysh was the Pilots' Federation's former executive director who was recruited by Sir Peter Abeles in late 1988.

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SIR PETER ABELES' FINAL MEETING WITH PILOTS.

One of the great mysteries of the whole dispute was, given that Sir Peter Abeles' suspected real agenda appeared to be so thinly disguised and his contempt for the Position of Pilot so obvious, how could it be that the Pilots failed to perceive these things and as a consequence walk straight into Sir Peter Abeles' ambush. For it is true that while some pilots did suspect an ambush, most of the Pilots did not.

Well, the reason was simple.

The fact is, from a professional pilots' perspective the inevitable result of Sir Peter Abeles' plan was such an abomination it was simply beyond their perception. In other words, the Pilots did not think the companies would be "so stupid, to seriously attempt to replace them" with the ad hoc personnel and system they eventually ended up with.

Historically, the relationship between pilots and airline management was based on an enterprise bargaining arrangement and as such subject to a process of constant renewal (almost daily) as a matter of course. 55

However, it is an industrial fact of life that an enterprise bargaining arrangement can only work successfully in a climate of mutual respect and trust between the parties involved. Further, there must exist a willingness by both parties to negotiate in good faith. Unfortunately, due to Sir Peter Abeles' growing contempt for the Position of Pilot (which would appear to have been shared by other senior management personnel in both the major companies) this relationship between management and pilots had degenerated to such a low state that it had become unworkable. Put bluntly, in the eyes of many pilots Sir Peter Abeles' attitude towards them and their profession simply had to be resolved.

Further, a close study of Sir Peter Abeles' history reveals that he was the master at positioning himself such that no matter which way an issue unfolded, he invariably won. In this context most pilots believed that had they caved into Sir Peter Abeles' perceived provocation and withdrawn their claim they would have almost certainly been condemned to experience a 'death by a thousand cuts'.

It is now strongly suspected by pilots that Sir Peter Abeles' expert on pilots (the Pilots' Federation's former executive director, Mr Len Coysh) was probably advising Sir Peter Abeles that the Pilots were weak, riven with dissension and that if subjected to a concerted attack and offered more money they would split ranks and cave in after a couple of days. 56

All this may explain Sir Peter Abeles' closing comments at one of the two Melbourne Regent Hotel meetings of late July 1989, which were organised ostensibly for him to speak to pilots about his plans for Ansett's future. (It is now strongly suspected by Pilots that Sir Peter Abeles was probably using these meetings to personally gauge the Pilots' resolve) At the last of these meetings the pilots attending politely asked a whole series of irrelevant questions, studiously skirting around THE issue of the impending dispute while Sir Peter Abeles himself failed to raise it. (The dispute was just a matter of weeks away) In fact the Pilots' obsequious demeanor would have almost certainly confirmed any conviction that Sir Peter Abeles may have had that the Pilots were weak.

However, towards the end of the meeting, one of the more senior pilots bluntly asked; "Look, let's stop pussy footing around, red letters are out (referring to the Federation's distinctive red information newsletters regarding the looming dispute) what are you going to do about it?"

To which Sir Peter Abeles quietly replied; "You do what you think you have got to do but understand this; I have a deep commitment to the 'Accord'."

And that was it. No beseeching speech. No dire threats. Just that one quietly spoken line. 57

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55. Negotiations about pilot productivity had been continually occurring successfully over the previous 30 years. There even existed within the Pilots' pre-dispute contract a formalised process for the changing the conditions of the Pilots' employment contract known as 'Letters of Agreement'. This process was used to 'fine tune' the Pilots' Contract on a day to day basis in the light of changing circumstances. Until the lead up to the dispute, these negotiations were usually conducted in a professional and cooperative manner.

56. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th August 1989 for Sir Peter Abeles' expectation that the dispute "..would be short"

57. After making that comment Sir Peter Abeles promptly closed the meeting and left.

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THE PILOTS' RESIGNATIONS.

The decision by the Pilots to resign en masse within the first week of the Dispute had a profound effect on the subsequent course of the Dispute. This decision was the subject of a great deal of controversy throughout the Dispute and was widely misunderstood by both the public and the media. Unfortunately, an initial source of this confusion was due to Captain McCarthy's public statement explaining the reason for the resignations as being partly due to "the shabby treatment of them by airline management" . (More on this later)

The true reason for the resignations was actually quite straight forward. The fact remains that the Pilots had little choice but to resign in order to protect themselves from being sued by anyone adversely affected by the Dispute. Unlike most Western democracies, the right to strike under statute law did not exist in Australia in 1989. Further, it was not widely known that when the Companies issued the writs against their pilots, they also sacked them. The status of being a 'sacked' pilot served with a writ implied in a legal sense 'wrong doing' by the pilot concerned. This in turn made them much more vulnerable to being successfully sued by anyone else adversely affected by the Dispute. (Thus for example, Mr Keith Williams of Hamilton Island Resort attempted to personally sue the pilots issued with writs by the Companies.) 58

Further, it should be remembered that as a result of the IRC cancelling the Pilots' original award a couple of days beforehand, the option for the Pilots to back down and rescind their pay claim no longer realistically existed. In other words, the point of no return had already passed. 59

It was in this dire set of circumstances that the Pilots' Federation advised the Pilots that resignation removed the very real danger of being successfully sued and besides "..it was obvious they were going to be picked off one by one and sacked anyway." 60

Unfortunately, Captain McCarthy's 'throwaway' line that the Pilots resigned because of "the shabby treatment of them by airline management" not only tended to trivialise the issue but ultimately proved to have disastrous consequences. While the comment was obviously never intended to be taken seriously (and most media commentators at the time did not take it seriously) it was seized upon by some sections of the media and the members of Sir Peter Abeles' Alliance to argue that the Pilots had "freely resigned their careers in a fit of pique." This enabled the members of Sir Peter Abeles' Alliance to declare that because the Pilots had resigned "of their own free will" their jobs had become vacant and as such, "the Dispute was over and they were now recruiting!" This argument enabled the pilots who came from all over the world and presented themselves for the jobs that were clearly not theirs, to kid themselves that they were not stealing the jobs of others. But more importantly, it allowed many key people in the Labor Party, the IRC and the ACTU to publicly justify the tactics subsequently used against the Pilots. 61

As it transpired during the course of the Dispute, the mass resignation of the Pilots had the following unforeseen consequences:-

NOTE: Many people have come to believe that Airlines shutdown the Airline system because the Pilots resigned. This is untrue. The true position was that the Airlines began to stand aside individual pilots and issue writs on them on throughout the day of 23/8/89. Management subsequently shutdown the Airline system at 8pm that night. The Companies were presented with the Pilots' mass resignations in the afternoon on the following day, namely 24/8/89. See Appendix 9, Airline Dispute Chronology.

The airline shutdown in turn :-

The tragedy for the Pilots was that by resigning they had become trapped between 'a rock and a hard place'. Thus, while the resignations afforded the Pilots protection from being sued, it also placed them in a very weak position from an industrial point of view. From an industrial perspective they had become 'persona non gratia' and consequently had little recourse to any of the traditional employee protections within the Australian Industrial System. 62

NOTE: In handing down his September 1994 decision regarding the respondency of the Domestic Pilot Industrial Awards (section 118 case), Senior IRC Deputy President Hancock provided a surprisingly candid appraisal of the Pilots' Dispute in general and the Pilots' mass resignations in particular. However, Mr Hancock provided no assessment on the IRC's handling of the Dispute. See Appendix 8: 'IRC Deputy President Hancock's S118 Decision' for excerpts from Justice Hancock's findings. 63

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58. The Companies served writs on Pilots in what appeared to be an indiscriminate and random manner. Whether this indiscriminate issuing of writs by the Companies had some other purpose apart from being used as a 'terror' tactic to split the Pilots, is still unclear. It is suspected by many Pilots that this tactic may have been specifically designed to place the Pilots in a position such that if they did not split ranks and cave in then they would have had little choice but to resign en masse. It may be pertinent to note that Sir Peter Abeles was very adept at placing himself in a position such that which ever way a situation unfolded he would still be in a winning position. As with so many aspects of the Dispute, the only hope of ever unraveling this issue will be through the auspices of a Royal Commission.

59. The option for the Pilots to back down no longer existed because their previous award (which had been cancelled by the IRC on 21/8/89) did not have to be recognised because it no longer existed! This meant the Pilots' Federation would have had to justify every condition of employment negotiated over the previous 30 years clause by clause. It is suspected by many Pilots that the Companies probably did not want the Pilots to back down until after the cancellation of their original award had been achieved. This may explain the reason why the writs served on individual pilots did not appear until after the cancellation of the Pilots' original award had been effected.

60. It is important to understand that the Federation advised the pilots to resign. There was no coercion or pressure placed on any Pilot to resign. The decision to resign was the individual choice of each pilot.

61. Very few people who came to personally know Captain McCarthy during the course of the Dispute failed to be impressed by his calm dignity in the face of appalling pressure. This calmness, coupled to his frank openness and complete honesty with the Pilots commanded respect and made him an exceptional leader. His calm leadership was without doubt a major factor in the Pilots' industrial solidarity. (A union leader does not end up with 80% of the membership still behind him after 6 months 'locked out', by lying to them) In this context, Captain McCarthy's 'looseness' with the truth to the media on the occasion of the Pilot resignations was most out of character. While this episode was of no consequence to Pilots, because every pilot knew why he/she had resigned, it was to have disastrous consequences on the subsequent course of the Dispute. It should be understood that throughout the Dispute, Captain McCarthy's public utterances were invariably truthful because he used the public forum of the media to communicate with Pilots. Apart from Captain McCarthy's basic honesty, it would have been counter productive for him to attempt to mislead Pilots, especially through the media.

62. As Bill Kelty is reported to have said during the meeting in Prime Minister Hawke's office on the 15th August 1989, the cancellation of the Pilots' original award would "...teach 'em what its like to be out of system.....it is no soft option to be out of the system." See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989

63. Justice Hancock was a member of the full bench of the IRC adjudicating at the hearings regarding the Pilots' Dispute in 1989.

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ANALYSIS OF THE PILOTS' PAY CLAIM.

Considering that the Pilots' pay claim was allegedly the cause of the most expensive industrial dispute in Australia's history, it is surprising that no independent body has seriously attempted to dissect and analyse the Pilots' pay claim or examine in any detail the pay structure of the Airlines' Individual Contracts. Close examination of these twin issues reveals a level of duplicity and hypocrisy of breathtaking proportions.

Breaking down the pay claim into its constituent parts reveals that the Pilots expected a real pay increase of around 10%. (This assertion is explained in detail later)

The background to the Pilots' pay claim is as follows.

It must be remembered that the Pilots' Federation's refusal to give a commitment to the guidelines of the 'Accord' prior to the commencement of negotiations was used by Sir Peter Abeles and his partners to mobilise the raft of tactics which they had planned in advance in their bid to subjugate the Pilots' Federation. Yet, the Federation's refusal to give a commitment to the guidelines of the 'Accord' prior to the commencement of negotiations was based on a number of very valid reasons which appear to have been forgotten in the mayhem of the Dispute. These reasons were:

1. That at the time of the Pilots' claim, nobody was prepared or able to define just what the actual boundaries of the guidelines were. In other words, the Pilots were being expected to sign a blank cheque. 64

2. Even if the guidelines had been defined, it is a fact that the 'Accord' could usually be a remarkably flexible document when it suited the 'Accord' partners. As Captain McCarthy quite rightly observed early in the Dispute, "You would be amazed at what they can fit within the wage fixing guidelines when it suits them." No better example of this can be found than the Federal Politicians 36% pay rise package of late 1988. (which needless to say, received the enthusiastic support of the vast majority of politicians from both sides of the political fence.) This pay rise package was announced just before Christmas 1988, so avoiding much media scrutiny. The level of cynicism of the people who were insisting that the Pilots remain within their system is no more graphically illustrated than by IRC commissioner Barry Maddern's acknowledgment that there was general agreement that the Politicians' pay increase could be justified within the wage fixing principles because no one dissented! 65

3. The Pilots' Federation's previous industrial success by using direct enterprise bargaining to resolve salary matters made them very hesitant to rely on the IRC. Further, their reservations about using the IRC were simply confirmed when IRC Commissioner Justice Coldham stated right at the beginning of the process that the Pilots' claim was "outrageous and outside" the yet undefined 'guidelines'.

All these considerations led most pilots to believe at that time that had the Federation agreed to abide by the these undefined guidelines they would have received a 6% pay rise and not a cent more.

NOTE: The subsequent 18% pay rise awarded to Qantas B747-400 Pilots by the IRC in January 1990 (which went virtually unnoticed by the media and the general public) provides an example of how the 'system' could be made to work without causing disputation when it suited the 'Accord' partners. As such, it provides further evidence that the Pilots' Dispute was never really about pay. It also demonstrates that the Federation's pay claim could have been processed without destroying the 'Accord'. (as was claimed by Mr Hawke and others) While the Qantas Pilots' case no doubt had merit, its subsequent success at passing through the 'Accord process' virtually unscathed served as a very public example to the rest of the union movement of the rewards available to those who stayed within the 'System'. (It should be noted that the Qantas Pilots' pay rise did not result in a wages blow out within the rest of the union movement.) 66

That aside, the Pilots' Federation did agree that they were prepared to have the IRC ratify any subsequent agreement they may have reached with their respective employers, but only after the relevant negotiations between them had taken place. 67

Now, it is simply an industrial reality that employees, through their union, sometimes have no choice but to take industrial action in order to demonstrate unequivocally to their employers the seriousness of their concern with regard to an issue in dispute. In other words, some form of industrial action is from time to time the only realistic avenue available to employees to get an employer to the negotiating table.

It has been forgotten that the Pilots did not strike. They exercised the mildest form of industrial action available to them; a limitation on the hours they were prepared to work (the Pilots' 9 to 5 campaign) in order to get Sir Peter Abeles to commence the negotiation process. 68

With this in mind, the Pilots expected that after a period of public political grandstanding by the members of Sir Peter Abeles' Alliance, common sense would have prevailed and a normal process of negotiation in good faith would have then commenced.

Clearly, most pilots did not consider the possibility of Sir Peter Abeles' suspected real agenda or the ambush.

The following is a breakdown of the Pilots' actual pay claim and an examination of the wider aims that the Pilots were attempting to achieve.

The purpose of the Pilots' claim was designed to achieve four main aims.

These were:

A more detailed examination of these aims is as follows:

1. The Restoration Of Pilots' Pay.

It is not the purpose of this document to examine in detail the success or failure of the 'Accord' between the Hawke Government and the ACTU. However, in order for the reader to be able to develop some sort of perspective on the Pilots' claim, the following is a summary of the effects the 'Accord' process had had on pilots' wages.

It should be understood that the original 'Accord' of 1983 was supposed to maintain the real purchasing power of wage and salary earners through a process called 'full indexation'. But over the years, as with so many political promises, the real wages of salaried employees inexorably declined despite the fact that Australia was experiencing one of its longest periods of boom, with record company profits. In the view of the Pilots the 'Accord' process was being used to facilitate the real wage compression of salaried employees without the threat of industrial disruption.

In the case of the Pilots, due to inflation and the 'Accord' process, they had experienced a reduction of:

The net result of all these factors was that the Domestic Airline Pilots were, at the time of the Dispute, in the ranks of the western world's lowest paid airline pilots. 70

Obviously, other wage earners were effected in a similar fashion as the Pilots, however the Pilots had decided that as the 'Accord' was no longer delivering on any front (including job creation) they had had enough.

To this end, the Pilots served a claim on the Airlines, to be negotiated, which was based on the Ansett pay scales and consisted of 21% effective immediately and 7%, compounded for inflation to become effective one year later. This totaled the well known figure of 29.47%

Captain McCarthy's public statement at the beginning of the Dispute that this was not an ambit claim was seized upon by Sir Peter Abeles' Alliance and sections of the media as 'proving' that the Pilots were totally intransigent and that the only way to deal with them was to crush them.

But this of course this ignores the fact that a "claim to be negotiated" is by definition ambit. Further, it is the basic tenet of negotiating tactics that the exact nature of the real fall back position is not revealed. (i.e. ask for tuppence but take a penny.) That aside, any lasting resolution to an industrial dispute must contain the essential elements of what both sides really want to achieve. In other words, the Pilots were well aware that a true and lasting resolution to the Dispute could only occur if both sides 'won'.

Now it is inconceivable that Sir Peter Abeles and the negotiators from all Airlines were not aware of these basic negotiating rules. The fact is, the Federation and the Airline Companies had been negotiating between themselves virtually daily for the previous 30 years and like a married couple, they knew each other backwards.

This being the case, the burning question which is rarely asked and has never been answered is:

Why did negotiations never start?

The most likely reason was that Sir Peter Abeles never intended to negotiate. As mentioned earlier there is evidence pointing to Sir Peter Abeles' suspected hidden agenda. If this was the case, then it is clear that Sir Peter Abeles could not afford to allow negotiations to even commence, because once negotiations had started a resolution was inevitable. It should be remembered that the foundation of Sir Peter Abeles' suspected hidden agenda was the subjugation, if not total destruction of the Pilots' Federation in his bid to restructure the rest of his airline. All this of course puts into perspective Sir Peter Abeles' decision to shut down the airline system within the first days of the Dispute and his point blank refusal to allow the negotiation process to start. 71

Conversely, it is also the reason why Captain McCarthy insisted on countless occasions throughout the Dispute that "the Pilots want to negotiate with the airline companies, free of outside interference, and that a successful resolution to this dispute could only emerge as a result of direct negotiations between the Federation and Airline Management".

In hindsight, although Sir Peter Abeles' preparations for the impending dispute were not well disguised, the Pilots missed all the signs and walked straight into what appears to have been a classic ambush.

Which brings us to the question, what was the ambit in the Pilots' claim?

The answer of course, lies within the domain of the Federation's Senior Negotiators and as negotiations never occurred, it will probably never be fully divulged. However, there were plenty of 'items' that most rank and file pilots were quite happy to 'trade in' for a direct pay rise. Keep in mind that the following list is by no means comprehensive.

Like many unions in Australia, the Pilots' Federation had over the years managed to negotiate various allowances as part of their remuneration package in lieu of a direct pay increase. This was usually done in order to circumvent the wages policy of which ever government happened to be in power at the time. 72

In the case of the Pilots' Federation, some of the allowances they had managed to negotiate, particularly during the life of the 'Accord', included:

With this in mind, it would be true to say that most rank and file pilots expected the Federation to 'trade in' the myriad of allowances for a straight uncomplicated pay rise. That being the case, the true base position that most pilots expected negotiations to proceed from, was somewhere in the order of:

To summarise, the Pilots expected about a 10% real wage increase, a cleaned up contract and 7% one year later to compensate for forecast inflation. 74

Of course, as Captain McCarthy quite rightly said, once negotiations in good faith had commenced it would be true to say that anything was possible, including large pay rises for any significant productivity trade offs. (Which is exactly what transpired in the Individual Contracts, but we come to that shortly.)

2. The Renewal Of The Australian Airlines' Pilots' Contract.

This Contract was over 2 years past expiry and significantly inferior to the Ansett Pilots' Contract. Negotiations about the renewal of this contract (which were conducted at Lorne in June 1989) had broken down because the Australian Airlines' Negotiators were required by their owners (the Federal Government) to negotiate with the 'Industry' as a whole. (In reality that meant Sir Peter Abeles.)

3. The Establishment Of An Industry Award.

The purpose of this was to cover all airlines, including the proposed future airlines like Compass. Clearly an industry award would have achieved the previous aim of renewing the Australian Airlines' Pilots' contract. Further, an industry award made good sense to not only the Companies but also the Pilots, especially with airline deregulation on the horizon. For the Companies it provided a level playing field between all companies with regards to pilots' wages and conditions of employment. In the case of the Pilots , it removed the very real threat of each company playing one group of pilots off against another. 75

4. The Re-Establishment of Respect for the Position of Pilot,

The re-establishment of respect for the Position of Airline Pilot by senior airline management was clearly the crux of the whole dispute. There can be little doubt that had Sir Peter Abeles and the other senior airline managers possessed a proper respect and understanding for the Position of Airline Pilot, the planned denigration of the Profession of Pilot would have been inconceivable. That being the case, all other issues of disagreement would have either never arisen, or would have been resolved at some stage in a civilised and dignified manner.

In other words, with a proper respect for the Position of Airline Pilot there would have been no dispute.

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64. Even the ACTU itself had difficulty with the 'guidelines' at that time. As the then ACTU President, Simon Crean (who later became a minister in the Hawke Government) said at the time, that "the union movement was not prepared to give a commitment to something that had yet to be fully defined."

65. As reported in the Australian Newspaper Dec 24th 1988.

66. The Companies' replacement Individual Contracts contained a 25+% pay rise. For a full explanation about this pay rise see the chapter titled "The Hidden Pay Rise in the Individual Contracts"

67. This process is the basis of "enterprise bargaining", a system subsequently embraced by the Accord partners.

68. They took this action because they were acutely aware of the potential disruption to the rest of the nation their industrial action would cause.

69. No better example can be found than Sir Peter Abeles' speculation in airline aircraft, which has practically bankrupted Ansett, added to the national indebtedness and in the process contributed to the devaluation of the Australian dollar.

70. See Appendix 5 regarding an 'International Comparison of Airline Pilots' Pay.'

71. As indicated in the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. 1989 (See Appendix 1), Sir Peter Abeles and Mr Ted Harris (Australian Airlines' Chairman) appear to have decided that the cancellation of the Pilots' original award would isolate the Pilots industrially. But perhaps more importantly, the cancellation of the Pilots' original award was fundamental to the introduction of the Individual Contracts. It would appear that the indiscriminate issuing of the writs on pilots and the subsequent decision by the members of Abeles' Coalition to shutdown the airline system may have been an integral part of the plan to introduce the Individual Contracts. However, it should be noted that after four (4) weeks of fruitless coercion by the members of Abeles' Coalition, it had become patently obvious that the decisive (and expected) defeat of the Pilots had not been achieved. (Only a handful of pilots had returned.) This failure to achieve the expected quick destruction of the Pilots' Federation, ("...will be short", see Appendix 1) effectively meant that Sir Peter Abeles had lost the dispute. Considering the damage to the interests of his fellow shareholders and the country at large, Sir Peter Abeles' decision to press on with the dispute for a further 5 months was grossly irresponsible. In many respects his behaviour became reminiscent of World War 1 generals pressing on with fruitless frontal attacks despite appalling casualties. The Dispute had degenerated into economic 'madness'!

72. Almost always a policy of a real wage reduction in the name of the "...wider national interest".

73. See the 'O Day Anomaly' in Appendix 6 for a full explanation of the 'O day'.

74. Removal of at least 20 pages out of the old contract associated with the forced overtime formula.

75. Sir Peter Abeles was alleged by the Federation to have interfered in the negotiations held at Lorne in late June 1989 between the Federation and Australian Airlines' Management regarding the renewal of the Australian Airlines' Pilot Contract. According to the Federation negotiators, after 3 days of fruitful negotiations it became obvious that the Australian Airlines' management negotiators did not possess the authority to negotiate about anything of substance. In response to the question as to what was going on, the Australian Airlines' Management negotiators said that Sir Peter Abeles wanted an 'Industry Award'. (It should be remembered that Sir Peter Abeles was not supposed to have anything to do with Australian Airlines)

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THE HIDDEN PAY RISE WITHIN THE INDIVIDUAL CONTRACTS.

Of all the hypocrisy and straight out dishonesty that emerged out of the Dispute, none was more blatant than the 25%+ pay rise concealed in the Airline Companies' Individual Contracts and which was presented to the public as a 6% rise. The presence of this hidden pay rise provides clear evidence that the Dispute was never really about pilots' pay, but rather the subjugation of Pilots for the various reasons discussed elsewhere.

It must be remembered that the non resolution of the whole dispute was officially due to the Airlines' point blank refusal to negotiate the Pilots' pay claim because it was alleged to be outside the undefined wage fixing guidelines associated with the 'Accord' by being in excess of 6%.

The problem for Sir Peter Abeles and his partners was that at the time of the Dispute, airline pilots' pay in Australia was significantly deficient when compared to other airlines around the world. Thus, even to get 'scab' pilots the airlines had to pay the going world rate. Hence, the reason for the hidden pay rise. 76

By completely changing the method used to calculate pilots' pay, Sir Peter Abeles and his partners were able to create a 'smoke screen' around the issue of pilots' pay. In this way they were able to convince the public, who were significantly funding their side of the Dispute, into believing that a 25% pilot pay rise (which they had to pay to get pilots to scab) was only 6%!

This exercise was achieved in the following manner. At the beginning of the Dispute, Sir Peter Abeles alleged that:-

As mentioned earlier, Sir Peter Abeles stated that "The average pilot only flies 35 hours a month". The key word is 'average'. With regard to Ansett Airlines this statement may even have been somewhere near the truth due to the Company's gross inefficiency of pilot utilisation. But of course, 'average' also included:

However, the main reason why pilot productivity appeared to be so poor, particularly in Ansett's case, was due to the Airlines' policy of aircraft substitution and/or flight cancellations. In order to maintain high seat loadings on their aircraft (i.e. full aircraft) airline management would often either cancel flights or swap aircraft types of different sizes.

The following example illustrates this point. For safety reasons airline pilots only ever fly one type of aircraft at a particular stage in their career. (i.e. An Airbus 320 pilot could not fly a Boeing 767.) Keeping this in mind, let us assume that a Boeing 767 (a large aircraft) and its pilots were rostered to fly from Melbourne up the east coast of Australia, with the pilots ending their day's work at Brisbane for an overnight, with another flying sequence planned for the following day starting out of Brisbane. The same day, an Airbus (a smaller aircraft) and its crew were rostered to fly in the opposite direction to Perth with this air crew overnighting in Perth. Quite often, as the time of these flights approached it would transpire that ticket sales were such that the Perth flight would become over booked and require a larger aircraft, whereas the east coast flying really only required a smaller aircraft.

So, management would simply swap the aircraft.

But the original pilots would not fly this new sequence, usually because of later roster requirements. 'Reserve' or spare crews would fly these new sequences, with the original pilots often just 'passengering' to their original overnight port in order to resume their rostered flying the following day. (Further, the 'reserve crew' would often fly home as passengers the following day.)

Airlines can afford this inefficient usage of pilots because pilot wages represented less than 5% of airline operating costs.

But getting back to the word 'average'. Sir Peter Abeles deliberately confused the word average with typical.

The fact is, the typical pre-dispute airline pilot was usually rostered to fly between 62 to 67 hours a month. (average about 64 hours)

Thus, under the new pay scale in Sir Peter Abeles' Individual Contract, a typical line pilot received the following pay for flying his pre-dispute roster:-

His pre-dispute pay,

In summary, a pay rise well in excess of 25%. (6%+4%+20%) 80

And this pay increase does not include any real overtime. Since the Dispute, the Airlines have employed far less pilots. Obviously the pilots that are employed are now flying far more hours in a year. Further, as a consequence of abandoning their colleagues and scabbing, many of these pilots have been appointed to positions well in excess of their pre-dispute seniority.

The combined effects of the hidden 25%+ pay rise, the increase in real overtime and career advancement in excess of pre-dispute seniority has resulted in the pay of many of the pilots who returned to work being literally doubled. (i.e. a 100%+ pay rise)

Yet the inability to resolve this dispute was allegedly due to the fact that the Pilots' original pay claim, (to be negotiated) was supposed to be outside wage fixing guidelines associated with the 'Accord' by being in excess of 6%!

Captain McCarthy's observation, which was made on numerous occasions early in the Dispute "..that it would appear that the pay rise sought by the Pilots has been met; we want to negotiate an orderly return to work", was never understood or heeded by the media.

But of course, this dispute was never really about pay anyway. And;

And the public?

Well, they were simply treated like mushrooms (i.e. kept in the dark etc) and through their taxes substantially helped fund the whole operation. And although many of them swallowed the story, an increasing number instinctively knew that something was very wrong even if they did not understand the details.

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76. See Appendix 5 regarding an 'International Comparison of Airline Pilots' Pay.'

77. This overtime payment was calculated using the following formula: The pilots new annual pay, divided by the new average number of flying hours per year, which is 660. (55 hours a month multiplied by 12 months = 660)

78. See Appendix 6 for an explanation of the 'O day anomaly'.

79. The 'old' pre-dispute pay was also increased by a further 15% to compensate for the loss of the pilot allowances no longer included in the individual contracts.

80. See examples of pre-dispute pilot rosters in Appendix 6

81. There were some exceptions.

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ANALYSIS OF THE INDIVIDUAL CONTRACTS.

Given that the Individual Contracts were the core issue of the Dispute and that their presence effectively deadlocked the Dispute within the first week, it is surprising that their significance was one of the most poorly understood aspects of the whole dispute.

The whole concept of an individual contracts is based on the premise that they facilitate workplace flexibility and provide employees with scope to exhibit extra individual endeavour or effort, which in turn could lead to an increase in financial reward for that employee whilst providing the employer with an increase in employee productivity. Thus for example, in the case of a salesman, the more product he sells the more he earns. Similarly, a factory worker, the more he produces the more he earns. The whole concept of Individual Contracts may certainly have a place in many employment environments. 82

However the concept and purpose of individual contracts serves no useful purpose in the cockpit of an aircraft because there is little scope for a pilot to increase his productivity safely.

However, there is significant scope for pilots to increase their 'so called' productivity unsafely.

As mentioned throughout this document, the ability of pilots to be able to make their day to day operational decisions free of the commercial considerations is fundamental to airline safety. Without 'pilot independence', then 'commercial considerations' (which will always exist in the airline industry) will inevitably begin to insidiously affect a pilot's day to day operational decision making process. This being the case and human nature being what it is, safe operational practices eventually become compromised. (i.e. Professional standards drop and pilots begin to 'bend the rules'.)

And when pilots no longer err on the side of safety disaster inevitably turns up.

Without basic pilot rights enshrined in an employment contract 'pilot independence' cannot exist.

Some appreciation of the magnitude of the loss of pilot rights associated with the Pilots' Federation being crushed during the course of this Dispute can be gauged by fact that the Pilots' original 200 page collective contract was replaced by a 16 page individual contract.

The following explains the importance to airline safety of some of the pilot rights and protections which were lost with the introduction of the Individual Contracts.

Under the conditions of the Pilots' pre-dispute contract, practically all aspects of pilot career advancement were determined by seniority. Thus seniority determined the type of aircraft a pilot flew, his status on that aircraft (i.e. whether he is captain or first officer), monthly roster, leave, days off, home base, practically everything.

It is important to understand that unlike most careers, the ability of management to have a direct role in pilot career advancement not only serves no useful purpose, but actually has the potential to produce some very dangerous incentives into the cockpit environment. The reason for this unique situation is that the day a pilot joins an airline, if he is worthy of selection he should be capable of being appointed as captain on the largest aircraft in the airline's fleet from day one. In other words, responsible airlines employ potential captains, not career first officers.

For safety reasons, airline aircraft are always crewed by at least 2 pilots of which only one can be the captain. Yet either pilot should be capable of acting as the captain. That being the case, the only fair and equitable method to determine who shall be the captain is by seniority.

It needs to be understood that pilots are flight checked by their peers at least five (5) times a year. This process is unique to the Profession of Airline Pilot. No other profession experiences this sort of scrutiny. If a pilot does not meet the high standards required during a check flight, he undergoes a period of retraining prior to a second check flight. If he fails this second check his airline career is finished. Further, because there are at least two pilots in the cockpit, every flight is essentially a check flight. Let there be no misunderstanding, pilots not performing up to standard soon get to be known about within a responsible airline system. 83

This system has the further advantage in that although a junior pilot should be capable of command on the day he joins the airline he usually spends the first 10 - 15 years of his career as a first officer gaining invaluable experience by flying with older and more experienced colleagues.

However, under the new individual contracts career advancement is now decided totally by management. Given that this system actually serves no useful purpose, then this ability to personally make or break a pilots' career effectively places immense power in the hands of management. The problem with this system of direct management 'patronage' is that pilots experience tremendous pressure, whether real or imagined by the pilot, deliberate or otherwise by management, to 'bend the rules' in relation to operational decisions such as flying in poor weather, flying overweight, flying with less fuel than prudent or operating aircraft with significant systems unserviceable.

Examples of how this sort of pressure on pilots to stay in favour with management resulting in safety standards being compromised and eventually leading to airline disasters are common and well documented.

For example, consider a large passenger aircraft such as a Boeing 747 making an approach to land at the destination airfield in bad weather. The aircraft can legally and safely descend in cloud to the lowest safe altitude or 'minima' published for this approach. When the aircraft reaches that minima, the captain is expected to assess whether the conditions are such that it is safe to continue the approach. (i.e. whether the pilots can see the runway) On some approaches, this minima may be only 30 metres above the ground and with the aircraft descending at over 300 metres a minute, the aircraft is less than 10 seconds away from impacting the ground. If the captain assesses that the conditions are such that it is not safe to continue the approach (such as he may not be able to see the runway) he should immediately abort the approach by climbing away from the runway. If fuel is short, a diversion to another airfield (the 'alternate' airfield) which may be over 1000 miles away may be the only safe option available. When all the considerations such as the extra fuel burnt by diverting, disruption to the following services planned for the aircraft, hotel accommodation for passengers and crew, extra landing charges and a host of other factors are taken into account, the decision to divert has the potential to cost an airline well over $100,000. 84

Yet in our example, had the captain been tempted to just 'sneak' down a little lower (i.e. below the minima) and as a consequence establish visual contact with the runway and land, he would have effectively saved his airline over $100,000. Whilst aircrew can often get away with this sort of unprofessional behaviour, eventually this sort of risk taking leads to disaster. It is that odd occasion when it all goes terribly wrong that disaster strikes. (And it usually happens very quickly.) The Hamilton Island incident described in Appendix 3 may prove to have been a classic example of this sort of incident almost degenerating into a disaster. 85

The question that needs to be addressed is; why would aircrew even contemplate such unprofessional behaviour?

The answer is that under the new Individual Contracts, not only does the pilot have few rights and as such can be dismissed without good reason, his whole aviation career is totally at the whim of management. Thus there exists very strong incentives for a pilot not to draw attention to himself and to stay in the 'good books' with the senior management of the airline.

And make no mistake, a $100,000 diversion does not escape management's notice. (especially if the competitor's aircraft managed to 'get in'.)

In a similar manner to the previous example, pilots working under individual contracts will inevitably experience pressure (whether real or imagined by the pilot) to:

And pressure to modify a myriad of other costly operational decisions, which invariably arise throughout a pilot's career.

But it gets worse.

Under the terms of the pre-dispute contract, if a flight was cancelled for whatever reason, the pilots still got paid. However, under the new Individual Contracts, if they do not fly, they do not get paid. Needless to say, this system actively encourages pilots to operate aircraft when it is unsafe.

So there we have it.

And as argued throughout this document, the first victim of such a system is airline safety.

It is for these reasons that the vast majority of the world's airlines embrace the seniority system of career advancement for their pilots under the umbrella of a collective employment contract.

And it is for all these reasons that professional pilots who understood and remembered their professional responsibilities simply could not sign the Individual Contracts, despite the pay rise. Hence the reason why the vast majority of the Airlines' former pilots refused to return to work under those conditions and why the Dispute is still, to this day not resolved.

It is not just a case of irresponsible scare mongering to highlight the fact that the loss of these basic pilot rights, when combined with pilots who have clearly demonstrated their inability to withstand management pressure by signing the individual contracts in the first place, has laid the foundation of Australia's first civil jet transport disaster. 86

Australia's outstanding aviation safety record is no accident, it is a direct result of the professionalism exercised by pilots free from these insidious pressures.

NOTE: It is not the purpose of this paper to analyse in detail the full extent and ramifications of the changes to the Pilots' Award that occurred with the introduction of the Individual Contracts. However, Appendix 7 contains the assessment of these awards by the former President of the Pilot's Federation, Captain Dick Holt (retired). Keep in mind that Captain Holt's appraisal was addressed to the Pilots during the first month of the Dispute.

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82. However, it should be noted that in most circumstances the negotiating position of an individual employee is considerably weaker than a collective bargaining arrangement. This is probably the main reason why the union movement is generally opposed to the concept of individual employment contracts and why employer groups want them!

83. The standards of airmanship required to be demonstrated are high, with the minimum criteria of each check item to be passed clearly defined and documented to avoid victimisation.

84. Depending on its age, lease payments for a Boeing 747 are somewhere in the order of $1 -$2 million per month. (i.e. $30,000 - $60,000 per day.)

85. The crash of the Martin Air DC10 at Faro in Portugal on the 21st December 1992 may prove to be an example of Pilots 'pressing on' with an approach in unsuitable and dangerous conditions resulting in disaster instead of diverting to an alternate aerodrome. As reported in 'Flight International' magazine of 27th Jan 1993, the aircraft's wingtip struck the ground as it landed during a storm. This caused the aircraft to deviate off the runway, breaking up and catching fire with the loss of 56 lives. See Aviation Safety Network for more details about this crash.

86. See Appendix 4 'Ansett B747 Sydney Incident' for a well documented example of these sort of pressures adversely affecting the performance of aircrew resulting in near disaster.

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THE PROFESSION OF AIRLINE PILOT.

In order to develop an insight into the Profession of Airline Pilot, it is important to realise that a professional pilot's primary task is to fly his aircraft from the departure airport to destination safely.

This fact cannot be over emphasised.

After this primary objective has been addressed, the myriad of other important considerations such as operating the aircraft economically, on time, smoothly, quickly, efficiently etc can be tackled. But unless the aircraft is operated safely it ultimately cannot be any of the latter. The fact is, airlines that do not operate their aircraft as safely as possible eventually 'lose' aircraft. And airlines that lose aircraft do not survive in the market place and as such are not viable. 87

As with any form of human endeavour, the ability of pilots to perform this primary task competently is a complex distillation of many diverse and often competing factors. Some of these factors include:

These qualities combined together begin to define the position of 'Professional Pilot'.

All these factors are crucial to a safe airline operation because the pilot in command of an aircraft is in a unique position. Not only is he the only person aware of all the factors and operational constraints pertaining to his particular flight, but ultimately he is the only person on location with the necessary expertise to be able to do deal in a safe manner with the myriad of problems that invariably arise throughout the course of a flight.

To summarise, an aircraft captain is the only person capable of managing his particular flight and as such his primary role in an airline is as the manager of his flight.

To quote an address to pilots from the former President of the Pilots' Federation, Captain Dick Holt (now retired), who said of the Position of Airline Pilot:

"Through his seat at the front of the aircraft flow the efforts of thousands of people who provide the means by which he carries out his task. However, it is an undeniable fact that:

These responsibilities are recognised in the definition of his title of "Captain", which means "in command" and as such legally the final responsibility for the safety of the aircraft rests solely with the pilot in command. 89

It is these professional responsibilities that not only make pilots "Sui Generis", but also worth every cent of their pay and conditions. 90

In a sense, pilots are the stewards of an airline's three most valuable assets; its passengers, its aircraft (worth up to $200+ million each) and the public's confidence in the corporate identity of the airline. As such, unpalatable though it might be to some like Bob Hawke and Sir Peter Abeles who think "pilots are just glorified bus drivers" the most important people in any successful airline are its pilots, for on their backs rides the very survival of the airline.

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87. It is not widely known that due to financial losses associated with the Mount Erebus disaster, Air New Zealand came to within 24 hours of closing down. It was only the direct intervention of the then Prime Minister, Sir Robert Muldoon, in appointing a new board and supplying Air New Zealand with a Government loan that saved it.

88. It is the core ethic of the profession of airline pilot that all operational decisions of the pilot in command must always err on the side of safety. This ethic defines of the concept of 'GOOD AIRMANSHIP'.

89. The legal position of the pilot in command of an aircraft is defined under Australian Civil Aviation Regulation (CAR) 224 which states that "the pilot in command shall have final authority as to the disposition of the aircraft."

90. The title "Sui Generis", which means "of one's own kind" (latin), was used to describe the position of Airline Pilot during a 1954 Arbitration Court decision.

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EXTERNAL FACTORS CONTRIBUTING TO AIRLINE DISASTERS.

One of the more poorly understood aspects of modern airline operation is the fact that with the advent of the modern jet transport, civil aviation has become much safer associated with the increased reliability of aircraft 'systems'. (for example, jet engines are inherently much more reliable than piston engines.) Consequently, whereas a generation ago (1950's) catastrophic aircraft systems failure was a significant cause of airline disasters, this is no longer the case today. 91

As a consequence of this quiet revolution, the majority of so called airline "accidents" since the 1960s are not accidents at all. They are usually the result of a set of circumstances and/or a series of relatively minor incidents mismanaged (or inappropriately handled) by the relevant aircrew. As such, with the benefit of hindsight the resulting disaster often proves to have been avoidable if it had been handled in a different manner. 92

This being the case, the cause of many airline disasters could be described as being due to "pilot error". However, while this assertion is often seized upon by airline management and government aviation authorities to shift the entire blame for the disaster onto the aircrew, it often proves to be a gross over simplification of a far more complex situation. If the object of any investigation into an airline disaster is to determine the true cause (or causes, including all peripheral influences) of that disaster, it is vital to determine all the reasons why the aircrew operated the aircraft in a manner which, in retrospect proved to be inappropriate for the circumstances. 93

The fact is there are many examples where factors adversely influencing the relevant aircrew's decision making process are often set in train by policy decisions and/or attitudes of airline management and/or government authorities years before the disaster occurs. Some of these factors include:

Of considerable significance is the attitude by senior airline management towards not only 'pilot professionalism' (meaning safety, particularly associated with pilot independence) but a professional approach to their jobs by all employees throughout all sections of the airline. As argued throughout this document, safety should be the overriding ethos of an airline. Unfortunately, this is increasingly not the case, not only in Australia, but throughout the world usually due to overriding commercial considerations associated with the deregulation of the world airline industry. The importance of a responsible corporate attitude towards airline professionalism cannot be over emphasised. Because the attitude of senior management permeates throughout all sections of an airline, a poor management attitude insidiously adversely affects all aspects of an airline operation. The inevitable result of this corporate climate is a reduction in safety margins.

That aside, it should be remembered that because the final responsibility for the safety of an aircraft rests solely with the pilot in command (Captain) of that aircraft, it is his responsibility to insist that his flight (including all preflight preparation) is conducted in a professional (meaning safe) manner, irrespective of pressures which may be placed upon him to get the aircraft flying. (and earning revenue) If need be, the pilot in command must be prepared to refuse to operate the aircraft even if it means the loss of his job.

A captain is paid (and earns) in excess of $100,000 to ensure that not only are all the myriad of little insignificant clues noticed, but are also assessed in a honest manner. (In other words, the captain must not delude himself about the potential significance of any clues that come his way.) Further, he must display the strength of character to be able to withstand the significant 'pressure' (whether real or imagined by the pilot, deliberate or otherwise by management) to get the aircraft airborne and earning revenue. Despite this pressure (which unfortunately he can expect as a matter of course) it is his job to insist that the source of the problem be determined prior to takeoff. Remember, the final responsibility for the safety of the aircraft rests solely with the captain. 94

Many of the factors described above played a significant role in the lead up to the Ansett Airlines Boeing 747 accident which occurred at Sydney Airport on 19/10/94 in which the aircraft crash landed with its nosewheel still retracted. This incident was a classic example of a series of external factors involving commercial pressures from airline management and CAA impropriety adversely affecting the performance of the whole crew such that they were unable to cope with a relatively minor problem, resulting in an avoidable crash. 95

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91. The inflight disintegration of a number of early comet jets in the '50s is a graphic example of this.

92. By definition, an accident is 'an unforeseen chance event resulting in injury'. The key word is 'unforeseen'. In modern aviation most 'chance events' have been 'foreseen'. and procedures designed to manage these adverse sets of circumstances in a safe manner should have been put in place by airline management and the aircrew properly trained to carry out these procedures.

93. History is riddled with investigations where the board of inquiry was used to 'cover up' procedural and/or endemic faults existing within an airline and/or the relevant civil aviation authority. The 'Mount Erebus Disaster' involving Air New Zealand is a recent example of this sort of behaviour. It should be noted that it was not until a Royal Commission was finally set up that the true extent of the attempted cover up by senior management personnel of Air New Zealand was revealed. The Royal Commission was then able to unravel the true events leading up to the 'Mount Erebus Disaster'.

94. This example illustrates the vital importance to airline safety of the two character traits which professional pilots must possess; 'INTEGRITY' meaning honesty such that the pilot does not delude himself about the significance of any information or clues and 'STRENGTH OF CHARACTER' as in the ability to resist external 'pressure' to modify operational decisions in the light of commercial considerations.

95. See Appendix 4 'The Ansett B-747 Incident of 19 Oct 1994' for a detailed analysis of this accident.

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THE AUSTRALIAN FEDERATION OF AIR PILOTS. (AFAP)

It became obvious very early in the Dispute that Sir Peter Abeles' primary objective was the subjugation, if not the total destruction of the Pilots' Federation (AFAP) in his endeavour to have total control over his pilots. As mentioned earlier, the members of Sir Peter Abeles' Alliance had decided even before the Pilots had embarked on their industrial action to focus all their efforts on the destruction of the Pilots' Federation rather than attempt to resolve the issues involved by negotiation. (See Appendix 1 regarding the meeting of Company leaders in Prime Minister Hawke's office on 15/8/89) Whilst on the face of it Sir Peter Abeles' strategy could be considered rational, it represents a gross misunderstanding of the role of the Pilots' Federation to the Profession of Air Pilot in particular and to air safety in general. It also represents a misunderstanding of the causes of the 'Dispute' and of the role of the Federation's executive in the 'Dispute'.

Prior to the 'Dispute' the Pilots' Federation performed a number of functions with regard to professional aviation by representing professional pilots in a number of arenas. These include:

1. Trade Union.

As a trade union the 'Federation' represented domestic aviation pilots in the industrial arena at all levels of the industry up to and including domestic airline pilots. In this capacity the 'Federation' was the respondent to all the relevant aviation industrial awards except the Qantas Pilots Award. (Qantas pilots are represented by their own separate union, the Australian International Pilots Association AIPA)

At the time of the Dispute the 'Federation' was clearly the most powerful union in Australia. The Federation's strength stemmed from its inherent structure and the commitment by a significant number of its members to their profession. Unlike many trade unions, the Federation was rigorously run on democratic principles and as a consequence its policies represented the true wishes of the majority of the membership. Through its pilot councils the power within the union rested solely with the membership (through the representation of the members' representatives) and NOT with any of the union officials employed by the 'Federation'. The election of officials and motions regarding industrial action were all done by secret ballot. 96

In this way the policies of the union were rank and file driven, not leadership driven as was argued by Sir Peter Abeles and his partners in the Victorian Supreme Court. 97

Ultimately the collective industrial strength of a union such as AFAP is the only effective shield available to protect individual pilots from the day to day commercial pressures which have always existed in the aviation industry. The presence of a truly independent pilots' union ensures the existence of pilot independence with regard to a pilot's operational decision making process.

The 'Federation' also had a clear responsibility to protect the pay and conditions of its members in accordance with the wishes of the members. From an industrial point of view, the industrial campaign embarked upon by the Pilots' Federation was both lawful and measured.

However, the 'Federation' was much more than an industrial union representing the Pilots. The other main roles of the Pilots' Federation include:

2. Technical Committee

It is the purpose of the Technical Committee of AFAP (in conjunction with similar committees from other pilot unions throughout the world) to collate and review the actual operational experiences of its membership. (the vast majority of whom are line pilots) The Technical Committee of the 'Federation' (along with a similar body in the Qantas pilot union, AIPA) is the only source of independent aviation technical expertise available in Australia. The Federation's membership is ultimately the only source of pilot expertise available to the wider community that is not beholden to powerful vested interests such as governments or large corporations. (such as TNT and Newscorp)

Further, the Federation's technical committee, through its affiliation with the International Federation of Airline Pilot Associations (IFALPA), has access to a vast pool of pilot experience and expertise from around the world. The aviation expertise obtained through this pilot network provides an important source of information for airline pilots to continually upgrade and refine their expertise. When it is all said and done, line pilots are really the only source of pilot expertise available simply because they are the only ones in the commercial arena actually gaining the relevant experience. It is this source of technical expertise that is utilised by the pilot organisations like AFAP to lobby and ultimately influence governments and airline management to ensure that the regulations governing the operations of airline aircraft always err on the side of safety. 98

It would be true to say that historically the vast majority of airline safety features that now make air travel so safe were invariably initiated or strenuously lobbied for by professional pilot bodies such as the Pilots' Federation.

Some specific examples include:

3. Professional Guild

Since its inception, the 'Federation' has always acted as the focus for the Profession of Pilot. In this capacity the 'Federation' embodied and voiced the ethics permeating the profession in a similar manner to the way that the AMA represents the Profession of Doctors and the Society of Engineers represents the Profession of Engineers.

Throughout its history, the 'Federation' has represented the unified voice of professional pilots in relation to the lobbying of government authorities and airline management, particularly in regard to airline safety issues. It is a fact of life that the 'Federation' has had to periodically flex its industrial muscle to ensure airline safety standards were maintained and improved. 102

However, the Pilots Federation was much more than the sum of its parts. It was an embodiment of the ethics of the Profession of Pilot as well as its public voice. The destruction wrought upon the Pilots Federation by Sir Peter Abeles and his partners has irrevocably changed the aviation climate in Australia for the worst. In the aftermath of the 'Dispute', the airline industry is now almost entirely in the hands of the sycophants to people like Sir Peter Abeles and without the moderating affect of the Pilots Federation in the industry, these people are redefining the ethics of the industry away from airline safety to a position more in line with airline profit imperatives.

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96. The historical reasons as to why the 'Federation' was so rigorously structured from its inception on a democratic basis is explained in Appendix 10: 'Capt Dick Holt's History of the Pilots' Federation'.

97. The judge hearing the civil damages court case brought against the Pilots' Federation by the Companies in the Victorian Supreme Court, Justice Brooking (case number CL421) accepted the claim by the Companies that the Pilots were coerced by the Federation's leadership into conducting their industrial campaign. However, Senior Deputy President of the IRC, Justice Hancock, rejected this argument when handing down his judgement of 22 Sept 1994 regarding the respondency of the Pilot Awards. See Appendix 8 for a summary of Commissioner Hancock's decision.

98. It would be true to say that many of the more questionable changes that have occurred within the CAA during the early part of the 1990's would have never come about had AFAP not been emasculated during the 'Dispute'.

99. The presence of the Pilots' Federation in accident and incident investigations has ensured that a 'whitewash' similar to Air New Zealand's attempted cover-up of the Mt Erebus disaster had not occurred in Australia prior to 1989.

100. Thus for example, jet RPT aircraft are now required to be able to continue a takeoff following an engine failure whilst still on the ground. AFAP's technical committee has played a significant role establishing Aircraft Certification Criteria

101. The DC9 jet aircraft is a good example of an aircraft cockpit designed with significant pilot input.

102. The issue of airport security in the late 1980's is a pertinent example. The 'Federation' was forced to threaten industrial action to get the relevant Federal Government Authorities to take the matter seriously.

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MISTAKES MADE BY THE PILOTS.

In view of the disastrous outcome of the Dispute, it would be ludicrous to deny that mistakes were made, both by the Pilots collectively, as well as the Federation's leadership. As Captain McCarthy candidly admitted during the Dispute, " with the benefit of hindsight, some decisions made by the Federation would have been different". Some of the more unfortunate decisions made by the Pilots include:-

The Federation had chosen to lump all the grievances into one big dispute partly because of Abeles' alleged preference for an award to cover the whole industry. 104

It is ironic that the alternative strategy of addressing the grievances of each pilot group on a case by case basis between the Federation and each airline separately, had always been used in the past with success. Further, the minutes of the meeting of Sir Peter Abeles' and his partners in Prime Minister Hawke's office on the 15th August 1989 seems to indicate that this strategy may have been feared by Sir Peter Abeles and his partners. 105

It is now clear that had the Federation structured the Dispute around the grievances of each pilot group on an airline by airline basis, Sir Peter Abeles and his coalition partners would have found it extremely difficult to justify or effect the Airline shutdown. This in turn, would have almost certainly precluded the ability of Abeles' Coalition to use most of the tactics that they subsequently used so effectively against the Pilots following the airline shutdown. Thus, had the Pilots chosen to structure the looming dispute such that one domestic airline was not directly involved in the dispute of the other (and consequently still flying), it would have been highly unlikely that Sir Peter Abeles and his partners would have been able to:-

In view of the exceptional solidarity displayed by the Pilots during the Dispute, it is now clear that had the extraordinary raft of tactics used against the Pilots been denied Abeles' Coalition (as described above), it is very doubtful that this dispute would have degenerated into the unmitigated disaster it eventually became.

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103. It should be noted that whilst Captain McCarthy did not explain to the public the existence of the 25%+ pay rise in detail, he did say on numerous occasions that "it would appear that the pay rise sought by the Pilots has been met, we wish to negotiate a return to work."

104. It should be remembered that the Australian Airlines' negotiations at Lorne broke down due to Abeles' alleged interference in the negotiation process, by insisting on the creation of a single Industry Award for pilots.

105. See Appendix 1 regarding the minutes of the meeting in Prime Minister Hawke's office of the 15th Aug. '89 where Sir Peter Abeles made the comment that "If let them do it their way, rolling strikes, disruptive over a long period, and they will get more than they should...."

106. The silence of the Qantas Pilots to these changes and their acceptance of the grossly inadequate investigation process used to 'investigate' the many 'incidents' involving the foreign pilots throughout the course of the Dispute disgusted many domestic airline pilots.

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CONCLUSION.

If there was one underlying characteristic about the Dispute it would have to be 'madness'. Madness in the sense that there was a loss of insight by all the parties involved into the eventual consequences of their respective actions. After all, there have been no winners in the Dispute.

Thus, the Pilots in their attempt to resolve their grievances with their respective employers about pilots' pay and management's growing contempt for the position of pilot, lost not only their careers, but more importantly the very essence of their profession; 'Pilot Independence'.

It is now obvious that the Pilots' past victories associated with their history of having to remind Airline Management every 10-15 years not to take the position of pilot for granted lulled the Pilots into a false sense of security about their capacity to deal with such a formidable opponent. All these things not only clouded the Pilots' vision as to what they were up against, but more importantly, they lost sight of what they were putting at risk in their pursuit of a resolution to their grievances with Airline Management.

The Pilots' failure to fully take into account the underlying political imperatives of the various members of Sir Peter Abeles' Alliance facilitated the formation of that alliance. Sir Peter Abeles' plans leading up to the eventual destruction of the Pilot' Federation were transparent and his close friendship with Bob Hawke was well known. The political importance of the 'Accord' to the various Accord Partners was widely documented and as a consequence the importance of the 'Accord' to them should have been better appreciated by the Pilots. Further, the well publicised push by some large unions to break out of the 'Accord' and pursue their own wages campaign ensured that the 'Accord' partners would publicly portray the Pilots' pay claim as a direct threat to the 'Accord' and consequently that the Pilots had to be crushed at any cost in order to make an example of them. In many respects the timing of Pilots' pay claim and the way it was handled could not have been worse.

With the benefit of hindsight all these factors should of been foreseen.

Which prompts the question, why then did the Pilots pursue their pay claim?

The answer to this question it is twofold. The first aspect relates to the Pilots' perception of the 'Accord' and their attitude towards the various Accord Partners and the second relates to the Pay issue itself.

Readers should be aware that prior to the Dispute most Pilots understood very little about the complex politics associated with the 'Accord'. In the eyes of Pilots, the 'Accord' was a bankrupt agreement representing a litany of broken promises. The Accord Partners themselves were viewed by most Pilots (rightly or wrongly) as a band of inflexible people pursuing their own political agenda with little interest or sympathy in the unique problems associated with airline flying. By the same token, the subtleties associated with the political imperatives of the various Accord Partners was simply beyond the perception or interest of most Pilots.

In essence, most Pilots viewed the 'Accord' with contempt and consequently that it was of little relevance to Pilots. With this attitude in mind, the Pilots simply viewed their pay claim as an issue between them and the Airline Management and no one else.

Which brings us to the issue of Pilots' Pay itself, the alleged cause of the Dispute.

It should be understood that Professional Pilots are an international commodity and as such pilots' pay commands an international price. The fact remains that at the time of the Dispute pilots' pay in Australia was deficient when compared to the rest of the Western world and it was simply untenable that Australian airline pilots be paid less than the going world rate.

Make no mistake, pilots' pay was instinctively understood by most Pilots to be essentially a non issue! The pay rise was always going to turn up, it was just the method of achieving it that may have been the focus of some 'negotiation'. For this reason the hidden pay rise within the Companies' Individual Contracts came as no surprise to Pilots because they expected it.

In other words, this Dispute was never really about pay and both the Pilots and Airline Management knew it.

The real issue at stake was that Airline Management, lead by Sir Peter Abeles, had developed a profound contempt for the Position of Pilot (and possibly for Pilots personally) and consequently they no longer recognised the authority or responsibility pertaining to the position of 'Pilot'. For this reason the attempted and eventually successful introduction of the Individual Contracts was again, not unexpected by Pilots. The Individual Contracts were viewed by Pilots as the 'grand finale' of a long drawn out campaign by Sir Peter Abeles to denigrate the Position of Pilot.

The alleged dispute about pilots' pay was simply a 'furphy' for public consumption enabling the extraordinary raft tactics used against the Pilots to be justified.

However, what did astound Pilots was that this Dispute was allowed to rage on unresolved for over 6 months, causing absolute mayhem to the rest of Australian society, endangering the lives of tens of thousands of air travelers, consuming millions of dollars of public money and resources and costing the Australian economy literally hundreds of millions of dollars; all associated with one of the most outrageous abuses of political power in living memory and all for the benefit of one man, Sir Peter Abeles.

And yet few outsiders appeared to perceive the blatant dishonesty that permeated the tactics used against the Pilots or the injustice.

That aside, it must be recognised that having made the mistake to tackle Sir Peter Abeles head on, the Pilots were effectively dispatched onto the industrial scrap heap within a matter of days, with no avenue for a return left open. 107

In the end the Pilots have had to pay a terrible price for their part in the Dispute. For having been forced to resign they were faced with a dreadful choice. Either they scabbed on their colleagues and profession or they lost their careers.

Most chose the latter. 108

In Sir Peter Abeles' case, perhaps his 'madness' can be better understood by the fact that his contempt for the Position of Pilot denied him the ability to understand the Profession of Pilot. Because of this he was unable to comprehend the fundamental importance to the Profession of the concept of 'pilot independence'. It is clear he no longer really recognised the authority pertaining the position of 'Captain'. As a consequence he failed to realise the futility of attempting to coerce professional pilots to abandon their professional guild and embrace an employment contract that deprived them of any rights to exercise their professional skills free of management pressure. This lack of understanding ultimately denied him the decisive victory he expected and needed.

What was even more extraordinary was that within the first few weeks of the Dispute it became patently obvious that the expected rapid and decisive defeat of the Pilots was not achievable.

Because of this, Sir Peter Abeles had essentially lost the Dispute within the first month.

From that point on his decision to press on with the destruction of the Pilots' Federation (and by default the Profession of Pilot) must surely be judged as grossly irresponsible, not only to the interests of the shareholders of TNT and Newscorp, but also to the rest of the Australian community who were suffering significant dislocation while the Dispute remained unresolved. In a sense Sir Peter Abeles' decision to press on with the Dispute for a further 5 months must surely be judged as economic madness and almost certainly reflected an insane desire to get at pilots.

Which prompts the question; given that the Dispute was never really about pay, what were Sir Peter Abeles real motives behind this extraordinary affair? Was his real agenda the destruction of the Pilots' Federation as part of a strategy to restructure the rest of his Airline empire. 109

Or was it simply that as a powerful man used to getting his own way he was no longer prepared to tolerate employees who were not prepared to be at his beck and call and that he was prepared to loose his corporate empire defeating them rather than give in. 110

The only hope of ever getting close to the truth of this matter will be through the auspices of a Royal Commission, which unfortunately will probably only occur after the inevitable airline disaster has occurred.

That speculation aside, what is clear is that the Dispute ultimately ruined Sir Peter Abeles.

The consequent prolonged nature of the Dispute rendered his business empire desperately weakened, both financially and politically. The political debt he subsequently owed to both the Labor Government and ACTU was such that it became politically impossible for him to ruthlessly move on the other unions associated with the airline industry. The desperate financial position of Ansett Airlines has resulted in it no longer having the resources to effectively deal with the myriad of competitors, both domestic and international, gathering on the horizon. 111

It is perhaps ironical that due to the Dispute, Sir Peter Abeles has effectively supplied Ansett's future competitors with some of their most valuable assets; the cream of Australia's professional pilots. This is something which, without the Dispute, they would have never got. At the same time, his contempt for the Position of Pilot has deprived Australia's domestic aviation industry of a vast pool of pilot expertise built up over the previous 40 years. As argued throughout this document, this dearth of professional cockpit management skill, coupled to an employment environment devoid of any pilot rights, will inevitably result in an avoidable airline disaster at some time in the future.

Yet Sir Peter Abeles contempt extends far beyond the Pilots. For it is the public at large who are still paying and suffering the consequences of this extraordinary episode. His disregard for the inevitable consequences of the outcome of this dispute will leave a ominous legacy which society will have to contend with well into the future. 112

In the case of Bob Hawke, his action of laying at the feet of his friend (Sir Peter Abeles) the office of Prime Minister was unprecedented and should greatly disturb all Australians, irrespective of their political persuasion. This was clearly a corrupt abuse of power and should be the subject of a Royal Commission in its own right.

Finally, it is worth noting that one year after the start of the Pilots' Dispute, the industrial relations 'club' (consisting of the Hawke Government, some significant entrepreneurs like Sir Peter Abeles, the ACTU and the IRC) had embraced a new industrial relations policy based on direct negotiations between employers and employees called "enterprise bargaining". The fact that the Pilots' Federation had been negotiating with their employers under the auspices of this same industrial policy for the previous 30 years appears to have escaped the attention of most observers. When it is remembered that the Pilots' insistence that negotiations with their employers be free of outside interference, was a classic example of this new policy, then the hypocrisy of the industrial relations club almost defies belief.

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107. Resigned, 'locked out' and with no industrial award, all occurring within 4 days.

108. It is a comment on the strength of character of the Domestic Pilots in 1989 that 80% of them were prepared to walk away from their careers rather than be part of Sir Peter Abeles' denigration of their profession.

109. As described in the chapter 'Abeles Suspected Real Agenda'.

110. This may not be as far fetched as it sounds. History is riddled with examples of powerful people dragging their empires to destruction rather than giving in. The behaviour of Napoleon, Hitler and more recently Saddam Hussein are but a few of the more famous examples. Sir Peter Abeles' rather extraordinary statement in an interview with Richard Carlton on the '60 minutes' television program of September 10th 1989; that he "would not give in ...because if I give in, I'd rather close the airline forever..." may have actually been very close to the truth. Another clue supporting this hypothesis is that although the Individual Contracts contained a 'fist full of dollars' they also contained virtually no Employee rights. As argued throughout this document, this lack of pilot rights served no useful purpose. This implies that Sir Peter Abeles was not really concerned about what he had to pay to get Pilots, so long as they were totally within his power.

111. Sir Peter Abeles 'resigned' as the chief executive of TNT in October 1992 and as joint managing director of Ansett on 10 Nov 1992. He died of cancer on 25 June 1999.

112. The Ansett B747 crash landing at Sydney airport on 19 Oct 1994 is a sobering portend of the consequences of Sir Peter Abeles' actions.

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ABOUT Alex PATERSON

Alex Paterson is an ex Ansett pilot who resigned his position along with most of his colleagues in August 1989 associated with the Australian Pilots' Dispute of that year.

At the time of the Dispute he was a newly elected member of the AFAP executive and although he had little influence over the major decisions pertaining to the same he played a significant role in the day to day running of the Dispute as it unfolded. This role provided him with a rare inside view of the Dispute from a pilot's perspective.

The author can be contacted at email: 

Photograph of Alex Paterson


COPYRIGHT

The document 'A Pilot's Perspective of the Australian Pilots' Dispute of 1989' is the copyright of the author, Alex Paterson. All rights reserved by the author. Not withstanding this, the document may be reproduced and disseminated without the express permission of the author so long as reference to the author is made, no alterations are made to the document and no money is charged for it.

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Additional Keywords: army, airforce, industrial dispute, pickets, strike

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