Fair Work Australia will have to arbitrate a new wage agreement for Qantas pilots, engineers and ground staff after their negotiations with the airline failed ahead of a midnight deadline.
The airline and three unions - the Australian and International Pilots Association, the Transport Workers Union and the Australian Licensed Aircraft Engineers Association - have failed to resolve the dispute in the set time frame.
Both the AIPA and TWU had sought a further 21 days to resolve the matter but Qantas rejected the request, forcing the matter to be settled by Fair Work Australia whose decision will be binding.
The engineers continued talks late into the afternoon before following the other unions into binding arbitration.
Qantas chief executive Alan Joyce says arbitration could take a number of months.
He says this means there can be no industrial action by unions or Qantas in that time, providing certainty for the airline's customers, employees and shareholders.
"During the arbitration period no action can take place and at the end of that period we'll have a binding agreement on all parties which could last up to four years," Mr Joyce said.
"So now for the next few years there's not going to be any action as a consequence of an industrial dispute with these unions."
AIPA says it is disappointed Qantas would not agree to demands it presented to the airline on Friday and accused Qantas of sabotaging the talks.
"We have a very strong case to bring to arbitration and we're confident of getting a good result there," AIPA vice president Captain Richard Woodward said.
"However it is a pity that Qantas, as an airline, will have to be subjected to this long, drawn-out process when a negotiated outcome was possible."
"Qantas pilots simply want to operate Qantas flights. That's why we're in this dispute and that's what we will continue to fight for."
ALAEA federal secretary Steve Purvinas says he is hopeful the matter can be resolved by Christmas.
"We've finished negotiations," he said.
"We've just got a few outstanding matters that we are quite happy for Fair Work Australia to decide in arbitration.
"We were thinking... a 21-day extension wasn't going to help us and it's just easier to sit down before a full bench and get them out of the way."
Mr Joyce said some progress had been made during talks with pilots but they were unable to reach agreement.
"We will continue to explore any opportunities with the pilots' union to reduce the number of matters that need to be arbitrated on," Mr Joyce said.
"Qantas did not terminate the negotiations today. Both parties concluded that an agreement could not be reached so the matter will be resolved by arbitration."
Threats of action
In its talks with the TWU, Mr Joyce says the airline had made an offer of "reasonable increases in pay and conditions" and job protection for existing Qantas employees but the union rejected its offer.
"We cannot give in to demands that we hand over control of parts of the airline to the union," he said.
"The union was asking us to break the law and agree to only use companies that have enterprise agreements in place with the TWU and to write this into a legal document.
"We simply could not agree to that."
The pilots' union has launched a Federal Court challenge to the FWA ruling that ordered the 21-day negotiation period and banned any further industrial action after Qantas grounded its fleet on October 29.
The TWU is considering launching a similar challenge. If it wins, the TWU says flights will be disrupted during the Christmas holiday period.
Workplace Relations Minister Senator Chris Evans says the Federal Government will oppose any challenge to the current Fair Work order.
"In the interests of certainty for the travelling public, the tourism industry and the wider economy, the Government will oppose any challenge to the current order terminating industrial action at Qantas," Senator Evans said in a statement.
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