Qantas, the Australian airline, announced Saturday that it had grounded its entire fleet around the world in labor dispute between the company and its employees.

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HONG KONG — Qantas, the Australian airline, announced Saturday that it had grounded its entire fleet around the world, the most drastic move yet in a protracted labor dispute between the company and its employees.

The announcement caused the immediate cancellation of 600 flights affecting 70,000 travelers, the airline said.

Alan Joyce, the airline’s chief executive, said the fleet of 108 aircraft in up to 22 countries would remain grounded until Qantas reached an agreement over pay and work conditions with the unions representing pilots, mechanics and ground staff.

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The decision drew sharp reaction from the government and labor unions, with the government ordering an emergency arbitration hearing on Sunday. Leaders were expected to argue that Qantas should be forced to fly in Australia’s economic interest.

“I believe Australians want to see this sorted out. I believe business wants to see this sorted out. I want to see this sorted out,” Prime Minister Julia Gillard said at a news conference. “I’m looking at this dispute as prime minister and at its implications for our economy.”

A spokesman for the Australian Workers’ Union, one of the country’s oldest and largest unions with more than 135,000 members, criticized the airline’s decision to ground its fleet without notice.

“Words can’t express our anger at the unilateral decision Qantas management has taken — as well as the impact it will have on all Qantas workers and the thousands of travelers now left stranded in Australia and around the world,” the national secretary of the group, Paul Howes, said.

“Unions rightly give 72 hours notice before industrial action, but Qantas management has given no notice before this wildcat grounding of their fleet,” he said, in a statement on the union’s website.

The airline said beginning Monday it would lock out all employees involved in the dispute, including the engineers association, pilots, catering and ground handling associations. The grounding of the fleet will cost the airline an estimated $21 million a day.

A series of labor disputes have hit the airline as employees have voiced concern about jobs being moved out of Australia. Qantas has been forced to reduce and reschedule flights for weeks because of the disputes.

In a statement Saturday, the airline said the dispute had cost $16 million a week in lost revenue.

Barry Jackson, president of the Australian and International Pilots Association, told Sky News that Qantas had “hijacked the nation.”

“It really has put everyone on notice and … it’s forcing the government’s hand on this,” Jackson said.

The decision by Qantas immediately threw into disarray the travel plans of passengers using the airline. Australia’s Foreign Ministry was adding emergency staff in Canberra to help Australians stranded by cancellations.

The Australian Broadcast Corp. reported that among the travelers whose plans were disrupted were heads of state set to depart Australia on Qantas flights after concluding a Commonwealth nations summit meeting led by Queen Elizabeth II.

Qantas said it would offer hotel accommodation and alternative flights to those stranded midjourney. Refunds and ticket transfers will be available to passengers with canceled flights.

The Associated Press contributed to this report.

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