Australian and International Pilots Association v Qantas Airways Limited
[2013] FWCFB 317
•17 JANUARY 2013
[2013] FWCFB 317 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.266—Industrial action related workplace determination
v
Qantas Airways Limited
(B2011/3994)
SENIOR DEPUTY PRESIDENT WATSON | MELBOURNE, 17 JANUARY 2013 |
Industrial action related workplace determination.
TABLE OF CONTENTS
1. DECISION
2. EVIDENCE
2.1 QANTAS
2.2 AIPA
3. EVIDENCE EXCLUDED
4. BACKGROUND TO THE QANTAS BUSINESS
4.1 STRUCTURE
4.2 EMPLOYMENT OF PILOTS
4.3 FINANCIAL PERFORMANCE
4.4 THE MARKET IN WHICH QANTAS OPERATES
4.5 THE CIVIL AVIATION REGULATORY FRAMEWORK
5. GENERAL SUBMISSIONS OF THE PARTIES
6. THE STATUTORY CONTEXT
7. THE WORKPLACE DETERMINATION
7.1 CORE S.272 OF THE ACT
7.1.1 Nominal expiry date
7.1.2 Better off overall test
7.1.3 Safety net requirements
7.2 MANDATORY S.273 OF THE ACT
7.3 AGREED TERMS S.270 OF THE ACT
7.4 TERMS DEALING WITH THE MATTERS AT ISSUE: S.270 OF THE ACT
7.4.1 Administrative
QAL1—Restructuring and updating EBA7v—Base Agreement and Base Rostering Manual
QAL44—Update Schedule 3, Scheduling Arrangements, SA.1 of EBA7v to reflect the current version of the FAM.
Coverage of the workplace determination
7.4.2 Removal or reduction of inefficient work allocation and unproductive time
QAL3—Delete the requirement for Qantas to pay by-pass for any pilot who has had training cancelled and QAL4 Training not commenced at end of training year is deferred or cancelled at Qantas’ discretion
QAL12—Establishment divisor: Manpower planning divisor to be determined by Qantas from time to time by category by category basis
QAL14—Bid period divisor: Actual divisor per category per bid period to be decided by Qantas, optimal for the bid period
QAL15—Qantas option to implement 28 day rosters (or option to increase to 56 day bid periods) on a fleet by fleet basis
QAL16—Ability to recommence a bid period due to major disruption
QAL18—Requirement to bid for blank lines in next roster by week 1 in current roster
QAL19—Pre-allocate in the next roster pattern protection hours owed from the roster period to the current period
QAL26—No annual leave to be taken on blank line
AIPA19—MGH for BLHs and RLHs to be set at average received by PLHs (divisor plus element 1A), excluding allowances
QAL28—Streamline and reorder simulator support and standby procedures
QAL36—Re-order open time priorities for BLHs to have higher priority than PLHs
QAL37—Implement the facility for extra patterns allocated for a pilot’s route check to be a partial offset for pattern protection for any patterns dropped
QAL38—Implement the facility for a BLH called off standby for a trip that overlaps into the subsequent bid period for the over-projection to offset low line pattern protection
QAL59—Insert a provision that if a pilot is removed from a pattern for training duties the value of the training duties may be used as a partial offset for any pattern protection resulting on an hour for hour basis
QAL60—Insert provision that credited hours associated with additional patterns for route checks are not subject to pattern protection
QAL43—Remove requirement for Qantas to need to make attempts to contact five pilots
QAL46—Amend clause 27.9.3 regarding 26 hours (deadheading - “drafting error”)
QAL47—Senior Check Captain (i.e. Training Captain) rules
QAL49—Bid period for B767 Category A/B pilots to run over 56 days
QAL50—Implement the facility to allocate training even if over-projection occurs
QAL51—Long term absence recency
QAL52—Clause 37 (EBA7v) to be amended to provide for procedures to allow all training duties to be pre-allocated to a pilot prior to a pattern line build
QAL53—Amend 17.2 - any days in excess of 18 duty free days may be allocated during the period the training pilot is on ground training duties
QAL55—Remove the requirement for 30 self sectors per annum
QAL56—Update 17.2.20 to capture correct training language
QAL57—Confirm that there is no limit on the amount of home study a pilot is required to do for regulatory purposes (with no pay)
QAL58—Insert provision that a Captain must not give away a sector of flying if it would cause them to run out of recency
QAL61—Ability to assign simulator support duties where over-projection would result
QAL62—Ability to transfer A330 and B767 to and from a modified version of LOA156A at Qantas’ discretion (addressed by QAL15 and QAL20)
AIPA20—Pattern protection on carers’ lines
7.4.3 Slip Times, Flight and Duty Time
QAL20—Introduction of CAO48E on a fleet by fleet basis with appropriate adjustments to scheduling rules/clause 21 of the Rostering Manual - slip, flight and duty time limitation table
AIPA25—Introduce standard for adequate rest facilities
QAL29—Reset Qantas’ maximum for fleets on a 28 day roster to the greater of the pilot’s actual line build value or divisor plus MDC
7.4.4 Pay and Classification Issues
QAL22—New terms and conditions for new entrants
AIPA8(B) in the AWD—Introduce payload bands
AIPA13—Pay increase, backpay and flattening 12 year scale
AIPA14—Rate for Boeing B787 (B787) aircraft
7.4.5 Leave and Entitlements
QAL5—Insert provision defining “ordinary hours of work”
QAL10—Allowances within Australian Ports - pay in arrears or daily travelling allowance arrangement
QAL23—Implement new provisions in relation to certification of sick leave
QAL24—Require 90 day half-pay sick leave entitlement to be separated by 12 months service
QAL25—Rewrite of provisions relating to annual and long service leave
AIPA2—Rewrite of provisions relating to annual and long service leave
AIPA24—Improve home transport and related matters
QAL33—Change to home transport entitlements
QAL34—Review arrangements for transport between city and airport
AIPA22—Definition of “First class accommodation” and AIPA5 Definition of “Flight deck duty time”
AIPA28—Change to method for debiting personal leave
AIPA29—Fatigue – debiting of personal leave
7.4.6 Managing Surplus Pilot Situations
AIPA8—Qantas livery
AIPA9—Prevent using workplace determination efficiency to reduce a pilot in category or make redundant
AIPA11—Leave without pay
AIPA12—Improved provisions relating to establishment levels
AIPA31—Changes to consultative committee
AIPA34—Once only right to bid backwards
QAL27—Streamline basing, posting and transfer procedures
QAL2 and QAL11—Review and clarify reduction in numbers process and when election needs to be made
AIPA17—Localised lines
AIPA33—Threshold issues in reduction in numbers process
7.4.7 Redundancy
AIPA10—Redundancy provisions
7.4.8 Miscellaneous Claims
QAL6 and QAL7—loss of licence policy “psychosis or psychoneurosis”
QAL8—Re-employment after medical termination subject to Qantas approval
QAL9—Requirement that each pilot provides and maintains up-to-date contact details
QAL39—Update clause 36 to reflect Qantas Group aircraft
AIPA23—Duty Travel
QAL40—Change duty travel: First class on a space available basis
AIPA6—Restore the value of the capital amount payment under the loss of licence policy
AIPA15—Expand the range of items that can be salary sacrificed including access to the Executive Motor Vehicle Schemes for F/O and S/Os
AIPA18—Domicile rights
AIPA26—Entitlement to class related privileges to pilots using duty travel
AIPA27—Concessional Travel
7.4.9 The Role of AIPA
QAL41—Remove requirement for AIPA approval of computer systems
QAL63—Remove from definitions and various sections all industrial processes and provisions that relate to or affect Qantas’ ability to manage pilot standards
AIPA30—Changes to grievance and dispute procedures
AIPA 32—Association Business
7.4.10 Other Claims
QAL64—New Superannuation clause
7.5 NO OTHER TERMS S.271 OF THE ACT
8. CONCLUSION
ABBREVIATIONS
Act: | Fair Work Act 2009 |
AFDP: | Additional Flight Duty Payments |
AIPA: | Australian and International Pilots Association |
AOC: | Air Operator’s Certificate |
AOEC: | Application and Operation of Employment Contract |
AWD: | AIPA Workplace Determination Proposed on 13 June 2012 (Exhibit AIPA 9) |
BLH: | blank line holder |
CA Act: | Civil Aviation Act 1988 |
CAAC: | Company Aircraft Assessment Committee |
CAO: | Civil Aviation Order |
CARs: | Civil Aviation Regulations 1988 |
CASA: | Civil Aviation Safety Authority |
CASK: | cost per available seat kilometre |
CWD: | Compromise Workplace Determination Proposed on 4 September 2012 (Exhibit AIPA40, attachment DB27) |
DDFD: | designated duty free days |
EBA7v: | Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (EBA 7, as varied) |
EBIT: | Earnings before Income Tax |
EFA: | Express Freighters Australia |
FAM: | Flight Administration Manual |
FDDT: | flight deck duty time |
F/O: | First Officer |
FRMS: | Fatigue Risk Management Systems |
LCC: | low cost carrier |
LHP: | Long Haul Pilots |
LOA: | Letter of Agreement |
LOL: | loss of licence |
MDC: | minimum daily credit |
MGH: | minimum guaranteed hours |
MRB: | Medical Review Board |
PAC: | Pilot Assessment Committee |
PLH: | pattern line holder |
PP Act: | Parliamentary Privileges Act 1987 |
Qantas: | Qantas Airways Limited |
QAL: | Qantas claims |
QWD: | Qantas Workplace Determination Proposed on 29 May 2012 (Exhibit QF 6) |
RLH: | reserve line holder |
SHP: | Short Haul Pilots |
S/O: | Second Officer |
URTI: | Upper Respiratory Tract Infection |
1. DECISION
[1] Section 266(1) of the Fair Work Act 2009 (the Act) requires the Fair Work Commission to make a workplace determination (an industrial action related workplace determination) as quickly as possible after the end of the post-industrial action negotiating period 1 if a termination of industrial action instrument has been made in relation to a proposed enterprise agreement,2 the post-industrial action negotiating period ends, and the bargaining representatives for the agreement have not settled all of the matters that were at issue during bargaining for the agreement. On 1 January 2013, Fair Work Australia was renamed the Fair Work Commission.3 In our decision we have referred to the Fair Work Commission which incorporates reference to Fair Work Australia as it was known prior to 1 January 2013.
[2] On 31 October 2011 a Full Bench of Fair Work Australia made an order 4 pursuant to s.424 of the Act to terminate industrial action in relation to a proposed enterprise agreement to replace the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (EBA 7, as varied) (EBA7v)5 being negotiated between Qantas Airways Limited (Qantas) and the Australian and International Pilots Association (AIPA). Qantas Airways Limited which, unless specifically identified otherwise, is described as Qantas in this decision.
[3] AIPA appealed the decision and order to the Federal Court of Australia, seeking an order quashing the decision, and an order directing Fair Work Australia to hear and determine the application that was before it according to law. The appeal was dismissed by the Full Court of the Federal Court of Australia on 10 May 2012. 6
[4] Qantas, AIPA and Captain I Woods were bargaining representatives for the negotiation of an enterprise agreement. The bargaining representatives did not settle all of the matters at issue between them during the 21 day period following the termination of the industrial action 7 (the post-industrial action negotiating period).
[5] Accordingly, the Fair Work Commission is required by s.266 of the Act to make a workplace determination as quickly as possible. This decision, and the workplace determination we have decided to make, represent the finalisation of this dispute.
[6] On 9 December 2011, directions were made requiring Qantas and AIPA to file proposed workplace determinations, statements and any expert evidence. Amended directions were made on 29 December 2011 to extend the directions to include Captain Woods. The matter was listed for the hearing of evidence over several weeks between June and September 2012. On 3 September 2012, further directions were made for the filing and service of written submissions. Oral submissions were heard on 30 and 31 October 2012.
[7] In the course of the proceedings, Qantas tendered a proposed workplace determination (QWD) 8 and AIPA tendered a proposed workplace determination (AWD)9 on 14 June and subsequently AIPA filed a significantly modified “compromise” workplace determination (CWD) on 4 September 2012.10
[8] AIPA’s primary submission was that the matters that were still at issue at the end of the post-industrial action negotiating period should be resolved by the Fair Work Commission making a workplace determination in the terms set out in the CWD. 11 The principle claim in negotiations advanced by AIPA was for “job security” provisions. In the AWD these took the form of an Application and Operation of Employment Contract (AOEC) provision and associated provisions concerning leave without pay, redundancy, establishment levels and “Loss of Licence” payments. The AOEC provision requires all Qantas flights to be operated by pilots covered by the workplace determination, or pilots not covered by the workplace determination but who are afforded terms and conditions no less favourable than if they had been covered by it. For the purpose of the provision, Qantas flights were defined to extend beyond a flight operated by Qantas to include flights using a Qantas flight number or flights operated in Qantas livery, but excluding a codeshare flight operated by an entity other than Qantas and its associated entities, not flying in Qantas livery. The AIPA job security claim in the CWD focussed on flights operated in Qantas livery beyond those operated in the established role of various Qantas entities, together with a new consultation clause, redundancy provisions and a “Group Mobility” clause.
[9] The QWD reflected around 60 Qantas claims advanced in bargaining, in several broad categories:
● administrative;
● removal or reduction of inefficient work allocation and unproductive time;
● slip times and flight and duty time;
● pay and classification issues;
● leave and entitlements;
● managing surplus pilot situations;
● redundancy;
● miscellaneous matters;
● the role of AIPA; and
● other claims.
[10] The proposed workplace determinations worked off a “base document”–a modernised version of EBA7v agreed for the purpose of the arbitration between Qantas and AIPA, in most respects. The major difference was that Qantas divided the document into a workplace determination and a Rostering Manual, whilst AIPA retained rostering matters within the body of the workplace determination.
[11] In his final submissions 12 Captain Woods sought that the Fair Work Commission make a workplace determination in the form of a proposed “EBA8 of 2008”, an agreement reached by AIPA and Qantas, which was voted down13 by the pilot group.14 He did so, on the basis that it was the last agreed position reached between Qantas and AIPA. In the alternative, Captain Woods submitted that the Full Bench should extend EBA7v for a period of 12 months, with appropriate pay adjustments.
2. EVIDENCE
[12] Extensive evidence was led by Qantas and AIPA:
2.1 QANTAS
● R Gurney, Group Executive of Qantas Airlines Commercial; 15
● E Haggerty, Manager, Industrial Relations, Qantas; 16
● R Tobiano, Principal Adviser Flight Operations, Qantas; 17
● M Wolny, Manager of Safety Systems and Governance, Qantas; 18
● G Evans, Chief Financial Officer, Qantas; 19
● C Richardson, Partner, Deloitte Access Economics of Deloitte Touche Tohmatus; 20
● P Wilson, Captain, Chief Pilot, Qantas;21
● M Wagener, Principal Adviser, Flight Crew Operations, Qantas; 22
● P Probert, Captain, Head of Training and Checking, Qantas; 23
● T Voget, Manager, Flight Crew Resourcing, Qantas; 24 and
● P Harbison, founder and Executive Chairman of CAPA–Centre for Aviation; 25
● Dr K Walker, Bachelor of Medicine, Bachelor of Surgery, Fellow of the Royal Australian and New Zealand College of Psychiatrists, Master of Criminology, registered medical practitioner, foundation member of the Royal Australian and New Zealand College of Psychiatrists Faculty of Forensic Psychiatry and a member of the New South Wales Medicolegal Society. 26
2.2 AIPA
● D Backhouse, Captain A380, Qantas, Vice President and Long Haul Representative of the Executive Committee AIPA and a member of the AIPA negotiating team for the new “Long Haul Enterprise Agreement”; 27
● A J Beavan, Captain B767, Qantas and AIPA representative in the scheduling process; 28
● S Anderson, Captain B747-400, Qantas and Secretary and on the Committee of Management of AIPA; 29
● M Meletopoulo, Training Captain Category D B747-400, Qantas; 30
● M Butt, Captain B747-400, Qantas, AIPA accommodation and allowances representative and a member of AIPA negotiating team for the new “Long Haul Enterprise Agreement”; 31
● R Woodward, Captain A380, Qantas and Vice President and on the Committee of Management of AIPA; 32
● A Susz First Officer (F/O) B747-400 and Treasurer and on the Committee of Management of AIPA; 33 and
● B York, Attorney and Associate Director of Representation Department of the Air Line Pilots Association, International; 34
● R Curran, Scheduling Consultant to AIPA; 35
● Dr J Phillips, Bachelor of Medicine, Associate Professor at the Universities of New South Wales and Adelaide and James Cook University, Chairman of the Specialist Medical Review Council. 36
[13] Qantas also tendered a statement of Ms S Taranto, 37 Executive Manager Cabin Crew, Qantas. AIPA also tendered statements of Mr G Maclean,38 a former cabin crew member of Qantas, Mr B Welch Captain B747-40039 and Dr D Dawson,40 Director, Appleton Institute, Central Queensland University, Adelaide. None of these witnesses were required for cross-examination.41
[14] Captain Woods filed a statement of evidence 42 and various documents43 in support of his proposed workplace determination. He was not required for cross-examination.44
[15] A large number of documents were also tendered by Qantas and AIPA in evidence.
3. EVIDENCE EXCLUDED
[16] During the course of the hearings, AIPA tendered (as Exhibit AIPA1) an extract from transcript of the Senate Committee Hansard of Rural Affairs and Transport References Committee inquiry into Pilot training, airline safety and the Transport Safety Investigation Amendment (Incidents Reports) Bill 2010 which recorded evidence of Mr A Joyce, Chief Executive Officer and Managing Director of Qantas and Mr B Buchanan, Jetstar Group Chief Executive Officer, Jetstar Airways Limited (Jetstar). Counsel for Qantas objected to the tender of the transcript and cross-examination of Mr Gurney 45 and Mr Harbison46 in relation Exhibit AIPA1 on the basis that it offended s.16(3) of the Parliamentary Privileges Act 1987 (PP Act). During the course of the hearing Exhibit AIPA1 was accepted and cross-examination proceeded on the basis that the Full Bench would later hear and determine the objection and that the transcript of cross-examination based on Exhibit AIPA1 would be restricted.47
[17] In final written submissions Qantas pressed its objection, submitting that the evidence given by Mr Joyce and Mr Buchanan to the Senate Inquiry cannot be tendered in the current proceedings as its tender is for the purpose of drawing, or inviting the drawing of, inferences or conclusions from proceedings before the Senate Inquiry and that any cross-examination conducted with respect to Exhibit AIPA1 is in breach of the PP Act and must be excluded. Qantas relied on the authorities in Habib v Commonwealth of Australia, 48 AMI Australia Holdings Pty Ltd and Another v Fairfax Media Publications and Others,49 Mees v Roads Corp50 and Amann Aviation Pty Ltd v Commonwealth of Australia.51
[18] In its final written submission AIPA conceded that whilst the Full Bench was entitled to receive the transcript of the Senate Committee as evidence of what was said, that transcript cannot be relied on as establishing the truth of what was said. 52
[19] Section 16(2) of the PP Act defines “proceedings in Parliament” to mean:
“. . . all words spoken and acts done in the course of, or for purposes of or incidental to, the transacting of the business of a House or of a committee, and, without limiting the generality of the foregoing, includes:
(a) the giving of evidence before a House or a committee, and evidence so given;
(b) the presentation or submission of a document to a House or a committee;
(c) the preparation of a document for purposes of or incidental to the transacting of any such business; and
(d) the formulation, making or publication of a document, including a report, by or pursuant to an order of a House or a committee and the document so formulated, made or published.”
[20] Section 16(3) of the PP Act provides that:
“In proceedings in any court or tribunal, it is not lawful for evidence to be tendered or received, questions asked or statements, submissions or comments made, concerning proceedings in Parliament, by way of, or for the purpose of:
(a) questioning or relying on the truth, motive, intention or good faith of anything forming part of those proceedings in Parliament;
(b) otherwise questioning or establishing the credibility, motive, intention or good faith of any person; or
(c) drawing, or inviting the drawing of, inferences or conclusions wholly or partly from anything forming part of those proceedings in Parliament.”
[21] We have considered the terms of s.16(3) of the PP Act and the authorities drawn to our attention, including the observations of Justice Rein in AMI Australia Holdings v Fairfax and Others that:
“Considering that the obvious purpose of the Act is to prevent members of Parliament or members of the public who give evidence before a Standing Committee having statements made by them in Parliament or before a Committee used as a means of establishing or supporting inferences as to facts, motives or intentions relevant in courts or tribunals, and being taxed in cross-examination about those utterances, proving that a member of the House of Representatives said ‘X’, if it were relevant, does not, in my view, infringe that purpose. The distinction between challenging or impugning a witness in relation to anything said or done in Parliamentary proceedings, on the one hand, and merely proving that something was said in Parliament, is one which has been clearly recognised in cases prior to the introduction of s 16 of the Act . . .”; 53
and the observations of Justice Gray in Mees v Roads Corp that:
“The Court is not able to accept the truth of anything stated in them for the purpose of determining the issue before it . . . To the extent to which this view might be thought to hamper the respondents in resisting the applicant’s case, that is the result of the requirements of parliamentary privilege.”;
and
“As long as the Court refrains from making a finding, or drawing an inference, to the effect that parliament has been misled, it commits no breach of parliamentary privilege and does not trespass upon the area for which parliament alone has responsibility, namely control of its own proceedings. To hold otherwise would be to abdicate the Court’s responsibility to decide the issue before it.” 54
[22] We have decided, consistent with the PP Act, to exclude from the evidence Exhibit AIPA1 and to also exclude from the evidence the cross-examination of Mr Gurney 55 and Mr Harbison56 in the restricted transcript, because the tendering of the transcript and the cross-examination in relation to it was directed to the purposes made unlawful by s.16(3) of the PP Act.
4. BACKGROUND TO THE QANTAS BUSINESS
4.1 STRUCTURE
[23] Qantas is the publicly listed entity and the overall parent company for all entities falling within the Qantas Group. The Qantas Group, which is “commonly used to describe the group of various companies, within ultimate ownership of Qantas Airways Limited, that operate airline and airline-related services”. 57
[24] From an organisational perspective, the Qantas Group is split into five business segments:
● Qantas Airlines;
● Jetstar;
● Qantas Frequent Flyer;
● Qantas Freight Enterprises; and
● Qantas Corporate. 58
[25] There are a number of entities that are 100% owned by Qantas or its subsidiaries within the Qantas Group. These include:
● Jetstar;
● Jetconnect Pty Ltd;
● Eastern Australian Airlines Ltd;
● Sunstate Airlines (Qld) Pty Ltd;
● Express Freighters Australia (EFA);
● Jetstar New Zealand; and
● Network Aviation. 59
[26] While the business segments involved in flying (i.e. Qantas Airlines and Jetstar) are managed in an independent manner, most major network and strategic decisions are made at a Qantas Group level. 60
[27] Qantas Airlines is the business segment under which the “Qantas-branded” flying businesses sit, branded as “Qantas” or “QantasLink”. There are three airline businesses which fall within the Qantas Airlines business segment:
“(a) Qantas Mainline, branded as Qantas, which operates mainline routes domestically and internationally;
(b) Regional Airlines, branded as QantasLink, which operates regional routes in Australia; and
(c) Jetconnect Limited, a New Zealand company which operates a number of Qantas-branded services between Australia and New Zealand.” 61
[28] There are approximately 35,000 employees across the Qantas Group. Around 28,600 of these employees are employed in the Qantas Airline business segment, approximately 2,200 of whom are pilots. 62
[29] There are a range of other airline operators in which Qantas or its subsidiaries have (or will have) various stakes. These include:
● Jetstar Pacific—in partnership with Vietnam Airlines (30% interest); 63
● Jetstar Japan—in partnership with Japan Airlines, Mitsubishi Corporation and Century Tokyo Leasing Corporation (33.3% interest); 64
● Jetstar Hong Kong—a joint venture partnership with China Eastern Airlines, to launch in mid 2013 (no agreement yet on the interest of Qantas) ;65
● Jetstar Asia—based in Singapore (49% interest); 66 and
● Air Pacific (46.32% interest). 67
4.2 EMPLOYMENT OF PILOTS
[30] In Qantas, there is one pilot workforce falling into two groups: Long Haul Pilots (LHPs) and Short Haul Pilots (SHPs).SHPs are pilots who operate Boeing 737 aircraft. Qantas operates these aircraft almost exclusively on Australian domestic flights. The remainder of the Qantas pilot workforce are LHPs. LHPs operate four types of aircraft: the Boeing 747-400 (B744), the Boeing 767 (B767), the Airbus A330 (A330) and the Airbus A380 (A380). These aircraft operate nearly all Qantas international flights and a number of domestic flights. 68 As at 14 February 2012, Qantas had 2,225 pilots of whom 1,556 are LHPs, 528 are SHPs and 141 are on leave without pay.69 Currently Qantas employs approximately 300 more pilots than are required to carry out the available work,70 the vast majority of whom are LHPs.71 The SHPs are covered by the Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement 2007.72 The LHPs are covered by EBA7v and are the subject of the current proceedings.
[31] The LHPs (excluding those on leave without pay and undergoing conversion courses) are distributed by rank and aircraft type as follows: 73
Rank | B744 | B767 | A330 | A380 |
Captain | 180 | 147 | 162 | 103 |
F/O | 183 | 126 | 136 | 95 |
S/O | 203 | 0 | 59 | 128 |
4.3 FINANCIAL PERFORMANCE
[32] The international and domestic operations of Qantas are for most purposes run as one business within the Qantas Airlines business segment. However, an analysis of the profitability of each route can be undertaken and shows that:
(a) the domestic network achieved an Underlying Earnings Before Income Tax (EBIT) of approximately $444 million in the financial year 2010–11; and
(b) the international network achieved a negative Underlying EBIT of approximately $216 million in the financial year 2010–11. 74
[33] The Qantas international network absorbs 38% of the Qantas Group’s invested capital and 66% of the investment in the Qantas Airlines business segment. 75
[34] The Qantas Airways Limited FY12 Results, published on 23 August 2012 discloses a statutory EBIT of negative $173 million, compared to positive $436 million in the 2010–11. 76 Underlying EBIT, excluding items identified by management as not being representative of underlying performance,77 for each financial year were $265 million and $644 million respectively. The underlying EBIT contribution from each segment of Qantas for 2011–12 was recorded as follows:
● Qantas : negative $21 million ($228 million in 2010–11);
● Jetstar : $203 million ($169 million in 2010–11);
● Qantas Frequent Flyer : $231 million ($342 million in 2010–11);
● Qantas Freight : $45 million ($62 million in 2010–11); and
● Corporate/unallocated : negative $191 million (negative $189 million in 2010–11). 78
[35] The accompanying media release 79 stated that “All parts of the Group were profitable with the exception of Qantas’ international network”.
[36] The negative $21 million EBIT for Qantas in 2011–12, reflected an estimated cost of from the industrial action in late 2011 of $194 million. 80 The Consolidated Interim Financial Report for the half year to 31 December 2011 elaborated:
“Industrial Action by the Australian Licensed Engineers Association (ALAEA), the Transport Workers Union (TWU) and the Australian International Pilots Association (AIPA) and the subsequent grounding of the Qantas fleet unfavourably impacted the half-year results by $194 million. The financial impact included lost passenger revenues and forward bookings prior to the grounding ($68 million and $27 million respectively), the direct impact of the grounding including lost revenues, refunds, third party carrier costs and accommodation ($70 million), and customer recovery initiatives ($29 million).” 81
[37] The Qantas international network has been a source, over the past two financial years, of losses for Qantas has adversely affected the overall profitability of the Qantas Group. Qantas contends that the poor financial performance of Qantas’ international operations must be addressed. 82
4.4 THE MARKET IN WHICH QANTAS OPERATES
[38] Qantas faces competition from premium airlines such as Etihad Airways, Emirates, Singapore Airlines and Cathay Pacific, as well as low cost carriers (LCC) and, increasingly, international airlines based in China. 83
[39] In the international market, the market share of Qantas has dropped from 34% in 2002 to 19% in 2011 (27% including Qantas and Jetstar). 84
[40] In the domestic market, Qantas is performing well. It retains a strong share of corporate travel. QantasLink is performing well in the regional areas. However, there are significant challenges for Qantas in the premium travel market domestically. The market share of Qantas has dropped from 74% in 2002 to 45% in 2011 (65% including Jetstar). 85 Virgin Australia provides competition and has publicly stated its intention to pursue the premium market of corporate travel.86
4.5 THE CIVIL AVIATION REGULATORY FRAMEWORK
[41] Civil aircraft operations in Australia are regulated by the civil Aviation Act 1988 (CA Act). Under the CA Act, the Civil Aviation Safety Authority (CASA) is the statutory authority established to ensure the safety of civil aircraft operations and the safety of the passengers on such services. Under the CA Act, to operate a high capacity airline service such as Qantas does, the operator must have an Air Operator’s Certificate (AOC), issued by CASA. 87 The Chief Pilot of Qantas is the Head of Flying Operations for the purposes of the CA Act, one of the “key personnel” as defined in s.28 of the CA Act. A key statutory responsibility of that position is to monitor the compliance of Qantas’ pilots with the CA Act and Civil Aviation Regulations 1988 (CARs) and Civil Aviation Orders (CAOs) issued by CASA. The Chief Pilot of Qantas holds the responsibilities imposed by Civil Aviation Order CAO82.0, which include:
● controlling all flight crew training and operational matters affecting the safety of flying operations;
● ensuring compliance with the CA Act, the CARs and;
● monitoring operational standards;
● allocating appropriate aircraft; and
● maintaining various records in relation to training and operations. 88
5. GENERAL SUBMISSIONS OF THE PARTIES
[42] Qantas submitted that the arbitration was critical to the future of Qantas and that the interests of the 35,000 employees within the wider Qantas Group including LHPs were inextricably linked to the success of Qantas. It further submitted that there is a strong public interest that the workplace determination enable, not inhibit, Qantas’ ability to respond to competitive pressures and remain successful.
[43] Qantas submitted that its unit costs are significantly higher than most of its competitors and its LHP productivity is relatively low compared with much of its competition. Labour costs are a major part of its controllable costs, of which pilot labour costs are a significant portion. It submitted that the case for containing wages growth and removing inefficient and unproductive work practices was compelling.
[44] In addition, Qantas noted geographic constraints on Qantas’ operation as an “end-of-the-line carrier”with alimited range of destinations, routes and frequency, competing against intermediate airlines geographically capable of offering a much wider array of non-stop routes, with high frequency, to European and other destinations.
[45] Qantas submitted that it faced a range of very serious commercial challenges which are largely structural in nature and not likely to abate:
● rapid growth of the “6th Freedom” 89 carriers in the Gulf States, Singapore and now China;
● rapid increase in capacity in international routes and services to and from Australia;
● aggressive competition from Virgin Australia, particularly in the domestic market;
● increasing growth in LCC with a dominance of LCC in the Asia-Pacific market;
● high fuel costs; and
● the high Australian dollar.
[46] Qantas submitted that the changes it seeks are modest and achievable. 90 It submitted that many are based on the proposition that Qantas should be able to have LHPs actually perform more of the flying hours it has paid for, with other proposed changes being aimed at reining in industrial arrangements that have, over time, either expanded far beyond their original industrial purpose or ceased to be relevant to current circumstances.
[47] Qantas submitted that significant improvement in productivity is the only viable solution to achieve a higher level of profitability within the Qantas Airlines business, which is urgent in the Qantas’ international operations. 91 Qantas referred to productivity in the sense of generating a higher return from the existing asset base by reducing unit costs, in circumstances where there is little or no scope to increase airfares.92
[48] Qantas estimated that its cost base is approximately 20% higher than many of its key competitors, such as Cathay Pacific, Singapore Airlines, Etihad Airways and Emirates. 93
[49] Qantas submitted that the AWD involved very little in the way of concessions to address inefficiencies. Rather, it submitted that the AWD contains a number of claims which involved significant costs and inefficiencies. It submitted that any genuine concessions in the CWD are few in number and modest in nature.
[50] AIPA, whilst acknowledging the difficult economic times and the range of factors that have undermined the competitiveness of the International Division of Qantas, submitted that it does not accept that it is necessary or appropriate that the terms and conditions of LHPs should be “slashed and burned” as proposed by Qantas. 94 AIPA on behalf of the LHPs is not, and has never been resistant to sensible and reasonable changes to improve efficiencies and productivity, provided there is due recognition and some allowance for the legitimate job security and other interests of LHPs, having already actively agreed (in whole or in part) to a substantial number of Qantas claims in the AWD as originally filed.
[51] AIPA submitted that Qantas did not act in a manner consistent with the object of the Act in that it stymied and stalemated the negotiations by refusing to give “genuine consideration” to AIPA’s legitimate job security demands; failed to give proper and valid reasons (supported by relevant probative information) for rejecting those claims (even when appropriate cost savings and other measures to improve productivity were achievable as “consideration” for their acceptance); and engaged in capricious and unfair conduct, both during the bargaining process and currently via the proposed QWD that “undermines” freedom of association and collective bargaining.
[52] AIPA contended that the proposed QWD reveals that Qantas pays scant regard to the interests of the LHPs. Qantas shows no interest in having a workplace determination that will serve to build, rather than further erode, the recent parlous state of industrial relations and workplace harmony between Qantas and its LHPs.
[53] AIPA submitted that, due to the nature of the work performed by pilots, the regulation of their terms and conditions of employment is inherently complex. It submitted that the existing prescription is the result of 39 years of consent arrangements. The current agreement (EBA7v) is the 8th enterprise agreement since 1992. Its 509 pages reflect the complexity of the arrangements and the willingness of the parties to build on previous agreements resulting in an amalgam of regulatory provisions.
[54] AIPA submitted that for reasons that are not readily apparent and certainly not supported by probative evidence, Qantas wants to be restored to what AIPA describes as the pre–Cram 95 position of total “control” of its business, by removing or reducing the role and “say” of AIPA and of LHPs in matters of real and legitimate interest, significance and concern to them.
[55] AIPA submitted that the capacity to “replace” a workplace determination with a further enterprise agreement (s.278 of the Act) during the life of the workplace determination and the real limitations on the power of the Fair Work Commission to vary a workplace determination (see s.279 Act) also suggests that the QWD approach of “slashing and burning”conditions of employment should be rejected and that a “minimalist/deadlock breaking only” approach to the workplace determination context should be adopted.
[56] In short, AIPA submitted that the Fair Work Commission should not accede to the QWD as it is a document that:
● removes a vast array of long standing negotiated workplace conditions;
● pays no regard to the interests of the pilots;
● does not demonstrate how it will be beneficial to the public;
● was created against the background of a bargaining process not conducted in accordance with accepted bargaining principles; and
● seeks to destroy the incentive for future bargaining.
[57] AIPA characterised the proposition advanced by Qantas as being that pilot costs are costs that can be “controlled”, can be cut and such cuts will or might help Qantas’ financial position somewhat. AIPA asserted that the Full Bench should not make the changes that Qantas seeks, seemingly regardless of any real merit in many of the changes proposed and of the adverse, unfair or unreasonable impact that such changes may have on pilots, their health and safety and on their work/life balance.
[58] AIPA submitted that Qantas made 64 claims for changes to the current arrangements, on the basis that the changes sought should be granted in the interest of reducing costs. However, the evidence led by Qantas, in large measure, failed to identify what cost savings would flow from the claimed changes. It submitted that it is remarkable that a company the size of Qantas did not adduce accurate, unequivocal evidence as to LHPs’ costs in circumstances where it requests the Fair Work Commission to make significant and far reaching cuts to those costs.
6. THE STATUTORY CONTEXT
[59] The making of an industrial action related workplace determination is subject to the relevant statutory provisions, set out in Division 3—Industrial action related workplace determinations of Part 2-5—Workplace determinations:
“267 TERMS ETC. OF AN INDUSTRIAL ACTION RELATED WORKPLACE DETERMINATION
Basic rule
(1) An industrial action related workplace determination must comply with subsection (4) and include:
(a) the terms set out in subsections (2) and (3); and
(b) the core terms set out in section 272; and
(c) the mandatory terms set out in section 273.
Note: For the factors that FWC must take into account in deciding the terms of the determination, see section 275.
Agreed terms
(2) The determination must include the agreed terms (see subsection 274(2)) for the determination
Terms dealing with the matters at issue
(3) The determination must include the terms that FWC considers deal with the matters that were still at issue at the end of the post-industrial action negotiating period.
Coverage
(4) The determination must be expressed to cover:
(a) each employer that would have been covered by the proposed enterprise agreement concerned; and
(b) the employees who would have been covered by that agreement; and
(c) each employee organisation (if any) that was a bargaining representative of those employees.
268 NO OTHER TERMS
An industrial action related workplace determination must not include any terms other than those required by subsection 267(1).”
[60] Division 5—Core terms, mandatory terms and agreed terms of workplace determinations etc., of Part 2-5 of the Act sets out the statutory requirements in relation to workplace determinations:
“272 CORE TERMS OF WORKPLACE DETERMINATIONS
Core terms
(1) This section sets out the core terms that a workplace determination must include.
Nominal expiry date
(2) The determination must include a term specifying a date as the determination’s nominal expiry date, which must not be more than 4 years after the date on which the determination comes into operation.
Permitted matters etc.
(3) The determination must not include:
(a) any terms that would not be about permitted matters if the determination were an enterprise agreement; or
(b) a term that would be an unlawful term if the determination were an enterprise agreement; or
(c) any designated outworker terms.
Better off overall test
(4) The determination must include terms such that the determination would, if the determination were an enterprise agreement, pass the better off overall test under section 193.
Safety net requirements
(5) The determination must not include a term that would, if the determination were an enterprise agreement, mean that FWC could not approve the agreement:
(a) because the term would contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); or
(b) because of the operation of Subdivision E of Division 4 of Part 2-4 (which deals with approval requirements relating to particular kinds of employees).
273 MANDATORY TERMS OF WORKPLACE DETERMINATIONS
Mandatory terms
(1) This section sets out the mandatory terms that a workplace determination must include.
Term about settling disputes
(2) The determination must include a term that provides a procedure for settling disputes:
(a) about any matters arising under the determination; and
(b) in relation to the National Employment Standards.
(3) Subsection (2) does not apply to the determination if FWC is satisfied that an agreed term for the determination would, if the determination were an enterprise agreement, satisfy paragraphs 186(6)(a) and (b) (which deal with terms in enterprise agreements about settling disputes).
Flexibility term
(4) The determination must include the model flexibility term unless FWC is satisfied that an agreed term for the determination would, if the determination were an enterprise agreement, satisfy paragraph 202(1)(a) and section 203 (which deal with flexibility terms in enterprise agreements).
Consultation term
(5) The determination must include the model consultation term unless FWC is satisfied that an agreed term for the determination would, if the determination were an enterprise agreement, satisfy subsection 205(1) (which deals with terms about consultation in enterprise agreements).”
[61] In relation to each of the matters at issue, the Fair Work Commission is required to take into account each of the factors set out in s.275 of the Act:
“The factors that FWC must take into account in deciding which terms to include in a workplace determination include the following:
(a) the merits of the case;
(b) for a low-paid workplace determination—the interests of the employers and employees who will be covered by the determination, including ensuring that the employers are able to remain competitive;
(c) for a workplace determination other than a low-paid workplace determination—the interests of the employers and employees who will be covered by the determination;
(d) the public interest;
(e) how productivity might be improved in the enterprise or enterprises concerned;
(f) the extent to which the conduct of the bargaining representatives for the proposed enterprise agreement concerned was reasonable during bargaining for the agreement;
(g) the extent to which the bargaining representatives for the proposed enterprise agreement concerned have complied with the good faith bargaining requirements;
(h) incentives to continue to bargain at a later time.”
[62] In addition to the specific matters in Part 2-5 of the Act, to which the Fair Work Commission is required to have regard, there are some other general provisions which are relevant to the determination of the matters at issue.
[63] Section 577 of the Act states:
“FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that FWC performs its functions and exercises its powers efficiently etc. (see section 581).”
[64] Section 578 of the Act states:
“In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.”
[65] Our task involves an assessment and balancing of the impact of the various workplace determination provisions proposed in the interests of Qantas and its employees, and the public interest, and the other statutory considerations within s.275, having regard to the matters within s.577 and s.578 of the Act.
[66] As noted by the Full Bench inTransport Workers’ Union of Australia v. Qantas Airways Limited; Q Catering Limited:
“[29] In particular we note the consideration by the Full Bench of the earlier authorities and the endorsement of the approach that the task of the tribunal in a matter such as this is to assess the respective positions of the parties in relation to the matters at issue and, by reference to the statutory factors, arrive at a conclusion that would be regarded as appropriate in the context of the bargaining had the bargaining concluded successfully. The Full Bench in the Curragh Case noted that this did not involve a form of subjective prognostication as to the outcome of the negotiations. Rather, the task involves an objective assessment of the statutory factors and an overall judgment as to an appropriate workplace determination to apply to the operations concerned until the parties replace the determination with a new enterprise agreement.” 96
[67] The task of balancing the various statutory considerations necessarily requires a balancing of the competing interests of the parties to the negotiations, in circumstances where a measure proposed in the interest of one party might adversely affect the interests of the other party. We think the assessment of the specific proposals advanced by each party requires a firm evidentiary basis for change to be established, particularly in circumstances where, as in this case, industrial arrangements have been long regulated by agreements entered into by the parties.
[68] We will apply the matters which arise from s.275 of the Act in considering the range of claims before us. The claims should be considered against the following background:
● The commercial environment in which the Qantas business operates.
We accept the broad thrust of the evidence of Mr Harbison in relation to markets in which Qantas operates. That evidence establishes that the Qantas international operations, as an “end-of-the-line carrier”, faces formidable structural disadvantages, including network breadth and frequency, compared to intermediate airlines based, for example, in the Gulf States. The increased competition is occurring in the context of greater access to markets associated with international deregulation. Mr Harbison’s evidence establishes that Qantas international faces increased competition from LCCs, particularly in the Asia-Pacific markets. Mr Harbison’s evidence also suggested increased competition in the domestic market since the turn of the century, with pressure on prices and a consumer focus on price, met by Qantas’ two brand strategy with Jetstar in the LCCs end of the market.
The parties put some information before the Full Bench in relation to both relative costs 97 and productivity98 of Qantas pilots. Both Qantas and AIPA submitted that such comparisons were difficult to make because of differences in remuneration structures, access to relevant information and operational (including fleet type and configuration) and structural differences between airlines. Much of the evidence went to critiquing estimates provided by witnesses for the other side. We accept that the information before us is indicative at best. Nonetheless, it does indicate that the cost of Qantas pilots is relatively high compared to those of many competitors and Qantas gains no advantage in terms of stick hours per pilot and available seat kilometres or cost per available seat kilometre per pilot, with less favourable available seat kilometre when compared to Virgin Australia, Singapore and Emirates.
● Qantas’ financial performance.
On their face, relevant financial reports indicate that for the 2011–12 financial year, Qantas’ EBIT was negative $173 million compared to positive $436 million for the previous financial year. Underlying EBIT, although positive, at $265 million in 2011–12 was substantially down on the previous year. The financial data also shows that all parts of the Qantas Group were profitable with the exception of Qantas’ international network and Qantas Corporate. Data for the international business have only recently been published, making it impossible to determine trends in the performance of the international operations. Further, as is apparent from the differences in the raw and underlying EBIT data, the headline data is affected by abnormal factors, such as the cost of industrial action, including the shut down associated with the proposed lock-out in 2011. Nonetheless it is evident that over the past year at least, the international business is not generating a return on the substantial capital invested in it.
● The tension between the commercial interests of Qantas and the interests of its pilots, each of which would be affected by the various proposals and the history of fixing pilots’ terms and conditions by agreement and the complexity of the industrial arrangements applying to pilots.
As noted by AIPA, existing industrial prescription of the terms and conditions of Qantas LHPs is the product of decades of bargaining, resulting in consent arrangements, reflecting “the complexity of the arrangements and the willingness of the parties to build on previous agreements resulting in an amalgam of regulatory provisions.” 99
In this context it is necessary that any changed arrangements are properly justified and their effects are adequately understood, in order to allow a proper assessment of the impact of the various proposed measures on the interests of Qantas and its pilots. We are persuaded that we should be cautious about altering longstanding agreed arrangements and should only do so if there exists a clear evidentiary basis for doing so and the practical effect of any changes is clear, whist also having regard to the commercial and operational environment in which Qantas operates and its financial circumstances.
[69] The merits of the case (s.275(a)) are considered when deciding which terms to include in the workplace determination.
[70] Section 275(b) of the Act applies only in relation to a low-paid workplace determination and is not relevant to the current matter.
[71] The interests of the employers and employees who will be covered by the workplace determination (s.275(c)) raises a consideration of the often conflicting interests of Qantas and its pilots. There exists a clear interest on the part of Qantas in securing ease of administration of its industrial arrangements with pilots, productivity gains through, for example, better utilisation of its pilot resources and cost savings and greater certainty in its ability to manage flight operations. Conversely, the pilots have an obvious interest in maintaining and enhancing their incomes, avoiding uncertainty and disruption to their non-work life, securing continuing employment with better opportunities for advancement to higher levels of seniority, and having an effective input, through AIPA, into operational decisions which impact on them.
[72] Much of the evidence in relation to particular proposals was general in nature. On the one hand, Qantas relies on benefits asserted in terms of efficiency, recovery of flying time, productivity and administrative ease, advanced in the context of operational pressures on Qantas’ business (particularly its international business). On the other hand AIPA focuses on the potential adverse impact on pilots in the form of increased disruption of family life and roster uncertainty. There is little clear evidence as to the effect of the proposal in practice and the extent to which the benefits and detriments relied upon would arise. Such generalised evidence is not sufficient to justify a change to long standing agreed arrangements. Nonetheless we have attempted to assess and balance the competing interests as best we can on the evidence before us.
[73] Public interest (s.275(d)) necessarily raises considerations beyond the interests of the parties. As a general proposition, initiatives which enhance productivity; increase competition in a market; or create employment, will attract the public interest, a consideration to be balanced against the other s.275 criteria. Conversely, union claims for wage increases and employer claims to reduce entitlements will not normally have a public interest component. Such claims are likely to turn on the merits of the particular proposal. While claims to increase or decrease labour costs will be in the interests of the party concerned, and hence attract s.275(c), they are unlikely to impact on the public interest. 100
[74] Productivity improvement in the enterprise or enterprises concerned (s.275(c)) is directed to the conventional economic concept of the quantity of output relative to the quantity of inputs. Considerations of the price of inputs, including the cost of labour, raise separate considerations which relate to business competitiveness and employment costs. 101
[75] It will be necessary to consider each claim specifically to determine whether they generate productivity benefits as conventionally understood or savings in labour costs. For example, proposals by Qantas to increase its capacity to recover pattern protected hours, for which it has paid, would generate productivity benefits. Its proposal to engage new pilots at lesser terms and condition would generate cost savings, rather than productivity benefits.
[76] Considerable attention was directed to the approach of the parties in the negotiations for a new agreement (ss.275(f) and (g)). We will later consider the positions advanced by the parties and any relevant findings.
[77] The absolute failure of Qantas and AIPA to reach any level of agreement in relation to the numerous matters in issue in the negotiations raises a question as to how readily we should give effect to the proposals before us, having regard to incentives to continue to bargain at a later time (s.275(h)). This is particularly so given the desirability of the parties to turning their practical understanding to the matters in issue given the complexities of many of the operational issues and uncertainties as to the practical operation of the proposals.
The Negotiations
[78] It is necessary to consider the evidence as to the negotiations between the parties in order to assess the statutory matters within ss.275 (f) and (g).
[79] Mr Wagener gave evidence 102 explaining that Qantas’ objective in the negotiations was to obtain better productivity without reducing LHPs’ take home pay and without throwing out the basic structure and features of EBA7v, to be achieved by:
● removing inefficient work allocation rules;
● removing, as far as reasonably practicable, “unproductive hours” whereby pilots are paid for hours they do not actually work (e.g. scheduling restrictions, pattern protection, etc.);
● the removal of AIPA “vetoes” to ensure that Qantas has certainty and stability in delivering its services; and
● the introduction of market comparable rates for new recruits.
[80] Qantas’ negotiating agenda was based on the proposition that Qantas has relatively low stick hours per pilot, low available seat kilometres per pilot, and that pay rates (Qantas pilot salaries) are relatively high. It contended that this reflects that, for an airline industry that developed largely protected from competition, practices had developed over time where there was an increasing gap between the flying paid for and the amount of flying actually performed by LHPs. Qantas illustrated this point by reference to poor recovery of pattern protection, increased minimum daily credit (MDC) and minimum guaranteed hours (MGH), inefficient flying and non-flying allocation rules and restrictions built into training rules. Qantas submitted that $100 million of its total LHP labour costs of $425 million per annum were not directly attributable to flying and/or penalties involved with flying. 103
[81] Notwithstanding the significant issues facing the international business, Qantas contended that it was not (and is not) seeking to make significant reductions to the terms and conditions of LHPs (although it was and is seeking to reset rates and penalties, but not other conditions, for new pilots). Instead, Qantas was not only offering to maintain wages, but to offer a percentage wage increase that was comparable to wage increases made by the Fair Work Commission across various industries and in keeping with the wages increase policy of 3% that Qantas has generally agreed in the settlement of other enterprise agreements. Further, Qantas submitted that it was not seeking to change the fundamental work allocation systems. 104
[82] Qantas submitted that the negotiations were protracted and difficult and that one of the key reasons for this was that AIPA chose to persist with the AOEC claim, as a threshold issue on which all other progress relied, even though it was clear from around February 2011 that Qantas was not willing to agree to this claim. 105
[83] Qantas submitted that whilst a significant portion of the evidence of a number of AIPA’s witnesses was devoted to the proposition that Qantas did not attempt to meet the “legitimate concerns” of AIPA’s membership regarding “job security”, when pressed, it became clear that this lack of engagement was in fact a failure by Qantas to either:
“(a) agree to one of the various iterations of the AOEC clause put forward by AIPA; or
(b) put forward an alternative formulation for the AOEC claim—in other words, AIPA seeks to criticise Qantas for its failure to modify AIPA’s own claim into something that could be agreed by Qantas.” 106
[84] AIPA contended that Qantas acted in a way that is inimical to both ss.275(e) and (f) of the Act by its fixation on what it regarded as the “economic imperative” and Qantas’ refusal to pay any proper regard to the legitimate industrial interests of its LHPs.
[85] The minutes of the bargaining meetings are included in the second Haggerty statement, 107 and the first Susz statement.108 The various documents and correspondence exchanged between the parties are annexed to the first Susz statement and marked AS-3 and AS-4.109
[86] Qantas tabled a log of claims in relation to the negotiations on 24 August 2010. The log comprised 59 detailed claims. AIPA tabled its claims on 20 March 2011 in a document that listed 12 claims under five general headings.
[87] The bargaining process was difficult and ultimately unproductive, reflective of the nature of the claims advanced and the determined position of Qantas and AIPA representatives in relation to the various claims aired. Each party was critical of the approach of the other in the negotiations. However, the Full Bench is not persuaded that the evidence supports a finding that any bargaining representative for the proposed enterprise agreement did not comply with the good faith bargaining requirements. Further, we are not satisfied that the conduct of the bargaining representatives for the proposed enterprise agreement concerned was not reasonable during bargaining for the agreement. Accordingly, we make no adverse findings as to the bargaining conduct in the context of s.275 of the Act.
7. THE WORKPLACE DETERMINATION
7.1 CORE S.272 OF THE ACT
7.1.1 Nominal expiry date
[88] Qantas seeks a nominal expiry date of four years from the date the workplace determination is made. AIPA specified a nominal expiry date of 31 December 2014 in the AWD and offered a compromise position of 31 December 2015 in the CWD. We are required to determine an expiry date which must be no more than four years after the date on which the determination comes into operation.
[89] Given the extensive range of matters at issue, their complexity and breadth and the context of a history of terms and conditions agreed between Qantas and AIPA, we have taken a cautious and measured approach to imposing changed terms and conditions within the workplace determination, particularly where changes proposed will not have an immediate effect or relevant circumstances might change in the immediate future. The nature of the matters at issue and the common challenges posed by the commercial environment in which Qantas and its pilots operate also commend themselves to negotiated agreement, consistent with the emphasis upon enterprise-level collective bargaining in the Act and the requirement, in s.275(h) of the Act, to take into account “incentives to continue collective bargaining at a later time” in making a workplace determination.
[90] In those circumstances, and given continuing uncertainty and change in the environment in which Qantas operates, we have decided that that the workplace determination should be of relatively short duration to encourage the parties to address outstanding issues in negotiations for an enterprise agreement to replace the workplace determination, doing so cognisant of changed or changing circumstances. The workplace determination will contain a nominal expiry date of 31 December 2014.
7.1.2 Better off overall test
[91] It is agreed that each of the proposed workplace determinations would satisfy the requirements arising under s.272(4) of the Act concerning the better off overall test. 110 We are satisfied that the workplace determination we have determined meets that test.
7.1.3 Safety net requirements
[92] AIPA submitted that there are no issues arising under s.272(5) of the Act, concerning safety net requirements. 111 Qantas did not suggest that any of the proposed workplace determination provisions contravene the safety net requirements. We are satisfied that none of the provisions in the proposed workplace determinations contravene s.55 or the requirements in Subdivision E–Approval requirements relating to particular kinds of employees of Division 4–Approval of enterprise agreements of Part 2-4 of the Act.
7.2 MANDATORY S.273 OF THE ACT
[93] Section 273 of the Act requires the inclusion within the workplace determination of a term about settling disputes, a flexibility term and a consultation term. No terms were agreed in respect to these matters, or any other, at the end of the post-industrial action negotiating period.
[94] Sections 273(4) and (5) of the Act, require that in the absence of agreed flexibility and consultation terms which meet certain statutory requirements, the Fair Work Commission must include model terms in the workplace determination. There being no agreed terms in respect of flexibility and consultation, we are required to, and will, include the model flexibility term 112 and the model consultation term113 in the workplace determination.
[95] We will determine the form of the dispute settlement provision when determining the claim in AIPA30, below.
7.3 AGREED TERMS S.270 OF THE ACT
[96] No terms were agreed at the end of the post-industrial action negotiating period. 114 By the end of the 21 day post-industrial action negotiating period the bargaining representatives (including Captain Woods) had not agreed on any terms to be included in the agreement. Consequently, we are confronted with the task of arbitrating all terms and conditions for LHPs.
7.4 TERMS DEALING WITH THE MATTERS AT ISSUE: S.270 OF THE ACT
[97] We are confronted by a multitude of matters at issue: over 60 Qantas claims and over 30 AIPA claims (some of which have within them a number of issues for determination).
[98] Some matters were agreed, in whole or in part, after the post-industrial action negotiating period 115 but they are limited in number or significance. The AIPA CWD did result in some level of agreement in respect of a number of Qantas claims,116 in some cases full agreement, and modification or withdrawal of claims reflected in the AWD. Further, Qantas did agree to modify its position in respect of some of its claims having regard to the submissions of AIPA. The CWD was advanced as a package proposal117 and is to be treated as a package, rather than an as indicating agreement to specific provisions in isolation.
[99] It is necessary to assess the various proposals by Qantas and AIPA before us against the requirements of the Act. Before doing so, however, we will deal with the position advanced by Captain Woods, a bargaining representative for himself and other pilots 118 who will be covered by the workplace determination. Captain Woods submitted that we should make a workplace determination in the form of the proposed “EBA8” or, alternatively, extend EBA7v, subject to the adjustment of wages for inflation.
[100] Neither course of action was justified by evidence or argument and would be justified only if all additional matters in dispute were found to be without merit when assessed against the statutory considerations within s.275 of the Act. We decline to adopt either proposal.
[101] We now deal with the various claims before us within the categories of claims suggested by Qantas, 119 although we have moved some of the claims between those categories. Qantas claims are identified as QAL and AIPA claims are identified as AIPA.
7.4.1 Administrative
[102] The administrative matters in issue arise in relation to:
● QAL1 seeks to:
- restructure EBA7v by separating the Rostering Manual (to be included as an schedule to the workplace determination);
- make drafting, process, language, legislative and administrative changes; and
- delete the current Fatigue Risk Management Systems (FRMS) clause and introduce a new clause that permits Qantas to introduce a FRMS that overrides all flight and duty time limits.
● QAL44 seeks to incorporate the current Flight Administration Manual (FAM) as an appendix to its proposed scheduling manual; and
● The coverage of the workplace determination.
QAL1—Restructuring and updating EBA7v—Base Agreement and Base Rostering Manual
[103] There is substantial agreement by AIPA to drafting, process, language, legislative and administrative changes proposed by Qantas, but not to the Qantas proposal for the creation of a separate Rostering Manual within the workplace determination (which for the purposes of this decision will include machinery provisions within the workplace determination to reflect a separate Rostering Manual). In relation to the drafting matters AIPA opposed:
● the deletion of “aspirational statements” which appear in EBA7v, concerning recognition of AIPA and parties’ commitment to work together;
● changes to a probation provision in clause 15.5.2 of all three proposed workplace determinations;
● changes to minimum rest times in clause 30.7.1 of the QWD;
● changes to salary sacrificing arrangements;
● changes to insurance cover in circumstances of war;
● the redundancy provision proposed;
● references to LHPs’ own non-availability;
● the provision dealing with pattern protection for B767 pilots;
● the changed reference from “pattern limited protection” to “date-limited pattern protection”;
● deletion of the Dallas Fort Worth Agreement (Dallas Agreement); 120
●incorporation of the Letter of Agreement (LOA165), rather than the inclusion of it as an appendix;●deletion of grandfathering provisions relating to a pilot working on a part-time basis; and
●changes to a clause dealing with FRMS and a provision in relation to the operation of the workplace determination in the circumstances of an approved FRMS. AIPA submitted that the change to the FRMS provision was not a matter in issue during negotiations.
[104] AIPA also submitted that whilst there is agreement to update references to a now defunct Qantas rostering program there is no agreement as to a replacement term and that it is unclear what the purpose or effect of changed definitions proposed in clause 14 of the QWD are.
[105] Further, AIPA proposed an additional clause in the context of the CWD package, providing that where agreement is required under the workplace determination, it will not be unreasonably withheld. This clause is relevant to other disputed clauses where Qantas seeks the removal of the requirement for agreement and AIPA seeks to introduce additional clauses of that nature.
Separate Rostering Manual
[106] Qantas seeks the creation of a separate Rostering Manual, within the workplace determination to assist scheduling staff and fleet managers by making the Rostering Manual more accessible and manageable. 121 Mr Haggerty’s evidence was that the status of the provisions within the workplace determination would not be diminished, the separate manual is simpler and a separate Rostering Manual operates effectively in relation to SHPs.122
[107] Qantas submitted that the parties agreed to the structure of the base agreement. 123 The evidence does not support a finding that AIPA agreed to the creation of a separate Rostering Manual. The evidence of Captain Welch,124 who represented AIPA in the exercise of updating EBA7v into a “Base Document”, is that when Qantas provided the first draft of the Base Agreement, with a separate Rostering Manual, he informed Mr Haggerty that he was willing to work on this document on the basis that, as had been understood throughout the updating exercise, final agreement on having a Rostering Manual “outside the EBA” rested on a decision by the AIPA negotiating team. Such agreement was never provided.
[108] We are satisfied that Qantas has justified the segmentation of the workplace determination to create a separate Rostering Manual within the workplace determination. We accept that there would be some administrative benefit arising from collecting workplace determination provisions concerning rostering arrangements into one section of the workplace determination and see no detriment to the interests of LHPs in doing so. Indeed, LHPs might be assisted by the collection of rostering provisions in one place within the workplace determination. There is no good reason why the consolidation of rostering provisions in one place within the workplace determination should not take the form of a separate Rostering Manual as an Appendix to the workplace determination. The inclusion of the Rostering Manual will be subject to modification of clause 2.4 of the QWD to remove any possible doubt that the Rostering Manual forms part of the workplace determination, prescribing terms and conditions of the workplace determination. The parties should confer as to the appropriate form of clause 2.4 necessary to achieve this certainty and address any cross-referencing issues, as alluded to by AIPA, 125 when settling the terms of the workplace determination.
[109] There remain a number of other matters in dispute in this area, which need to be addressed in relation to the relevant provisions appearing within the workplace determination:
a) FRMS
[110] FRMS is a scientific and data based risk management process for managing fatigue. The FRMS “flexibly applies the framework of existing fatigue management rules using a process, which employs data and science to continuously monitor” and manage fatigue and to ensure that operations are not excessively fatiguing. 126 There is already an FRMS in place at Qantas.127 The current FRMS has been developed with the participation of Captain Woodward, AIPA Vice President, as a member of the FRMS Project Design and Implementation Team.128 Under the new CASA Civil Aviation Order, CAO48E, FRMS will be the cornerstone of fatigue risk management. Mr Wolny’s evidence was that it is proposed to come into operation in the next few years129 and that CASA’s intention is to promulgate the new CAO48 in the fourth quarter of 2012, shortly after which Qantas will be in a position to approach CASA to commence a trial, which is part of the approval process for an FRMS.130
[111] During the negotiations for EBA7v, the parties agreed to insert a clause that permitted the introduction of an agreed FRMS, taking precedence over flight and duty limitations within the agreement during its life. Clause 11B of EBA7v reads:
“11B. Flexibility provision
In circumstances where the Company and the Association agree to adjust the flight and duty limitations (including agreed variations) or introduce a fatigue risk management system, the adjusted limitations will take precedence over the limitations set out in the Agreement until either replaced or repealed by a request from either party. The adjusted limitations will be promulgated to all flight crew members at least 28 days prior to the bid period in which they will become operative. Any agreed changes to flight and duty limitations will be constrained by the applicable flight and duty limitations prescribed by the Aviation Regulatory Authority.”
[112] The QWD seeks to change this clause to read:
“11. Fatigue Risk Management System
11.1 The Rostering Manual shall apply subject to the provisions of any Fatigue Risk Management System (FRMS) which has been approved by the Aviation Regulatory Authority (or such other governmental authority with responsibility for approving such systems) for operation in respect of the pilots engaged in the Company’s operation.
11.2 For the avoidance of doubt, if there is a FRMS in operation in accordance with the provisions of clause 11.1 above, the FRMS will operate to the exclusion of any flight and duty time and rest limitations set out in the Rostering Manual or the Determination.”
[113] AIPA contended that the provision proposed by Qantas would eliminate the requirement that any FRMS that is introduced would be a FRMS agreed to by AIPA and permit Qantas to introduce an FRMS which overrode all of the flight and duty time limits and rest requirements in the workplace determination and was not a matter at issue within the meaning of s.267(3) of the Act. AIPA submitted that the Qantas proposal would replace current regulation of flight and duty times exclusively by CASA regulation, potentially introducing terms and conditions inferior to those within the workplace determination.
[114] We do not accept that the Qantas claim in respect of the precedence afforded to an approved FRMS over the agreement was not a matter in issue during the agreement negotiations, having regard to the negotiating minutes and in particular the extracts collated in Exhibit QF48. We think it is clear enough from the minutes of 8 June 2011 that Qantas was seeking an outcome whereby an approved FRMS would replace relevant agreement rostering arrangements.
[115] We are not persuaded to alter the basis for permitting a FRMS from overriding provisions regulating flight and duty times as reflected in the agreement of AIPA and Qantas in EBA7v (modified to reflect the context of the workplace determination), save for one matter. In respect of agreement to have the provisions of any FRMS, which has been approved by CASA take precedence over the limitations set out in the workplace determination, the provision in clause 11B of EBA7v will continue to apply, subject to a proviso that agreement will not be unreasonably withheld. Until a FRMS is approved and its implications on the regulation of flight and duty times in the workplace determination is known, it is uncertain what impact a precedence clause of the type proposed by Qantas would have on the terms and conditions in respect of flight and duty times reflected in the workplace determination and how the interests of pilots and Qantas would be affected. In the absence of a FRMS, we are not in a position to consider those interests, amongst other matters, in the making of the workplace determination. Alteration of the workplace determination terms and conditions in respect of flight and duty times consequent upon the approval and operation of a FRMS should follow an assessment by the parties of the FRMS once finalised.
b) Deletion of “aspirational statements” which appear in EBA7v, concerning recognition of AIPA and parties’ commitment to work together
[116] We are not persuaded that provisions of this kind, in clauses 3.1 and 13 of the CWD, which reflect recognition of the parties or their commitment or intention, are appropriate in a workplace determination.
c) Changes proposed by Qantas to a probation provision in clause 15.5.2 of all three proposed workplace determinations
[117] Qantas proposes to enlarge its ability to extend the probationary period for absences through personal illness 131 (leave132) and a period of leave without pay to “any period of absence from duty”.133 This change falls beyond the scope of editorial change, substantively affecting the provision. It has not been justified in the submissions or evidence of Qantas. The workplace determination will incorporate the provision contained within the CWD.
d) Changes to minimum rest times in clause 30.7.1 of the QWD
[118] The QWD seeks to alter the corresponding provision in EBA7v in two respects:
1. to add “or posting” to “a basing”, an amendment agreed to by AIPA and reflected in clause 31.1.8(a) of the CWD. We understand the addition to be directed to reflect current terminology and will be included in the workplace determination;
2. to alter the restriction on continuous travel from “in excess of 24 hours” to “in excess of the equivalent provisions for duty travel”. There is insufficient evidence or submissions to allow us to assess the practical impact of the proposed change. We are not satisfied that this change to the current provision has been justified.
[119] The relevant workplace determination term will be in the form proposed by AIPA in clause 31.1.8(a) of the CWD.
QAL41—Remove requirement for AIPA approval of computer systems
[555] QAL41 removes the requirement 291 for AIPA agreement of the computer rostering system.
[556] Qantas submitted that the key purpose of this claim is to enable Qantas to update, amend or introduce a new rostering platform without necessitating continued bargaining with AIPA during the life of the workplace determination, submitting that the consultation provision in clause 9 of the QWD will be enlivened by any “major changes” to technology which are likely to significantly affect LHPs.
[557] We are not satisfied that sufficient reason for altering the existing arrangement for agreement in relation to computer programs has been advanced. The involvement of AIPA in the updating and amendment of the rostering platform or introduction of a new rostering platform provides a safeguard in respect of the interests of LHPs and there is no evidence of an adverse impact on Qantas of current arrangements.
[558] AIPA submitted that Qantas has made two other changes to the QWD under the auspices of QAL41 (which it opposes):
(a) the removal of the agreed audit system; 292 and
(b) the removal of the requirement to agree on bid lines. 293
[559] AIPA submitted that the removal of the agreed audit system and the requirement to agree on bid lines were not part of the QAL41 claim and Qantas has provided no evidence to support the changes.
[560] In its written submissions, Qantas did not address the additional changes identified by AIPA. Mr Voget’s evidence was that Qantas agrees with AIPA in respect of clause 57.3 of the AWD (as a new insertion to 10(c) to the Rostering Manual). That provision will be included.
[561] We are not satisfied that Qantas has made out a case for the removal of the agreed audit system and the requirement to agree on bid lines.
QAL63—Remove from definitions and various sections all industrial processes and provisions that relate to or affect Qantas’ ability to manage pilot standards
[562] QAL63 seeks to remove industrial provisions and processes that relate to, affect, or impact upon Qantas’ ability to manage pilot standards by removing from the QWD requirements to refer certain matters, including suitability for promotional training (see clause 17.5.5 of the QWD) or further training where initial training is failed (see clauses 17.6.1, 17.6.3, 17.6.4 and 20.7.3 of the QWD), to the Pilot Assessment Committee (PAC). Additionally, through QAL63, Qantas seeks to remove the requirement that a recommendation for demotion by the Company Aircraft Assessment Committee (CAAC) be referred to the Demotions Committee (DC) (see clauses 17.7.3 and 17.7.4 of the QWD).
[563] Qantas submitted that current arrangements are inappropriate, particularly where they limit the Chief Pilot’s capacity to deal in accordance with his regulatory obligations as Head of Flying Operations, that there are existing measures in place to ensure these processes are thorough and fair, and the current processes inevitably introduce an industrial overlay to a process that should purely be about operational and safety standards.
[564] The arrangements in the above Committees are long standing features of the consensual industrial prescription existing between the parties, which have a role in protecting the pilots’ legitimate industrial/professional interests. There is no evidence that they have materially impeded Qantas’ commercial operations or otherwise now require change. We are not persuaded to remove these provisions when making the workplace determination. We are persuaded, however, to include in the workplace determination a provision, as proposed in the CWD that in the event AIPA is unable to appoint members to a PAC within three weeks from the date upon which Qantas inform AIPA of the requirement to appoint members to the PAC, the Chief Pilot may decide the outcome of the matter. We do so to address one practical concern raised by Captain Wilson in his evidence concerning the difficulties experienced in securing the timely participation of AIPA nominees. 294
AIPA30—Changes to grievance and dispute procedures
[565] AIPA30 seeks to vary the current grievance, dispute and disciplinary procedures (clauses 45-47 of each proposed workplace determination), it submitted, to ensure procedural fairness and that the principles of natural justice are included in the steps of these processes. The changes sought by AIPA are to: 295
● allow a pilot to obtain an external review (by the Fair Work Commission) of a decision of the CAAC, PAC and/or DC on the basis of procedural fairness and natural justice not being afforded, by amending the matters excluded to allow a pilot to dispute and/or grieve any decision of the CAAC, PAC and/or a committee established pursuant to clause 17.7 on the grounds of lack of natural justice and/or procedural fairness, or in circumstances where the procedures provided for by the workplace determination were not followed;
● add “AIPA” to the definition of a party to ensure AIPA is able to raise disputes and grievances under this section of the workplace determination.
● include time limits on the first two steps in the dispute settlement process to ensure that disputes are handled in a timely and efficient manner; and
● add provisions in the disciplinary process that provide the right to review reports of allegations before being requested to respond.
[566] AIPA submitted that the natural justice provisions would prevent a decision maker considering an appeal from/review of his/her own decision and ensure that a party is entitled to be heard before a decision adverse to it is made.
[567] AIPA submitted that the processes and procedures outlined by the CAAC manual do not provide adequate procedural fairness and/or natural justice. This is said to be unacceptable given that these are processes that relate to demotion, reduction in remuneration, the loss of future promotion rights and ongoing employment.
[568] Qantas opposes this claim on the basis that it would unreasonably interfere with the Chief Pilot’s decision-making in this area, where there are already excessive industrial processes. The Qantas’ processes were said to be robust and ensure that the procedures and requirements followed by the CAAC provide procedural fairness and this is an essentially employee-focused process.
[569] We are prepared to incorporate the explicit requirement for procedural fairness as a basis for external review. No substantial detriment to Qantas’ interest arises from the possibility of review in circumstances where the provision of procedural fairness is in issue, particularly in circumstances where the evidence of Captain Wilson wasthat natural justice is embedded in the Qantas processes. 296
[570] AIPA seeks to include “AIPA” in the definition of a party to ensure it is able to raise disputes under this section of the workplace determination when a group of pilots are affected by a change or matter that should be disputed, rather than requiring that one of the pilots must be named as the party to the dispute. This element of the claim was not pressed in the CWD.
[571] We see no reason to include AIPA as a party to any of the clause 45-47 processes. There is no evidence to suggest that there is any need for AIPA to have the capacity to raise disputes and grievances on behalf of a pilot or pilots where the pilot or pilots can raise them and be represented by AIPA, if they chose, within the process.
[572] AIPA30 seeks to incorporate time limits 297 on dispute settlement procedures to ensure disputes are handled in a timely and efficient manner. AIPA30 also seeks to amend clause 47.2.2 of the AWD and the CWD to allow pilots up to 90 days to lodge a grievance from the date of Qantas’ action (i.e. in lieu of the current 60 days) on the basis that pilots are often away for periods of up to ten days or more and do not have sufficient time to realise that they have been affected by a change in company policy.
[573] Qantas submitted that no adequate reason is given to support the extension of the timeframes for pilots to lodge grievances and the limitation on the time for Fleet Managers and the Chief Pilot to respond. Further, it submitted that the amendments are unnecessary and burdensome, particularly where Fleet Captains are often flying and would be very unlikely to be able to comply with such a timeframe. During cross-examination Mr Haggerty conceded that 28 day time limits may not be “unreasonable”. 298
[574] We are not satisfied that the general evidence of Captain Anderson that “[t]here have been occasions where AIPA or a member have written to their Fleet Manager or Chief Pilot, invoking the DSP and have not received a response for many weeks” 299 provides a sufficient basis of introducing the time limits sought by AIPA. There is no clear evidence of a practical issue requiring this change proposed in AIPA30.
[575] Nor are we persuaded that a sufficient case has been put to extend from 60 days to 90 days the period, for pilots to lodge a grievance from the date of Qantas’ action. There is no evidence to suggest a problem of pilots having insufficient time to lodge a grievance. However, we think it reasonable to reference the 60 day period to the date on which a pilot is affected by a change in company policy within the workplace determination.
[576] AIPA30 also seeks to extend the opportunity to review all relevant information and make notes before the flight crew member is requested by Qantas to attend an interview to circumstances where a pilot is required to “provide a written response”. When properly understood, the claim is not opposed by Qantas. 300 We think the balance of interests and merit clearly supports this change, which will be reflected in the workplace determination.
The workplace determination will contain grievance, dispute and disciplinary procedures in the form of clauses 45-47 of the QWD, subject to the AIPA changes we have accepted. We are satisfied that the disputes procedure meets the requirements of s.273(2) of the Act.
AIPA 32—Association Business
[577] In AIPA32, the AWD includes provisions to extend time relief entitlements (as previously agreed to in Part 11 in EBA6), and obliges Qantas to provide financial support from Qantas for pilots undertaking AIPA business. In the CWD, AIPA no longer sought the EBA6 provisions, instead seeking to:
● increase the amount of relief from flying to which the President and a delegate is entitled;
● increase the number of pilots that can be nominated by the President of AIPA for pre-allocation of flying from two to five; and
● alter arrangements for offsetting pattern protection for a pilot attending a meeting with Qantas as part of their representative duties.
[578] AIPA submitted that the change would recognise the role of AIPA representing LHPs under the workplace determination and rebuild the relationship between Qantas and its pilots. The claim is opposed by Qantas.
[579] We will not include in the workplace determination changes to give effect to AIPA32 in the form of either the AWD or the CWD. The AIPA changes depart from current arrangements and no reasonable basis has been established for including them in the workplace determination.
7.4.10 Other Claims
QAL64—New Superannuation clause
[580] QAL64 seeks to replace the existing superannuation provisions in order to comply with Qantas’ current legislative obligations and to standardise the superannuation clauses in agreements across Qantas.
[581] Qantas submitted that these amendments are necessary because they:
(a) remove references to the phrase “successor fund” which has a specific meaning and may not be appropriate in the context that it is currently used;
(b) remove references to the previous name of the relevant superannuation plan and replace them with the current name; and
(c) are consistent with 13 other agreements that operate in respect of other groups of Qantas Group employees.
[582] QAL64 seeks to:
(a) “update” the superannuation provisions to comply with Qantas’ current legislative obligations and to standardise the superannuation clauses in enterprise agreements across Qantas;
(b) “ensure” that payments are made in accordance with the Superannuation provider’s rules; and
(c) “include” a clause in respect of the minimum superannuation guarantee legislation.
[583] AIPA agreed in principle to (a) and (b), but objected to the wording of the QWD. In respect of (a) and (b), Qantas ultimately accepted the wording changes proposed by AIPA in respect of clauses 31.4.1–31.4.3 of the QWD 301 and agreed to the deletion of any reference to a minimum contribution level as contained at clause 31.4.3 of the QWD.302 As a result, there was agreement by the end of the hearing program to the following clauses (with clause 31.4.3 of the QWD being deleted):
“31.4.1 Entitlement to choose a superannuation fund
The Company will make superannuation contributions to a complying superannuation fund in respect of each pilot. The superannuation fund to which contributions will be made in respect of a pilot will be the fund chosen by that pilot which is consistent with the choice of fund regime (including MySuper).
31.4.2 Default fund
If a pilot does not select a superannuation fund in accordance with the choice of fund regime, the superannuation contributions in respect of that pilot will be made to the Qantas Superannuation Plan (or any successor to that plan) to be credited to the pilot’s designated division or divisions (including the MySuper division) as the default fund for the purposes of the choice of fund regime.”
[584] We are satisfied that those clauses, in that form, should be included in the workplace determination. The additional clauses within clause 34 of the QWD have been considered in respect of AIPA15 above. Our decision in respect of AIPA15 will result in the inclusion of clauses 31.4.4 and 31.4.5 in the terms proposed in the QWD, but renumbered to reflect the deletion of subclause 31.4.3.
7.5 NO OTHER TERMS S.271 OF THE ACT
[585] No other terms will be included within the workplace determination.
8. CONCLUSION
[586] The parties are directed to provide a draft workplace determination giving effect to our decision, identifying any areas of disagreement between them that may arise in doing so. It is an understatement to indicate that the matters before us involved a high level of complexity, compounded by the extensive terms of EBA7v, the base document and the workplace determinations sought. Accordingly, we will also provide the opportunity for Qantas and AIPA to identify and raise any technical issues, uncertainties, or potential unintended effects of the workplace determination drafted to give effect to our decision at the same time as they provide the draft workplace determination. We make it clear, however, that we will not accommodate any attempts to re-argue the matters decided by us through that opportunity.
[587] We will afford Qantas and AIPA an opportunity to agree upon and advise us of a date by which the draft workplace determination and a document identifying technical issues, uncertainties, or potential unintended effects can be filed. In the absence of agreement that date will be Tuesday, 12 February 2013. The workplace determination will be settled by Senior Deputy President Watson, with recourse to the Full Bench. If necessary the matter will be listed for the settlement of the workplace determination.
SENIOR DEPUTY PRESIDENT
Appearances:
M Kimber SC with T Slevin of Counsel and D Taylor for Australian and International Pilots Association.
F Parry SC with R Dalton of Counsel for Qantas Airways Limited.
I Woods on his own behalf.
Hearing details:
2012.
Melbourne:
May 25;
June 12, 13, 14, and 15;
Sydney:
August 6, 7, 8, 9, 10, 13, 14, 15, 16 and 17;
September 4, 5 and 6;
October 30 and 31.
Final submissions:
2012.
Melbourne:
October 30 and 31.
1 Section 266(3) of the Fair Work Act 2009.
2 Section 266(2) of the Fair Work Act 2009.
3 Fair Work Amendment Act 2012.
4 [2011] FWAFB 7444 and PR516214.
5 AG844026.
6 Australian and International Pilots Association v Fair Work Australia [2012] FCAFC 65 (10 May 2012); per Lander, Buchanan and Perram JJ.
7 Section 269(2) of the Fair Work Act 2009.
8 Exhibit QF 6.
9 Exhibit AIPA 9.
10 Exhibit AIPA 40, Attachment DB27.
11 Exhibit AIPA 63, at para 1.13.
12 Exhibit Woods 4.
13 Exhibit AIPA 63, at para 7.1.5 and QF 57, at para 63.
14 Exhibit Woods 1, at para 17.
15 Exhibits QF 7 and QF 8.
16 Exhibits QF 9 and QF 10.
17 Exhibits QF 14 and QF 15.
18 Exhibits QF 17 and QF 18.
19 Exhibits QF 21 and QF 22.
20 Exhibit QF 25.
21 Exhibits QF 26 and QF 27.
22 Exhibits QF 29 and QF 30.
23 Exhibits QF 31 and QF 32.
24 Exhibits QF 33 and QF 34.
25 Exhibits QF 4, QF 23 and QF 24.
26 Exhibit QF 55.
27 Exhibits AIPA 22, AIPA 23, AIPA 24 and AIPA 40.
28 Exhibits AIPA 25 and AIPA 26.
29 Exhibits AIPA 29 and AIPA 30.
30 Exhibits AIPA 31 and AIPA 32.
31 Exhibits AIPA 34 and AIPA 35.
32 Exhibits AIPA 41 and AIPA 45.
33 Exhibit AIPA 46 and AIPA 47.
34 Exhibits AIPA 37 and AIPA 38.
35 Exhibit AIPA 33.
36 Exhibit AIPA 61 and Appendix K of Attachment KTW-1 of Exhibit QF 55.
37 Exhibit QF 38.
38 Exhibits AIPA 20 and AIPA 21.
39 Exhibit AIPA 62.
40 Exhibit AIPA 57.
41 Transcript, at paras 7669, 7670 and 12991.
42 Exhibit Woods 1.
43 Exhibits Woods 2, Woods 3 and Woods 4.
44 Transcript, at paras 6895 and 6903.
45 Transcript, at para 1115
46 Transcript, at para 5178
47 Transcript, at para 5227.
48 [2008] FCA 1494.
49 [2009] 74 NSWLR 612.
50 [2003] FCA 306.
51 (1988) 81 ALR 710.
52 See s.16 Parliamentary Privileges Act 1987 (Cth); Amann Aviation Pty Ltd v Commonwealth of Australia, (1988) 81 ALR 710; Mees v Road Corporation [2003] FCA 306.
53 [2009] 74 NSWLR 612, at para 17.
54 [2003] FCA 306, at paras 86 and 87.
55 Transcript, at paras 1108-1113 and 1140-1277.
56 Transcript, at paras 5229-5242.
57 Exhibit QF 21, at para 6.
58 Exhibit QF 21, at para 8.
59 Exhibit QF 57, at para 1021.
60 Exhibit QF 21, at para 9.
61 Exhibit QF 21, at para 11.
62 Exhibit QF 21, at para 10.
63 Exhibit QF 8, at para 36.
64 Exhibit QF 8, at para 37.
65 Exhibit QF 8, at para 38.
66 Exhibit QF 8, at para 35.
67 Exhibit QF 8, at para 57.
68 Exhibit QF 26, at para 7.
69 Exhibit QF 26, at para 7.
70 Exhibit QF 26, at para 48.
71 Transcript, at para 5929.
72 AC309500.
73 Exhibit QF 26, paras 8-10.
74 Exhibit QF 21, at para 34.
75 Exhibit QF 21, at para 36.
76 Exhibit QF 51, at p.9.
77 Such as major transformational/restructuring initiatives, transactions involving investments and impairments of assets outside the ordinary course of business; Exhibit QF 51, at p.10.
78 Exhibit QF 51, at p.8.
79 Media Release; Qantas 2011/2012 Financial Result; 23 August 2012.
80 Exhibit QF 51, at p.18.
81 Exhibit AIPA 11.
82 Exhibit QF 21, at para 37.
83 Exhibit QF 21, at para 38.
84 Exhibit QF 21, at para 39 and Attachment GRE-6.
85 Exhibit QF 21, at para 40 and Attachment GRE-6.
86 Exhibit QF 21, at para 40 and Attachment GRE-6.
87 Exhibit QF 26, at paras 11-12.
88 Exhibit QF 26, at paras 14-16.
89 Used by an (intermediate) airline which is based geographically between the origin and destination point, combining rights to transport passengers and freight to and from their country to countries at the origin and destination points. See Exhibit QF 4, Attachment PJH-2 at pp 100-104.
90 Exhibit QF 57, at para 4.
91 Exhibit QF 21, at paras 49-50.
92 Exhibit QF 21, at para 51.
93 Exhibit QF 21, at para 52 and Attachment GRE-7.
94 Exhibit AIPA 63 at para 2.2(b).
95 Re Cram and Others; Ex parte N.S.W. Colliery Proprietors’ Association Limited and Others (1987) 163 CLR 117 at 133.
96 [2012] FWAFB 6612, at para 29.
97 Exhibit AIPA 46, Attachment AS-8 and AS-9, Exhibit QF28, at paras 28-36 and MWW-2, Exhibit QF 23 and Exhibit QF 4, at Attachment PJH-2 Table 6.3 on p.90.
98 Exhibit AIPA 46, Attachment AS-10 and AS-17.
99 Exhibit AIPA 63, at para 1.10.
100 Schweppes Australia Pty Ltd v United Voice[2012] FWAFB 7858, at para 50.
101 Schweppes Australia Pty Ltd v United Voice[2012] FWAFB 7858, at paras 38-47.
102 Exhibit QF 28, at paras 18-27.
103 Transcript, at para 6700.
104 Exhibit QF 57, at para 111.
105 Exhibit QF 57, at para 117.
106 Exhibit QF 57, at para 123.
107 Exhibit QF 10, Attachment EH-A.
108 Exhibit AIPA 46, Annexure AS 1.
109 Exhibit AIPA 46.
110 Exhibit AIPA 63 at para 5.5.1 and Exhibit QF 57, at para 184.
111 Exhibit AIPA 63 at para 5.6.1.
112 Fair Work Regulations 2009, atSchedule 2.2.
113 Fair Work Regulations 2009, atSchedule 2.3.
114 Exhibit AIPA 63 at paras 1.6 and 5.10.3 and Exhibit QF 57, at para 181.
115 See, for example, Appendix G of QF 57: Agreed Administrative Amendments. Limited other areas of agreement are evident in the submissions of AIPA and Qantas.
116 Exhibit AIPA 63, Appendix C.
117 Exhibit AIPA 40, at para 6.
118 Exhibit Woods 4.
119 Exhibit QF 59.
120 Exhibit AIPA 12 - Agreement in relation to Sydney-Dallas-Sydney operations dated 04/04/2011.
121 Exhibit QF 57, at para 215.
122 Exhibit QF 10, at para 138.
123 Exhibit QF 57, at para 216.
124 Exhibit AIPA 62.
125 Exhibit AIPA 63, at para 10.1.12.
126 Exhibit QF 17, at para 16.
127 Exhibit QF 17, at para 19.
128 Exhibit QF 17, at para 30.
129 Exhibit QF 17, at para 38.
130 Transcript, at para 4179.
131 EBA7v, clause 12.5.3.
132 CWD, at clause 15.5.2.
133 QWD, at clause 15.5.2.
134 Exhibit QF 10, at para 202.
135 Exhibit AIPA 23, at para 7(b)(viii).
136 Exhibit QF 57, at para 236.
137 Exhibit QF 57.
138 Exhibit AIPA 23, at para 20.
139 Exhibit QF 57, at para 252.
140 Transcript, at paras 13797-13798
141 Exhibit QF57, at paras 256-262.
142 Assigned as an allocation to a pilot for which the pilot has not bid or awardedas an allocation to a pilot as a result of the pilot’s bid.
143 Through clause 16.5.2 in both the QWD and the CWD.
144 Exhibit QF 33, at para 246.
145 Exhibit AIPA 63, at para 10.4.4.
146 Exhibit AIPA 63, at p.257.
147 See amendments at clause 16.4.16(b) of the QWD.
148 Exhibit QF 57, Appendix B, table 2.
149 Exhibit QF 57, Appendix B, table 2.
150 Exhibit QF 26, at para 48 and Transcript, at para 5929.
151 Transcript, at para 7654.
152 [2010] FCA 231 at 13 and 14.
153 Transcript, at paras 6538-6543.
154 Exhibit AIPA 25, Annexure JB-11 and LOA162A in EBA7v, at Part 12.
155 Exhibit AIPA 63, at para 10.13.9.
156 Exhibit AIPA 22, at para 133.
157 Exhibit QF 34, at para 95(b).
158 Exhibit QF 33, at paras 197-198.
159 Exhibit AIPA 57 at para 10.17.9(a) and Exhibit AIPA 19.
160 Exhibit QF 33, at paras 217-218.
161 Exhibit AIPA 63, at para 10.23.4.
162 Exhibit AIPA 25, at para 51.
163 Exhibit AIPA 22, at para 133(g) and AIPA 46, at para 119(ii).
164 Exhibit AIPA 63, at para 9.19.5.
165 Exhibit AIPA 63, at para 9.19.9.
166 Exhibit AIPA 63, at para 9.19.11.
167 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
168 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
169 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
170 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
171 Exhibit AIPA 63, at para 10.25.11.
172 Exhibit AIPA 63, at paras 10.25.17 - 10.25.20.
173 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
174 Exhibit QF 14, at Attachment RJT 1, 13 April 2009 Memo of Captain Wilson.
175 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
176 Exhibit QF 33, at para 178.
177 Exhibit AIPA 33, at para 20.
178 The final priority in relation to the allocation of open time flying, which permits Qantas to assign a duty to any pilot it is able to contact, overriding many agreement provisions to ensure that operations are carried out. (Priorities 15-17 of EBA7v.)
179 EBA7v, Clause 27.21.3(b).
180 EBA7v, Clause 27.19.1; Priority 6.
181 Identified in Exhibit AIPA 63, as 47(b) and (c), 47(f) and 47 (i) and (dd).
182 Exhibit AIPA 46, Annexure AS-3 - Qantas’s claim number 56 – Update clause 17 to capture the correct training language.
183 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
184 Exhibit QF 57, at para 508.
185 Exhibit AIPA 25 at para 189.
186 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
187 Exhibit AIPA 25, at para 202.
188 Exhibit QF 34, at para 182.
189 Exhibit QF 34, at para 182.
190 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
191 Exhibit AIPA 31, at para 116.
192 Clause 27.15.8(d).
193 Exhibit QF 57, at para 596.
194 Exhibit 34, at para 121.
195 Exhibit QF57, at para 448.
196 Clause 21.4 Pattern/Roster construction flight and duty time limitations in the Qantas Rostering Manual.
197 Transcript, at para 13897.
198 Clause 69.1 Flight and Duty Time Limitations tables.
199 Transcript, at para 11963.
200 Transcript, at paras 4083-4092.
201 Exhibit QF 57, Appendix B: Summary of estimated costs and cost savings associated with Claims.
202 Based on a report commissioned by AIPA in 1998 (since updated) and provides a recommendation for the facilities required for adequate rest in flight. See Exhibit AIPA 34, at para 161.
203 Exhibit QF 18, at para 72.
204 Exhibit QF 18, at para 70.
205 Exhibit QF18, at paras 74-75.
206 Exhibit QF 18, at para 71.
207 Exhibit AIPA 41, at para 129.
208 Exhibit AIPA 45, at para 94.
209 Exhibit AIPA 25, at para 133.
210 Exhibit AIPA 25, at para 134.
211 Exhibit QF 29, at para 133.
212 Exhibit QF 57, at para 698 and Exhibit QF28, at paras 55-64.
213 Exhibit AIPA 46, at para 121.
214 Exhibit QF28, at para 56 and Transcript at para 6810.
215 This does not include increases to ODTA, ADTA and meal allowances.
216 Transport Workers’ Union of Australia v Qantas Airways Limited; Q Catering Limited[2012] FWAFB 6612 at para 95 and [2012] FWAFB 236 The Australian Licenced Aircraft Engineers Association v Qantas Airways Limited at para 26.
217 Exhibit QF 57, at para 831.
218 Transport Workers’ Union of Australia v Qantas Airways Limited; Q Catering Limited [2012] FWAFB 6612at para 96 and The Australian Licenced Aircraft Engineers Association v Qantas Airways Limited[2012] FWAFB 236, at para 26; AG891046 PR519230 at Appendix B.
219 Schweppes Australia Pty Ltd v United Voice - Victoria Branch [2012] FWAFB 8599, at para 152-153.
220 [2012] FWAFB 236, at para 26.
221 [2012] FWAFB 236, at para 26.
222 [2012] FWAFB 236, at para 26.
223 PR516214.
224 [2012] FWAFB 236.
225 [2012] FWAFB 6612.
226 Exhibit QF 57, at para 833.
227 Clause 24.4.4 of EBA7v.
228 Clause 2 of EBA7v.
229 Clause 10 of EBA7v.
230 Clause 24.4.4 of EBA7v.
231 Schweppes Australia Pty Ltd v United Voice - Victoria Branch[2012] FWAFB 8599, at para 140.
232 Exhibit QF 21, at paras 67-68.
233 Exhibit QF 22, at para 39.
234 Exhibit QF 21, at para 69.
235 Exhibit QF 51, at p. 16.
236 Exhibit QF 28, at para 67- 69.
237 Exhibit AIPA 63, at para 10.20.2.
238 Clause 39.3.7 of CWD.
239 Exhibit QF 1, Tab 4, clause 33.3.10, at p.286 of EBA7v.
240 Exhibit QF 28, at para 66(a).
241 Exhibit QF 57, at para 860(b).
242 Exhibit QF 28 , at para 69.
243 Exhibit QF 28, at attachment MWW-25.
244 Exhibit QF 34, at para 151.
245 Exhibit AIPA 26, at para 45.
246 Exhibit QF 34, at para 151.
247 Exhibit AIPA 63, at para 9.1.7(a).
248 Exhibit QF 1, clause 28.28.6 (corrected from 28.29.6), at p.272 of EBA7v.
249 Transcript, at para 7184.
250 Exhibit QF 59, at Appendix B.
251 Exhibit QF 1, clause 35.1 at p.293 of EBA7v.
252 Exhibit QF 1, clause 34.1 at p.291 of EBA7v.
253 Exhibit QF 34, at para 157 and ‘TRV-19’.
254 Exhibit QF 34, at para 177.
255 Exhibit QF 1 clause 3.5.11.
256 Exhibit AIPA 63, at para 9.4.13.
257 Exhibit AIPA 63, at para 9.28.7.
258 Exhibit QF 1, clause 31.9.9 at p.286 of EBA7v.
259 At clause 38.3.9.
260 Exhibit QF 29, at para 102.
261 Exhibit AIPA40.
262 Exhibit QF29, at para 101.
263 Exhibit AIPA 26, at para 15.
264 Exhibit QF 29, at paras 96-99.
265 Exhibit QF29, at para 98.
266 Exhibit AIPA 25, at para 237.
267 Exhibit AIPA 40 at DB28.
268 Exhibit AIPA 40 at DB28.
269 See QF 57 at paras 1097 and 1146.
270 AP794089 and Exhibit QF 1 at tab 2.
271 Exhibit AIPA 24 at Attachment DB23.
272 Exhibit QF 55 at p.62, Appendix F at p.501.
273 Exhibit QF 1, clause 3.5.11, at p.485 of EBA7v.
274 Exhibit AIPA 69.
275 Attached to Exhibit AIPA 68.
276 Exhibit QF 55, at p.7 and Appendix K.
277 Exhibit QF 55, attachment KTW-1, at p.11.
278 Exhibit QF 55 and Appendix K.
279 Exhibit AIPA 61, at para 39-40.
280 Exhibit AIPA 61, at para 34.
281 Exhibit QF 1, clause 22, at p.132 of EBA7v.
282 ReCram and Others; Ex parte N.S.W. Colliery Proprietors’ Association Limitedand Others (1987) 163 CLR 117, at 136.
283 Exhibit QF 26, at para 48.
284 Exhibit QF 26, at para 47-48.
285 Exhibit AIPA 34, at para 114.
286 Exhibit QF 10, at para 90.
287 Transcript, at para 7947.
288 Transcript, at para 7340.
289 Exhibit QF 57, at paras 1361-1366.
290 Exhibit QF 29, at para 88.
291 Exhibit QF 1, clause 27.4.2, at p.165 of EBA7v.
292 Exhibit QF 1, clause 27.4.5, at p.179 of EBA7v.
293 Exhibit QF 1, clause 27.4.5, at p.179 of EBA7v.
294 Transcript, at para 6155-6161.
295 Exhibit AIPA 63, at para 9.30.1.
296 Transcript, at para 6192.
297 See AWD/CWD clauses 46.2.1 and 46.2.2.
298 Transcript, at para 3107.
299 Exhibit AIPA 29, at para 107.
300 Exhibit QF 57, at para 1284.
301 Exhibit QF 57, at para 710.
302 Exhibit QF 57, at para 711.
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