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Qantas could be forced to reinstate 2,000 workers

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Australia’s leading airline could be made to reinstate 2,000 ground staff

The Transport Workers Union has asked Australia’s Federal Court to make orders to reinstate 2,000 crew sacked by Qantas.

The positions of the redundant staff were outsourced, in a method that would save the airline $100 million a year.

The TWU’s request came after the court ruled on Friday the outsourcing was unlawful, because Qantas took into consideration the risk those workers would strike in 2021 during new enterprise agreement negotiations.

Qantas pledged to appeal the ruling

Qantas has pledged to appeal the ruling after insisting the outsourcing was done purely for commercial reasons, arguing the airline had continued to hire ground workers prior to the Covid pandemic which hit Australia around March 2020.

Qantas suggested that it was not practical to decide on “relief” in the case until the appeal was heard.

The court warned it could take years for the “Full Court” to hear an appeal and questioned whether it was fair to leave 2000 workers in doubt for that long.

Justice Michael Lee of the court also however suggested the TWU’s request for the reinstatement of the former employees was “unworkable”

Given the time that had elapsed, the redundancies paid and the likelihood some had taken new jobs, the Justice Lee says the reinstatement of staff wasn’t likely to happen.

“I’m struggling to see how you could deal with this matter … in a way that’s contemplated by the proposed orders,”

said Justice Lee.

Matthew Follett for Qantas agreed that it would be problematic to make orders for reinstatement of the baggage handlers, ground crews and cleaners.

“You would need to look at where in the life cycle of employment each individual was, potentially what their state of health was, because if your honour is contemplating compensation for loss of opportunity to earn future earnings then contingencies need to be brought into account,”

said Mr Follett.
Qantas could be forced to reinstate ground crew.

“We’re talking about a period of time since employment was lost and the circumstances of individuals in terms of alternative employment,”

Why Qantas outsourced jobs:

In August 2020, Qantas announced its plans to outsource ground handling – which involves services like baggage handling and aircraft cleaning – at 10 ports as part of its response to the COVID-19 crisis. This work has already been outsourced for several years by Qantas at 55 ports across the country.

A competitive tender process, which included inhouse bids put forward by employees and the TWU, confirmed that outsourcing these services would save in excess of $100 million a year because of the efficiencies delivered by specialised companies that provide similar services to scores of airlines.

Outsourcing also avoided Qantas spending $80 million over the next five years to replace aging equipment such as tugs and bag loaders, and allow it to better match resourcing with fluctuating levels of demand.

The decision to outsource was made in November 2020. It resulted in around 1,700 Qantas employees receiving redundancy packages as the handover to external companies was progressively completed by March 2021. Many of these employees were already on COVID-related stand downs.

Anthony Lucas is reporter, presenter and social media producer with ticker News. Anthony holds a Bachelor of Professional Communication, with a major in Journalism from RMIT University as well as a Diploma of Arts and Entertainment journalism from Collarts. He’s previously worked for 9 News, ONE FM Radio and Southern Cross Austerio’s Hit Radio Network. 

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Money

Boeing CEO to depart with lucrative exit package despite chaos

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Boeing CEO Dave Calhoun is set to step down from his position at the end of the year, walking away with a substantial payout despite challenges faced during his tenure.

Here are the key points:

  • Massive Payout: Despite Boeing’s stock price plummeting by 43% since Calhoun took over as CEO in 2020, he is poised to receive a $24 million payment upon his departure.

  • Additional Compensation: Calhoun holds options that could potentially earn him an additional $45.5 million if his successor manages to boost Boeing’s share price by 37%.

  • Comparative Compensation: Calhoun’s compensation during his tenure exceeds that of CEOs in similar industries, despite Boeing’s stock underperforming in comparison.

Boeing CEO Dave Calhoun’s impending departure at the end of the year has sparked controversy as he stands to walk away with a substantial payout, despite the company’s tumultuous journey under his leadership.

READ MORE: Boeing CEO to step down

Despite inheriting a company reeling from the aftermath of two deadly 737 Max crashes, Calhoun’s tenure has been marred by further setbacks, including the recent Alaska Airlines door blowout incident that further tarnished Boeing’s reputation.

Boeing offers CEO $5.3 million incentive to stay through recovery …

With Boeing’s stock price plummeting by 43% during Calhoun’s time at the helm, questions arise about the correlation between executive compensation and company performance, especially in the face of such significant challenges.

‘Raised eyebrows’

Calhoun’s lucrative exit package, valued at $24 million, has raised eyebrows among shareholders and industry observers alike.

Additionally, the potential for Calhoun to earn an additional $45.5 million based on the future performance of Boeing’s shares has intensified scrutiny over executive compensation practices.

This sizable payout contrasts starkly with Boeing’s stock performance, which has significantly underperformed compared to both industry peers and broader market indices, highlighting the dissonance between executive rewards and shareholder value creation.

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Money

It’s been a record year for CEO compensation

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In 2023, Broadcom’s CEO Hock Tan was granted a stock award worth $161 million, propelling him into the realm of highest-paid CEOs.

However, as the company’s share price surged, the value of Tan’s award skyrocketed to approximately $1.3 billion, outpacing even the shareholders’ annual returns.

Tan’s compensation reflects a broader trend among top executives in the tech sector, where awards of restricted stock and stock options surged in value alongside company share prices.

Notably, CEOs like Charles Robbins of Cisco Systems and Shantanu Narayen of Adobe also saw substantial increases in their compensation, doubling in some cases.

The disclosure of such equity growth in executive compensation is a new requirement by the Securities and Exchange Commission (SEC), providing shareholders with insights into the changing value of executives’ awards throughout the year.

CEO pay is on the rise.

New heights

Overall, CEO pay at major S&P 500 companies reached new heights in 2023, rebounding from slower growth in the previous year. The median pay for these CEOs rose to $15.6 million, up from $14.1 million in 2022, reflecting a surge in equity awards.

Broadcom clarified that Tan’s stock award is designed to span five years, with no plans for additional equity grants or cash bonuses during that period.

Tan’s compensation, which amounts to approximately $33 million annually over five years, is contingent upon his continued tenure and specific share price targets.

While the initial valuation of Tan’s restricted shares stood at $160.5 million, the surge in Broadcom’s share price prompted the company to reassess the likelihood of meeting vesting conditions.

This reassessment suggests that Tan may not receive all the shares initially granted.

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Money

Market forecast: weather whirlwinds influencing investments

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Prime conditions for commodity investments arise from global weather shifts, geological tensions, and rising interest rates.

With global weather patterns causing disruptions in traditional supply chains, coupled with geopolitical tensions over natural resource access, and the anticipation of higher interest rates impacting financial markets, the conditions for commodity investments have reached exceptional levels.

Amidst this backdrop, Farrer Capital has emerged as a standout player, leveraging its unique ‘blue ocean’ approach to capitalize on price dislocations and scarce competition in the market.

Mark Wyld from MW Wealth joins the show to share his insights on the inclement weather impacting the market.

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