Reference no: EM133390977

Case: Virgin Australia workers asked to accept pay freeze, but promised their jobs won't be outsourced

About 6,000 workers at Virgin Australia will be asked to vote on a new workplace enterprise agreement that would see their pay frozen for 18 months to two years as the airline struggles to recover from the coronavirus pandemic.

Key points:

• Virgin workers will have to vote on whether they accept a deal that includes a pay freeze for up to two years. 
• Airlines have suffered a major financial hit from the COVID crisis, which has seen thousands of Virgin workers lose their jobs.
• The unions say the proposed deal protects worker conditions and ensures jobs won't be outsourced.

But workers have been promised that none of their roles will be outsourced in the meantime, like they have been at rival airline Qantas. Qantas this week confirmed it would be outsourcing more than 2000 ground staff roles due to an expected $10 billion hit to its revenue. The unions said Virgin Australia's move to keep roles in-house rather than outsource them to third parties could give the airline a competitive advantage against its bigger rival, after they and the airline's new owner Bain Capital agreed to the in-principle enterprise agreement deal. Outsourcing Qantas jobs is 'un-Australian', say workers. Virgin's 6,000 workers will, in the coming weeks, have their vote on the proposed new enterprise agreements.

The in-principle agreements were negotiated between Virgin management and union worker negotiators from the TWU (Transport Workers Union), FAAA (Flight Attendants' Association of Australia), ASU (Australian Services Union) and ALAEA (Australian Licensed Aircraft Engineers' Association). Virgin Australia has been one of the biggest corporate casualties of the coronavirus crisis, already making a third of its workforce redundant. The $3.5 billion sale of Virgin Australia to private equity firm Bain Capital was finalised late last month, following commitments to retain as many jobs and services as possible.

The unions have now reached in-principle agreement on fresh workplace enterprise deals with Virgin's new management, led by chief executive Jayne Hrdlicka. Ms Hrdlicka had a previous rocky relationship with the unions when she worked at Qantas, and then as chief executive of Jetstar, but as vowed to work with the unions constructively, and this agreement is the first sign.

Question 1. Who are the three (3) key employment relations stakeholders in the case study, and what are their main arguments?

Question 2. Which frame of reference in the field of employment relations would be most helpful for the employee stakeholder in the case study? In your answer, justify your reasons.