Unions put off Virgin Australia pay talks following Paul Scurrah’s departure

Unions prepare to unleash on Virgin Australia’s new owners Bain Capital following axing of CEO Paul Scurrah.

In happier times – Paul Scurrah in his temporary office at the airline’s new headquarters at South Brisbane. Picture: Lyndon Mechielsen

Unions representing Virgin Australia employees will demand enterprise bargaining talks with the airline’s new owners Bain Capital be put on hold for a year, following the dramatic axing of CEO Paul Scurrah.

The popular leader was told on Wednesday the firm was taking a different direction under the US private equity firm, and former Jetstar boss Jayne Hrdlicka would replace him.

The news was not received well by employees and unions, who are in the midst of negotiating new work agreements with the Bain-led Virgin Australia, aimed at reducing labour costs.

The Transport Workers Union and a number of other unions called a halt to negotiations before the announcement, and were set to meet with Bain leaders on Monday afternoon.

The Australian understands the TWU will not resume talks until Bain provides a written assurance about the future of 6000 staff still employed at Virgin Australia.

Flight Attendants Association of Australia secretary Teri O’Toole said it would be a difficult task for Bain to reach agreement with unions in the current environment.

“The employees feel cheated by Paul Scurrah’s departure, after Bain said so publicly he was staying,” Ms O’Toole said.

“Virgin employees trust Paul and have a lot of faith in him. He built an incredible connection with the entire employee group and his departure has left a very bad taste for employees.”

She said Ms Hrdlicka would need to build up trust within the workforce, left reeling by the triple blows of COVID, administration and now the loss of their CEO.

“The best thing for Virgin to do would be to roll over negotiations, get some temporary COVID-19 (financial) relief to get back on their feet, and restart negotiations in a year or so, when we have a better idea of what post-COVID aviation will look like,” Ms O’Toole said.

“Aviation is a safety-sensitive industry. We need employees to be thinking about their safety roles and not being distracted by these major changes to the direction of their airline and it’s leadership.

“The impact of Paul Scurrah’s departure is being underestimated, as is the importance of the Virgin culture.”

Until the sale to Bain Capital is finalised early next month, Ms Hrdlicka will not be allowed to step foot in Virgin Australia’s new headquarters at South Brisbane. Mr Scurrah is expected to stay on until the transaction goes through.

Virgin Independent Pilots Association president John Lyons said they had no confidence in Bain, after the firm “abrogated its promises” on all fronts. “They’re trying to rush through employment agreements at an unseemly pace, and trying to reduce terms.”

Unions fear Bain is trying to push them onto pay rates that were “below that of Jetstar”, with cabin crew facing cuts of between $12,000 and $24,000.