Australian and International Pilots Association v Qantas Airways Limited
[2011] FCA 1487
•20 December 2011
FEDERAL COURT OF AUSTRALIA
Australian and International Pilots Association v Qantas Airways Limited [2011] FCA 1487
Citation: Australian and International Pilots Association v Qantas Airways Limited [2011] FCA 1487 Parties: AUSTRALIAN AND INTERNATIONAL PILOTS ASSOCIATION and JASON THOMAS HYDE v QANTAS AIRWAYS LIMITED (ACN 009 661 901) File number: VID 1462 of 2011 Judge: DODDS-STREETON J Date of judgment: 20 December 2011 Catchwords: INDUSTRIAL LAW – Application for interlocutory injunction to restrain base transfer of employee pilots – Transfer alleged to breach seniority provisions in applicable enterprise bargaining agreements – Applicants claimed that relevant provisions of enterprise bargaining agreements were incorporated into second applicant’s contract of employment – Whether serious question to be tried that the transfer would breach second applicant’s contract of employment – Whether balance of convenience favours grant of interlocutory relief Legislation: Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Schedule 16 items 2(2), 16, 17 Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 applied
Bradto Pty Ltd v State of Victoria (2006) 15 VR 65 applied
Byrne v Australian Airlines Ltd (1995) 185 CLR 410 considered
Toll (FGCT) Pty Ltd vAlphapharm Pty Ltd (2004) 219 CLR 165 citedDate of hearing: 19 December 2011 Date of last submissions: 19 December 2011 Place: Melbourne Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 84 Counsel for the Applicants: Mr M G Rinaldi Solicitor for the Applicants: Australian and International Pilots Association Counsel for the Respondent: Mr C O'Grady Solicitor for the Respondent: Blake Dawson
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
FAIR WORK DIVISION
VID 1462 of 2011
BETWEEN: AUSTRALIAN AND INTERNATIONAL PILOTS ASSOCIATION
First ApplicantJASON THOMAS HYDE
Second ApplicantAND: QANTAS AIRWAYS LIMITED (ACN 009 661 901)
Respondent
JUDGE:
DODDS-STREETON J
DATE OF ORDER:
20 DECEMBER 2011
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The application for interlocutory relief sought by the originating application dated 16 December 2011 be dismissed.
2.The further hearing of the originating application be adjourned to a date to be fixed.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
FAIR WORK DIVISION
VID 1462 of 2011
BETWEEN: AUSTRALIAN AND INTERNATIONAL PILOTS ASSOCIATION
First ApplicantJASON THOMAS HYDE
Second ApplicantAND: QANTAS AIRWAYS LIMITED (ACN 009 661 901)
Respondent
JUDGE:
DODDS-STREETON J
DATE:
20 DECEMBER 2011
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION
This is an application for an interlocutory injunction restraining the respondent, Qantas Airways Limited (“Qantas”), from implementing its allocation of transfers to the Brisbane base to three employee pilots. The applicants, the Australian and International Pilots Association (“AIPA”) and Jason Hyde, a pilot employed by Qantas, allege that the proposed transfers would breach both the seniority provisions of applicable enterprise bargaining agreements and Mr Hyde’s contract of employment into which those provisions are incorporated by reference, as Mr Hyde, who is currently based in Sydney, is relevantly senior to the three transferred pilots and has indicated his preference for a transfer to the Brisbane base, which, in the applicants’ submission, should have priority. While injunctive relief is precluded for breach of a provision of the relevant enterprise bargaining agreements, the applicants rely on the alleged breach of Mr Hyde’s contract.
By an originating application dated 15 December 2011, the applicants seek interlocutory relief as follows:
1.An injunction, until the trial of this proceeding or further order, restraining the Respondent from allocating base transfers in breach of the contract of employment of the Second Applicant.
2.Such further or other interlocutory or interim orders as this Honourable Court may think fit.
The final relief sought in the originating application is as follows:
1.Declarations under section 21 of the Federal Court of Australia Act 1976 that the Respondent has breached the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 and the Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement 2007.
2.The imposition of penalties upon the Respondent under item 40 of the table in item 16 of Schedule 16 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 for breaches of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 and the Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement 2007.
3.A permanent injunction under section 23 of the Federal Court of Australia Act 1976 restraining the Respondent from allocating base transfers in breach of the contract of employment of the Second Applicant.
4.Such further or other orders as this Honourable Court may think fit.
The applicants relied on the following:
1.Affidavit of Jason Hyde affirmed on 15 December 2011.
2.Affidavit of Bradley Hodson affirmed on 15 December 2011.
3.Affidavit of Jonathan Nguyen affirmed on 16 December 2011.
4.Supplementary affidavit of Jonathan Nguyen affirmed on 19 December 2011.
5.Written submissions dated 16 December 2011.
The application was opposed.
The respondent relied on the affidavit of Trevor Voget affirmed 19 December 2011 and written submissions dated 19 December 2011.
BACKGROUND AND EVIDENCE
Applicants’ evidence
Jason Hyde is an airline pilot employed by Qantas as a Second Officer based in Sydney, flying B747 aircraft. He commenced employment with the airline on 30 November 2004 pursuant to a letter of appointment dated 16 November 2004, also based in Sydney as a Second Officer flying B747 aircraft. He has a seniority number of 1960 as at 15 December 2011 and has, in his letter of preference, expressed a first preference for the B737 as a First Officer based in Brisbane. In about October this year, Mr Hyde learnt that a Perth based First Officer, Paul Burkamshaw, was awarded a B737 vacancy in the Brisbane base. Mr Hyde concluded that as Mr Burkamshaw was junior to him in the Qantas seniority list, the award of the vacancy was in breach of the enterprise bargaining agreements.
Mr Hyde, therefore, on 24 October 2011, contacted the AIPA and was informed that the matter would be raised with Qantas. He deposed that on 28 October 2011, AIPA officers informed him that Qantas would reverse the award of vacancies to Mr Burkamshaw and two other Perth based First Officers, Stephen Power and Tian Viljoen, but on 8 November 2011, Qantas released a Notice to Flight Staff No. 140/11, which advertised three vacancies in the Brisbane base only to B737 crew.
On 24 November 2011, Qantas issued a notice to staff stating that First Officers Paul Burkamshaw, Stephen Power, and Tian Viljoen had been awarded the Brisbane base transfers.
Mr Hyde deposed:
I am aware that all three (3) individuals are junior to me. I wish to be transferred to Brisbane and am ready, willing and able to move my base to Brisbane, but have not been given the opportunity despite being senior to the three pilots who have been awarded the Brisbane base transfers.
The first applicant, AIPA, is an employee organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth), which has members who are employed by Qantas as flight crew members (pilots) on routes operated by long haul and short haul aircraft types.
Bradley Hodson, who is an airline pilot employed by Qantas, is the Vice President of and the Short Haul Representative of AIPA. Captain Hodson deposed, inter alia, to the relevant provisions of the enterprise bargaining agreements and Qantas’ conduct in relation to the base transfers of pilots allegedly in breach thereof, as follows:
6.AIPA's constitutional rules allow it to enrol and represent the industrial and legal interests of flight crew members (pilots) employed by Qantas and its subsidiaries.
7.Qantas pilots are employed under one of two transitional instruments [within the meaning of Part 2 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), subitem 2(3)(a)]:
(a)Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (As Extended and Varied by Vice President Watson by Order made 13 May 2009) (“Long Haul Agreement”), or
(b)Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement 2007 (“Short Haul Agreement”) (collectively, “the EBAs”).
8.The Long Haul Agreement covers all long haul pilots employed by Qantas who are members or are eligible to be members of AIPA. Long haul pilots are pilots of all aircraft types operated by Qantas with the exception of Boeing 737.
9.The Short Haul Agreement covers all short haul pilots employed by Qantas who are members or are eligible to be members of AIPA. Short haul pilots are pilots of Boeing 737 aircraft.
10.Seniority of long haul pilots employed by Qantas is regulated by clause 13 of the Long Haul Agreement.
11.Seniority of short haul pilots employed by Qantas is regulated by clause 15 of the Short Haul Agreement.
12.Seniority is a pilot's length of continuous service with Qantas and that seniority commences from the date of any given pilot's letter of appointment.
Captain Hodson deposed that Qantas maintained a list ranking all its employee pilots by seniority, which did not distinguish between short haul and long haul pilots, save for pilots who were employed before September 1992. However, it appeared that Qantas maintained two versions of the list, one of which is entitled Shorthaul Seniority Order (A List) and the other, Longhaul Seniority Order (Q List).
Captain Hodson deposed:
Seniority is crucial in the careers of both short haul pilots and long haul pilots employed by Qantas as it determines the order of selection for:
(a)promotion;
(b)transfer to a base station within Australia (base transfers);
(c)transfer to, and status on, an aircraft type; and
(d)demotion or termination of employment in the event of redundancies.
On 19 October 2011, Captain Hodson received an email from First Officer Jason Lipson notifying him of four permanent base transfers and two base swaps of first officer pilots on the Boeing 737 “short haul” fleet. Jason Lipson was named as one of the four transfers, which also included First Officers Power, Viljoen and Burkamshaw, but did not wish to accept the transfer if it were contrary to seniority.
Captain Hodson deposed that he wrote to Qantas seeking clarification of the relevant clause of the Short Haul Agreement under which the proposed transfers were awarded, but received no response.
As noted above, on 8 November 2011, Qantas released a Flight Operations Notice to flight staff but directed only to B737 flight crew members, notifying them of three vacancies in the Brisbane base, which Captain Hodson considered should have been promulgated to all qualified flight crew pursuant to cl 15.3 of the Short Haul Agreement and cl 13.4.14 of the Long Haul Agreement. On 11 November 2011, he requested that Qantas clarify its apparent non‑compliance with cl 17.2.1 of the Short Haul Agreement and identify which provisions allowed the base transfers as promulgated, but received no reply.
On 24 November 2011, Qantas released notification that First Officers Power, Viljoen and Burkamshaw had been allocated the base transfer to the Brisbane base, to commence in bid period 281, a roster commencing on 19 December 2011.
Captain Hodson, by letter dated 25 November 2011 to Qantas, sought an undertaking by 2 December 2011 that it would not implement the purported base transfers and that it would withdraw the allocation.
Captain Hodson deposed that by an email dated 5 December 2011 to AIPA, Nic Wright, B737 Fleet Captain, provided no undertaking nor any explanation as to how the vacancies were allocated in accordance with the Short Haul and Long Haul Agreements.
By a letter dated 6 December 2011 to Qantas, Captain Hodson again requested an undertaking by 7 December 2011, indicating that AIPA would otherwise issue proceedings, but received no response.
Captain Hodson deposed:
Given that Qantas intends to implement the allocation of the base transfers to Stephen K Power, Tian Viljoen and Paul Burkamshaw on 19 December 2011, AIPA respectfully requests that this honourable Court grant an order of an interlocutory injunction to prevent the implementation of such allocation pending final hearing of this matter. The reason for seeking an interlocutory injunction is that once the allocation is made to the pilots concerned, it would be very difficult for them to return to their original base as it means relocating themselves and, in some instances, their family back to the original base.
Jonathan Nguyen, the senior in‑house lawyer for the AIPA, deposed to discussions with David Backhouse, Vice President and Long Haul Representative of AIPA, who advised that he had spoken to Mr Voget of Qantas about the transfers and a response was foreshadowed by 25 October 2011, after which Mr Nguyen also wrote to Qantas seeking undertakings to withdraw the transfers, which were not provided.
Mr Nguyen deposed that on 28 October 2011, First Officer Viljoen sent an email to Philip van den Heever, AIPA Executive Director. In the email, First Officer Viljoen stated that he was advised that the decision to transfer him to Brisbane had been reversed by Qantas.
Mr Nguyen deposed:
AIPA contends that there is a serious question to be tried as to whether that allocation and its implementation constitutes a breach of the contract of employment of the Second Applicant, Second Officer Hyde, in particular the clauses thereof entitled “Seniority” and “Location of Employment”. AIPA is also concerned that further allocations of base transfers may occur in breach of that contract of employment. Further, it is easier and more convenient to maintain the current status quo than for Qantas to implement the allocation of the three base transfers to Brisbane and possibly have to reverse them at a later date, with the attendant inconvenience to those transferred pilots. There is a lesser risk of injustice associated with the course of granting the injunction sought than by refusing to grant it.
By a supplementary affidavit, Mr Nguyen deposed that seven other pilots senior to the most junior transferred pilot, First Officer Burkamshaw, had also bid for the Brisbane base transfers.
Respondent’s evidence
Mr Voget, the Manager of Qantas Flight Crew Resourcing, deposed that Qantas lost six B737 First Officers from the Brisbane base between 29 August and 7 October 2011, which resulted in effective overstaffing at Brisbane and an excess of B737 First Officers at Perth, creating an imbalance of hours within terms of the Rostering Manual (which is appended to the Short Haul Agreement) between short haul flight crew member bases.
He deposed that First Officers Burkamshaw, Power and Viljoen, who were all based in Perth, were transferred to address the imbalance. They were all First Officers within Qantas’ short haul operations, while Mr Hyde, who is a Second Officer within the long haul operation flying a B747, is not qualified to perform a First Officer role nor trained to operate B737 aircraft, which would involve him both receiving 13 weeks of full-time training and receiving a promotion. Mr Voget deposed that, most significantly, First Officers are qualified to take off and land aircraft, while a Second Officer is not.
Mr Voget deposed that First Officers Power, Viljoen and Burkamshaw were formally notified of their transfer on 24 November 2011. First Officer Power resided in Sydney but had formerly been based in Perth, which involved longer commuting, and the other First Officers had now made arrangements to relocate from Perth to Brisbane, involving in one case, a spouse resigning from her employment in Perth. The First Officers had borne the expenses of their transfers to Brisbane.
Mr Voget deposed that if interlocutory relief were granted, Qantas would have to find suitably qualified people to replace the three First Officers at the Brisbane base for the roster commencing on 19 December 2011. Each First Officer would need time to reorganise his affairs and family arrangements and could experience disruption and negative reactions, so would not be immediately available for operational duties.
Mr Voget deposed that the roster commencing on 19 December 2011 was published on 9 December 2011 and the advance publication was required under, inter alia, the Short Haul Agreement. It would take time to find replacements for the three First Officers, thus creating significant operational and manning problems for Qantas should they be removed at the outset of the roster period.
Further, if the First Officers were removed from the Brisbane roster, it was likely that Qantas would contravene the provisions of the Short Haul Agreement requiring the balancing of hours, which the transfer of the three First Officers was intended to address.
DISCUSSION
The principles relevant to a grant of interlocutory relief are well established. The Court must determine:
(a)whether the applicants have shown that there is a serious question to be tried; and
(b)whether the balance of convenience favours the grant of an injunction.
In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, Gummow and Hayne JJ stated (at 81 to 82):
The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries, and continued:
The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.
By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the court continued, in a statement of central importance for this appeal:
How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.
(citations omitted)
As the respondent submitted:
6.In respect of serious question to be tried, the Applicant must essentially show that there is a sufficient likelihood of success at the trial of the proceeding: ABC v O'Neill at [65] per Gummow and Hayne JJ, TCFUA v Huyck Wangner Australia Pty Ltd [2008] FCA 1504 at [25] per Jessup J, Williams v AMWU (2009) 178 IR 458 at [25 - 26] per Jessup J, Williams v AMWU (2009) 184 IR 367 at [5] per Jessup J, ABCC v CFMEU (2009) 189 IR 165 at [35 - 37] per Gilmour J. The requisite likelihood of success will fundamentally turn on "the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought": ABC v O'Neill at [71] per Gummow and Hayne JJ, CEPU v Blue Star Pacific Pty Limited (2009) 184 IR 333 at [21] per Greenwood J.
7.The second limb of the test requires the Court to weigh up, amongst other things, whether the inconvenience the Applicant would suffer if an injunction was refused outweighs or is outweighed by the injury which the Respondent would suffer if an injunction were granted: Beecham Group at 623, ABC v O'Neill at [65] per Gummow and Hayne JJ. The practical consequences flowing from the grant or refusal of relief are of critical significance: Samsung Electronics Co v Apple Inc [2011] FCAFC 156 at [49].
8.The two limbs of the test should be considered together rather than in isolation from each other; see for example Cahill v CFMEU (2006) 151 IR 41 per Kenny J. For example, "the balance of convenience may be affected by the Court's perception or evaluation of the strength of the Plaintiff's case": Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 155 per Mason ACJ.
In the present case, it is necessary to distinguish between interlocutory relief in relation to, on the one hand, alleged breach of provisions of the EBAs and, on the other hand, alleged breach of Mr Hyde’s contract of employment, constituted by the failure to award vacancies in the Brisbane base in accordance with seniority, as, on a proper construction, interlocutory relief is not available for the former.
It is apparent from their dates, and was undisputed, that the EBAs were made prior to the introduction of the Fair Work Act 2009 (Cth) (“FW Act”) on 1 July 2009. Under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (“Transitional Act”), the EBAs became “transitional instruments” on 1 July 2009, and in particular, “agreement-based transitional instruments”.
Schedule 16, item 2(2) of the Transitional Act provides:
A person must not contravene a term of an agreement-based transitional instrument that applies to the person.
Note 1: This subitem is a civil remedy provision (see item 16, and Part 4-1 of the FW Act).
Note 2: An injunction may not be granted in relation to a contravention of an agreement-based transitional instrument (see item 17).
Schedule 16 item 16 of the Transitional Act makes clear that the provisions of the FW Act relating to civil remedies (Part 4-1) apply to breaches of transitional instruments. However, Schedule 16 item 17 provides:
The Federal Court and the Federal Magistrates Court may not make an order under Division 2 of Part 4-1 of the FW Act granting an injunction, or an interim injunction, to prevent, stop or remedy the effects of a contravention of:
(a) a transitional instrument;
...
That is, while a person may seek orders such as declarations and pecuniary penalties in relation to breaches of transitional instruments, the Federal Court is precluded from granting an injunction in relation to those breaches. Counsel for the applicants conceded that by reason of Schedule 16 item 17 of the Transitional Act, injunctive relief under s 23 of the Federal Court of Australia Act 1976 (Cth) was also probably precluded.
The claim for interlocutory relief (as opposed to final relief) in the present originating application is therefore necessarily limited to the alleged breach of Mr Hyde’s contract of employment, rather than a breach of the EBAs. It is in relation to that alleged breach of contract that the question whether there is a serious question to be tried and the balance of convenience must be assessed.
Whether serious question to be tried
The applicants contend that there is a serious question to be tried that the present allocations (and apprehended future allocations) of base transfers are in breach of clauses 13.4.1 and 13.4.4 of the Long Haul Agreement (and a substantially identical provision in clause 17.2 of the Short Haul Agreement), and hence of Mr Hyde’s contract of employment, into which the relevant provisions are incorporated.
Qantas contended that cl 13 of the Long Haul Agreement (which applied to Mr Hyde’s employment) was not incorporated into his contract, but if it were, cl 13, on a proper construction, required base transfers to be allocated on the basis of seniority only to sufficiently qualified persons. Mr Hyde, as a Second Officer flying 747s, was not sufficiently qualified for duty as a First Officer on a 737, which, as a different aircraft, would require at least 13 weeks’ full-time training.
There was a difference between, on the one hand, the terminology of cl 13.4.1(a), and, on the other hand, cl 13.4.4 of the Long Haul Agreement, both of which are relevant to the relationship between seniority and entitlement to a base transfer.
Clause 13.4.1(a) states:
Without limiting any other provision of this Employment Contract and provided that in each case the flight crew member is sufficiently qualified to undertake the training or duty required, seniority will determine the order of the selection of flight crew for:
(i)promotion;
(ii)transfer to a base station;
(iii)transfer to, and status on, an aircraft type; and
(iv)demotion or termination if redundancies occur.
(emphasis added)
Clause 13.4.4 states:
All initial and residual vacancies will be awarded in order of seniority to sufficiently qualified flight crew members from the letters of preference held on file or bids for specific vacancies received by the Company by the closing date.
(emphasis added)
The applicants submitted that the reference in cl 13.4.4 dealing with awarding vacancies in order of seniority to sufficiently qualified flight crew members from the letters of preference, should be read as a telescoping of the reference in cl 13.4.1 to being “sufficiently qualified to undertake the training or duty required”, so that Mr Hyde’s lack of sufficient qualification forthwith to undertake duty in the base vacancy did not disentitle him to transfer, if he were sufficiently qualified to undertake the relevant training for it. There was, however, no evidence before the court as to Mr Hyde’s qualifications to undertake training for the duty at the Brisbane base. The applicants invited me to infer Mr Hyde’s sufficient qualification for the training from cl 14.7.4 of the Long Haul Agreement which, in terms, covers the qualifications required for promotional training and/or transfer to another aircraft type, but there was no evidence that Mr Hyde satisfied all the relevant criteria there stated.
The applicants also relied on, by way of submission, the alleged absence of any advice by Qantas to Mr Hyde that he was not sufficiently qualified to undertake the training or duty required for his preference expressed in the letter of preference, as required by cl 13.4.1(b) of the Long Haul Agreement.
There was, however, no evidence that Qantas had failed so to advise Mr Hyde, and, more importantly perhaps, cl 13.4.1(b) refers, in terms, to an application for a vacancy. The relationship of an application for a vacancy to a bid by way of a letter of preference, as made by Mr Hyde, was unclear, as the two concepts are distinct and I was not persuaded that the obligation to advise applied to the latter.
For the above reasons, the applicants’ argument that the failure to award Mr Hyde a Brisbane base transfer on the basis of seniority constituted a breach of cl 13 of the Long Haul Agreement appeared weak, as (assuming in the applicants’ favour that cl 13.4 implicitly refers to sufficient qualification for either training or duty), there was unrebutted evidence that Mr Hyde is currently not sufficiently qualified to undertake the duty of flying 737s, and there was no evidence that he was sufficiently qualified to undertake the relevant training.
Given that conclusion, it is unnecessary to determine the strength of the applicants’ argument that cl 13.4.4 should be read as including a reference to sufficient qualification to undertake training. In my opinion, however, it appeared unpersuasive, as clauses 13.4.1 and 13.4.4 are directed at different topics, and clause 13.4.1 is more general. Clause 13.4.1 is directed at seniority as a determinant of the order of selection of flight crew members for a number of different matters, including promotion, transfer to and status on an aircraft type, and demotion or termination if redundancies occur, as well a transfer to a base station. The alternative of undertaking training may thus not apply to all diverse situations in which seniority will determine the order of selection.
Clause 13.4.4, in contrast, is more specific and limited in scope. It states that vacancies will be awarded to “sufficiently qualified flight crew members”. Thus, cl 13.4.4 addresses only one of the diverse situations noted in cl 13.4.1 in which seniority determines “the order of the selection”. While the relationship of subclauses 13.4.1 and 13.4.4 poses difficulties, it is arguable that the specification in cl 13.4.4 that vacancies will only be awarded to “sufficiently qualified” flight crew members does not include an implicit reference to training.
It is also unnecessary, given the above conclusions, to determine the strength of the applicants’ contention that entitlement to a base transfer based on seniority overrode any requirements or entitlements associated with the rank or status of pilots pursuant to cl 14.3 of the Long Haul Agreement, the category of pilots according to aircraft type (as referred to in cl 14.5), and the provisions governing promotion in cl 14.7.
In the applicants’ submission, the primacy of cl 13.4.4 would entitle a pilot of low rank but great temporal seniority to a base transfer requiring higher rank, with a concomitant entitlement to whatever training was necessary.
That argument appears incompatible with the construction that cl 13.4.4 does not cover flight crew members who are merely sufficiently qualified for training, and appears, moreover, at odds with other provisions of the Long Haul Agreement. For example, clause 14.7.2 states:
Seniority determines selection for promotional training
A flight crew member will be selected for training and promotion beyond the category of Second Officer (on the aircraft type to which the flight crew member was initially allocated) in accordance with this clause 14 and clause 13 (Seniority),
thus indicating that seniority is merely one element in selection for promotional training. Clause 14.7.4 also indicates additional qualifications for promotional training and/or transfer to another aircraft type, and cl 14.7.3 states that after five years of operation in a category, the company will assess a pilot’s operational suitability for promotion, also indicating requirements additional to, or different from, seniority.
As I have concluded that it is not reasonably arguable that, even if cl 13 of the Long Haul Agreement were incorporated into Mr Hyde’s contract, it was, on the evidence before the court, breached in the circumstances of this case, it is unnecessary to consider the strength of the argument that the relevant clause was incorporated. In deference to the submissions of the parties, however, I do so briefly.
Mr Hyde’s contract does not include an express term that base transfers are to be allocated to sufficiently qualified personnel in accordance with seniority which does not discriminate between short haul and long haul pilots (or indeed, any express term relating to relative entitlement to base transfers).
Mr Hyde’s contract of employment contains the following clause (“conditions clause”):
CONDITIONS OF EMPLOYMENT
In addition, the Qantas Airways Limited Flight Crew Long Haul Certified Agreement 2003-2004 (EBA IV), as varied or replaced from time to time (‘Certified Agreement’) and any Letters of Agreement entered into between the parties to the ‘Certified Agreement’, applies to your employment. The provisions of the ‘Certified Agreement’ apply to your employment independently of and do not form part of the terms and conditions fixed by this letter, except where specific reference is made to the ‘Certified Agreement’ in this letter.
(emphasis added)
The applicants rely, in the present context, on the following two “Seniority” and “Location of Employment” clauses of Mr Hyde’s contract of employment:
SENIORITY
Your position on the pilot’s seniority list will be determined in accordance with any agreement reached between Qantas and the Australian and International Pilot’s [sic] Association.
LOCATION OF EMPLOYMENT
Your initial basing will be SYDNEY, although you may be required to work at other locations in accordance with the ‘Certified Agreement’…
The applicants conceded that, while the general exclusion in the conditions clause is clearly stated, the exception is less clearly expressed as “except where specific reference is made to the ‘Certified Agreement’ in this letter”. The applicants also acknowledged that a construction whereby any specific reference to a Certified Agreement anywhere in the letter would invoke the application of all provisions of the Certified Agreement would be unpersuasive, as that would render nugatory the preceding express exclusion if there were any specific reference to the Certified Agreement, no matter how fleeting and no matter of what import, anywhere in the letter.
The applicants nevertheless contended that the court should adopt a relatively broad approach. It should, despite absence of an express reference to the Certified Agreement or the Long Haul Agreement, read the reference in the seniority clause to “any agreement” as sufficient. Further, despite the clearly limited reference in the seniority clause to a pilot’s position on the seniority list, to which a particular part of the Long Haul Agreement obviously related, the applicants contended that the clause should be construed to incorporate all the consequences and applications of seniority thus determined, consistently with the modern approach to construction outlined in Toll (FGCT) Pty Ltd vAlphapharm Pty Ltd (2004) 219 CLR 165 and like authorities, as discussed in Sappideen C, O’Grady P, Riley J and Warburton P, Macken’s Law of Employment (7th ed, Lawbook Co, 2011).
In the applicants’ submission, if the consequential benefits of seniority were not also incorporated into the contract, there would be no point in incorporating the provisions governing the determination of seniority.
In written submissions, Qantas submitted that:
The Applicants say that the clauses titled "Seniority" and "Location of Employment" have the effect of incorporating provisions contained in both the Long Haul and Short Haul Agreements dealing with seniority and base transfers. This submission pays no or insufficient regard to the following:
(a)The only transitional instrument that the letter of appointment refers to is the Long Haul Agreement. No reference is made to the Short Haul Agreement. If any transitional instrument was incorporated into the contract, it would be the Long Haul Agreement and not the Short Haul Agreement. The Long Haul Agreement which itself is said to be binding upon, among others, "long haul flight crew". Similarly, the Short Haul Agreement is said to be binding upon "short haul flight crew" - the Second Applicant is a long haul flight crew member not a short haul flight crew member. He does not have the benefit of the provisions of the Short Haul Agreement.
(b)To the extent that the contract purports to incorporate the terms and conditions of the Long Haul Agreement, it only does so "where specific reference is made to the 'Certified Agreement"' (emphasis added). The provision is clear and unambiguous in providing that a specific reference to the 'Certified Agreement' is necessary for provisions of that Agreement to be incorporated into the contract. Absent such a reference the Long Haul Agreement applies not as part of the contract but independently of it (ie. by statutory force).
(c)The "Seniority" clause pointed to by the Applicants does not contain any specific reference to the 'Certified Agreement'. Rather, it refers to "any agreement reached between Qantas and the Australian and International Pilot's [sic] Association". If the parties had intended that this be a reference to the Long Haul Certified Agreement, then those precise words would have been used - as is the case in various other instances throughout the contract (see, for example, provisions dealing with Annual Leave and Long Service Leave, Sick Leave, and Termination of Employment).
(d)The "Location of Employment" clause provides that the Second Applicant "may be required to work at other locations in accordance with the 'Certified Agreement"' (emphasis added). To the extent that this clause deals with employment being located other than at Sydney, it does so only in respect of the capacity of the Respondent to unilaterally require or direct the Second Applicant to work at those locations. That issue does not arise on the facts of this case.
(emphasis in original)
There was force in the respondent’s argument that because the letter of appointment in other clauses referred very, or more precisely to the Certified Agreement (such as the clauses governing annual leave, long service leave, sick leave, the bond and termination), the much looser reference in the seniority clause to “any agreement” did not amount to a “specific reference” to the Certified Agreement. While the applicants’ position on the adequacy of the specific reference was nevertheless arguable, their contention that it imported not only the provisions governing the determination of seniority but all consequential benefits and applications thereof was, in my view, unpersuasive in the light of the plain and circumscribed meaning of the terminology employed.
It does not follow that the incorporation of the provisions governing the determination of seniority (if achieved) would be futile or pointless unless accompanied by the consequences, as the parties may reasonably have intended the latter to be established by and enforceable as provisions of the Certified Agreement as varied or replaced from time to time. Before me, Qantas relied, with some force in my view, in that context, on Byrne v Australian Airlines Ltd (1995) 185 CLR 410 (“Byrne”), in which the High Court held that award terms would not be implied into the employment contracts in fact or by law. Qantas contended that, although Byrne involved implication of terms of an award, by parity of reasoning, the court should be hesitant to discern an intention or need to incorporate provisions of enterprise bargaining agreements as contractual terms, because, as Brennan CJ, Dawson and Toohey JJ stated at 421:
In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award and, as we have said, the award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer nor the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations.
In my opinion, it was not persuasive that the statement that “Your position on the pilot’s seniority list will be determined in accordance with any agreement reached between Qantas and [the AIPA]” (assuming in the applicants’ favour that this amounted, albeit obliquely, to a specific reference to the Certified Agreement) is sufficient to import more than the provisions governing the determination of position on the seniority list, as distinct from the various effects that may flow from that position.
I was also unpersuaded that the stipulation in the “Location of Employment” clause that the pilot may be required to work in other locations in accordance with the Certified Agreement sufficed to incorporate into the contract of employment the conditions in relation, inter alia, to base transfers based on seniority. The plain purpose of the “Location” clause is to impose obligations on pilots.
For the reasons stated above, I was not persuaded that the applicants established a serious question to be tried.
Whether balance of convenience favours grant of interlocutory relief
Further, while, given my above conclusion, it was unnecessary to determine, I was not persuaded that the balance of convenience favoured a grant of interlocutory relief.
The question whether there is a serious question to be tried and whether the balance of convenience favours the grant of interlocutory relief are not entirely separate and independent, but must be examined together (Bradto Pty Ltd v State of Victoria (2006) 15 VR 65 (“Bradto”) at 68).
In relation to the balance of convenience, whether the injunctive relief sought is mandatory or prohibitory, the court “should take whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial” (Bradto at 73).
In order to obtain injunctive relief, the applicant must demonstrate likelihood of injury or prejudice for which a pecuniary award of damages is not an adequate remedy. The respondent submitted that any injury to Mr Hyde was adequately and appropriately compensable by damages and possibly declaratory relief.
Mr Hyde adduced no evidence of the injury or inconvenience he will suffer by reason of any breach of the contract, save that he wished to transfer to the Brisbane base and was ready and willing to do so, but had been denied the entitlement to do so, in accordance with his seniority.
There was no material providing any further details of the detrimental consequences to Mr Hyde from the present denial of his preference, and the basis on which pecuniary compensation would be inadequate was unclear.
The applicants also asserted that it would be easier and more convenient to maintain the status quo than possibly to have to reverse the three transfers to the Brisbane base in future, should they subsequently be found to be in breach of the contract of employment. While it appeared that one transfer only, at most, would need to be reversed to satisfy Mr Hyde’s entitlement, should it be established, the applicants relied on Mr Nguyen’s evidence that seven other Qantas officers who were senior to the three transferees had indicated a preference for Brisbane.
The applicants acknowledged that the balance of convenience related in the present instance only to Mr Hyde’s contractual claim and conceded that the contracts of the seven additional senior persons were not in evidence, but contended that it was appropriate to take account of the wider consequences of the impugned conduct, particularly given the overlap, as a matter of substance, between the applicants’ distinct claims.
In my opinion, however, even had I found a serious question to be tried, the prejudice to Qantas, should I grant the interlocutory injunction and it were subsequently found that Mr Hyde was not entitled to relief, outweighed the injury that Mr Hyde would suffer if an injunction were refused, but he ultimately succeeded in his claim.
The prejudice to which Mr Hyde deposed amounted to no more than the denial of his alleged entitlement, while Captain Hodson, on behalf of Qantas, deposed to significant problems in operating the Brisbane base for the entire current roster due to a shortage of suitably qualified pilots, significant inconvenience and detriment to the three First Officers who have now been transferred (which in turn would affect Qantas as their employer, due to associated unavailability to work), and Qantas’ non‑compliance with its obligation to balance hours under the Short Haul Agreement.
While the applicants contended that the balancing of hours obligations did not depend on maintenance of the impugned transfers, there was no evidence, as distinct from assertion, to support that submission.
Further, if, as the applicants submitted, the court should independently consider the inconvenience to the three officers who have been transferred (as distinct from its impact on Qantas), in my opinion, given the stage the transfers had reached by the date of the hearing, it did not weigh in the applicants’ favour.
Although the applicants advised Qantas that they would issue proceedings unless Qantas proffered an undertaking by 7 December 2011, they did not do so until 16 December 2011, with a hearing on 19 December 2011. By that time, not only had the allocations for the bid period commencing on 19 December 2011 been made, but the bid period had in fact commenced and the relevant officers and their families had, on the evidence, made arrangements, including a spouse’s resignation from employment, on that basis.
The status quo was thus not an apprehended, but an implemented, allocation, and the relevant officers would not be spared the effects of reversing their transfer, if necessary, were the injunction granted.
While, in the course of the hearing, the applicants characterised the transfers as temporary, there was no, or no persuasive, evidence to that effect. Moreover, if the relevant transfers were merely temporary, as the applicants conceded, it would not assist their case for an injunction.
CONCLUSION
While a number of other issues were raised during the course of argument, it is unnecessary to deal with them. In all the circumstances, in my opinion, the interlocutory relief sought by the originating application dated 16 December 2011 should be refused.
I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton. Associate:
Dated: 20 December 2011
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