Thousands accept 18-month pay freeze in new deal in exchange for family-friendly provisions

A leading Australian airline carrier has agreed to provide 10 days domestic and family violence leave and increase its paid parental leave from 12 weeks to 14 weeks to all of its 30,000 employees after it finalised a new enterprise agreement with the Australian Services Union (ASU) that guarantees the pay and conditions for more than 4,000 employees nationwide.


Last week, an overwhelming 93 per cent of the airline’s workers – employees from head office, call centres, airport and check-in, catering, freight and engineering jobs voted in favour of the new enterprise agreement despite the inclusion of an 18-month wage freeze. In the four-year union agreement, the wage freeze applies from July 1 this year and then between 2018 and mid-2020, employees will receive pay rises totalling 7.5 per cent.

The trade-off for the wage freeze is the domestic violence entitlement, an extra two weeks’ paid parental leave and two bonus payments.

The ASU recognised that women received up to 60% less in super at retirement because of career breaks due to caring responsibilities. The additional parental leave provisions were designed to address this retirement income inequality. The union said primary carers would receive 12 weeks’ paid parental leave and the additional two weeks of salary to be paid into superannuation, unless they elected otherwise, when taking parental leave. According to the employer’s modelling, this “family-friendly” option increases an employee’s super on retirement by about $50,000.

In exchange for union members’ accepting the deal, the airline will pay a one-off bonus of 5 per cent of each employee’s annual salary and a “record result” bonus payment of $3,000 for full-time employees and $2,500 for part-time employees.

According to the ASU, the agreement also provides better provisions for job security, rights for part-timers to convert to full-time at airports and a better deal for the senior professional group. With some changes to how job sharing arrangements operate and by recognising the importance of work life balance, the union hopes the agreement will encourage more women to stay in the workplace. It provides more clarity for shift workers wanting flexible working arrangements and employees transitioning to retirement.

In a statement to its members, the ASU said it secured some “innovative claims” that it hopes will benefit all the airline’s employees. The airline was happy that they reached an agreement that mutually rewarded its employees while also ensuring the long-term competitive strength of their business.

The agreement is currently lodged with the FWC for approval.

As a collective industrial instrument, enterprise agreements are negotiated between an employer and its employees through collective bargaining in good faith regarding terms and conditions of employment. Employers and employees and/or their bargaining representatives enter into a bargaining process to negotiate an enterprise agreement. Enterprise agreements must satisfy a number of legislative requirements including the Better Off Overall Test (BOOT) in order to be approved. The case above demonstrates a collective bargaining process which produced mutually beneficial outcomes for the parties involved.


iHR Australia can help organisations through all phases of an enterprise agreement with expert advice, assistance or as a bargaining representative. As experienced HR consultants, we offer an independent and objective perspective to ensure that terms and conditions are mutually beneficial to both the employer and employees. In particular, as your organisation navigates through the enterprise bargaining and negotiations, we oversee that the entire process adheres to relevant legislation including ensuring that the employees are better off overall when conditions in the agreement are compared to the relevant award. In working towards a final enterprise agreement, we will collaborate with you to translate your needs and challenges into a pragmatic plan of action in line with your vision, values and resources; aiming to strike a balance between your organisation’s long-term goals and the terms and conditions of the agreement.

Our services include:
• Development and drafting your enterprise agreement in line with organisational objectives and strategies
• Communication strategies, agenda setting and timetabling
• Negotiations with your employees and their nominated bargaining representatives (including unions)
• Advice in relation to protected industrial action, if any
• Approval processes (voting, etc.)
• Applications for approval to relevant tribunals
• Representation and advocacy in tribunals, as required
• Advice and interpretation of applicable legislation
• Adherence to the Fair Work Act 2009
• Adherence to good faith bargaining requirements and scope orders.