AIPA v Qantas Airways Ltd

Case

[2008] FMCA 1008

17 October 2008


FEDERAL MAGISTRATES COURT OF AUSTRALIA

AIPA & ANOR v QANTAS AIRWAYS LTD [2008] FMCA 1008
INDUSTRIAL LAW – Interpretation of agreement – reliance on extrinsic evidence – neither party correctly construing agreement – declarations and orders considered.
Workplace Relations Act 1996, ss.719, 720, 722, 841
AMIEU v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208
Kucks v CSR Ltd (1996) 66 IR 182
Short v FW Hercus Pty Ltd (1993) 40 FCR 511
Australian Municipal, Administrative, Clerical & Services Union v Treasurer of the Commonwealth of Australia (1998) 82 FCR 175
First Applicant: AUSTRALIAN & INTERNATIONAL PILOTS ASSOCIATION
Second Applicant: CAPTAIN GARRY DUGGAN
Respondent: QANTAS AIRWAYS LIMITED
File Number: MLG 711 of 2007
Judgment of: Burchardt FM
Hearing dates: 11, 12 March, 11 June & 12 September 2008
Date of Last Submission: 26 September 2008
Delivered at: Melbourne
Delivered on: 17 October 2008

REPRESENTATION

Counsel for the Applicants: Mr M.G. Rinaldi
Solicitors for the Applicants: A. J. Macken & Co.
Counsel for the Respondent: Mr M. Britt
Solicitors for the Respondent: Blake Dawson Waldron

THE COURT DECLARES AND ORDERS

DECLARES:

  1. That Qantas has breached the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2000 – 2007 for the reasons set out in the judgment. 

ORDERS:

  1. That a penalty of $5,000.00 be imposed on Qantas for the said breach.

  2. That the penalty be paid to the First Applicant. 

  3. That Qantas pay the Second Applicant $6,094.77 (less tax). 

  4. That interest on the amount in order 4 be paid at the rate of 10.5 per cent from 29 May 2007 until judgment.

  5. That the payments in orders 2, 4 and 5 be paid within 30 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 711 of 2007

AUSTRALIAN & INTERNATIONAL PILOTS ASSOCIATION

First Applicant

CAPTAIN GARRY DUGGAN

Second Applicant

And

QANTAS AIRWAYS LTD

Respondent

REASONS FOR JUDGMENT

Introduction

  1. This is an application for a declaration that Qantas Airways Limited ("Qantas") has breached the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2007 ("the agreement") by failing to pay Captain Duggan additional payment pursuant to clause 25.3 of that agreement. 

  2. The Applicants also seek payment of the money underpaid to Captain Duggan because of the failure to pay, together with the imposition of penalties pursuant to s.841 of the Workplace Relations Act 1996


    ("the Act") and other ancillary orders. 

  3. Qantas denies that it has done anything wrong and says that the proper interpretation of the agreement supports that contention. 

  4. For the reasons that follow, I think that the Australian & International Pilots Association (“AIPA”) and Captain Duggan are right, but not for the reasons they put forward.  As will become apparent, I think that Qantas is liable to pay Captain Duggan the money he seeks, but I think that Qantas' conduct was very understandable and does not, in my view, attract significant criticism. 

  5. Because of the way the case has been conducted, I will need to traverse the following matters:

    a)the proper approach to the interpretation of the agreement, including the extent to which it is or is not proper to have regard to extrinsic material;

    b)the proper interpretation of the relevant provisions of the agreement, and most particularly clause 25.3 and clause 27 thereof;

    c)an evaluation of the propriety of Qantas' conduct;

    d)interrelated with (c), consideration of the application for a penalty;

    e)the claim by Captain Duggan for restitution; and

    f)the claim for interest.

The proper approach to the interpretation of the agreement

  1. Both parties sought to introduce copious amounts of extrinsic material to assist in the interpretation of the agreement.  I have been provided with abundant authority as to the proper approach to the interpretation of industrial instruments of this sort.  I accept with respect the observations of North J in AMIEU v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 that the approach adopted by Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 (“Kucks”) is to be adopted in construing certified agreements. 

  2. The approach indicated by Madgwick J in Kucks, to which I have referred, is (at page 184) as follows:

    “It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced.  The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.  Thus for example, it is justifiable to read the award to give effect to its evident purposes having regard to such context despite mere inconsistencies or infelicities of expression which might attend some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for.  For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

    But the task remains one of interpreting a document produced by another or others.  A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award.  Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award.  So for example, ordinary or well‑understood words are in general to be accorded their ordinary or usual meaning.”

  3. To those remarks I would also add the observations of Burchett J in Short v FW Hercus Pty Ltd (1993) 40 FCR 511 where his Honour took a generous approach to the use of extrinsic material to aid in award interpretation. As Marshall J said in Australian Municipal, Administrative, Clerical, & Services Union v Treasurer of the Commonwealth of Australia (1998) 82 FCR 175 at [178]:

    “There is no sound reason why recourse to probative extrinsic material by the Court should be conditional on identification of an ambiguity.  Further, there is no sound reason why use of the extrinsic material should be limited to identifying the mischief sought to be addressed by the award, as distinct from construing the meaning of the award itself.  But the debate is rather academic.  I regard myself bound by the approach of Burchett J in Short v Hercus, Drummond J having agreed with his Honour's approach on the issue of award interpretation and the use of extrinsic material.”

  4. For the reasons to which I will come in due course, it is quite clear that it is no easy matter to work out what the relevant clauses of this agreement really mean. To the extent that it might be helpful, in the particular circumstances of this case I would regard extrinsic material as being admissible.

The interpretation of the agreement

  1. The Applicants' position was simple and can be shortly put. They say that clause 25.3 required Qantas to pay Captain Duggan an additional payment in excess of the bid divisor +5 for bid periods 245, 247 and 248.

  2. That simple position, however, requires some understanding as to what the facts are. At this point it is also not possible to proceed without making the acquaintance of the agreement itself. It should be noted that this is a chunky doorstop of an agreement, running as it does with its various annexures and the like, to the better part of 600 pages.

  3. Clause 25, which in a more conventional agreement might have been described as overtime or penalty payments, runs for a mere four pages.  But clause 27, which approximates an hours‑of‑work clause, runs from page 157 to page 264 of the agreement. Small wonder that the interrelationship of these two clauses is clouded by uncertainty.

  4. Clause 25.3 reads as follows:

    25.3  Additional payment when assigned over divisor +5

    Where a flight crew member is assigned a duty that takes his or her projected credited hours over the bid period divisor (or, where applicable, his or her personal divisor) +5, the flight crew member will receive an additional payment of 1 hour for each credited hour (pro‑rated for time less than 1 hour) that remains over the bid period divisor (or, where applicable, his or her personal divisor) +5 at the end of the bid period.  The Company will not exercise the right to remove overprojection where the hours are caused by these circumstances.

    Even to read that clause requires further understanding of some of the phrases in it. 

  5. It is common cause that Qantas divides the working year of the pilots with whom we are concerned into what are known as bid periods, discrete periods of time that involve a number of patterns which are journeys or successions of journeys. 

  6. The whole procedure for the allocation of this work is set out in clause 27 of the agreement. It is extremely tightly prescribed to ensure a result that enables, to put the matter broadly, the more senior pilots to get the work of their choice.

  7. The amount of work that the pilot can be required to do in a bid period is worked out by Qantas in consultation with the AIPA and is a figure that, as it were, provides the benchmark against which what the pilots actually do is measured.  It corresponds, in ordinary industrial parlance, to the standard ordinary hours of work required per week, e.g. 35, 40 or whatever, although it eventuates in a completely different fashion.

  8. Much of the debate in the case turned on what is meant by the word "assigned" in clause 25.3, and indeed elsewhere in the agreement.

  9. To understand that, it should be understood that when Qantas is considering who is going to do what work in a bid period the pilots bid for what they want. From that process, one of two (or, according to one witness, three) outcomes can obtain. If the pilot gets what he or she asks for, that is regarded as having been awarded.  If the pilot does not get what he or she has bid for, but is nonetheless required by Qantas to perform a pattern, then that is regarded as being assigned.  The definitions in the agreement, which are longstanding, are to this effect.

  10. I should say that the third method of allocation of work, which was contended for by Captain Kearns (the most senior witness called by Qantas), was that you could also have work allotted by agreement in circumstances where a pilot had not bid for a pattern but was offered it, and accepted. There is nothing in the agreement, despite its enormous length, that expressly sets out that third method of work allocation.

  11. It is common cause that once pilots have commenced a pattern there may be disruptions caused by events such as passenger illness and the like that are outside Qantas' control. These are known as downline disruptions.

  12. It is uncontroversial that on three of his journeys Captain Duggan was the subject of downline disruption which, through no fault of either him or Qantas, meant that at the end of his relevant bid period his hours exceeded, albeit in a small margin, bid period divisor +5.  He has been paid for the excess period at standard, but not overtime, rates. 

  13. Credited hours are calculated in accordance with clause 27.15.2-27.15.10 of the agreement.  This aspect of the agreement was not controversial in this proceeding. 

  14. Clause 27.22 of the agreement provides for a series of exceptions to flying of allocated patterns.  It is provided that flight crew members "will fly each pattern allocated under the provisions of this agreement except", relevantly, where:

    27.22.1(d) after commencement of duty, the pattern is changed or disrupted.

  15. Pursuant to clause 27.22.2(d) pattern changes after reporting for duty are to be treated as downline disruptions. 

  16. Because Qantas based its primary position on the effect of downline disruptions, it is necessary to set out subclause (d) in full:

    (d)Pattern changes after reporting for duty to be treated as downline disruptions

    (i) Disruptions to other flight crew members to be minimised

    A change to a flight crew member’s pattern after the flight crew member has reported for duty for departure from his or her base station will be treated as a downline disruption.  Scheduling re-arrangements required as a result of the change will be kept to a minimum and will be made so as to minimise disruptions to the patterns of other flight crew members. 

    (ii) Downline disruption

    When a flight crew member loses credited hours during a pattern because of a down line disruption, the flight crew member will be pattern protected and available in accordance with clause 27.16.

    (iii)Downline disruption causing conflict between MBTT & next pattern

    When a pattern resulting from a downline disruption and/or the minimum base turnaround time to which the flight crew member is entitled conflicts with the next pattern the flight crew member will be pattern protected in accordance with clause 27.16.

    (iv)    Overprotection caused by downline disruption

    If a flight crew member becomes over projected as a result of downline disruption and the Company removes time in accordance with sub-clause 27.22.2(k), the flight crew member will be pattern protected and available in accordance with clause 27.16. 

  17. There are a number of things to be noticed about this sub-clause.  First of all, it is a longstanding clause in the agreement, albeit that its numbering has been changed from time to time.

  18. Second, there is an obligation on Qantas to keep rearrangements required as a result of the downline disruption to a minimum (clause 27.22.2(d)(i)).  Qantas plainly does this, because it took some years before Captain Duggan actually experienced one. 

  19. Further, if a flight crew member becomes overprojected (i.e. it is anticipated that the time he will spend away will be in excess of bid period divisor +5), Qantas may remove time in accordance with clause 27.22.2(k). 

  20. Clause 27.22.2(k) entitles Qantas to, in effect, remove the overprojection to an amount below the bid period divisor +5 if the flight crew member does not themself choose to do so, pursuant to clause 27.22.2(j).

  21. What I take all of this to mean can be put in practical terms thus:

    a)if a downline disruption occurs, then the pilot will not perform the pattern they were supposed to (clause 27.22.1(d);

    b)if arrangements are made to accommodate the downline disruptions that extend beyond the bid period divisor +5, Qantas plainly may reduce the number of hours that the flight crew member is anticipated to perform to keep them below the bid period divisor +5 (Clause 27.22.2(k). 

  22. What clause 27.22 does not deal with in terms, however, is what happens where Qantas does not in fact reduce the hours that the pilot performs (i.e. his or her credited hours, which do not necessarily mean hours actually worked but include a large number of other potential matters – see clause 27.15). 

  23. Qantas contended that clause 25.3 could not be read to apply to downline disruptions because the changes to a pattern that downline disruptions cause are never the subject of any bidding process and cannot therefore ever be either awarded or assigned.  I accept that that is correct. 

  24. Qantas also submitted that the provisions about downline disruptions in clause 22.22 constituted a code. 

  25. Nonetheless, Qantas' arguments beg the question. 

  26. So too, in my opinion, does the argument contended for by the Applicants.

  27. The Applicants said, quite simply, that under the agreement work can only be awarded or assigned, and therefore anything that a pilot did not bid for and get (i.e. awarded) must be assigned.  From the fact that the words "awarded" and "assigned" are drafted in mirror‑image terms, I conclude that those who drafted those phrases (and this was a long time ago, decades ago) saw them as operating as an exclusive mechanism to deal with the bidding process. 

  28. Nonetheless, the position earnestly contended for by Qantas that clause 27.22.2(d) precludes overtime payment to Captain Duggan is, in my view, misconceived.  If one construes that clause properly, what is provided is that downline disruptions will be kept to a minimum ((d)(i)) and, relevantly, Qantas may remove overprojection arising from downline disruption ((d)(iv)). 

  29. Clause 27.22.2(k), however, does not make it mandatory for Qantas to remove projected credited hours to a point where the pilot is below the bid divisor +5. 

  30. That is in fact what happened here.  Captain Duggan, on the three occasions in respect of which he makes complaint, did in fact work more than the bid period divisor +5 and Qantas simply did not exercise its power to prevent this, either because it did not wish to or, more probably I suspect, because it was unable to given the exigencies. 

  31. It is noteworthy that everybody agrees that these sorts of problems are more likely to emerge on the last pattern in a bid period, because if they occur previously, Qantas can remove hours pursuant to clause 27.22.2(k). 

  32. I do not accept the position contended for by the Applicants that the phrase in clause 25.3,

    The company will not exercise the right to remove a projection where the hours are caused by these circumstances,

    applies to downline disruptions.  It cannot, because clause 27.22.2(k) is plainly contradictory to this.

  33. This finding necessarily leads to the conclusion that the assignment process at least initially contemplated by clause 25.3 was to do with the scheduling of hours in the normal bidding process. I accept Qantas' submission that the relevant portions of clause 27 would otherwise contradict clause 25.3. I also accept that it is no coincidence that downline disruptions have historically been in a separate part of the agreement.

  34. Nonetheless, the hours that Captain Duggan worked still have to be dealt with.

  35. At this point it is necessary to traverse some of the historical evidence put before the Court given that as I find the terms of clause 25.3 to contradict clause 27.22.2(k). 

  36. It seems common cause that up until the negotiations of EBA 5 in 2001 the parties had proceeded on the basis that the then existing terms of the then extant certified agreement permitted Qantas to remove over projection, howsoever over projection was caused i.e. whether by deliberate scheduling or by downline disruption. 

  37. From the materials filed it is clear that there was dissatisfaction amongst at least a proportion of the Qantas crew about such over projection and the hours it required the employees to work. 

  38. I accept the evidence of Captain Duggan, which is not in substance different from that of the Qantas witnesses, that the amount of flying time being imposed on 767 pilots at this time was a real issue.  I also accept because it is consonant with common sense and what the materials filed by the parties show about the negotiating process that one way in which AIPA sought to reduce the number of hours was to increase overtime payments. 

  39. It should be noted that the arguably hearsay material contained in Exhibit GD5 to Captain Duggan’s affidavit gives an interesting indication as to the sort of hardships that the pilots concerned were referring to.  John Payne, the author of the complaints, said:

    “I have had my pattern line broken in week 1 of this Bid Period and was assigned a 7 day pattern which resulted in my:

    ·    Missing a friend’s 40th birthday celebrations;

    ·    Missing a reunion dinner;

    ·    Losing a “plum trip” that finished by paxing home from SIN;

    ·    Arriving home at lunchtime on my wife’s birthday in a very tired state.”

  40. As frontline expressions of significant industrial hardship those complaints might seem somewhat exotic to many blue collar or white collar workers. 

  41. Nonetheless, both sides agreed that there was a significant level of discontent amongst the relevant pilots at this time. 

  1. The original claim for overtime payments made by AIPA in EBA 5 was, in effect, for overtime where workers were assigned overtime or awarded overtime.  That was eventually whittled down to clause 25.3 in its current form. 

  2. The net effect of the amendment was the addition of the words “the company will not exercise the right to remove over projection where the hours are caused by these circumstances” at the end of clause 25.3. 

  3. I have noted that at one point in the process Captain Duggan prepared a position paper for himself (“annexure WK 15”), which involved:

    Item 1.5

    ·    The Company’s right to remove hours as specified in section 27(n)(11) does not apply.  Delete section 27(n)(ii)(11).  Amend section 27(n)(ii)(4) “treated as a downline disruption and as an assignment for pay purposes.”  Delete last sentence. 

  4. Clause 27(n)(ii)(11) is as Exhibit R3 makes clear the precursor term to that which is now found in clause 27.22.2(k) of the existing agreement. 

  5. The amendments suggested by Captain Duggan would have meant an alteration to the text of the then sub-clause 27(n)(ii)(4) by the insertion of the words referred to which would have the effect of defining a downline disruption as an assignment, which was not in the then wording.  The deletion of the last sentence referred to would have removed the company’s capacity to over project. 

  6. It is clear that clause 27(n)(ii)(11) has remained in the agreement effectively unchanged. 

  7. I accept the evidence of Captain Kearns that whatever may or may not have been in Captain Duggan’s mind (and possibly his co-negotiators) this aspect of the matter was never pressed before Qantas in the EBA 5 negotiations.  The nature of the history of the parties since EBA 5 makes it clear that this would have been a matter involving substantial amounts of money in what was clearly then a financially tight market and it is far more probable than otherwise that if it had been raised it would have been raised in terms. 

  8. Nonetheless, the company did agree to changes and clause 25.3 was amended to remove the company’s capacity to remove over projection where assignment took place.

  9. I think it is clear that what the parties intended was that clause 25.3 would operate in the ordinary scheme of assignment of duties (but not, as it transpired, awarding of duties) in the bid period process.  That is certainly what Qantas thought it meant. 

  10. One of the difficulties for both parties, however, is that clause 27.22.2(k) (and in its predecessor form of 27(n)(ii)(11)) did no more than give Qantas the right to remove over projection where the pilots themselves failed to do so where a pattern accrued more credited hours than were originally scheduled so as to exceed the bid period divisor +5.

  11. The pre-existing clause said nothing whatever about what should happen in respect of payment. 

  12. In my view, the existing regime required Qantas to pay workers for credited hours unless they were removed by Qantas so as to avoid over projection. 

  13. Furthermore, it is clear that where the downline projection causes the necessity for some further or different work, that is regarded as being an allocation of a duty. 

  14. Neither allocation nor duty are expressly defined in the agreement, but allocation seems to me to be a phrase used in clause 27.21 of the agreement to govern the circumstances under which pilots bid (or, as the case may be, do not bid) for time and are then awarded or assigned as the case may be. 

  15. In the ultimate, I think that the better view is simply that these confusing provisions, about which the parties may well not have had the same understanding following the conclusion of EBA 5, amount to the following:

    (a)Where Qantas sets a line of patterns by assigning a pilot work that will take them over their bid period divisor +5 the company cannot remove that over projection (clause 25.3);

    (b)Where a downline disruption occurs Qantas will do everything that it can to ensure that rearrangements required as a result of the change will be kept to a minimum (clause 27.22.2(d)(1)). 

    (c)A flight crew member who becomes over projected as a result of a downline disruption may relinquish excess hours (clause 27.22.2.(J)). 

    (d)If the pilot does not voluntarily relinquish hours Qantas may still remove over projection pursuant to clause 27.22.2(k). 

  16. None of these clauses deal in terms with what happens when, as happened to Captain Duggan, Qantas does not in fact reduce the over projection caused by downline disruption. 

  17. In my view, the position is that Captain Duggan is simply entitled to be paid for his credited hours pursuant to clause 27.15. 

  18. While clause 27.22.2(k) plainly allows Qantas to reduce its obligations where it is practicable to do so, there is nothing in clause 27.22 that says that work caused by downline disruptions is not work that ought to be credited and paid in the ordinary way. 

  19. In my view, doing the best I can with provisions that are in part contradictory and which have given rise to unanticipated (at least by Qantas and possibly AIPA also) results, the word assigned should be approached according to its ordinary meaning.  The Oxford Shorter Dictionary defines assign as:

    1.  Allot, appoint, determine;

    2. Appoint or designate (a person) to an office, duty, fate, etc, to do a task.

  20. Those definitions fit very clearly the factual circumstances as I understand them in this case. 

  21. Although it is true that assignment in the sense traditionally contemplated in the bidding process for open time can never take place where there is a downline disruption, on any sensible understanding of the English language the duties that arise for a flight crew member arising from a downline disruption are duties imposed upon them by Qantas, albeit that it is not Qantas’ fault that they are indeed imposed.  The duties are assigned both in the dictionary sense indicated above and in the sense that they are imposed by Qantas without the pilot’s agreement. The latter meaning is the substance of the meaning attached to the meaning of assigned as it has been understood for many years in the agreement.

  22. This view is by no means without its difficulties. It requires a rather convoluted outcome inasmuch as it would mean that clause 25 would have to be taken to apply to assignment whether by the bidding process or by downline disruptions when it does not say that in terms and when the last sentence of the clause would plainly have to be read subject to clause 27.22.2(k). Approached in this way, which I believe adopts the spirit of the judgment of Madgwick J in Kucks, the agreement means that:

    (a)where Qantas initially assigns a pilot in excess of bid divisor +5 Qantas may not remove the overprojection (clause 25.3);

    (b)where overprojection arises not out of initial assignment but out of a downline disruption, Qantas may remove the overprojection (clause 27.22(k));

    (c)If Qantas does not in fact remove the overprojection, any hours in excess of bid divisor +5 require the additional payment set out in clause 25.3. 

  23. Thus I find that the proper interpretation of this agreement leads to Captain Duggan being paid pursuant to clause 25.3 for the downline disruptions that he suffered. 

  24. Although the parties did not intend it to have this meaning, the fact is that the introductory words of clause 25.3, as opposed to the last sentence, can be applied where Qantas fails to remove over projection caused by downline disruptions pursuant to clause 27.22.2(k). 

  25. I therefore think that Captain Duggan, whose credited hours it is agreed exceeded the bid period divisor +5, is entitled to be paid for the time that he claims.

The measure of penalty that should be imposed upon Qantas

  1. The vast majority of the evidence called in this case was in my view largely, if not wholly, unhelpful to the central question of interpretation because it was so self‑serving in nature.  In saying that, I do not imply any criticism of the witnesses.  I am not suggesting that they manipulated their evidence to suit their circumstances; rather, they expressed long‑held views consistent with their experience and the position for which they now contend. 

  2. The evidence is however of assistance when one comes to the issue of penalty, because it sheds some light on the reasons for the disagreement between the parties and why they have acted as they did.

  3. It is neither necessary nor appropriate to traverse at great length the extensive materials filed by Qantas and by the Applicants.  It is sufficient for me to say that I found the evidence given by the Qantas witnesses to have been given honestly.  I have no doubt that those in Qantas who took the decisions that have given rise to this proceeding did so because of a genuine, albeit as I have found, misconceived view that what they were doing was consistent both with past practice and with the terms of the agreement itself. 

  4. It is clear that the bidding process and the ancillary use of the words "awarded" and "assigned" have been around for a very long time, since the 1960s.  It is also clear that for a very long time downline disruptions did not give rise to any form of further entitlement. 

  5. I accept the evidence of Qantas that downline disruption was simply not part of the focus of the debate that led to EBA 5 and the introduction of the clauses of the agreement that I have been now asked to interpret. 

  6. I do not accept that Qantas' course of action was dictated, as the Applicants submitted, by high‑handed disregard for their lawful obligations. 

  7. Nonetheless, this was conduct that involved Qantas management at a very senior level and although it sprung from a genuinely‑held view as to what the position was, that position has turned out to be incorrect and the conduct complained of is unlawful. 

  8. It was and would have remained open for Qantas when the issue was first raised by Captain Duggan to have sought an interpretation, rather than merely to have insisted on its position when, on any view, the position was open to argument by both sides. 

  9. Qantas has, quite naturally, not expressed contrition, which would be contrary to its position in the case.  Nonetheless, Qantas’ conduct generally has been proper.  Qantas has no prior legislative infractions.  It made a very proper concession about interest.  I accept that the three failures to pay Captain Duggan fall to be treated as one breach of the agreement (s.719(2) of the Act).  The failures were clearly a course of conduct based on Qantas’ view of the agreement. 

  10. In all the circumstances, Qantas should be ordered to pay a penalty of $5,000.00, bearing in mind the maximum of $33,000.00. 

  11. That sum should, as the Applicants request, be paid to the First Applicant.

An order for restitution under section 720 of the Act

  1. There is no suggestion by Qantas that this is not appropriate and I will order that the agreed sums of $6,094.77 (less tax) be paid to Captain Duggan.

The claim for interest

  1. Pursuant to s.722 of the Act, the Court must, unless good cause is shown to the contrary, order that interest be paid. Qantas has conceded expressly that the relevant penalty rate should be 10.5 per cent. That is in fact a figure higher than that claimed by the Applicants themselves. This concession reflects well on Qantas in its conduct of the proceeding.

  2. I will hear the parties as to whether any amendment is appropriate to the declaration and orders I have drafted. 

I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate:  Brooke Evans

Date:  17 October 2008