VIRGIN AUSTRALIA: Everyone has a say in who shouldn’t be the next Virgin CEO

Everyone seems concerned about who will replace outgoing CEO Jayne Hrdlicka at Virgin Australia. First, it was the various unions that service Virgin Australia, including the Transport Workers Union (TWU). Now, it’s the Employment Minister Murray Watt.

The Minister has urged Virgin Australia to carefully consider the industrial relations track record of its next chief executive. He’s talking about Paul Jones, Virgin’s Chief Customer Officer who those in the know are backing to be the frontrunner to replace Ms Hrdlicka.

Why all this interest in the new CEO?

Paul Jones is a former Qantas executive. His name is now permanently tainted by a judges comment over the Qantas decision to illegally outsource over 1,700 ground crew jobs during the COVID-19 pandemic.

The sackings were held to be illegal in both the Federal Court and on appeal to the High Court. Qantas has been ordered to compensate the workers and has also been fined for the illegal act.

An act designed to save Qantas hundreds of millions of dollars has not cost them hundreds of millions.

Most troubling to Jones’s possible appointment as CEO of Virgin Australia is the court’s finding that Jones’ testimony was “particularly troublesome”. The implication being that he tailored his evidence to support Qantas’ legal defence. Now if you are interested in the truth, that makes him extremely untrustworthy. But in the loyalty apparently demanded by organisations these days, and modelled by the current American president, the ability to apparently lie to a court may be regarded as a positive employment trait.

Watt: Virgin Must Prioritise Workers and Public Interest

The latest public figure to weight into this debate is Senator Watt. In a bit of plain speaking when asked about Jones’ potential appointment, he stated that “most Australians would like to see Virgin choose a CEO who has a demonstrated record of putting their workers and the public first.”

Virgin Australia sale of 25% to Qatar Airlines on the line

Watt is entering the fray at a time when Virgin Australia’s owner, Bain Capital, is seeking regulatory approvals to sell a 25% stake in Virgin to Qatar Airways.

It looks like the sale is weeks away from interim approval from the Foreign Investment Review Board (FIRB). That approval is required before Bain can announce its choice of CEO.

The suspicion is that Virgin is delaying the announcement of Hrdlicka’s successor so it doesn’t affect the FIRB decision. The reason it might upset the CEO decision is that Virgin intends to appoint the controversial Jones.

Trade union opposition

The Transport Workers Union strongly opposes Jones as CEO, because of his role in the Qantas illegal outsourcing saga. The union has even indicated that the TWU could withdraw its support for the Qatar-Virgin sale if Paul Jones is appointed. The TWU has no formal status in deciding about the sale, but its opposition would make it more difficult for the government to publicly support the sale.

An important piece of evidence in the court battle over the Qantas sackings was a note from Jones noting potential changes to employment laws under a Labor government. Jones consequently admitted awareness of intended laws that would have the effect of forcing contractors to be paid the same as employees. If such laws were implemented (which they now are) would have rendered the cost benefit of outsourcing null and void.

The Qatar Deal and Government Tensions

The Australian federal government has had a fraught relationship with Qatar Airways. Last year it blocked Qatar’s bid to increase flights to major Australian cities. The Virgin-Qatar deal allows Virgin to bypass these restrictions by operating a ‘wet-lease arrangement on long-haul routes using Qatar aircraft and crew.

The ACCC is expected to deliver its draft ruling on the deal later this month, with the FIRB following shortly after.

2PAXfly Takeout

The appointment of a new CEO at Virgin Australia will be an important milestone in Australian aviation. Given the reliance of airlines on largish labour forces, and thus the importance of employment negotiations, the appointment of someone with a bit of a tarnished history in this area might be problematic.

Lets hope Virgin Australia settles on a candidate that has an exemplary history in worker relations. Although, a workers understanding of an exemplary history in this area may be different from that of a corporation.