Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

In Australia we are lucky enough to take aviation safety for granted. We have an impeccable safety record that is the envy of the world, but that is something that we must never be complacent about. It is fair to say that in the last few years the aviation sector has been under increasing pressure. There is a concern by those who care about safety the most—pilots and cabin crew—that there are matters that need to be addressed. That is why the Senate Rural Affairs and Transport Legislation Committee undertook a comprehensive inquiry last year into aviation safety issues and made a number of key recommendations which, unfortunately, the government has not accepted, particularly in relation to ensuring that pilots who are in control of a large passenger capacity jet aircraft have at least 1,500 hours experience before they are in the cockpit. There is real concern that it is something that needs to be maintained.

The 2011 rural affairs and transport committee's inquiry into pilot training and aviation safety issues, unfortunately, raised more questions than it answered. Since then, the more answers I have tried to find, the more questions I have been forced to ask. Aviation Australia is a far cry from the organised, diligent system it appears. During that first inquiry, a pilot said to me privately, 'Better a Senate inquiry now than a royal commission later.' It is a thought that bears deep contemplation. We have reached the stage where if we do not act, if we do not do all that must be done, that appreciably materially compromises aviation safety in this country. That is the motivation behind this bill, the Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011, and the Qantas Sale Amendment (Still Call Australia Home) Bill 2011 that will be debated shortly.

Last year I was contacted by Jetstar cabin crew over their concerns about how Thai based Jetstar crew were being treated. These crew were based in Thailand but regularly worked on flights travelling between Australian domestic airports and carrying domestic passengers. Even though they were flying domestic routes on Australian planes, often working side-by-side with Australian crew, they were employed under Thai contracts. That meant their pay was a fraction of what their Australian colleagues were earning and their contracts were not subject to Australian workplace conditions. Shifts of up to 20 hours straight with no limits on duty extensions meant that these flight attendants were so exhausted they doubted whether they could react appropriately in an emergency.

On average Thai based flight attendants get paid a base salary of $258 a month. For each hour they fly they get an additional $7 plus allowances. In fairness to the CEO of Jetstar, Mr Bruce Buchanan, with whom I have had some constructive discussions about this, he says that the base pay is not a fair comparison because they do get those extra allowances. But their pay would still be about one-third of that of an Australian based crew for the same sort of work. They do not have sick leave entitlements and they have about half the annual leave of their Australian counterparts. When they do take leave, they are only paid $9 a day on top of their base wage.

These flight attendants approached me via Australian based crew who were concerned about their conditions. They are terrified of the consequences and terrified of repercussions if they speak out. They are employed by a company called Tour East Thailand which has contracted workers to Jetstar. The approach of the Qantas group in relation to this is to say, 'It's a separate entity; we didn't know what was going on.' Well, Tour East Thailand is 37 per cent owned by Qantas. Qantas is a substantial shareholder in that company.

As it turned out, the cabin crew were right to be frightened. In April last year five Thai based crew pulled out of a domestic flight between Sydney and Melbourne because they were exhausted after a series of international and domestic flights, including back of clock operations where they were literally up all night as part of their duties. Typically it could be Sydney-Denpasar-Sydney, which is an 18- to 19-hour shift from the time they are picked up from their hotel to the time they are dropped off. Instead of being supported in their decision not to risk passenger safety, they were threatened with dismissal by Tour East Thailand. They were admonished; they were threatened with repercussions if they ever did that again. The letter they received from Tour East Thailand stated that 'poor time management' was not accepted and that the company required an undertaking that they would not 'repeat these behaviours in the workplace'. That is simply outrageous. It is unacceptable because, when it comes to issues of fatigue and aircraft safety, it is important that cabin crew are there primarily—as they remind us, as they should—for our safety in the event of an emergency. If crew are simply so fatigued that they would not be able to function in the event of an emergency, that is a serious concern. What concerns me is that CASA, our regulator, which does have a significant and onerous task in dealing with aircraft safety in this country, is still working on issues of fatigue management and is proceeding slowly. The sooner there are regulations and rules in place specifically in relation to fatigue management for cabin attendants the better off we will all be.

This bill's purpose is to create a level playing field for those crew members and to stop airlines exploiting foreign labour to cut costs. In response to concerns raised during the committee stage of the bill, I have circulated amendments that will alter the bill to amend the Fair Work Act to ensure that overseas based cabin crew working on domestic legs of international flights come under the jurisdiction of this act. The second amendment introduces a requirement for all holders of Australian aircraft operators certificates to have a fatigue risk manage­ment system in place. That is long overdue. These are sensible and fair measures to ensure both passenger and crew safety.

It is worth reflecting on a story on the ABC1 Latelineprogram on 30 September last year, which revealed that a Jetstar worker had quit over conditions and safety concerns. A former flight attendant told Latelinethat he quit his job at Jetstar because of safety concerns over long shifts for cabin crew and about staff not being able to answer safety questions. This piece of investigative reporting revealed that a clause in the contract of Singapore based Jetstar crew states that they can be forced to work shifts that are longer than 20 hours—something an Australian based crew cannot do, nowhere near that. Two weeks before quitting, former Jetstar flight attendant Dallas Finn filed an incident report about fatigue after flying five return international flights in five days. He said:

The majority of these flights were quite busy. I found that my sleeping patterns were drastically affected to the point of fatigue. Clearly there are safety issues here pertaining to cabin crew if an emergency situation arises on the return flight from Saigon or Manila where the duty is 12 to 13 hours return.

Mr Finn told Lateline that cabin crew were forced to work long hours. He said:

The majority of the flights out of here from Darwin are all back of the clock, so you're leaving early evening and you're not getting back till quite early the next morning.

He then described how the Ho Chi Minh flight could be 12 to 13 hours. But Mr Finn said it was a flight that he shared with Singapore based staff that gave him more cause for concern. He said:

Before we actually get on a flight we have to go through a briefing; one is ... the questions are on emergency procedure, on occupational health and safety procedure, and a medical question.

I went to answer the emergency and the medical question when the cabin manager stopped me to get the Singapore crew to actually answer the questions, and basically they couldn't answer the emergency procedure and they couldn't actually answer the medical question.

It was the first time I've ever been scared of actually flying because if something went down I didn't know if that crew would be able to back me up.

Jetstar says that they comply and that there are no issues for concern. But, when pilots from Jetstar have told me—and I am very grateful to those pilots for contacting me on a regular basis to tell me about their concerns—that there are cabin crew they have concerns about, where they actually have had to say, 'I don't think you should be flying,' that is a real concern in terms of the way Australian aviation operates.

Jetstar is now under investigation by Fair Work Australia due to these practices. In response, Jetstar has said that it will cap the number of domestic routes that overseas crew can fly. So in a sense it is fair to say that Jetstar has been caught out and that it has now changed some of its practices, which is welcome. I do welcome the dialogue I have from time to time with Mr Buchanan, the CEO of Jetstar. I will be able to expand on that in the other bill. Their concern is that aviation is a very tough international environment and that, in order to survive, they need to take these sorts of operational decisions in order for Jetstar to be competitive. But I beg to differ in relation to that, given that the cost of cabin crew as a proportion of an airline's total operating expenses is a very small fraction of what it costs to run an airline. If the cost of paying people one-third of the Australian wages on a domestic flight is upped to Aussie conditions, I cannot see how that would add a punitive onus on that airline.

The current laws and regulations are not tight enough to make sure that a company cannot wriggle out of its obligations. That is my concern. Currently, flights are tagged with identifying numbers that show whether they are international or domestic, but the numbers are assigned by the airlines themselves and they do not appear to have any strict regulations or criteria to determine what constitutes a domestic versus an international flight. When I asked a question in the Senate about this, I think the minister was genuinely trying to be helpful but it did not really answer the question in that it was left to the discretion of the airlines. For instance, a flight that originates in Adelaide and is tagged with an international number can fly to Melbourne and then to Sydney and then on to Brisbane before it leaves on its international leg, and that is not prevented under the current rules. All of that is fine, but problems arise when the airline carries domestic passengers on those legs. If all the passengers that get on the plane at each domestic airport are going to stay on the flight until it reaches its international destination, it can properly be considered an international flight. I have no issue with that. But, if a passenger gets on in Melbourne and flies the domestic leg to Sydney, is it still a truly international flight? Is it appropriate for some of those cabin crew to be paid one-third of what their Australian counterparts are getting?

Overseas based cabin crew who operate on flights with domestic tags are required to hold 457 visas. These visas come with various rules in relation to pay and workplace conditions. Importantly, these visas can only be granted where an employer can demonstrate that there is a genuine need that cannot be filled with Australian workers. However, overseas based cabin crew working on Australian flights with international tags are paid under a special visa designed to facilitate their entry into the country since, reasonably enough, they are not expected to stay for long periods. This visa does not carry any of the conditions of a 457 visa, and the decision of which visa to grant relies almost solely on what tag number the flights have. The tag number, as I mentioned earlier, is chosen by the airlines themselves and is apparently not subject to any regulations. It should be, and that is what this bill is trying to deal with. An airline can use this loophole to save a few dollars in wages without any difficult workplace relations conditions to get in the way.

I acknowledge the work and the contribution of my colleagues Senator Gallacher and Senator Sterle to the Senate inquiries into this matter. They both have long and esteemed careers in the transport industry and know a thing or two about it. My plea to Senators Sterle and Gallacher is that this loophole needs to be addressed. It is a loophole that has been fixed up in shipping, which I will refer to shortly, but not in relation to this. In fact, the savings that can be made through this loophole are apparently so great that, according to Qantas CEO, Alan Joyce—who I do not think is any relation to Senator Joyce—

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

He might be. You never know.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

He might be. Senator Joyce has a cheeky grin on his face; I do not think they are related. They might be, but very distantly. According to Alan Joyce, the Qantas Group would have to quite simply pull out of its Darwin and Cairns operations. That is scaremongering of the highest order. It is misleading, and the Qantas Group, to my understanding—and Senators Sterle or Gallacher can correct me on this—has not given us details of how much the cabin crew make as a proportion of their costs. I think Senator Sterle is saying that is the case; it has not provided that information, as it indicated that it would during the Senate inquiry.

This threat, made in the Rural Affairs and Transport Legislation Committee's 6 February 2012 hearing into the bill raises the question: is the Qantas Group so dependent on underpaid workers that it will fold a number of its routes if it has to pay people a fair wage? It has been estimated that cabin crew costs make up less than 10 percent of aircraft operating costs, according to an article from the Economic Times in January 2010, and, as I said we are still waiting for that information.

I have asked questions of the Minister representing the Minister for Immigration and Citizenship in the Senate to see if the circumstances surrounding visas could be clarified. They could not. There appear to be stricter rules applying to international airlines with international crew, but little that applies to international crew on Australian airlines. I strongly urge that the Department of Immigration and Citizenship investigate these circumstances because it is not right, and it is not fair that overseas workers be exploited to make an Australian airline a quick buck.

During the committee inquiry process I faced accusations that I had something against Qantas and did not want it to succeed. Nothing could be further from the truth. In fact, I was on a Qantas flight this morning. Like most Australians, I feel an incredible sense of pride in the flying kangaroo. There is nothing better than sitting in a foreign airport and catching sight of that red tail as the plane thunders past. There are few companies that inspire such fierce loyalty among its employees and its passengers. The very reason I fought so hard for these changes is I share that same loyalty. I do not want a truly Australian Qantas to be a thing of the past, and I do not want Australia's safety reputation to be in any way compromised as a result of cost-cutting measures.

The true intention of this bill is not just to protect overseas workers from being exploited. It is also to make sure there are regulations in place to stop staff being pushed to their limits and into a physical and mental state that is just not safe; not to them and not to the passengers they are there to protect in the event of an emergency. In an emergency, cabin crew must react instinctively to direct passengers and operate safety equipment—they must not be physically and mentally exhausted from excessively long hours. There are also the post-flight conditions to think of. For years, cabin crew members have been complaining to Jetstar about excessively long duties that have left them too tired to travel home safely. I have heard a number of stories of people having accidents on their way from a long shift because they were simply too fatigued.

I also note the similarities between the circumstances I have outlined and changes that the government has made in a similar area. 'Flags of convenience' are almost universally popular in the shipping industry. Essentially, your ship abides by the rules of whichever country it is registered in—hence the popularity of Panama and similar countries, where the laws relating to everything from safety and maintenance to workplace conditions are far more lax and, in some cases, virtually non-existent.

In 1992, the House of Representatives Standing Committee on Transport, Communications and Infrastructure published a report titled Inquiry into ship safety: ships of shame, which detailed stories of crews paid a pittance or not at all, of unseaworthy vessels, of uncertified crew and poor safety equipment, of falsified documents and of brutal treatment. The committee found that commercial pressures were the major factor behind these problems. A further report in 1995 revisited the issue because the exposure of the first report had 'not ended the exploitation, denial and physical abuse of seafarers'.

Finally, some changes came into effect in January 2010, with the regulations for the Fair Work Act specifically stating that vessels with continuous voyage permits and those with three or more single voyage permits issued in a 12-month period are covered by the Fair Work Act. If the government has deemed it reasonable to take this step there is no reason it cannot deem it reasonable to take similar steps for the aviation industry. Effectively, if a foreign registered ship is travelling from Sydney to Melbourne and is carrying domestic cargo it must pay Australian rates and conditions. What difference is there when we are talking about an Australian aircraft flying a domestic route and carrying domestic passengers, but not paying its workers on that flight Australian rates and conditions? It is as simple as that. If we can deal with 'ships of shame' we should be able to deal with 'planes of pain'.

The government must take action on this. It is not fair. It is not acceptable. It is, quite simply, unjust. It is exploiting overseas workers and it is also taking away Australian jobs in circumstances where they should not be taken away. This is only one small aspect of the problems facing Australia's aviation industry, but it is an important one not just in terms of safety but also in terms of people's rights.

I said earlier that my involvement in these issues has raised more questions than answers. This is one of the very few answers; this bill and the amendments circulated do not place an undue burden on airlines. This is about fixing an anomaly—a loophole—that needs to be sorted out here and now. This is an opportunity for this chamber to deal with it. This is an opportunity to remedy a clear loophole that must be sorted out once and for all.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I think Senator Xenophon has raised some very valid concerns on behalf of some very concerned people. Unfortunately, we just do not believe that the bill is the way to go in respect of resolving those issues. Essentially this bill seeks to impose new conditions on international airline licences and air operator certificate holders with the intention of ensuring that all flight and cabin crew employed by related airline companies are offered the same terms and conditions as Australian based crew employed directly by that airline.

The scope of the bill is very broad. It applies to a wide range of business relationships, and the cost implications of the bill would threaten the viability on a range of routes. I will highlight some of those routes later on. Senator Xenophon's proposed amendments rewrite the bill but continue to raise issues for the commercial operations of our airlines and pre-empt CASA's work in relation to fatigue management as well as departmental consideration of matters raised by the Senate Standing Committee on Rural and Regional Affairs and Transport in its report on the bill. The government does not support the bill.

The Senate Standing Committee on Rural and Regional Affairs and Transport has examined the bill, proposed amendments to it and has recommended against passing it. The bill is in breach of our international obligations. The bill would significantly restrict Australian airlines in their capacity to operate internationally and to form very important strategic partnerships with other carriers. Wages and conditions of employees of Australian airlines are matters for the Fair Work Act 2009, consistent with the approach the government has taken in other industries. Safety issues such as fatigue management are being addressed by the safety regulator, the Civil Aviation Safety Authority, following advice received from the International Civil Aviation Organisation on relevant standards and further recommended practices.

Essentially, as I have said, this bill would severely restrict the ability of Australian based airlines to compete in the international aviation market. The committee did take evidence from Virgin and Qantas in respect of specific areas of that restriction. A requirement to offer Australian wages and conditions to crew employed by codeshare partners in other countries would effectively limit Australian carriers to a very small number of routes on which they provide direct services. As a result, the choices for the Australian travelling public would be very much restricted. For example, the bill would effectively prevent Australian airlines offering codeshare services to destinations such as Nashville, Dusseldorf, Dunedin, Miami and probably quite a number of others. This would reduce the choices for the Australian travelling public.

There are also serious concerns in respect of international law, as the bill imposes Australian workplace laws on foreign airlines operating in foreign countries. The government notes that the proposed amendments have been circulated in an attempt to address some of these issues, but the bill would still have an impact on Australian airlines' ability to compete with international rivals and undermine the work already being done to manage fatigue among cabin crew. The government supports the committee recommendation not to pass the bill.

The government has paid careful consideration to the issues raised in the Senate committee inquiry into the bill in relation to fair pay for the crew of safe airlines. The government recognises that concerns have been raised about the wages and conditions that are offered to foreign based airline crew flying in Australia. These issues are related to concerns about fairness and the way airlines manage fatigue among cabin crew. But the bill makes it virtually impossible for our airlines to compete in the international aviation market. The government will be accepting the Senate Standing Committee on Rural and Regional Affairs and Transport's recommendation that the bill not be passed.

While the proposed amendments completely change the bill, the revised bill is unnecessary in light of the ongoing work that government is progressing to address these issues. The government is currently undertaking an independent review of the Fair Work Act. The independent panel is due to provide a report to the government on 31 May. The government will consider the review panel's report and determine whether amendments to the Fair Work Act are required.

The scope of this bill is very wide. It applies to a wide range of commercial arrangements. Virgin Australia and Qantas would need to ensure that the crew employed by their codeshare partners are offered wages and conditions comparable to their own crew. This would have a significant adverse effect on the commercial competitiveness of Australia's international airlines in an increasingly difficult operating environment. This also raises serious concerns in relation to international law, our bilateral air service agreements and our mutual recognition of aviation regulatory arrangements with New Zealand, due to the extraterritorial implica­tion or application of workplace conditions.

The bill also attempts to deal with concerns in relation to the management of fatigue amongst cabin crew. Safety issues such as fatigue management are being appro­priately addressed by the safety regulator, CASA, and following advice from the International Civil Aviation Organisation on the relevant standards and recommended practices. CASA released a draft proposal on flight crew fatigue for public comment on 1 May, and a draft proposal for cabin crew fatigue is scheduled for later this year. Legislation is therefore unnecessary in light of CASA's ongoing work to provide better systems for fatigue management.

Senator Xenophon's amendments completely rewrite the bill. However, the amendments do not address the concerns with the original bill. The proposal to require AOC holders to develop a system of fatigue management is unnecessary in light of the ongoing work by ICAO and CASA. The revised bill also amends the Fair Work Act 2009 to extend the Australian workplace relations framework to all aircraft crew performing work in Australian domestic aviation.

The Fair Work Act principally regulates employment relationships. In contrast, the revised bill would impose workplace relations obligations and circumstances where there is no employment relationship. Because of this and a number of technical issues with the bill, the government does not support the revised bill. However, the Department of Education, Employment and Workplace Relations is currently considering whether the Fair Work Act covers foreign airline crew working on Australian domestic flights and whether any legislative change is required.

In short, the bill would significantly restrict Australian airlines in their capacity to operate internationally and to form strategic partnerships with other carriers, and it would certainly reduce the choices available to the Australian travelling public. Wages and conditions of employees, in Australia, of Australian airlines are matters for the Fair Work Act 2009, consistent with the approach taken across industries. Safety is the business of CASA. The amended bill is unnecessary in light of CASA's ongoing work to provide better systems for fatigue management.

I would like to say a number of other things. It is very clear that there are some widely held and deeply felt concerns amongst flight crew in the operations in Australia. They have been raised very visibly, very publicly and very appropriately by Senator Xenophon. The fact that he has been able to elevate these concerns and this dispute to this place is a significant achievement for those people. A number of them gave evidence about their fear of possible retribution, lack of promotion, lack of job opportunities and the loss of their entire career. Those people were fair dinkum and their evidence was fair dinkum. The fact that the matter has been elevated to debate in this place is a good thing, and credit is in no small part due to Senator Xenophon.

The push for cheaper and cheaper fares puts pressure on all of the airline industry operations, and on no-one more than on pilots and aircrew. The questionable practices in relation to the Thai based labour hire company are just an example of the result of the never-ceasing drive to give Australians cheaper airfares. But amongst all that you have got to remember that the reason we have flight attendants on a plane is that, when things happen, you have got to get off in 90 seconds. They are the people that have trained and trained to deal with the unlikely event of a plane coming down in a hurry. When the lights are off, there is an emergency and the slides are operating, you have got to follow the instructions of your flight crew. To push them beyond the limits of normal fatigue management is an absolute dereliction of managerial responsibility. To combine that with a miserable attempt at a salary on what is clearly a domestic Australian flight is a disgrace. Jetstar may tag their flights from Darwin to Sydney as international flights, but the reality is that the customer gets off, goes through customs and wanders away, and other people get back on, not through customs, just boarding a normal domestic service, and the flight crew who have operated the international sector then continue on the domestic sector. For those people not to be paid the same as Australian workers under the Fair Work Act is a disgrace.

If you want to take the push a bit further and, in search of cheaper fares, lower the very high pilot standards that Australia has enjoyed then there is probably a risk to that. The risk is that a person without the appropriate number of flying hours that we have required over the years may make a mistake. If you want to combine that lack of experience with fatigue and low wages then there are possibly grave concerns arising. I commend Senator Xenophon for raising that.

What I am saying, though, is that CASA and the Fair Work Act and the appropriate organisations that can represent people should have these matters resolved to the satisfaction of those people that have raised the issues with their company in the first instance. The evidence that was given to the hearing with CASA had no resolution. At least one of the witnesses made a statement that they thought that CASA would solve the problems, and, after repeated efforts, they had no resolution. That is up to CASA to respond to, but that was certainly given in evidence to the hearings. So I actually share Senator Xenophon's concerns in respect of some of these matters that have been raised. I just do not believe that this amended bill is the way forward.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I will not leave you in suspense, Mr Acting Deputy President. We will not be supporting the Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011, for a range of reasons. Senator Gallacher went through them. We have to allow a company the capacity to deal in the markets that it operates in. If we were to pursue overseas an equivalence with the terms and conditions in Australia, the ultimate result would be that overseas flights would be stopped because we would be uncompetitive. The margins that airlines are on—you can see it around the world—are extremely tight, and we note quite a number of airlines going broke. It is a regular occurrence. So lumbering them up with more regulation and conditions which just will not cut the mustard and will not compete in overseas markets would in many instances be a short-term solution before that route was actually withdrawn.

I heard the sympathies that were well articulated by Senator Gallacher. My query is: if you hold those views so dearly, why don't you support the bill? What is your position? Is that the position of your party or is it the position that you hold?

There are a range of issues that are coming to light, and we can see them in regard to the lockout. A company has to be able to deal with its disputes as they arise. We want this organisation, Qantas, to remain a viable organisation in Australia. We should recognise how tight the margins are, especially with the Australian dollar where it is at the moment and the pressures that are on at the moment and also noting, really, the fact that its profit, for the capital that it has got employed, is very low. But it still exists, and we are seeing other airlines in other places currently shutting down.

I have briefly perused the Senate report. I note the emphatic and well-meaning endorsement by Senator Xenophon. If Alan Joyce were not my brother, I would probably consider—no, I am no relation!

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I knew it!

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

No, I am no relation to Alan.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

And that's a great relief to Alan!

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Yes, I know. I am taller, so I must be older! But, on a more serious note, issues of safety are something that the coalition are very aware of. If we genuinely believed that we were compromising the safety of people flying on an airline for which we had jurisdiction in some way then we would definitely be doing something about it. We believe that that is more in the realms of CASA and we will continue to rely on CASA to make sure that the safety of those who fly on these aircraft is maintained. There really is not much more to say that has not already been articulated in the coalition's dissenting report. As such, I will not hold the chamber up any longer. I just note that we will not be supporting the bill.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011. This bill seeks to reverse the long-term successful trend of Australian governments in progressively opening up the Australian economy to international competition. I oppose this bill as it will unduly hamper what are successful Australian businesses. This bill will undermine the aviation industry, an industry which is amongst the most competitive, open and transparent in the world.

This bill amends the Air Navigation Act 1920 and the Civil Aviation Act 1988 to provide that an Australian airline, or a subsidiary of an Australian airline, is not issued an international aviation licence unless it provides the same wages and conditions to overseas based flight and cabin crew operating its flights as if they were directly employed by the airline. In essence, this bill undermines what should be the reciprocal opportunity for Australian airlines to compete with foreign businesses in their own markets.

Why on earth are those supporting this bill trying to impede Australian businesses from competing in foreign markets on the same terms as any other Australian business? As the coalition have always maintained, the management of private—and indeed public—companies and the decisions determined during the course of running their businesses should be the exclusive remit of those companies. This bill illegitimately impinges on the ability of a company—including our iconic and much-loved flying kangaroo—to make decisions in order to facilitate the effective management and running of its businesses. Individuals and Australian businesses should not be subjected to any legislation that removes their paramount and indisputable right to run themselves and to compete internationally as they see fit.

As a means by which to fully understand the opportunity that lies before Australia, it is imperative that we reflect on Qantas's value to the Australian economy both past and present. The history of Qantas is an extraordinary Australian success story. Established in the Queensland outback in 1920, Qantas has become Australia's largest domestic and international airline. It is held in high regard all over the world and considered one of the very best and safest long-distance carriers. The flying kangaroo is one of the strongest and most recognisable brands, which represents so much more than just a company; it represents the optimism and the success of Australian enterprise. Qantas has a strong reputation for safety, operational reliability, engineering and maintenance, and customer service.

Of the almost $15 billion of income earned by Qantas in the financial year 2010-11, the overwhelming portion was generated within the Australian economy under our laws and industrial relations rules. Qantas employs approximately 35,700 people, with 93 per cent of them based within Australia. The company is inextricably linked with the development of civil aviation in Australia and represents the confidence we have in Australian businesses to compete successfully in a globalised economy. From the humble beginnings operating fragile biplanes that carried only one or two passengers in open cockpits, Qantas, the flying kangaroo, now proudly operates the new Airbus A380s, flying some 450 people halfway around the world in a day. One would be hard pressed to find a better advertisement for Australian enterprise and our nation as a whole. Qantas's employees, shareholders and indeed Australia's national interest will all be well served in the long run if it can fully grasp the unprecedented opportunity for growth so often deemed the 'Asian century'.

There are a number of flaws in this bill that would have implications for its enforcement and negatively impact on the profitability of airlines operating in Australia. Firstly, the bill is extraterritorial in its scope. There is uncertainty about whether the bill imposes Australian employment conditions extraterritorially, forcing airlines to offer Australian wages and employment conditions to employees based outside of Australia—in Thailand, Singapore and so on. This may mean that it is inconsistent with Australia's bilateral air services arrangements. This bill has serious implications for airlines operating in Australia and their international competitiveness and profitability in both domestic and international markets. It is not reasonable or fair to expect any business but particularly airlines not to be able to compete in foreign markets on the same terms as other businesses competing in that market.

This bill also misguidedly uses air operators certificates, or AOCs, the Civil Aviation Act 1988 and the Air Navigation Act 1920 to attempt to regulate industrial relations issues. The Civil Aviation Safety Authority was highly critical of the bill in this regard, stating in the CASA submission to the committee inquiry:

… CASA is seriously concerned that the addition of a workplace relations function would oblige CASA to become involved in negotiations between AOC holders and their employees on pay and working conditions … The perception of CASA as an independent safety regulator could be compromised if it were to become involved in vetting the pay and working conditions of AOC holder’s employees.

It simply does not make sense. CASA has long been held in this country as an organisation that is solely dedicated to the safety of Australians and to ensuring that AOC holders operate in the air with safety standards second to none elsewhere in the world. On the issue of fatigue management and safety, the airlines disputed the need for additional regulation. CASA stated that it was 'not aware of any negative safety trends' regarding AOC holders' foreign based crew.

The bill also contains a number of terms and conditions that are vague and would lead to uncertainty for those affected by the bill and for organisations such as CASA, who would have to implement certain functions. This makes it difficult to implement and an unnecessary burden on industry.

The Qantas grounding last year was nothing more than the culmination of protracted industrial action by trade unions against Australia's national airline. Make no mistake: this dispute was all about—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Oh, rubbish!

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

guerrilla tactics by trade union leaders—

Senator Sterle interjecting—

and now we hear from those across the chamber—determined to get more pay and better perks for their members, at a time when Qantas was trying to survive in a difficult business environment. Before the grounding in October, industrial action by the union bosses caused disruptions and delays to Qantas's flight schedules, which cost the airline an estimated $68 million. Senator Sterle: one of the union officials was reported in the press at the time as saying, 'We will bake them slowly'—unprecedented. The Transport Workers Union was determined to oppose any move by Qantas to launch a new airline in Asia. Its national secretary, Tony Sheldon, said he was not going to allow Qantas to become 'Asianised'; those were his words. What Qantas management was forced to do was ground the airline so it could regain control.

Senator Sterle interjecting—

I am not xenophobic, Senator Sterle. Qantas CEO Alan Joyce said back in February that, in the months leading up to the grounding, flight timetables were being massively disrupted because of the unions' tactics. The dispute had to be brought to a head, otherwise Qantas would have died a slow economic death, suffocated by the union stranglehold. The head of the Australian Licensed Aircraft Engineers Association—I referred earlier to his now infamous 'bake them slowly' quote—predicted the dispute would last for 'at least 12 months', flagging that the unions were prepared to undertake a 12-month strategy to debilitate the company. More menacingly, he promised to 'sort out' chief executive Alan Joyce and mused, in a reference to that great book, The Art of War:

If you live near a river, take a seat and eventually the dead bodies of your enemies will come floating by.

This Labor government was quite happy for militant union leaders to hold Qantas to ransom and did not intervene until Qantas grounded its entire fleet. But, eight months after the grounding came to an end, what has changed? Qantas is back in the air, the union bosses are no doubt planning their next assault on the airline's management under the pretext of looking after their members, and Labor senators are licking their lips over another opportunity to grill Alan Joyce.

This bill comes on top of the increase in airfares imposed by the Labor government in their budget delivered just this week. Labor are increasing the airport tax by $8 to $55 per passenger as of July. They tried to hide this away in the budget, but their panicked desperation to squeeze as much revenue as possible out of successful Australian businesses and the flying public has been exposed as nothing more than a cynical tax grab of more than $1.3 billion over four years. This bill and Labor's steep hike in airport taxes should of course be put in context: they will both impose a serious additional burden on those Australian companies, who are already trying to work out just how and why they must navigate the increased expenses associated with this Labor government's destructive and ultimately ineffective carbon tax. The coalition cannot support a proposed mechanism of making ideological industrial relations changes by stealth under the guise of aviation safety.

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

I will be supporting Senator Xenophon's bill, which addresses the unfair and dangerous conditions being imposed on cabin crews of international and domestic flights, predominantly by Jetstar, an airline controlled by the Qantas Group. The Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011 is designed to protect the workplace conditions of foreign or overseas flight or cabin crews who are working on Australian owned airlines or their subsidiaries. My understanding is that overseas based crews from a number of countries such as Thailand and Turkey can be used on the domestic legs of international flights by Australian Airlines. In other words, an Australian airline may have a flight from Bali to Perth, then on to Sydney, before returning to Perth and back overseas. During the two international and two domestic legs of these flights the cabin crew can be used as an overseas based crew.

Most if not all of these overseas based crews are not employed directly by the Australian airline but are in fact employed under foreign contracts either by a third party or by the overseas subsidiary of the Australian airline in which they are used as cabin crew. Because they have been employed under foreign contract arrangements, they are paid well below the amount any Australian owned airline worker would accept and at a level that Australian unions would consider outrageous if offered to their members. Why is it we have continued in Australia in recent years to race to the bottom of the barrel? Why is it that we do not value our safety standards? Why is it that we do not value the fact that people fought for better conditions, better rates of pay and safety? What was it that put our Australian icon, Qantas, ahead of all the others? It was the attention to detail and the attention to safety.

When Australians get onto a Qantas plane—and, for that matter, on Jetstar, a subsidiary of Qantas—they expect a certain level of care, diligence and maintenance. How do we ensure Australians are getting value for money? Why is it Australians choose to fly Qantas? What is it that gives them confidence to fly Qantas and to fly Jetstar? It is because of safety and because we believe they offer a better product. Why we would trash that product is beyond me.

It has been reported that these crews will regularly have to work shifts as long as 20 hours, not just occasionally but regularly. We know—it is a fact—that when people suffer sleep deprivation they do not work safely or economically and you do not get the best out of your staff. Jetstar requires these crews to fly return shifts on lengthy flights without an overnight stay. What happens if there is an emergency on one of these flights? I hope to God I am not one of those flights but I hope it is no other person. I do not wish to see us standing in this chamber for a condolence motion when a plane drops out of the sky and people are killed. What price do we put on human life and what price do we say is too much to pay for safety?

All of us in the Senate fly regularly. I have never enjoyed flying but I do appreciate knowing that the Qantas flight crews and cabin crews are well trained. They are professional and capable of handling a difficult emergency situation, should it arise. However, I would not enjoy flying around Australia with a crew who are continuously battling fatigue and whose judgment, if not seriously impaired, would be considered well below that expected of a crew responsible for hundreds of lives in an emergency situation.

Think of the last flight you took to get here. I hope you noticed the crew. They are workers who, as a rule, do their jobs extremely well and make a flying experience as comfortable as possible. Did you watch the emergency procedures as demonstrated by the cabin crew? Are you aware that, should an emergency situation occur—we all hope that will never be the case—the cabin crew who serve you and make your flight a comfortable one will all of a sudden be responsible for ensuring you and the other 200-odd people around you on the flight are kept safe and that panic does not ensue. This is not something we would identify with a fatigued and underpaid workforce. How many of us would be happy in an emergency situation to find the hospital workers, emergency services workers or police on whom we rely have been working regular 20-hour shifts for wages we ourselves would refuse? I doubt you would want the care of your family, your friends or yourself left up to the judgment of people suffering fatigue when well rested alternative crews are available.

One-third of Jetstar staff are employed overseas. A company by the name of Tour East Thailand employs the Bangkok cabin crews for Jetstar. Under the contract I believe these crews are required to sign, they must agree to work shifts up to 20 hours long but, as the contract states, 'The planned limit of operational extensions may be extended by the employer'. In other words, 'You'll work the hours we say.' I would like to see them try to get that past the TWU. To force anyone to work those hours would be a disgrace. We do not expect Australian workers to accept such conditions, and to expect foreign workers to accept those conditions on our shores would be nothing less than a form of slavery.

As an Australian Democratic Labor Party senator, I cannot remain quiet when such an outrageous exploitation of workers, Australian based or foreign based, goes on under our very noses. How can anyone working in this country be expected to live on wages less than the average wage when I was an apprentice? How can anyone working in this country be expected to work under conditions less than those expected by our own factory workers before Federation? And how can we be expected to see the safety standards on Australian airlines reduced to a level never accepted in this country? Anyone who works in this country should enjoy the protection of Australian laws and Australian standards. Australians should always be protected by Australian laws and Australian standards. To use loopholes in the immigration laws, to have foreign based crews working under conditions we would never accept and to put lives at risk in doing so is unforgivable. Senator Xenophon has given us examples of the conditions these foreign based crews are working under. I am personally disgusted that any company that calls itself Australian can employ people under these conditions, although in fairness to the Qantas group they do not expect to be an Australian airline in anything but name shortly. Maybe that it is why they can do this to their cabin crews.

Just recently we have heard about the possible shipping of our heavy maintenance offshore. How can that possibly be in the national interest? How can we possibly expect that we are going to maintain the levels of safety and maintenance that we all expect when we get on a plane? Do we honestly think in this house that once we have lost the ability to maintain the heavy engineering side of airlines in this country that we can flick a switch—when everything goes to hell and it all falls in a heap—and automatically overnight we can rebuild these manufacturing maintenance facilities in this country? It will not happen. We are kidding ourselves if we think it will. We heard earlier about the high Australian dollar. It has been 110 years since Federation and our currency has had its ups and downs. This is not a new phenomenon. Over 110 years we have had booms and busts—we have had mining booms and busts—but nobody seems to be looking at that. It has continually been used as a crutch, an excuse.

We also hear attacks on the union movement. Why is it that in 2012 we continue with an adversarial relationship between bosses and unions, between companies and unions. The good unionists need to hold the bad unionists to account, and the good employers need to hold the bad employers to account. They are only a minority on both sides, but it is continually brought up to go on a union-bashing exercise. It is always one side's fault. There is never acceptance of the fact that this is a joint problem. We all own part of this problem and yet we do not address it.

How can we be expected to see the safety standards on Australian airlines reduced to a level that has never been accepted in this country? Even if I cannot get through to senators that the basic principles of decency, justice and fairness demand we stop this blatant exploitation of workers in pursuit of higher profits, I hope I can get through to senators on the basis of expected standards of safety for the Australian public. If this continues, it is inevitable that a situation will arise in which a crew cannot perform its duties in an emergency. Then we will all be up in arms. How was this allowed? Who is to blame for this? Why wasn't something done about it? It was allowed because we have allowed it. We are to blame for the situation so far and it is up to us to do something about it. Senator Xenophon has given us one of the tools necessary to stop this appalling and increasingly dangerous situation. If we do not take up the opportunity we are provided with in this bill, then we will all be culpable when, God forbid, a disaster does occur.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I thank my colleagues for their contributions, some more than others, to this debate on the Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011. I want to address some of the contributions because they cannot be allowed to go unanswered. Firstly, Senator Gallacher says that this is not the way to go, but I note the senator's long interest and passionate advocacy in the transport industry. We have no dispute about that, but what I take issue with is the government's approach that says this is not the way to go. It raises a whole range of other issues and it pre-empts CASA on team management as well. When did CASA first raise the issue of team management? There was a discussion paper released on 25 August 2004. I reckon it is coming up to eight years; I think that is more than enough time. The fact is that the parliament has an obligation to act where there is a loophole. The parliament has an obligation to fix a problem that needs to be fixed. This is a problem that needs to be fixed.

It is fair to say that the government has fundamentally misunderstood the intent and the scope of this bill, as has Senator Edwards. The amendments were moved as a result of the committee process—and the committee process was a valuable one—to say that this was simply too broad. That is why I have introduced those amendments: to narrow the scope of the bill, to sort out the loophole that it is intended to fix. That loophole is: if you are on an Australian registered aircraft, a VH designated aircraft, on a domestic route that carries domestic passengers, then that cabin crew should be subject to the Fair Work Act; they should be subject to Australian terms and conditions. Anything less than that would be exploitation of those crews that are based overseas; anything less than that is actually taking away Australian jobs in circumstances where there appears to be an abuse of the special visas that are issued, because they would not be able to get a 457 visa in those circumstances. The amendments are the key to this and the amendments arose as a result of a committee process. That is something that this place does best: in a Senate committee we can rigorously assess legislation and subject it to scrutiny. I readily acknowledge that the legislation needed to be amended to narrow its scope and to remedy the mischief, if you like, of what is occurring right now.

Enough is enough. CASA has been talking about this for years. CASA does have a lot of work to do. I am not being critical of CASA, but I think it is unfair for CASA to throw its hands up and say that this is unnecessary in its amended form. I am not sure that that is what it is saying, but in any event the parliament has a role to sort this out.

Senator Joyce says that this bill will compromise the capacity of an airline to deal in the market it operates in and that it burdens airlines with more regulations and conditions. The key to this is the market in which these airlines operate. If it is a domestic flight—if it is carrying domestic passengers—it ought to be paying Australian wages and conditions or be subject to those rules, including fatigue management rules. The fact is if you have a flight with Etihad or United Airlines between Sydney and Melbourne, they cannot carry domestic passengers. They cannot, because rules of cabotage apply. They cannot do that, but Australian registered carriers can. That is a loophole that allows cabin crew to be paid much less than their Australian counterparts. What is worse, they are not subject to the same rules for fatigue management, and that is a real concern. As Senator Madigan pointed out so well, there is a real issue here with fundamental matters of safety. Senator Gallacher made the point that, if there is an emergency, you have to get people off an aircraft within 90 seconds. When you have cabin crew that have come forward to say, 'We are not safe to operate on an aircraft because we are so fatigued, because we are simply so exhausted, because we are simply so sleep deprived,' how on earth is that reasonable?

I thank Senator Edwards for his contribution, but he says that this is about an Australian company opening up its markets overseas. I think that criticism would be valid if we were talking about the bill in its original form, but the amendments sort that out once and for all. They unambiguously set out that the intent of this bill is to deal with domestic legs of flights where you are carrying domestic passengers and the way that they can be tagged as international flights. It is being abused, it is a loophole, people are being exploited and, what is more, it is taking away Australian jobs.

Senator Edwards mentioned that Qantas is a strong, iconic brand. I have no issue with Senator Edwards saying that. But why is it that so many of this company's 30,000 employees are fundamentally unhappy with the direction of the airline? Why is it that so many of the terrific men and women that work in Qantas on the ground and in the air, do the maintenance, fly the planes and crew the cabins are so fundamentally in despair over the direction that this airline is taking? Why is it that when something like 150 catering jobs were lost in Adelaide, those employees found out about it through the media? I think that shows disdain for the workforce, which must be noted.

These are matters that must be dealt with. Senator Edwards referred to the issue of the Qantas grounding; I will refer to that in speaking on the next bill. I think Senator Ludlam will also be making a contribution on the next bill. I thank the Australian Greens for their support of this bill and I thank Senator Madigan from the Democratic Labor Party for his support.

I wanted to reflect on the mischief here and on what the safety issues are. Government agencies in the United States, Europe and the United Kingdom have recently responded with increasing vigour to what has been described as a 'call to arms' to address the largesse of concerns that indicate that they collectively may have been complacent rather than chronically uneasy about underlying threats to and weaknesses in the modern aviation industry. This loophole is one of these weaknesses. Yet here in Australia the government response to the June 2011 report of the Senate Rural Affairs and Transport References Committee inquiry into pilot training and airline safety was one of almost disdain for the issues unearthed, and we barely scraped the surface of those issues in that inquiry.

When you consider that those who have been at the forefront of raising these concerns are cabin crew and flight crew, I think that more than anyone they have a vested interest in the safety of their passengers. I want to back the concerns of pilots and cabin crew when it comes to issues of genuine safety concerns. For that matter, how well did Qantas, as a significant shareholder in Tour East Thailand, communicate its corporate ethos in regard to staff relationships, safety and fatigue management and just culture—that is, the culture of being able to complain about safety issues without fear of recrimination—to its crew? I can tell you, they did not. Those crew based in Thailand are by and large terrified of repercussions if they speak out on safety issues. They are terrified of taking sick leave even if they are unwell or injured. They are terrified of speaking out about fatigue issues. Qantas says, 'It is not our company,' but they have a 37 per cent shareholding in it.

I also want to reflect on what will happen if we do not act on this. If we do not act on this we will continue to unnecessarily put the lives of passengers at risk with fatigued crew. We will continue to have a situation where there are two classes of crew on a Jetstar aircraft—or indeed any other aircraft of an Australian airline—that is flying domestic routes tagged as an international flight. If an Australian Labor Party government can sort out the issue of our coastal trade, our shipping, to ensure that there are fair wages and conditions paid on a domestic shipping route where you are carrying domestic cargo, why on earth can't this be fixed? This should really be a straightforward matter.

While fatigue in pilots is the most obvious risk to flight safety, there are other personnel who may be required to make decisions or act in some way to preserve, or certainly not endanger, the lives and wellbeing of the travelling public and those who may, for however brief a moment, be under the flight path of an aircraft. It seems that the government and its aviation portfolio agencies think that these things are not important. Perhaps the opposition still thinks that the bill is an unnecessary interference in the conduct of business. Fortunately, the Fair Work Ombudsman does not share that view and has chosen to prosecute Jetstar over its entirely messy exploitation of cadet pilots under sham arrangements via New Zealand contracts of employment. Of course, the Fair Work Ombudsman has yet to report on its other active investigation into foreign cabin crew employment practices, but let us wait and see what that inquiry reveals.

Finally, I want to thank a person that I have relied on for good advice in relation to this, someone who I believe has great integrity—that is, Captain Dick MacKerras, who used to be chief checking captain for Cobham Airlines. He has also been giving advice to AIPA, the Australian and International Pilots Association. He is Adelaide based. As a former CASA employee dealing with these issues, he knows his regulations. I am very grateful for his technical expertise and wise advice in relation to these matters. Captain MacKerras is, like so many others in the airline industry, passionate about safety, passionate about getting it right. And right now we are making a mess of things when it comes to cabin crew, fatigue issues and so-called tagged flights being completely exploited in the context of saving a few bucks. That saving of a few bucks potentially compromises safety, but fundamentally it is wrong in the way that it exploits those workers who are based overseas and who work under lesser conditions on what are essentially domestic flights. That needs to stop. That is what this bill is about. I seek leave to continue my remarks.

Leave granted; debate adjourned.