TWU calls on Virgin Australia bidders to put offers to staff in writing

Words will need to be backed up by written commitments and conduct in the future, says TWU’s national secretary.

A man sits at a cafe in front of a Virgin Australia aircraft at Sydney Airport, Sydney, Friday, June 19, 2020. Picture: AAP

The Transport Workers’ Union has called on the two bidders for Virgin Australia to put their commitments to Virgin staff in writing as administrator Deloitte’s Vaughan Strawbridge continues talks ahead of next week’s decision.

“We welcome any indication from the bidders that they have the interests of workers foremost in their approach,” TWU national secretary Michael Kaine told the Australian on Tuesday.

But he said any commitments by the rival bidders – New York hedge fund Cyrus Capital and Boston-based Bain Capital – about the preservation of entitlements and future benefits for Virgin’s 9000 staff would need to be made in public and put in writing.

“Words will need to be backed up by written commitments and conduct in the future,” he said.

Mr Kaine’s comments come as unnamed sources connected with the Bain bid briefed journalists, saying the Bain consortium would give equity in the airline to Virgin staff who remained with the business after a major restructuring, if it were chosen next week as the preferred bidder.

Mr Strawbridge is currently scheduled to choose the preferred bidder by next Tuesday.

Bain sources briefing journalists this week also indicated its bid would be committed to fully funding the entitlements of any workers who will be made redundant if took over the airline.

The move was seen as an effort by Bain to win over crucial union support following moves by two other unions to publicly support the rival bid by Cyrus which is seen as being potentially more sympathetic to employees.

Both bidders are expected to cut back Virgin’s existing workforce and operate with a reduced fleet of aircraft but none has given any specific commitment on how many staff would remain after they take over and go ahead with an expected restructuring.

The TWU has yet to make a commitment on which of the two rival bidders it will back.

Cyrus has received the support of two unions representing Virgin staff – the Flight Attendants Association of Australia and the Australian Licensed Aircraft Engineers Association.

The view of the key TWU could well be critical when administrator Mr Strawbridge puts a proposed deal to creditors at a meeting on August 21.

Any proposal by the administrator has to be supported with a majority of creditors by number and a majority by value.

Potential to block a proposal

With about 9000 employees with entitlements owed by Virgin, the unions could have the potential to block a proposal it dislikes at the August 21 meeting.

Mr Kaine indicated on Tuesday that the TWU might not follow the other two unions in giving public support to any bidder, but would instead be working with the one to be chosen next week by Mr Strawbridge as the “preferred” bidder.

“We look forward to working with the winning bidder to secure the future for workers in a newly launched Virgin,” he said.

“But to make this happen the federal government will have to break its deafening silence and intervene in this process.”

The TWU is continuing to warn that the Virgin sell off process still has the potential to be derailed unless the federal government is prepared to offer more financial backing for the airline which went into administration on April 21 with debts of almost $7bn.

“If efforts to get Virgin back on track fail it will be because of the federal government’s refusal to act,” Mr Kaine said.