Australian pilots were today taking their national airline Qantas to the employment court over allegations that a New Zealand airline is simply a subsidiary set up overseas in a bid to reduce wages.
The Australian and International Pilots Association claims the Qantas-owned subsidiary Jetconnect is a "sham company" set up in New Zealand for the sole purpose of avoiding Qantas' obligations under the award, and the employment agreement it has with Qantas pilots.
The pilots have asked the full bench of Fair Work Australia to vary the pilots' award so that it covers any wholly-owned subsidiary of Qantas, thus forcing the airline to pay the New Zealand pilots Australian wages.
After apparently being set up to undertake domestic flights within New Zealand, last June Qantas quietly gave Jetconnect responsibility for 133 flights a week between Australia and New Zealand.
But the pilots say Jetconnect is effectively an operating division of Qantas -- its New Zealand pilots wear Qantas uniforms, have Qantas staff numbers, and fly Qantas aircraft which travel routes determined by Qantas, the Sydney Morning Herald reported.
Conditions of employment at Jetconnect are significantly inferior to those at Qantas -- pilots say they are paid up to 33 per cent less and do not receive the same superannuation entitlements.
They say Qantas makes a double saving by using Jetconnect: paying less in pilots' wages and reducing the hours it has to give to pilots under the Qantas agreement.
"Our problem is that Jetconnect is for all intents and purposes part of an Australian company, but Qantas is bypassing the minimum Australian pilot's salary," the association president, Barry Jackson, said.
Qantas denies there is a direct link.
"Jetconnect is a New Zealand company operating in New Zealand with aircraft originating from New Zealand and using New Zealand staff," a spokesman said.
A decision in the union's favour would have significant implications for other Qantas subsidiaries such as Jetstar, as well as the broader Australian aviation sector.
It could also set a precedent for other companies that employ foreign workers who regularly move between Australia and overseas. The umbrella union body, the Australian Council of Trade Unions ACTU has said it wants to join the action on behalf of workers across the country who it says could be affected.