Alliance Airlines Pty Ltd

[2018] FWCA 4716

[2018] FWCA 4716

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Alliance Airlines Pty Ltd
(AG2018/536)

ALLIANCE AIRLINES PILOTS’ (BRISBANE, TOWNSVILLE AND CAIRNS) ENTERPRISE AGREEMENT 2018

Airline operations
COMMISSIONER LEE	MELBOURNE, 17 AUGUST 2018

Application for approval of the Alliance Airlines Pilots’ (Brisbane, Townsville and Cairns) Enterprise Agreement 2018.

[1] An application has been made for approval of an enterprise agreement known as the Alliance Airlines Pilots’ (Brisbane, Townsville and Cairns) Enterprise Agreement 2018 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Alliance Airlines Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

[2] The Australian Federation of Air Pilots (AFAP) lodged a Form F18 in this matter indicating that they supported approval of the Agreement. However, the Form F18 indicated that they disagreed with one or more of the answers given to the questions in the Form F17 – Employer’s statutory declaration, including an answer at question 3.3 in relation to translating classifications and an answer given at question 3.5 which indicated the Agreement contains no terms or conditions of employment that are less beneficial than the equivalent terms and conditions in the relevant modern award. The relevant modern award for the purposes of the ‘better off overall test’ (BOOT) in s.193 of the Act is the Air Pilots Award 2010 (the Award). The AFAP set out that there were several terms or conditions that are less beneficial in the Agreement than the Award including training and temporary transfers. In summary, the AFAP set out in relation to training that the possible imposition of a training bond for the types of training contemplated in clause 27 of the Agreement is less beneficial than clause 16 of the Award. As clause 16 of the Award requires the employer to be responsible for training costs in certain circumstances the AFAP submits that this gives rise to a BOOT concern.

[3] The issue in relation to clause 27 – Training Costs and Bonding, was the subject of a number of hearings and conferences and an exchange of correspondence between the Fair Work Commission (the Commission), the Applicant and the AFAP. The Applicant and the AFAP made both written submissions and oral submissions in relation to the matter.

[4] In summary, the Applicant submits that clause 27 of the Agreement deals with matters not contemplated in clause 16 of the Award and in particular clause 16.2, and therefore clause 27 of the Agreement is not relevant for consideration under s.186 of the Act. In the alternative if clause 27 does deal with the types of training contemplated in clause 16 of the Award, then as clause 16 of the Award does not deal with service bonding for the training, the Applicant submits that this requirement is outside the scope of clause 16 of the Award. Further, the Applicant submits that the provision is supported by the approval of other enterprise agreements containing similar provisions.

[5] On 19 July 2018 in providing its views on an earlier undertaking proposed by the employer, the AFAP submitted that the type of training which will be subject to a training bond under clause 27 of the Agreement is exactly the type of training which is contemplated under clause 16 of the Award. Consequently, the construction of clause 16.2 of the Award advanced by the Applicant’s representative is plainly wrong as the training is clearly required by the employer. The AFAP submit that both the AFAP concern with the Applicant’s proposed interpretation of clause 27 of the Agreement being “plainly wrong” and the concern that the Agreement does not pass the BOOT need to be resolved before the Agreement can be approved by the Commission.

[6] Having considered the submissions of the parties, I agree with the AFAP that it is possible that the effect of clause 27 of the Agreement may be such that it leads to employees not being better off overall. This may occur if it was to result in employees being required to enter a training bond and repay the costs of training in the event of them ceasing employment prior to expiration of the bond and the training that was the subject of the bond was training that the terms of clause 16 of the Award would have required the employer to pay for all facilities and other costs associated with attaining and maintaining those qualifications.

[7] As mentioned above, a number of hearings and conferences were conducted before me with the Applicant and the AFAP in relation to this issue and various forms of possible undertakings that might satisfy this concern were considered and discussed. Ultimately, prior to a hearing on 2 August 2018 my chambers sent the Applicant and the AFAP draft wording of an undertaking in relation to training for the parties’ consideration, which was in the following terms:

“All facilities and other costs associated with any training of a Pilot as defined under the Agreement required by the Company, including costs associated with attaining and maintaining those qualifications, which falls under clause 16 of the Award will be the responsibility of the Company and will not be the subject of a training bond under clause 27 of the Agreement. For the avoidance of doubt, if the types of training specified in clause 27 of the Agreement is training that would fall under clause 16 of the Award the costs will be the responsibility of the Company and will not be the subject of a training bond.”

[8] At the hearing, the Applicant agreed it would provide an undertaking in these terms. The AFAP made submissions indicating that it had concerns in relation to the undertaking and therefore that I could not be satisfied that employees are better off overall. The AFAP filed an outline of submissions prior to the hearing. Those submissions stated that the Commission was bound by the Full Federal Court’s decision in McLennan v Surveillance Australia Pty Ltd [2005] FCAFC 46. The AFAP submit that in that case the Full Court in arriving at the conclusion it did found that Dash 8 training was of the same type as the Islander training, which in turn was the training contemplated by clause 19.1 of the pre-modern award. As the text of clause 19.1 of the pre-modern award is substantially similar to clause 16.2 of the Award the AFAP submits that there is Full Federal Court authority that the training contemplated by clause 16.2 of the Award includes Initial Simulator training (being a form of endorsement training), and that that authority is binding on the Commission.

[9] The Applicant did not accept the submissions of the AFAP. The Applicant submitted that the Commission needs to be satisfied that employees are better off overall and that the undertaking they agreed to provide enables the Commission to approve the Agreement on the basis that it can be satisfied that the training provisions in clause 16 of the Award are preserved in terms of the Agreement.

[10] It is clear that the parties are in dispute about what types of training are contemplated under clause 16 of the Award. To the extent that there is a dispute about this, it gives rise to a concern that employees may not be better off overall. In order to satisfy that concern, I have sought and obtained an undertaking from the Applicant. The effect of that undertaking makes clear that training that properly falls under clause 16 of the Award will be paid for by the employer and not be the subject of a training bond. Having obtained that undertaking, my concern as to employees potentially not being better off overall is satisfied.

[11] As set out above, the AFAP contend that I must not just deal with the BOOT issue but also with the disputed contentions as to what types of pilot training properly fall under clause 16 of the Award. I respectfully disagree. The task of the Commission in determining whether to approve the Agreement is, among other things, to reach a state of satisfaction that the Agreement passes the BOOT. If the Commission has a concern that the Agreement does not pass the BOOT, it may approve the Agreement with undertakings.

[12] The Applicant has provided a written undertaking which satisfies my concern as to the effect of clause 27 of the Agreement in relation to the BOOT. In the circumstances, it is not necessary to determine the disputed claims as to what types of training fall under which particular provision. What the AFAP is asking me to do is to determine in their favour, as part of the agreement approval process, their preferred interpretation of clause 16 of the Award and the types of training it covers. I decline to do so as my concern in relation the application of the BOOT has been satisfied and it is not necessary for me to embark on that task. Further, I note that to do so would take a considerable amount of time and would delay the approval process for considerably longer than it has already been delayed. This approach is not consistent with the objective of s.171(a) of the Act. If an employee has a dispute in the future as to the types of training in clause 27 of the Agreement that may properly fall under clause 16 of the Award, this is a matter that can be dealt with under the dispute settlement term at clause 9 of the Agreement.

[13] Aside from my concern as to clause 27 and its impact on the BOOT, I raised other concerns in relation to the Agreement. The Applicant provided undertakings on these matters which satisfied my concerns. The written undertakings provided have been consolidated into one document. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[14] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[15] The Australian Federation of Air Pilots and the Transport Workers’ Union of Australia being bargaining representatives for the Agreement, has given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) I note that the Agreement covers the organisations.

[16] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 24 August 2018. The nominal expiry date of the Agreement is 24 August 2021.

COMMISSIONER

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ANNEXURE A