VIRGIN AUSTRALIA: Dodged Christmas strikes with 20% pay deal

Previously, I reported that Virgin Australia could be facing protected strike action . These applications by the unions representing baggage handlers and cleaners to the Fair Work Commission have been granted. It looked like we were in for some legal strikes if the wage negotiations were unsuccessful.

Strikes have been averted with a pay deal giving some workers a first-year pay rise as high as 20%.

The average pay increase across the three-year deal is more like 14.9%, just shy of 15%. It covers all pay grades regardless of any seniority.

Some details

Most rises are less than that headline 20% figure. Groundworkers get a first-year increase of 8.4%, then 3% and 5.5% in successive years. That first boost is a reward for foregoing increases during the height of the COVID-19 pandemic. This forbearance coincided with Virgin Australia going into administration.

The airline has since returned to profit as of 2023 – for the first time in 11 years.

That headline figure of 20% applies to a small number of managers. It’s a recognition of what they gave up during the pandemic.

To give you an idea of the pay levels in the industry, the lowest-paid ground workers earn roughly AU$49,000 annually. The highest paid get a base salary of SU$67,000 before allowances and penalties.

Other negotiations

Virgin Australia still needs to settle deals with cabin crew and pilots before it seeks to relist on the ASX. Cabin Crew have also applied for protected strike action after negotiations stalled.

The industrial relations approach is in stark contrast to that of Qantas, where baggage handlers were illegally sacked and their jobs outsourced. Virgin Australia in contrast, has chosen to keep its ground staff like baggage handlers and cleaners on staff

2PAXfly Takeout

While Virgin Australia has chosen a different and much less confrontational industrial relations route than Qantas, I wouldn’t put them in the category of a benevolent employer quite yet. Remember that they are balancing the need to retain and recruit new staff while maintaining a competitive cost base for the success of their relisting on the Australian Stock Exchange in 2024.

Virgin Australia staff were convinced by the current owner of the airline, Bain Capital to sacrifice a lot of benefits to retain staffing levels as the airline was sold at the end of its period of administration. This new wage negotiation doesn’t do much more than restore some of those benefits including wage increases, safety measures and some changes to rostering practices and job security. Virgin gains more flexibility in the number of part-time hours it has available to assist with on-time performance.