Academic journal article The Economic and Labour Relations Review : ELRR

Ansett Airlines Employees: A Preliminary Survey of Post-Retrenchment Outcomes

Academic journal article The Economic and Labour Relations Review : ELRR

Ansett Airlines Employees: A Preliminary Survey of Post-Retrenchment Outcomes

Article excerpt


The retrenchments that resulted from the September 2001 collapse of Australia's second large airline, Ansett Airlines, provide an opportunity to examine the processes of labour adjustment in the case of a highly-skilled service industry labour force. The case of Ansett Airlines is especially significant because it enables examination of the interconnections between internal firm-level labour markets and the outcomes of retrenchment. This paper focuses on events in the first eleven after Ansett's failure. It reports the results of a mail survey posted to a stratified random sample of 2000 former Ansett Airlines employees in August 2002. (1) A series of depth interviews were conducted to complement the quantitative content.

The first part of the paper introduces the notion of internal labour markets and describes Ansett Airlines as a 'rigid' internal labour market. Section Two discusses how retrenched employees' depth of attachment to Ansett Airlines--their embeddedness in the culture of the 'Ansett family'--shaped their attitudes to post-retrenchment job search and influenced their desire to remain in the aviation sector. The third section discusses the tension between vocational aspirations and household circumstances. The fourth part of the paper contrasts post-retrenchment jobs to employment at Ansett and analyses employment status at August 2002 to show that personal attachments and aspirations had a tangible impact on workers' employment outcomes. The conclusion emphasises that the social networks of Ansett workers continued to exist after the firm had disappeared and were a significant determinant of subsequent labour market experiences. The influence of past work histories and experiences on the outcomes of retrenchment challenges the proposition that contemporary workers no longer experience or covet close associations with their employer, co-workers and workplace (Wooden 2000, Di Prete et al 2002).

Ansett's Internal Labour Market

In their dual labour market (DLM) theory, Doeringer and Poire (1971) view the labour market as comprising two segments. In the primary labour market employees enjoy the advantages of job security, relatively high wages, attractive working conditions and benefits for long service. Internal training and promotion combine with hierarchical job 'ladders' to enable primary segment firms to manage the reproduction of skill to their long term advantage. Within internal labour markets, the allocation of jobs and benefits follows institutional rules and customs and is insulated from the forces of supply and demand in the external market. In contrast, the secondary labour market comprises a variety of less secure and less well remunerated jobs defined by the absence of primary segment benefits. Dual labour market theory makes a link between firms, jobs and the people employed in each segment. In a world in which 'good' primary segment and 'bad' secondary segment jobs are allocated competitively, the social characteristics of workers are highly correlated with types of jobs and employing firms.

In DLM theory, multiple barriers prohibit movement from the secondary into the primary employment segment. Conversely, the restructuring of manufacturing economies in high wage nations since the 1970s has demonstrated that primary segment workers frequently slip back into the secondary segment during economic crises (Braverman 1974). Previous studies of retrenchment outcomes in Australia, which have focused primarily on low-skill, mainly male blue collar cohorts, have tended to confirm that long-serving workers fall into marginal or inferior jobs after retrenchment (Wooden 1988, Weller and Webber 1999).

Dual labour market theories have been criticised for taking too simplistic a view of labour markets. They have not accounted for the range of employment types--including 'good' and 'bad' jobs--that can be found in primary segment firms. They too often assume that all disadvantaged individuals and groups (women, for example) are locked into secondary sector employment. …

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