Australian Federation of Air Pilots v Alliance Airlines Pty Ltd T/A Alliance Airlines

[2017] FWC 6748

[2017] FWC 6748

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

Australian Federation of Air Pilots
v
Alliance Airlines Pty Ltd T/A Alliance Airlines
(B2017/1178)

DEPUTY PRESIDENT MILLHOUSE MELBOURNE, 15 DECEMBER 2017

Proposed protected action ballot of employees of Alliance Airlines Pty Ltd – minimum period of notice – exceptional circumstances.

[1] On Friday 8 December 2017, the Australian Federation of Air Pilots (AFAP) filed an application for a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2009 (Act). The application concerned a proposed ballot of certain employees of Alliance Airlines Pty Ltd (Alliance).

[2] The employees in question are those employed as pilots who are members of the AFAP and who would be subject to a proposed enterprise agreement at the company’s bases in Brisbane, Townsville and Cairns. Their employment is presently covered by the Alliance Airlines Pilots Enterprise Agreement (North Queensland) 2010 and the Alliance Airlines Pilots Brisbane Enterprise Agreement 2010 (Agreements).

[3] Alliance advised the Commission that it did not oppose the application but sought an order pursuant to s.443(5) of the Act that the period of written notice referred to in s.414(2)(a) be extended to seven working days.

[4] Section 441 of the Act provides that the Commission must, as far as practicable, determine an application for a PABO within two working days after the application is made. The matter was the subject of a Mention on 11 December 2017. On 12 December 2017, Alliance filed and served material in support of its position that the period of written notice be extended. The AFAP submitted that no extension should be granted.

[5] The matter was the subject of a hearing on 13 December 2017. Mr Lauchland and Mr Stephens appeared for the AFAP. Mr Mackie of counsel appeared for Alliance, with permission.

Statutory framework

[6] Section 437 of the Act enables a bargaining representative to apply for a PABO. Subject to the restrictions in s.437(2A) and s.438(1) (which are not presently in issue), the Commission must make an order in relation to employees who will be covered by a proposed agreement in the circumstances set out in s.443. Section 443 relevantly provides:

“443 When the FWC must make a protected action ballot order

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3) A protected action ballot order must specify the following:

(a) the name of each applicant for the order;

(b) the group or groups of employees who are to be balloted;

(c) the date by which voting in the protected action ballot closes;

(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.

(4)  If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:

(a)  the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and

(b)  the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.”

[7] It is not in dispute, 1 and I am satisfied on the basis of the evidence and other material before me that:

(a) The AFAP is eligible to bring the application and has done so under s.437 of the Act. 2
(b) The application specifies the group of employees to be balloted and the questions to be put to the employees. 3
(c) A copy of the application was given to Alliance and Elections Australia Pty Ltd within 24 hours of the making of the application. 4
(d) The nominal expiry date of the applicable agreements has passed. 5
(e) The AFAP has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted. 6

Extension of the three day period

[8] Section 443(5) provides that, if the Commission is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying a longer period of written notice, the ballot order may specify a period of up to seven working days.

[9] The approach to exceptional circumstances in this context was discussed by Vice President Lawler in CEPU v Australian Postal Corporation, 7 (CEPU v Australia Post) which concerned an equivalent provision of the Workplace Relations Act 1996:8

“[10] In this passage his Honour was concerned with the ordinary meaning of the expression “exceptional circumstances” and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances “justifying” the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441.”

[10] The Vice President went on to state:

“[21] Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notices [sic] period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminution in the effectiveness of the employees’ bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension.

[22] The first example provided in Davids Distribution provides an illustration of where exceptional circumstances may justify an extension of the required notice period. A sophisticated piece of plant, such as a smelter, may take many days to shut down without damage. The employer is exposed to wholly disproportionate damage if it is prevented by too limited a notice period from undertaking an orderly shutdown of the plant. A further example may be afforded by a strike by teachers where the school needs to be able to notify parents of the strike so as to give them an opportunity to make alternative arrangements for the care of their children on the days of the strike. Typically, three working days will be insufficient for this purpose.”

[11] In order to warrant an extended period of notice, the Commission must be satisfied both as to the existence of exceptional circumstances and the fact that these justify the granting of the extended notice.

[12] As made clear in CEPU v Australia Post, this also requires a weighing up of the opportunity for Alliance to take appropriate defensive action against the diminution of the effectiveness of the AFAP members’ bargaining power that is contemplated by the scheme of the Act. In that light, it would not be a relevant exercise of discretion to grant additional notice simply to allow the employer to neutralise the impact of the industrial action.

[13] Where the interests beyond that of the immediate parties may be significantly impacted by the taking of industrial action, the tendency is for an extension of the notice period to be provided. 9

[14] Alliance contends that exceptional circumstances exist in the present case justifying the grant of seven working days’ notice in respect of all proposed questions. It led evidence from Lee Schofield, Chief Executive Officer of Alliance. 10 It said that the extended notice is to “allow travellers to make alternative arrangements.”11 The AFAP opposed the extension. It did not lead any evidence but cross examined Mr Schofield at the hearing.

Alliance’s flying operations

[15] Much of the focus during the hearing was on whether there are alternative airline operators or other services that the travelling public and/or Alliance’s customers could utilise in the event of an impact to Alliance’s flight services. Mr Schofield conceded, and I accept, that there are nine alternative operators that work in the same industry as Alliance, which are capable of providing alternative transport options in and out of certain remote ports, albeit that in some cases there may be some impact upon a customer as a consequence of, for instance, them being unable to secure a direct flight or being delayed as a consequence of capacity loads.

[16] Mr Schofield said that Alliance operates four kinds of flying operations:

1. Fly in/fly out (FIFO) mine charters

[17] Alliance transports approximately 4,000 customers each week to and from remote Queensland FIFO ports. Mr Schofield said that if Alliance was required to cancel services and the mine operators were to arrange alternative transport, it would take longer than three working days to organise, “given that consideration would have to be given to the relevant regulatory approvals, conduct of necessary audits, training of staff to handle aircraft receipt and dispatch and compliance with mandatory safety standards.” 12 There was no evidence before me in respect of these matters, including the extent to which such approvals and training needed to occur, how quickly those steps might be taken, or the impediments (if any) that might stand in the way of those steps being taken within three working days. Mr Schofield said that he hadn’t made enquiries with any of the alternative airline operators about their capacity, or had discussions with any mine operators since receiving the protected action ballot application.

2. Regular public transport (RPT) flying in regional Queensland and New South Wales

[18] Mr Schofield said approximately 3,000 customers per week fly with Alliance from Queensland into Bundaberg, Gladstone and Port Macquarie. 13 He said that if flights are grounded or severely impacted, seven working days’ notice would give customers a chance to make alternative arrangements while three working days would not.14He said that driving to these regional communities is not always an option and with extra notice, people “will just not take their trip at all and therefore not risk being stranded at the other end.”15

3. RPT flying on behalf of Virgin (and others) to regional Queensland

[19] Mr Schofield said that Alliance operates into Emerald, Rockhampton, Cloncurry and Mt Isa on behalf of Virgin, and between Brisbane and Mt Isa for Qantas. In the event of flight cancellations, he said that Virgin and Qantas would need to use their own aircraft and this would not always be possible and may drive flight cancellations.

4. Ad hoc charter flying for third parties

[20] Mr Schofield said that Alliance will “just have to refuse any request for charter flying” but an issue of concern would arise if such refusal arose during a natural disaster or where Alliance is requested to assist with recovery flights. 16 This concern was not developed further during the hearing.

Are there exceptional circumstances justifying an extension of the required notice period?

[21] Alliance sought that the PABO specifies seven working days’ notice in respect of each proposed form of industrial action. In the alternative, it sought seven working days’ notice for those forms of industrial action that it contends may result in a cancellation of a flight, being questions 1, 2, 4, 5, 10 and 11.

[22] In respect of questions 3, 7, 8 and 9, Mr Schofield said that these bans would give rise to financial consequences for Alliance 17 and, in the case of questions 6, 8 and 10, potential delays.18 It is obvious that financial consequences do not give rise to exceptional circumstances and delays are, unfortunately, an incident of flight travel. I am not satisfied that that there are exceptional circumstances justifying the period of written notice referred to in s.414(2)(a) being longer than three working days in respect of these proposed forms of industrial action.

[23] I consider the balance of the proposed questions below.

Question 1 – An unlimited number of indefinite or periodic bans on the performance of any duty prior to the designated sign on time, or after the designated sign off time (for clarification, this includes a ban performing duty extensions)

[24] Mr Schofield said that the non-performance of work before a designated duty period would have “minimal, if any impact” upon operations, but the non-performance of duties after the sign off time may mean that “the return flights are potentially cancelled.” 19 He said that if bad weather caused flight delays, an extension of duty by the pilot may be required in order for the last flight on that schedule to operate (but conceded that there is a degree of self interest in the pilot getting home from a remote location).20

[25] This evidence does not satisfy me that there are exceptional circumstances justifying an extension to the period of written notice. The evidence was general in nature, that this ban has the potential to lead to the cancellation of a return flight, if combined with other events such as delays and a pilot’s decision not to operate the aircraft as a means to return home from a remote location. There was no evidence before me as to why three working days’ notice would not be sufficient for Alliance to effectively mitigate its concerns in these particular circumstances. Further, there was no clear evidence why an extension of the notice period to seven working days would be necessary to minimise the impact on the travelling public in these circumstances.

[26] I am not satisfied, on the evidence, that the situation created by this proposed action is an exceptional circumstance or even if it was, that a longer notice period is justified.

Question 2 – An unlimited number of indefinite or periodic bans on departing an aircraft from a maintenance base with any deferred defect(s) including Minimum Equipment Lists (MELs)/Configuration Deviation Lists (CDLs)

[27] Mr Schofield said that most, if not all, aircraft in the fleet would be operating with a deferred defect, which does not affect its capacity to operate safely. 21 However, he had not checked how many aircraft might currently be so affected. He said that this ban would prevent aircraft with deferred defects from operating at all and would “potentially ground the entire fleet.”22

[28] The AFAP said that this ban is limited to departing aircraft from the maintenance bases in Brisbane, Cairns and Townsville only, but Mr Schofield said that all of Alliance’s Queensland flights depart from these ports. 23

[29] The AFAP said that it would be open to Alliance to relocate an aircraft with a deferred defect to a particular outport prior to the ban commencing as a mitigation strategy, but Mr Schofield rejected this option. He said that Alliance’s flight schedules mean that its aircraft are close to fully utilised and the strategy proposed would exacerbate the impact because the aircraft could not be used in the time leading up to the industrial action.

[30] Under cross examination, Mr Schofield conceded that some deferred defects could be repaired within three working days’ notice, but he said that the availability of certain parts (for instance, a tap in a toilet) might have a lead time of a number of months. 24

[31] Mr Schofield said that this ban would lead to the cancellation of many Alliance flights departing from Brisbane, Cairns and Townsville, 25 given the number of aircraft in the fleet that operate with a deferred defect. I am satisfied on the evidence before me that the extensive cancellation of flights departing from Brisbane, Cairns and Townsville creates an exceptional circumstance given the wide reaching impact such cancellations will have on the travelling public. These circumstances extend beyond the immediate interests of the employer and the employees concerned.

[32] I am also satisfied that, given the impact such cancellations may have across the flight schedule in the new year period, that these exceptional circumstances justify a longer period of notice, which is directed towards ensuring that the travelling public are adequately warned about the effect on services and given an opportunity to find alternative travel solutions.

[33] I am persuaded that three working days is an inadequate period of time for this to occur. However, I am unconvinced that seven working days’ notice is necessary for this purpose. This requires a balancing of the needs of the travelling public against any diminution of the effect of the industrial action. Irrespective of the additional notice, Alliance said that it will be unable to restore a grounded flight and accordingly, the protected action still comes at cost and great inconvenience to the business. Having regard to that balancing exercise, I consider that five working days’ notice should be provided.

Question 4 – An unlimited number of indefinite or periodic bans on accepting any duty change

[34] Mr Schofield said that a duty change is usually the result of flight schedule changes driven by a customer. 26 He said that if the pilot group were not willing to accept a duty change, this would have the potential to result in the cancellation of flights.27

[35] This evidence does not satisfy me that there are exceptional circumstances justifying an extension to the period of written notice. The evidence was in general terms and only that this ban has the potential to lead to flight cancellations. There was no evidence before me as to why three working days’ notice would not be sufficient for Alliance to effectively mitigate its concerns in these particular circumstances. Further, there was no clear evidence why an extension of the notice period to seven working days would be necessary to minimise the impact on the travelling public in these circumstances.

[36] I am not satisfied, on the evidence, that the situation created by this proposed action is an exceptional circumstance or even if it was, that a longer notice period is justified.

Question 5 – An unlimited number of indefinite or periodic bans on completing the following company reports: delay codes, flex take off EPR, in-flight trend monitoring, and AQD’s, where such reports do not relate to safety

[37] Mr Schofield said that bans on completing reports concerning delay codes and flex take off EPR would result in inconvenience or cost to Alliance but would not result in the delay or cancellation of flights. However, he said that reporting bans on in-flight trend monitoring and AQD’s gives rise to a safety concern, which impacts upon Alliance’s capacity to determine whether a flight should be cancelled. He said that this could affect Alliance’s ability to ensure regulatory compliance and “this could result in the grounding of all aircraft involved in the Queensland operations.” 28

[38] The AFAP said that the potential effect of this ban is exaggerated because the question clearly proposes an exception, “where such reports do not relate to safety.” The AFAP said that Alliance has provided no explanation as to how a failure to complete non-safety sensitive paperwork could result in the grounding of all aircraft. The AFAP also said that Alliance could utilise pilots from its Perth base as a mitigation step, but Mr Schofield rejected this on the basis that Perth pilots are already at full capacity and cannot be redeployed. 29

[39] There is no evidence before me about what adjustments Alliance could or would make to address its concerns in respect of this ban, and why those adjustments could not be made in three working days. The evidence was in general terms and only that this ban may lead to regulatory compliance issues and ultimately result in the grounding of Alliance’s Queensland fleet. There was no evidence that satisfied me that without the additional notice, Alliance would be unable to make alternative arrangements essential for ensuring the safety of the aircraft. Further, there was no clear evidence why an extension of the notice period to seven working days would be necessary to minimise the impact on the travelling public in these circumstances.

[40] I am not satisfied, on the evidence, that the situation created by this proposed action is an exceptional circumstance or even if it was, that a longer notice period is justified.

Question 11 – An unlimited number of 2 hour stoppages of work

[41] Question 11 involves an unlimited number of two hour stoppages of work. Mr Schofield gave evidence that this would lead to flight cancellations. 30 This would arise from flights impacted during the two hour stoppage and the subsequent impact on the flight schedule.

[42] I am satisfied on the evidence before me that an unlimited number of two hour stoppages of work does give rise to exceptional circumstances, given the particular nature of Alliance’s operations to and from remote communities. I have also taken into account Mr Schofield’s concern associated with a stoppage that is combined with other bans. These circumstances extend beyond the immediate interests of the employer and the employees concerned and extend to the interests of third parties, being the public who may be reliant on Alliance for transportation, including over the new year.

[43] I am satisfied that these exceptional circumstances justify a longer period of notice, which is directed towards ensuring that the travelling public are adequately warned about the effect on services and given an opportunity to find alternative travel solutions.

[44] I am persuaded that three working days is an inadequate period of time for this to occur. However, I am unconvinced that seven working days’ notice is necessary for this purpose. This requires a balancing of the needs of the travelling public against any diminution of the effect of the industrial action. Irrespective of the additional notice, Alliance said that it will be equally unable to restore a grounded flight and accordingly, the protected action still comes at cost and great inconvenience to the business. Having regard to that balancing exercise, I consider that five working days’ notice should be provided.

Conclusion

[45] I am satisfied that the AFAP, the applicant for the PABO, has been, and is, genuinely trying to reach agreement with Alliance.

[46] I am satisfied that the restrictions on the making of an application under ss.437(2A) and 438(1) are not applicable and that the other statutory criteria for the granting of a PABO have been met, noting that this was not in contest.

[47] I am also satisfied that exceptional circumstances exist, justifying the extension of the notice period in respect of the industrial action proposed in questions 2 and 11 to five working days. The standard three working day notice period will apply to all other proposed forms of industrial action.

[48] Pursuant to s.443(1) of the Act, a protected action ballot order is issued in PR598757.

DEPUTY PRESIDENT

Appearances:

J Lauchland, J Mattner and D Stephens for the Australian Federation of Air Pilots

S Mackie of Counsel with J Hignett for Alliance Airlines Pty Ltd

Hearing details:

2017.

Melbourne

December 13.

 1   Transcript at [13]-[15].

 2   Section 437(1) and s.443(1)(a) of the Act.

 3   Section 437(3) of the Act.

 4   Section 440 of the Act.

 5   Section 438(1) of the Act.

 6   Section 443(1)(b) of the Act.

 7   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2007] AIRC 848.

 8   Section 463(5).

 9   Transport Workers’ Union of Australia[2012] FWA 133; Transport Workers’ Union of Australia v the Chief Executive of the ACT Internal Omnibus Network (ACTION) on behalf of the Australian Capital Territory; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v the Chief Executive of the ACT Internal Omnibus Network (ACION) on behalf of the Australian Capital Territory[2010] FWA 3355.

 10   Exhibit R1.

 11   Transcript at [26] and [466].

 12 Exhibit R1 at [18].

 13   Exhibit R1 at [23]-[24].

 14 Exhibit R1 at [28].

 15 Transcript at [61].

 16   Exhibit R1 at [33]-[35].

 17   Exhibit R1 at [38(c)], [38(g)], [38(h)], [38(i)].

 18   Exhibit R1 at [38(f)], Transcript at [105], [239] and [243].

 19 Transcript at [74].

 20 Transcript at [205].

 21 Transcript at [79].

 22 Transcript at [88].

 23 Transcript at [161].

 24 Transcript at [78].

 25   Exhibit R1 at [38(b)].

 26 Exhibit R1 at [38(d)], Transcript at [95].

 27   Exhibit R1 at [38(d)].

 28   Exhibit R1 at [38(e)].

 29   Transcript at [165] and [376].

 30 Transcript at [122].

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