Case Study : The anatomy of a strike British Airways and Unite The industrial dispute between British Airways

s and Unite (the UK general union with over two million members) in the spring of 2010 provides a fascinating insight into the anatomy of an industrial dispute involving not only an employer and its employees, but also the government, political parties, customers and the media. BA employs about 13,500 flight attendants of whom about 12,000 are members of Unite. In February 2010, 81 per cent of BA cabin crew staff (on a turnout of 79 per cent of employees eligible to vote) who were members of Bassa, the cabin crew branch of Unite, voted in favour of industrial action in a row over proposed staffing cuts and changes to working conditions. This follows a previous ballot in late-2009 which overwhelmingly supported 12 days of strike action which British Airways successfully challenged in the high court (who then granted BA's request for an injunction against the strike on the basis of a balloting error that breached the 1992 Trade Union Act). This initial ballot was a response to BA unilateral decision to reduce cabin crew on long-haul flights by at least one person to reduce costs in response to a pre-tax loss of 401m in the previous year. At that time, Unite wrote to cabin crew claiming that the ruling underlines once again the extent to which the law is tilted against the rights of the ordinary person at work, and how a determined employer with effectively unlimited resources can frustrate your fundamental right to withdraw your labour as a last resort to ensure your voice is heard. The ballot in February 2010 followed no further progress to resolve the dispute despite extensive negotiation. Seven days of strike action subsequently took place on two separate occasions in March 2010. BA responded to the walkout in a number of ways. First, they withdrew discounted travel perks for air stewards, a significant and valued benefit. Second, they borrowed cabin crew from other airlines, chartered jets and used volunteer crew (for example, some BA pilots filled in for striking cabin crew). Despite such action, BA reported that bill for the strike action could be as much as 45million and that it carried nearly 400,000 less passengers than in the same month a year ago, representing a 15 per cent decline.

Ryanair, meanwhile, reported a 13% increase. During the seven days of industrial action BA operated 79% of its long-haul flight schedule and 58% of short-haul trips by hiring planes and crew from rival carriers. The wider context of this dispute is BA managements ongoing struggle to reduce operating costs in the face of declining demand, increased competition and rising nonlabour costs, such as fuel. Labour costs represent a significant cost to the airline industry and represent one of the only means by which airlines can make efficiency gains. Cabin crew represents the largest part of an airlines workforce. In order to reduce cabin crew costs by 140m a year, BA management proposes to recruit new crew on less favourable terms and conditions into a separate fleet that would not be subject to the expensive and inflexible demarcation that currently exists between cabin crew dedicated to long-haul and short-haul services. Unite are reported as being fearful that new workers, whilst being allowed to join a union, would be barred from collective bargaining with the existing workers, effectively dividing the workforce. The union also fear that the new fleet represents a Trojan horse to allow for the introduction of lower-paid workers, the intensification of work and a plan for this fleet to take over the most lucrative routes in order to marginalize existing workers. Despite the significance of these plans for employees, Unite will not discuss the new fleet proposal because pre-emptive strike action against it could be injuncted and a basis for legal action by BA. Further proposals made by BA to reduce costs include the dismantling of its seniority system of promotion, the restructuring of cabin crew operations and plans to bring pay in line with competitors who are widely reported to pay cabin crew significantly less than BA. A feature of this industrial dispute has been the claims and counter-claims about the impact of the strike action. For instance, BA claimed that the second of the two strikes saw more cabin crew working and more flights operating which represented weakening support for industrial action. Willie Walsh, the BA chief executive, said the airline flew more than 60,000 passengers on 470 flights on the Saturday of the second strike, compared with 43,000 on 350 flights on the previous Saturday. In response to such claims, Len McCluskey said: "This is the great BA con trick BA is claiming it can

function, but it is doing so by throwing away millions of pounds every day as it dumps its passengers on other carriers. Passengers who turn up expecting to fly BA, a brand they trust and have paid a premium for, will now be shipped on to carriers they've never heard of and instead of fully trained professional crew, they'll be attended to by a ragbag bunch of pilots, managers and strike-breakers masquerading as crew. In its desperation to break its workforce, BA is inflicting another trashing on this brand. The media has also played its part in the dispute both in shaping public opinion and as an outlet for these claims and leaks of sensitive information designed to strengthen the position of the parties (for example, leaked information regarding the extent of BAs losses due to the strike which subsequently caused a fluctuation in BAs share price). This strike also has a notable political dimension. Taking place in the run up to a UK general election, the Conservative Party leader, David Cameron, sought to gain political capital out of the strike suggesting that the prime minister, Gordon Brown, had shown a certain weakness in his attitude to the dispute, a failure to support non-strikers and of being in hock to the unions (Unite are reported to have donated 11m to the Labour party in the previous four years). In response, Brown stated that the industrial action was not in the interest of the public, BA or the workers, called it unjustifiable and deplorable and urged that the proposed strike action be called off. Reports also suggested that the government feared the political consequences of industrial action and its impact on their chances at the election, particularly in a climate of high unemployment where the threat of job losses hanging over much of the public sector in the coming months. For this reason, Gordon Brown is reported to have desperately sought to intervene in order to resolve the dispute. A further interesting development in the dispute was claims from some commentators (for example, more than 100 industrial relations academics in a letter to the Guardian) that BA managements plans for a second fleet, their response to the strike and approach to negotiations amounted to a concerted effort to break Unite through macho management and to seek to diminish the union power which has long been a feature of a fraught history of industrial relations at BA. In particular, BA were accused of being

deliberately obstructive in refusing to bring back a pre-strike peace offer which Unite subsequently claimed could form the basis for a deal to end the dispute and for subsequently tabling a worse offer (partly, it claims, to recoup the money lost in the dispute through a revised deal). BA refute these claims and believe that Unite and its cabin crew branches had several chances to reach agreement over the cost-cutting programme and have chosen to pursue unnecessary strike action. Unite warned that the dispute was sowing the seeds of long-term internal conflict at BA. Even after the current dispute is settled, Unite suggest that mistrust and ill feeling will perpetuate not only between management and Unite members taking industrial action but also among employees themselves, not least between the strikers and those who chose to cross the picket lines and pilots who filled in as cabin crew during the strike. At the time of writing, no new dates had been set for industrial action, although Unite refused to rule out the possibility of further strikes, and negotiations were ongoing.

CASE STUDY: STRIKE IN JET AIRWAYS

Introduction: In October 2008, Jet Airways (India) Limited (Jet), one of Indias leading domestic airlines, decided to lay off more than 1,000 employees to streamline its operations. The retrenchment was the second phase of its trimming operations. The first phase, which took place a day earlier, saw the airline showing the door to 850 cabin crew members6. The second phase of retrenchment included employees from all operations cabin crew, pilots, ground staff, airport services staff, and employees from management departments. The sudden decision not only took the employees by surprise but also caused alarm in the Indian aviation sector. Amidst great furor and opposition by various organizations and political parties, Naresh Goyal (Goyal), chairman of Jet, reinstated the employees a day later amidst great emotional drama. He was quoted as saying he had been appalled by the retrenchments of his employees, which he claimed, he had come to know only through media reports. He added that he would not be able to live as long as he lives with the tough decision his management had taken and clarified that he was taking back the employees as they were family to him and as head of the family he would take care of them. A month later in November 2008, Jet announced that it would consider serious salary cuts for its staff to handle the aviation crisis. While many industry analysts were surprised by the turn of events that had led to the reinstatement of the sacked employees, they opined that Jet had been forced to take drastic decisions such as laying off employees or initiating pay cuts because of the turbulent phase through which the aviation industry was passing. In September 2008, the International Air Transport Association (IATA) had predicted that world over the aviation industry would lose about US$5.2 billion based on an average jet fuel price of US$140 . The rise in fuel prices had pushed the fuel bills of the aviation industry to US$186 billion by the end of the year 2008. Background Note: Jet, with its headquarters in Mumbai, India, began as an air taxi operator in April 1992 and started its commercial operations a year later, in 1993. It operated with just 24 flights across 12 destinations initially, but showed exceptional growth with more than 357 daily flights to about 62 domestic and international destinations in 2008. It was first listed in the National Stock Exchange (NSE) in the year 2005. As of June 2008, it operated over 370 daily flights to about 68 destinations both in India and abroad including San Francisco, New York,Toronto, Singapore, Brussels, London (Heathrow), Hong Kong, Shanghai, Kuala Lumpur, Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain, Muscat, Abu Dhabi, Dubai, etc

HR Issues, Management and Decision Making at Jet According to the company, Jet paid the utmost importance to the composition of its senior management and its human resources with emphasis on teamwork as a key success factor. Being in the service-based industry, Jet gave priority to high quality, professional service to its customers The Retrenchment Drama Unfolds The retrenchment drama unfolded on October 16, 2008, when Jet announced that it would lay off nearly 1,100 of its staff a day after it had already laid off around 800 of its cabin crew members. The second phase of 1,100 employees included those from departments like management, flight attendants, and the cockpit crew. The company decided to lay off these employees with no prior notice but offered them a months remuneration Reasons for Retrenchment The growing challenges in the Indian aviation industry were the main reason for the lay offs at Jet, according to the company and other industry analysts. Turbulent Times for the Indian Aviation Industry The Indian aviation industry was one of the fastest growing aviation industries in the world. The Air Corporations (Transfer of Undertakings and Repeal) Act 1994 opened the Indian skies up to private operators. Apart from government-owned airlines, the aviation industry was flooded with private operators and low cost carriers The Debate Leading to the Reinstatement of Employees Jet received criticism from several quarters for retrenching its employees. Many of its employees protested against the decision to oust them without prior notice. Most of them had paid substantial amounts to receive training at major Aviation Training institutes Massive Salary Cuts Follow In the last week of November 2008, Jet decided on a 20% cut in the salaries of its pilots, engineers, and some other staff. The company planned a 5 percent to 10 percent cut in the salary of top officials who drew a salary above Rs. 75,000.