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Are Qantas employees grateful that bosses are reporting a profit – or did it come at their expense?

<span>Photograph: Phil Noble/Reuters</span>
Photograph: Phil Noble/Reuters

“It’s a remarkable turnaround,” Qantas boss Alan Joyce said when predicting an underlying profit before tax of between $1.2bn and $1.3bn for the six months to the end of the calendar year.

Qantas previously reported losses of $7bn during the pandemic. So the shift to profitability is noteworthy. But management and the unions have two very different explanations as to how the airline turned things around.

Joyce said on Thursday feedback received from workers had been “a huge thank you to the management of Qantas for getting the company through the Covid period”. But the Transport Workers’ Union argues the carrier has used a variety of tactics “to illegally sack, threaten and squeeze pay and conditions”.

Domestic cabin crew applied this week to the federal industrial umpire to take protected industrial action over fatigue concerns and potential outsourcing.

The ‘Joyce model’

The union says under the “Joyce model” the airline, instead of hiring workers directly, has increasingly set up subsidiary companies or outsourced contracts to undermine enterprise bargaining and cut wages.

These decisions were highlighted earlier this year when Qantas experienced cancelled flights, lost bags and allegations of unsafe practices. Qantas denied its complicated labour hire system was responsible.

The model also came under further scrutiny by a Senate committee examining equal pay for equal work. Qantas’s corporate affairs executive, Andrew McGinnes, told the inquiry earlier this month the airline was a “legacy business operating in a highly competitive market and for most legacy carriers that scenario hasn’t ended well” – which is why the airline had “evolved” its labour model over decades.

Related: Alan Joyce predicts underlying profit of up to $1.3bn and denies Qantas has a morale problem

“Our legacy terms and conditions are by far the highest in all the markets we operate in and have been grandfathered for thousands of our people,” he said. “But if we kept hiring on the same terms and conditions, especially when our competitors are paying just slightly above award rates, Qantas would likely not be here.”

Qantas says McGinnes was talking about cabin crew staff, but the TWU says it sums up company-wide hiring practices.

How many companies are we talking about?

Qantas has been asked to provide the Senate committee with a list of all its subsidiary companies, labour hire companies and the companies it outsources to.

We already know Qantas draws staff from at least eight ground crew companies while there are several companies that provide cabin crew.

Do all staff get paid the same for the same work?

Awards and conditions depend on who employs workers and when they were employed. It is possible to have four different cabin crew members on the same plane paid different rates. The same goes for the ground crew.

Overtime, shift loadings, shift length and minimum hours can all depend on the employer’s name on the payslip.

Workers at Qantas and in its supply chains are covered by at least 10 enterprise agreements, reflecting the complex employment arrangements set up under Joyce’s leadership.

There are four agreements for cabin crew alone: two covering short-haul flight attendants, one covering casuals who are employed by labour hire company Maurice Alexander Management, and one covering long-haul staff who work either directly for Qantas or its internal labour hire company Qantas Cabin Crew Australia.

The short-haul agreements are currently in dispute between the company and the Flight Attendants’ Association of Australia, with industrial action a possibility.

Pilots who fly under the Qantas banner are covered by a separate agreement, which was renewed this year after the company threatened to set up another internal employment entity to employ pilots on new planes if the pilots union didn’t agree to its terms.

There are also separate agreements for staff at budget subsidiary Jetstar.

Meanwhile, staff at the companies to which Qantas has outsourced its baggage handling and other ground duties – a move the federal court found was illegal – are covered by an additional three agreements.

What does Qantas say about its business model?

When it comes to cabin crew and freight, Qantas says demand is seasonal and it needs extra staff at different times of the year. It was not exclusively about cost-cutting, the company says.

It says its 104-year history partly explains the “complicated” labour force structures – it has acquired companies over time that have become part of the subsidiary workforce.

When it comes to the ground crew, Qantas has argued the change was about remaining competitive. The federal court found sacking 2,000 Qantas ground crew in 2020 at the start of the pandemic shutdown – and outsourcing the jobs – was illegal. That’s a finding Qantas is appealing.

Qantas has said the outsourcing was necessary due to the massive impact of Covid. The strategy saved money at a critical time and allowed resources to be better matched with fluctuating levels of demand, management said.

The union’s perspective?

The Transport Workers’ Union has argued Qantas outsourced workers to undercut staff pay and conditions.

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The union wants better regulation to tackle pay inequity and undercutting which would cover all workers and limit outsourcing and companies setting up lower-paying subsidiaries. It also says savings have not been re-invested in the airline but instead spent on a share buyback scheme.

The TWU national secretary, Michael Kaine, says it is workers and those who fly with Qantas who are suffering.

“Qantas is no stranger to crying poor when it suits, to go cap in hand to the taxpayer or in an attempt to mend its tattered reputation for illegally sacking workers and destroying nearly 2,000 lives.”

Are the changes linked to recent travel problems?

Qantas says flight delays and other problems earlier this year were Covid-related, with the airline down 20% of its staff at any one time because of illness and mandatory isolation periods.

The union, and whistleblowing staff, say outsourced ground crew have not been properly trained and high turnover in some contracted companies meant procedures were not being followed.

Related: Crisis in the skies: when will Australia’s aviation industry get back to normal?

Where to now?

Qantas is fighting the federal court ruling, arguing it was lawful to sack staff and change its hiring model. It says it would be too difficult and expensive to reinstate the 2,000 ground crew workers after dismantling the business.

The union wants legislative loopholes closed to prevent more companies following Qantas’s lead. It argues the use of labour hire firms, subsidiaries and outsourcing is contributing to structural wage issues across the nation, as well as undermining the health and safety of workers.

The Albanese government is looking at equal pay for equal work legislation down the track and it made “same job, same pay” part of its election platform. But there has been pushback from businesses across a whole range of sectors.