The employment of people working in Australia by companies based in New Zealand on cheaper rates is being highlighted by Australian unions in their dispute with Qantas Airways.

Qantas grounded its flights last week, arguing that industrial action had cost it A$68 million ($89 million). Flights resumed when Fair Work Australia granted the Government's application to terminate all industrial action. If no agreement is reached in 21 days arbitration will take place under the control of Fair Work Australia.

The three unions representing pilots, engineers, ground and catering staff have concerns about outsourcing and offshoring and are seeking guarantees from Qantas about job security, an Australian Council of Trade Unions spokesman said.

A submission to a senate committee by the ACTU last month details examples of offshoring to New Zealand by Qantas. It says the minimum annual base rate for Qantas call centre agents in New Zealand is $31,000 to $34,000 compared with A$40,245 and A$45,673 ($52,635 and $59,738) for Australian workers.


The submission said that in March Qantas subsidiary Jetstar NZ began offering individual employment contracts to New Zealand-based cadet pilots flying Australian routes for Jetstar.

The cadet pilots are paid $42,000 a year and repay training costs of $10,500 a year for six years. If they leave they have to repay training costs and pay a penalty. The union says the contracts are an artificial corporate arrangement to avoid the Australian legal award negotiations in the Australian operation of Jetstar.

The ACTU also reiterates the case unions lost when Fair Work Australia held that Qantas subsidiary Jetconnect is not bound by the Qantas short haul pilots award.

Jetconnect employs 600 staff in New Zealand. Its pilots are paid 30 per cent less than their Australian counterparts.

The Jetconnect flights are tagged as Qantas and employees wear Qantas uniforms and have Qantas staff numbers. Qantas is responsible for all ticketing and marketing. Jetconnect now flies more than two-thirds of Qantas' transtasman flights.