Australian and International Pilots Association v Qantas Airways Limited

[2014] FWC 6201

[2014] FWC 6201

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Australian and International Pilots Association
v
Qantas Airways Limited
(C2013/6781)

COMMISSIONER CAMBRIDGE SYDNEY, 9 SEPTEMBER 2014

Dispute settlement procedure - contested interpretations of provisions of workplace determination - provisions included as part of an industrial action related workplace determination - dispute as to method of deduction of personal leave - unusual rostering arrangements which impact upon personal leave deduction provisions - historical arrangements which involved adoption of different methods of personal leave deduction - matter of contested method of personal leave deduction subject of consideration by Full Bench in Decision to make terms of the workplace determination - inappropriate for single member of the Commission to depart from approach articulated by Full Bench - application dismissed.

[1] This matter involves an application made pursuant to section 739 of the Fair Work Act 2009 (the Act), for the Fair Work Commission (the Commission) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 13 November 2013. The application was made by the Australian and International Pilots Association (AIPA) and taken against Qantas Airways Limited (Qantas).

[2] The Commission is empowered to deal with the matter by virtue of a DSP found at Clause 47 of the Qantas Airways Limited Pilots (Long Haul) Workplace Determination 2013 (the Determination). The Determination covers Qantas, AIPA, and all long haul pilots employed by Qantas. The Determination was made by a Full Bench of the Commission on 3 May 2013.

[3] The issue in dispute can be summarised as a claim by AIPA that Qantas is using a method for deducting leave from pilots’ accrued personal leave entitlements during periods of illness, which is contrary to and not permitted by, the terms of the Determination.

[4] The matter was the subject of unsuccessful conciliation and the arbitration of the substantive matter in dispute has involved a Hearing conducted in Sydney on 2 May, 30 June and 3 July 2014. At the Hearing, Mr A Slevin, counsel, appeared for AIPA and he adduced evidence from two witnesses and further, he provided two uncontested witness statements although one of those statements was admitted over the objections made on behalf of Qantas. Mr F Parry, SC appeared for Qantas together with Mr R Dalton, counsel, and evidence for Qantas was provided by two witnesses.

Background

[5] The Determination is one of a number of industrial instruments made by the Commission as a consequence of the Full Bench Decision of 31 October 2011, which at the request of the then Minister for Tertiary Education, Skills, Jobs and Workplace Relations,terminated the protected industrial action which had been taken by various Unions who represented employees of Qantas. Relevantly, the Full Bench Decision to terminate industrial action was made in relation to industrial action taken as part of enterprise bargaining in pursuit of, inter alia, a proposed enterprise agreement to replace the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (EBA 7, as varied) (EBA7v).

[6] During 2012, a further Full Bench of the Commission conducted an extensive Hearing which involved both Qantas and AIPA providing evidence in support of their respective proposals for the terms which should be included in any workplace determination. On 17 January 2013, the Full Bench issued a Decision 1 (the 17 January Decision), which determined the numerous contested aspects of the alternative terms proposed for the workplace determination. Qantas and AIPA were required to provide a draft workplace determination document which reflected the determinations made by the Commission in the 17 January Decision. On 3 May 2013, the Full Bench issued a further Decision2 (the 3 May Decision), which resolved some outstanding issues and settled the final terms of the Determination.

[7] One of the numerous contested issues which were resolved in the 17 January Decision involved the issue described as “Change to method for debiting personal leave”. This issue was also referred to as AIPA28. The Full Bench dealt with the competing approaches to this issue in paragraphs [384] to [398] inclusive of the 17 January Decision. A summary of the relevant deliberations of the Full Bench can be found in paragraph [398].

[8] Importantly, AIPA28 was a claim which, in part, urged the Full Bench to include the following terminology in clause 39.3.9 of the Determination:

“39.3.9 Debiting of personal leave

(a) A pilot will only be deducted for days where he/she is unable to perform a scheduled duty or is not available for a scheduled available day.”

[9] The Full Bench rejected the terminology proposed in AIPA28 and instead decided to retain the terminology contained in EBA7v. Subsequently, this outcome was translated into the terms of clause 39.3.9 of the Determination which reads as follows:

“39.3.9 When sick leave commences and finishes

Sick leave will be deemed to commence on the day on which a pilot is unable to perform a scheduled duty or, if sooner, on his or her next Available Day, and will continue until, but not including, the first full day on which the Company has been notified the pilot is fit for duty. A pilot who, on an Available Day, reports sick before 1700 hours local time, will not be debited sick leave for that day.”

[10] AIPA has made application to the Commission to resolve what is in effect, an ongoing dispute about the method that Qantas has adopted for deducting personal leave from pilots’ personal leave balances during periods of illness. It was common ground that, since about 2003, Qantas has adopted three different methods for deduction of personal leave whilst throughout that time the relevant instrument provisions have not materially changed and are reflected in the current terms of clause 39.3.9 of the Determination.

The AIPA Case

[11] AIPA was represented by Mr Slevin who made verbal submissions in amplification of various written submissions.

[12] The submissions made by Mr Slevin commenced by making reference to three different methods that Qantas had adopted at different times for the debiting of personal leave over the period since 2003. Mr Slevin submitted that for present purposes the first period could be identified as being between 2003 and 2007 during which time Qantas used a method that involved the application of a calculator spreadsheet (the calculator method).

[13] The second period covered from 2007 until 2011 during which time, at the apparent direction of a Captain Wilson, Qantas adopted a very generous approach (the Wilson method) to the deduction of personal leave. The Wilson method involved fewer days of personal leave deduction than had applied during the previous period of the calculator method.

[14] In 2011, Qantas adopted a third method for the debiting of personal leave when it discovered that the generous Wilson method resulted in significant increases in pilots’ personal leave accruals. The method adopted from 2011, and currently observed by Qantas (the current method), is significantly less generous than either the Wilson or calculator methods.

[15] Mr Slevin submitted that what were essentially the same provisions of the relevant industrial instruments had been applied in three different ways and it was appropriate for the Commission to determine the correct interpretation and approach to debiting pilots’ personal leave during periods of illness. Mr Slevin contended that the correct interpretation of the provisions of the Determination involved adoption of the calculator method as had been applied by Qantas during the period between 2003 and 2007.

[16] In support of the adoption of the calculator method, Mr Slevin acknowledged that the Wilson method was quite generous. However, Mr Slevin made submissions which were strongly critical of the current method. In this regard Mr Slevin said that the current method involved the debiting from a pilot’s personal leave balance of each calendar day that a pilot had notified of an illness irrespective of whether the pilot was rostered to work on a particular day or days during the period of the illness. Mr Slevin submitted that the current approach was akin to personal leave being deducted in respect to an absence that covered a weekend. Mr Slevin submitted that no deduction should be made from a pilot's personal leave balance unless that pilot had received some payment for the particular day.

[17] Mr Slevin made further submissions which rejected any suggestion that the Commission did not possess the requisite power to determine the application made by AIPA in this instance. Mr Slevin submitted that the dispute settlement provisions of the Determination did not exclude a determination as sought by AIPA nor was there any impediment created by the issues in dispute having been the subject of certain findings and views expressed by the Full Bench in the 17 January Decision.

[18] Mr Slevin made detailed submissions which referred to the evidence of the various practices adopted by Qantas for the debiting of pilots’ personal leave and he also examined various other provisions of the Determination which involved the unusual and complex arrangements that apply to the way in which the work of pilots is rostered and their remuneration is consequently derived. Mr Slevin said that clause RM33.4 of the Determination was particularly significant. This clause dealt with the basis upon which a pilot who was a pattern line holder (PLH), that is a pilot rostered to work one or more flight patterns during a roster/bid period, obtains leave credit hours in circumstances when that pilot does not actually work the scheduled flight pattern hours. Clause RM33.4 is in the following terms:

“RM33.4 A PLH is entitled to credited hours for each day of personal leave equal to either:

RM33.4.1 where no medical certificate is supplied, the bid period divisor divided by 56[28]; or

RM33.4.2 where a medical certificate is supplied, the bid period divisor divided by 56[28] for days outside the pattern plus the average daily credit of the pattern (calculated by dividing the total value of the pattern by the number of calendar days of the pattern) for each day of a pattern that the pilot is unfit.

In relation to both calculations in RM33.4.1 and RM33.4.2, the credited hours for personal leave will be used to offset pattern protected hours and will not be used to increase a pilot's projected credited hours except that in the case of an assignable time available pilot, the credited hours will be used to increase a pilot's projected credited hours to MGH after having first offset any pattern protected hours.”

[19] It was submitted by Mr Slevin that various provisions of the Determination such as clause RM33.4, when considered in conjunction with the evidence of the calculator and Wilson methods, provided strong support for the proposition that there should be no deduction from a pilot's personal leave entitlement made in respect to a day for which the pilot does not receive payment. Consequently, Mr Slevin submitted that the current method which involved a deduction from personal leave entitlements for each calendar day that a pilot notified of illness was wrong. Mr Slevin said that the current method was not supported by the various provisions of the Determination, nor was it consistent with the history of adoption of the calculator and Wilson methods, and in addition, it offended the notion of paid personal leave because personal leave was deducted in respect of a day or days for which no payment was made.

[20] In summary, Mr Slevin submitted that the correct interpretation that should be given to the various provisions of the Determination which dealt with personal leave entitlements for pilots including clauses 39.3.9 and RM33, is that deduction of personal leave days during any period of notified illness of a pilot should be confined to those days for which the pilot receives payment. Specifically, no deduction from personal leave entitlements should be made for any day during the period of the illness for which the pilot does not receive payment.

[21] Consequently, Mr Slevin submitted that the correct method for debiting the personal leave entitlement of pilots was that which was referred to as the calculator method. Mr Slevin urged the Commission to determine the dispute by making a series of Orders which would oblige Qantas to adopt a method of deduction of personal leave which confined deduction to only those days within a personal leave period for which the pilot received a credit which translated into payment.

The Qantas Case

[22] Mr Parry, who appeared for Qantas, made verbal submissions which elaborated upon a written outline and final materials. The submissions made on behalf of Qantas firstly identified that the dispute involved competing interpretations of relevant provisions of the Determination which dealt with personal leave entitlements for pilots. The particular provisions under examination were clauses 39 and RM 33.4. Further, the submissions made by Qantas acknowledged that there had been various changed practices arising from the application of the relevant provisions of the Determination and consequently there was no settled interpretation of these provisions.

[23] Mr Parry made submissions which urged the Commission to have regard for the approach that might be properly adopted when interpreting the particular provisions of the Determination as opposed to the interpretation of terms contained in an enterprise agreement. In this regard it was suggested that the Determination should be considered and characterised as being more similar to a traditional Award rather than an enterprise agreement.

[24] The submissions made by Mr Parry also stressed that the contested interpretation of the particular provisions of the Determination that were the subject of this application were matters considered and determined by the Full Bench when it made the Determination. Mr Parry referred to particular paragraphs contained in the 17 January Decision and he submitted that essentially the same arguments that were advanced before the Full Bench were being re-agitated in the current proceedings.

[25] Mr Parry submitted that AIPA had asked the Full Bench to alter the terms of clause 39.3.9 to provide that personal leave debits would not occur unless a pattern line holder (PLH) received a corresponding credit. According to the submissions of Mr Parry, if the Full Bench had wanted to achieve this result they could have easily done so by altering the words in clause 39.3.9. Mr Parry further submitted that the Full Bench clearly rejected AIPA’s proposition to alter the terms of clause 39.3.9 and the relevant paragraphs of the 17 January Decision made this clear.

[26] According to the submissions made by Mr Parry, the Full Bench Decision involved a significant workplace arbitration proceeding which had resolved, inter alia, the particular contest regarding the correct method for the deduction of personal leave for pilots. Mr Parry said that the present proceedings were in effect, an attempt to vary a workplace determination which had been made by the Full Bench. Mr Parry submitted that neither the Act nor the Determination itself permitted the outcome sought by AIPA which was in effect, a variation to a workplace determination.

[27] Mr Parry made further submissions regarding the historical variations to the method that Qantas had applied in respect to debiting of personal leave. Mr Parry acknowledged that errors were made at different times during the period since approximately 2003. In particular, a significant and costly error occurred during the period that the Wilson method had been applied, circa 2007 to 2011. Mr Parry submitted that after Qantas had discovered and assessed the error made by application of the Wilson method, it had carefully considered various options and, in 2011, it decided to adopt the current method without any attempt to recover or reconcile any of the significantly more beneficial personal leave entitlements which had erroneously been provided to pilots during the period that the Wilson method had been applied.

[28] It was further submitted by Mr Parry that the correct approach to the interpretation and operation of clauses 39.3.9 and RM33.4 of the Determination, was reflected by the current method whereby Qantas has debited a day of personal leave for each calendar day of an absence. Mr Parry stressed that the wording of clause 39.3.9 of the Determination was the only provision which dealt with the debiting of personal leave and upon a plain reading it established that sick leave was deemed to commence and finish within the parameters stated therein. Mr Parry said that the wording of clause 39.3.9 could not be interpreted in the manner sought by AIPA.

[29] Mr Parry made further submissions about what he contended would be the consequences if the Commission was to interpret the provisions of the Determination as sought by AIPA. Mr Parry submitted that there were obvious and significant cost implications potentially amounting to millions of dollars. Further, Mr Parry submitted that a strange and unjust outcome would emerge when one examined the different personal leave treatment as between blank line holders (BLH) and pattern line holders (PLH). Mr Parry submitted that the uneven treatment between BLH and PLH pilots would represent an undesirable, even if unintended, outcome.

[30] In summary, Mr Parry submitted that the Commission should reject the application made by AIPA. It was submitted on behalf of Qantas that the interpretation of clauses 39.3.9 and RM33.4 of the Determination as was contended by AIPA, ran counter to the basis of the arbitrated settlement of a significant bargaining dispute which had been determined by a Full Bench. Further, it was submitted that it was not open to a single member of the Commission to provide an outcome contrary to that provided by the Full Bench in the 17 January Decision. In addition, it was submitted that the correct interpretation to be given to the contested provisions of the Determination would support and endorse the current method applied by Qantas for debiting personal leave.

Consideration

[31] This dispute is about the interpretation and application which should be given to particular terms which appear in a workplace determination (the Determination). The Determination was made as part of the basis for an arbitrated settlement of a significant bargaining dispute. The application made by AIPA in this instance has traversed an issue which was the subject of argument before a Full Bench of this Commission and which was part of the consideration and determinations encompassed in the 17 January Decision. Consequently, there has been an underlying caution attached to proceedings before a single member of the Commission which, in some significant way, revisits subject matter that was determined by a Full Bench.

[32] AIPA has advanced an argument that the subject matter which had been before the Full Bench could be distinguished from the dispute that it now sought to agitate regarding the interpretation of particular terms contained in the Determination. Further, AIPA contended that a more extensive evidentiary case had been developed in these proceedings such that it would enable the determination of the dispute to be made with the benefit of a more comprehensive and fully argued position when compared with that which had been presented to the Full Bench.

[33] The particular terms of the Determination which are the subject of this dispute involve the question of the method of debiting of pilots’ personal leave entitlements during periods of illness. The principal provision of the Determination which deals with debiting of personal leave is clause 39.3.9. The words that are contained within clause 33.3.9 were adopted by the Full Bench after it had considered and rejected alternative terms which had been proposed by AIPA. The alternative terms of clause 33.3.9 as proposed to the Full Bench by AIPA 3 would have, if they had been adopted, established terms in the Determination which would have provided an outcome essentially the same as that which has been sought in these proceedings.

[34] The well established approach to the interpretation of provisions contained in industrial instruments would need to involve a contextual and purposive cognisance broadly based upon the authority established by numerous Decisions as has been identified and summarised in a Decision of a Full Bench of Fair Work Australia in,Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd  4(Silcar). Somewhat unusually in this case the contextual and purposive analysis must focus upon the decision-making of the Full Bench rather than the actions, intentions and apparent purposes which would ordinarily be attributed to those who drafted and agreed upon terms contained in an enterprise agreement or other similar industrial instrument.

[35] An examination of that part of the 17 January Decision which dealt with AIPA28, (paragraphs 384 to398 inclusive) reveals that the Full Bench identified the following salient facts:

• Qantas unilaterally changed to the current method of personal leave debiting in 2011.
• the current method of personal leave debiting involved the debiting of each calendar day of absence including days when a pilot was not rostered to work.
• Qantas had used several different methods of deduction of personal leave in recent times without there being any material change to the relevant terms of the industrial instrument.
• Qantas opposed any change to the current method of personal leave debiting which had been implemented following the discovery of what it considered to be erroneous previous methods.
• Qantas did not seek to recover the increased leave benefits generated by the more beneficial but allegedly erroneous previously adopted methods.
• the genesis of the allegedly erroneous methods of personal leave debiting are connected to the crediting of leave for pattern protection purposes.

[36] The Full Bench evaluated the competing arguments of AIPA and Qantas and relevantly concluded “... we are not persuaded to give effect to AIPA28. We think that the issues raised by AIPA are best addressed in future negotiations between the parties who have a full understanding of the past agreed arrangements and the relationship to pattern protection.” 5

[37] During the proceedings in this matter there has been some detailed evidentiary expansion of the complexities and history surrounding the issue of debiting of personal leave for pilots. In particular, the detailed examination of the calculator spreadsheet has provided insight into the underlying rationale which established a method for debiting personal leave for a PLH which, because of the leave crediting for pattern protection, recognised that in particular circumstances days outside of the pattern would not generate a leave credit and consequently were considered as days that should not attract a personal leave debit. Although the logic and detail of what has been considered by Qantas to be erroneous methods of personal leave debiting may, as a result of these proceedings, be more thoroughly appreciated a number of important concerns have not been displaced.

[38] Firstly, the previous methods, both the calculator method and the Wilson method, introduced an inequity in the treatment of personal leave debiting as between PLHs and BLHs. Secondly, on its face the provisions of clause 39.3.9 are reasonably plain and certainly not capable of an interpretation that would, in effect, provide for what was advanced by the alternative wording in AIPA28. Thirdly, the Wilson method was acknowledged as being generous and, in these proceedings, AIPA did not seek the adoption of the Wilson method but instead sought a return to the earlier calculator method. Consequently, if the APIA position was endorsed by the Commission, Qantas would be entitled to, at very least, recover any “over entitlements” provided during the period of operation of the Wilson method.

[39] Balanced against these concerns it must be acknowledged that AIPA and its members would be understandably aggrieved by the changes to the method of personal leave debiting that have been implemented by Qantas management since 2003. There appears to have been repeated and inadequate consultation from Qantas in respect to the various changed methods particularly in regard to the change to the current method in 2011.

[40] Further, mention should also be made of the significant cost implications that would follow from any return to the calculator method, and such cost implications must be assessed having regard to the generous minimum personal leave entitlements which are provided to pilots under the Determination. These minimum personal leave entitlements are significantly more beneficial than those prescribed under the National Employment Standards.

[41] Finally and perhaps most importantly, the various factors which have emerged during the proceedings in this matter have been assessed in the context of a contest which arises in respect of the interpretation of provisions in a workplace determination which were adopted by arbitrated determination of a Full Bench of this Commission. In that context, any reasonable and objective assessment would have to recognise that unless there were compelling reasons arising from new evidence or changed circumstances identified after the Full Bench made the 17 January Decision, it would be inappropriate, indeed wrong, for a single member of the Commission to depart from the position articulated by the Full Bench.

Conclusion

[42] The resolution of this dispute has required the Commission to settle a contest about the interpretation and application which should be given to particular terms which appear in a workplace determination. In short summary, the particular terms of the Determination which are the subject of contest involve the question of whether the current method of debiting personal leave which has been adopted by Qantas since 2011, is correct and permissible.

[43] The words contained within the relevant provisions of the Determination and which are found at clause 39.3.9., were included as part of an arbitrated determination made by a Full Bench of the Commission. Notwithstanding the expanded evidentiary position adduced during proceedings in this matter there has been no compelling case made out to provide basis to depart from the position as articulated by the Full Bench in the 17 January Decision. There is no basis upon which to interpret the terminology contained within clause 39.3.9 when read in conjunction with other provisions of the Determination, in any manner contrary to that reflected by the current method of debiting personal leave as adopted by Qantas.

[44] The nominal expiry date of the Determination is 31 December 2014. It is understood that negotiations for a new enterprise agreement to replace the Determination have commenced. In view of the unfortunate history involving Qantas management adopting various different methods for debiting personal leave, and as was mentioned by the Full Bench in the 17 January Decision, the Parties should logically address the issue of debiting personal leave as part of the enterprise bargaining negotiations. Further, as part of the current enterprise bargaining negotiations, the Parties are urged to contemplate the mutual benefits that may be derived from establishing a far less complicated and less prescriptive set of arrangements which govern remuneration and leave entitlements for pilots.

[45] The application is dismissed and the proceedings are accordingly concluded.

COMMISSIONER

Appearances:

Mr A Slevin, counsel, appeared on behalf of AIPA;

Mr F Parry, senior counsel with Mr R Dalton, counsel, appeared on behalf of Qantas.

Hearing details:

2014.

Sydney:

March 21, May 2, July 1.

Brisbane:

June, 30.

 1   [2013] FWCFB 317.

 2   [2013] FWCFB 1706.

 3   [2013] FWCFB 317 @ [386].

 4   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd [2011] FWAFB 2555.

 5   [2013] FWCFB 317 @ [398].

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