30 years ago, Australia was gripped by industrial unrest that caused major disruption to domestic air travel. Airline pilots squared off against their employers. It was presented as a battle over pay, but really it represented much more.
The airlines were backed to the hilt by the Hawke Labor government, the right-wing media, and unfortunately, the Australian Council of Trade Unions (ACTU). Against all odds, the pilots put up a hard fight, but in the end, they were beaten by an unholy alliance that was hell bent on taking Australian capitalism in a new direction.
The 1989 pilots dispute was one of the most expensive Australia had ever seen. The government and the airlines spent hundreds of millions of dollars to not only win the battle, but to crush the pilot’s union – the Australian Federation of Air Pilots (AFAP).
During the dispute the government called a national emergency and deployed armed forces and planes to fly commercial routes. Hundreds of scab pilots from overseas had their visas fast tracked, and their wages paid by the government in an attempt to undermine the union’s campaign.
The dispute dragged on for months and it’s estimated that overall it cost the economy more than a billion dollars. Cabinet papers show that the government was well prepared for the dispute, with one confidential minute stating that they would not even discuss with the union unless it “publicly committed itself to accepting, and working within, the existing industrial relations system”.
The industrial relations system at the time was known as the Prices and Income Accord, a series of business-friendly agreements between the Labor government and the ACTU. Under the Accords the unions essentially agreed to restrict wage demands in exchange for price limits and an increase to the so called “social wage”.
The problem was that “social wage” outcomes and prices were not strictly regulated. There were also no limits on how much corporate profits could rise. The only thing set in stone was a cap on wages. Over time this led to a huge transfer of wealth from wages to profits. So called “social wage” outcomes fell by the wayside.
The Accord was really a wage-cutting plan and the cornerstone of the Hawke government’s neoliberal agenda. This agenda also included other pro-corporate policies like privatisation, free trade, deregulation and big business tax cuts.
In many countries neoliberal policies were fiercely opposed by the trade union movement, but in Australia the leaders of the ACTU partnered with the government and supported them. Together with the bosses they helped capitalism chart a new course.
Advocates of the Accord claimed that the new wealth created would “trickle down”, and that in the end workers would be better off. 30 years on the figures speak for themselves: wages as a percentage of the economy are much lower, and still decreasing, while profits are at record highs. The gap between rich and poor continues to widen.
Hawke’s plan for Australian capitalism relied heavily on all the unions complying. Most of the union leaders of the time were on board but a few resisted wage cuts. Those unions that that stepped out of line were thoroughly demonised and/or crushed. These included the unions representing builder’s labourers, nurses and pilots.
The pay claim
In 1989 the ACTU had ‘won’ a 6% wage rise under the Accord, but inflation was 7%. The pilot’s union, which wasn’t actually affiliated to the ACTU, hadn’t received adequate pay rises for a number of years, and estimated that they had lost about 20% in real wages. While their pay was sliding, there was an economic upturn, and the airlines were making good profits.
The pilots decided that in these circumstances a 6% pay rise was totally unacceptable. Instead they demanded a pay rise of 30%. This was calculated by combining the losses they had incurred with modest increases that actually covered inflation.
Hawke called the pilots “greedy”, but the 30% claim was similar to what was being delivered to senior executives. Even federal politicians received a 36% pay rise in late 1988. The problem for Hawke though was that if the pilots were granted 30%, where would it end? Next he would have had other workers lining up to negotiate pay rises outside of the Accord framework.
The entire wage fixing system would have been put in jeopardy, and the basis for all of Hawke’s neoliberal policies would have been weakened. It was not so much the size of the pilots pay claim, but the fact that they were not prepared to be bound by the rules that made this dispute so bitter.
The establishment not only wanted the pilots defeated, but their union had to be crushed. They considered that this would mean longer term benefits for profit-making in the airline sector.
While not known as a particularly radical union, historically the AFAP had won decent wages and good working conditions for their members. The AFAP was a rank and file driven union with relatively democratic structures. The union officials were actual pilots, unlike most other unions, which were dominated by career bureaucrats.
But the AFAP was more than a union, it also operated as a type of a guild that strove to protect the profession of the pilot. The union lobbied for things like airline safety regulations and pushed through important work practices, like the ability to make operational decisions free from commercial considerations. It was thanks to the AFAP that Australia was known for its impeccable aviation safety record.
The bosses hated all this. They saw the pilot’s union as a barrier to restructuring the workplace and making more profits. The Hawke government had begun plans to deregulate the airline industry and they saw the AFAP as a potential barrier to this process.
In the 1980s the domestic airline sector was essentially a duopoly dominated by the government owned Australian Airlines and the privately-owned Ansett airlines. Ansett was owned by firms connected to Peter Abeles and the media magnate Rupert Murdoch. Abeles also happened to be a close personal friend of both Bob Hawke and Bill Kelty, who was the secretary of the ACTU.
In June 1989 the pilots met with management for talks about a new agreement. They delivered their demand of a 30% pay increase but the airlines refused to negotiate, saying that the claim was outside of the Accord framework. In an attempt to get the employers back to the table, the pilots introduced work bans. They refused to work outside the hours of 9am to 5pm. This caused major disruptions and many flight cancellations.
It seems this was the opportunity the bosses and the government were waiting for. They used the excuse of the disruptions to go on the offensive. The airlines stopped all flights, effectively locking the pilots out. The employers then went to the Industrial Relations Commission (IRC) and applied to have the pilots Award cancelled. In record time the case was concluded in the employers’ favour.
The government also acted quickly to offer support to the bosses by authorising the air force and international carriers to carry domestic passengers. It was clear from the outset that a number of different players were primed and ready to put this dispute down.
In addition, the airlines launched legal action against the pilots, attempting to sue them for damages they had incurred as a result of the disruptions. The threat of legal action meant that individual pilots risked losing their homes, their savings and even their superannuation. In an attempt to avoid liability, around 1600 pilots decided to resign from their jobs en mass. All this happened in the first week of the dispute!
Adding pressure to the situation the government announced a “national emergency” and that it would compensate the companies to ensure other airline staff would not have to be stood down. As was to be expected, the corporate media vilified the pilots, claiming they were holding the country to ransom. Hawke publicly denigrated the pilots, describing them as “glorified bus drivers”.
The airlines began recruiting often underqualified scab pilots, including from overseas. They were employed on inferior individual contracts. The introduction of individual contracts was actually one of the key aims of the airlines during this dispute. It was on these contracts that they wanted the now resigned pilots to return to work.
In September the pilots did offer to return to work, on the terms of the Award, and if the employers agreed to negotiate in good faith. This offer was turned down. Clearly, the bosses had no real intentions of resolving the dispute. They wanted to keep the dispute going until the union was ruined.
The airlines instead successfully applied for a new Award that was based on the dodgy individual contracts. These contracts removed many rights and protections, and reduced working conditions. Outrageously the pilot’s union was not even made a party to the new Award. Moves were now underway to diminish the union and remove the pilots’ right to representation.
The airlines continued to try and coerce the pilots into returning to work on individual contracts. Amazingly, while the contracts slashed many working conditions, they included pay rises in excess of 25%! That the pay increase was close to the pilots 30% claim showed that this dispute had nothing to do with money.
In late September the bosses said that any pilot that refused to return on the new contracts would lose their seniority. But only a minority of the pilots were prepared to accept these terms so the dispute dragged on.
Lack of support
Given the scale of the attack being waged against the pilots and the AFAP, you would have thought that the wider trade union movement would have offered up significant support. After all, if the pilots were to be defeated it would only set a precedent for future attacks on all unions. But only a few unions put on work bans in support of the pilots.
While some regional labour councils passed resolutions in support of the pilots, the ACTU Congress passed a motion criticising the pilots’ pay claim! The way the ACTU acted during the pilots’ dispute was indeed disgraceful.
But despite the lack of support the pilots were holding out. Even with the combined scabbing efforts of the government and the airlines, the bosses were only able to get around 30% of normal air traffic operating. In fact, without the generous use of taxpayers’ money to avoid stand-downs, it’s likely that the pilots would have had the upper hand.
In late October the legal proceedings relating to damages commenced in the Supreme Court. Again, the case was expedited and the union and its officials were found to liable for damages of $6.5 million. This was an unprecedented decision, especially given that the dispute still hadn’t been resolved.
Along with removing the union as a party to the Award, this was how they planned to bankrupt and smash the union. In essence this decision was a major blow to the right to strike in Australia, as it showed that in practice it was virtually impossible for a union to organise any form of industrial action without exposing itself to civil damages. While this was a landmark decision, the airlines did not need to pursue the damages in the end.
In December the union held meetings across the country and resolved to hold out. The dispute continued over the summer break with a number of protests and pickets being organised. A federal election was due in March and the pilots used the lead up to the campaign to confront Hawke anytime he made a public appearance.
The pilots were determined but the dispute was at a stalemate. Over the summer break some 250 pilots left Australia to find work overseas. They were not prepared to work under the company’s inferior individual contracts. Meanwhile legal wrangling continued over which union should have coverage of pilots and who would be a respondent to the Award.
In early March 1990, unable to see a way forward, the union decided to give in. They agreed to return to work on the terms of the individual contracts. This really meant that the pilots were free to reapply for their old jobs on lesser conditions. Most didn’t. Some people estimate that 80% of all pilots refused to go back. Hundreds never worked again or were forced to go overseas.
There is no doubt that the 1989 pilots’ dispute marked a turning point in Australia. While the pilots’ union made some mistakes along the way they were ultimately betrayed, not only by the Hawke Labor government but by capitalist apologists within the trade union movement itself. The ACTU lined up on the side of the bosses to their eternal shame.
Labor’s rotten role
There are a number of lessons to be gleaned from this dispute, not least the real role of the Labor Party. For a long time, many trade union activists considered Labor to be flawed but reformable. While historically the party had a mass base, the Labor leaders always had a pro-capitalist outlook. The hope was that through democratic structures the base could influence, or replace, the leadership.
For many, subsidising the bosses to the tune of millions of dollars, and using the military to scab against workers in dispute, proved that this party was unreformable. Under Hawke, the leadership shifted to the right, the democratic structures were diminished and the base began to empty out. In the 1980s the organisation evolved. It ceased to be a “capitalist workers’ party” and was now an out-and-out tool for big business. It has remained so ever since.
Labor effectively wiped out the pilots’ union for a period, the second union Hawke managed to smash after the Builders Labourers Federation. This was a record that conservative governments all around the world looked at with envy.
The breaking of the pilots’ union paved the way for the deregulation of the entire industry. Labor, under Keating, merged Australian Airlines with Qantas and then privatised it in 1993. As such, a firm that was once a public asset was now being run as a profit-making enterprise, with the wealth created being funnelled to big shareholders rather than being used for the public good.
The decisions Labor made set important precedents, including for the subsequent Liberal government under Howard. For example, Howard copied many elements of Hawke’s approach against the wharfies during the 1998 waterfront dispute. Howard built upon Labor’s union busting and expanded things like the use of individual contracts.
The uninhibited right to strike still doesn’t exist in Australia, and it is now seen as normal for employers to use legal action against workers that dare to withdraw their labour in pursuit of decent wages and conditions.
By refusing to back the pilots the ACTU set in train a process that has severely damaged the trade union movement. The Accord could have been turned into a dead letter if all the unions had supported the pilots and emulated their struggle. Instead it survived and more repressive policies like enterprise bargaining and non-union agreements were introduced by Labor.
The Accord was a straightjacket that took away the union movement’s ability to struggle. The fight over the wealth workers created was given up on. The trade unions progressively lost their relevance as fighting organisations and they have since lost tens of thousands of members along with all of the influence they had in the 1980s.
While the establishment had to smash the pilots’ union, in most other sectors the bosses managed to push through neo-liberal counter reforms without too much trouble. In fact, they mostly did it with the cooperation of the pro-capitalist union leaders themselves.
Looking back at this dispute, the bosses must see it as a hard fight but one that was more than worth it. In many ways they probably can’t believe just how good things turned out. They were able to lay the basis for restructuring Australian capitalism, leading to a profit bonanza, all while getting Labor and the unions themselves to do all the dirty work.
For the workers’ movement the pilots’ dispute was a major blow that still hurts. We have been set back a long way and are still grappling to rebuild the trade unions along fighting lines. We are also still struggling to build a political alternative to Labor given it long ago gave up on not only socialism, but even representing the basic interests of working class people.
A new era of capitalist crisis will put the need to actually struggle over the wealth we create back on the agenda. In that context the pro-capitalist politics that still dominate the union movement will be found wanting. A new generation of workers will seek to learn the lessons of the past and they will discover that we have only ever gone forward on the basis of class struggle and socialist politics.
One of the key lessons of this dispute is that workers not only have a struggle against the bosses, but we also have a struggle against pro-capitalist politics and turncoats in our own movement.
By Anthony Main
See also these articles published in our predecessor publication ‘The Militant’ at the time of the dispute: