Australian Federation of Air Pilots v Lloyd Helicopters Pty Ltd
[1998] FCA 1384
•30 OCTOBER 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1158 of 1997
BETWEEN:
AUSTRALIAN FEDERATION OF AIR PILOTS
ApplicantAND:
LLOYD HELICOPTERS PTY LTD
(ACN 007 916 912)
RespondentJUDGE:
RYAN J
DATE OF ORDER:
30 OCTOBER 1998
WHERE MADE:
MELBOURNE
MINUTES OF ORDER
THE COURT ORDERS:
That the application be listed on a date to be fixed for further hearing in the light of the reasons published this day.
Note:Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1158 of 1997
BETWEEN:
AUSTRALIAN FEDERATION OF AIR PILOTS
ApplicantAND:
LLOYD HELICOPTERS PTY LTD
(ACN 007 916 912)
Respondent
JUDGE:
RYAN J
DATE:
30 OCTOBER 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
This is an application by the Australian Federation of Air Pilots (“the Federation”) for the imposition of penalties and the recovery of amounts payable as a result of alleged breaches by the respondent of the Helicopter Pilots (General Aviation) Award 1987 (“the Award”). Clause 49 of the Award in its original form stipulated:
(a) The following shall be minimum annual salaries for helicopter pilots engaged in offshore hydrocarbon and gas operations.
Years of Single engine All other
service command operationsUTBNI 9000lbs
1 25801 29315
2 26692 30206
3 27584 31102
4 28477 31993
5 29370 32884
6 30261 33778
7 31152 34670
8 32044 35562
9 32937 36455
10 33829 37347
11 34721 38239
12 35613 39132
13 36505 40024
14 37397 40915
15 38289 41808
That clause was renumbered 50 in June 1995 after which it provided:
(a) The following shall be minimum annual salaries for helicopter pilots engaged in offshore hydrocarbon and gas operations, Marine Pilot Transfer, Search and Rescue (as defined), effective from 1 February 1995.
Years Previous Safety New
of Base Net Total
Service Salary Adjustment Base
Salary
$ PA $ PA $ PA
1 2
Single Engine Command UTBNI 9000 lbs
1 34,274 416 416 36,000
2 35,288 416 416 37,000
3 36,302 416 416 38,000
4 37,316 416 416 39,000
5 38,330 416 416 40,000
6 39,344 416 416 41,000
7 40,358 416 416 42,000
8 41,371 416 416 43,000
9 42,385 416 416 44,000
10 43,400 416 416 45,000
11 44,414 416 416 46,000
12 45,428 416 416 47,000
13 46,442 416 416 48,000
14 47,456 416 416 49,000
15 48,470 416 416 50,000
Years Previous Safety New
of Base Net Total
Service Salary Adjustment Base
Salary
$ PA $ PA $ PA
1 2
All Other Operations Command
1 38,905 416 416 41,000
2 39,918 416 416 42,000
3 40,934 416 416 43,000
4 41,948 416 416 44,000
5 42,962 416 416 45,000
6 43,976 416 416 46,000
7 44,990 416 416 47,000
8 46,004 416 416 48,000
9 47,019 416 416 49,000
10 48,032 416 416 50,000
11 49,047 416 416 51,000
12 50,060 416 416 52,000
13 51,075 416 416 53,000
14 52,088 416 416 54,000
15 53,103 416 416 55,000
Clause 50 of the Award, similarly renumbered 51, provided, after the rates were amended, for “additions to salary” in these terms:
(a) A pilot who is required to hold a senior commercial pilot’s licence shall be paid $2786 ($2860 ppc 01Jun92) per annum in addition to the salary prescribed in clause 49.
Instrument flying rating
(b) A pilot who is required to hold an instrument flying rating shall be paid the following additional amounts:
Instrument flying rating Instrument flying rating
per annum per annum$ $
Command 3379 3468 (ppc 01Jun92)
Co-pilot 2197 2255 (ppc 01Jun92)
4th class 845 867 (ppc 01Jun92)Supervisory pilots
(c)
Per cent
Pilots in charge supervising: up to 3 pilots 5
More than 3 pilots 8
Check and training pilot 8
Check and training plus IFR 10
Chief pilot 10
Check and training who is also B designated chief pilot 12
The above percentages are to be applied to year 8 in the appropriate salary scale, inclusive of SCPL/IFR payments.
Special duties
(d) A pilot employed under this part shall be paid a special duties allowance at the rate of $4200 ($4305 ppc 01Jun92).
Clause 55 of the Award in its original form contained a list of four “reserved matters” which were:
Travel - Pilots operating from home base.
Hours of duty at home base.
First officer’s salary.
Superannuation.
It is alleged in paras 5 and 6 of the Federation’s statement of claim:
5.Between 1990 and 1995 the Respondent employed Yvonne Dobinson, Steward Davis, Gary Dukes, Daryl Smithwick, Peter Ryan, Peter Rogers, Ross Darling and Jason Cusack as pilots performing work under Part C of the Award.
6.During the period referred to in the preceding paragraph the Respondent failed to pay the said pilots at the rate prescribed by Part C and by reason thereof each of the said pilots has been underpaid and claims payment of the underpayment of salary. Full particulars of the underpayment will be supplied prior to the trial.
The statement of claim then referred to cl 38 of the Award which governed superannuation and contained in paragraph 8:
By reason of the underpayments referred to above, the Respondent has failed to pay the correct amount of superannuation contributions in respect of Yvonne Dobinson, Stewart Davis, Gary Dukes, Daryl Smithwick, Peter Ryan, Peter Rogers, Ross Darling and Jason Cusack during the above period of underpayments.
Clause 38 of the Award as it came into force on 6 June 1988 was at the end of Part A and provided:
38 – SUPERANNUATION
Reserved pending further discussion.
Subsequently, on 17 March 1989, a substantive provision governing superannuation was inserted by consent [Print H7452]. As further amended on 14 July 1989 [Print H8931] that cl 38 was in these terms:
38 – SUPERANNUATION
(a)(i) The employer shall in respect of each week of employment of a contributing member (as defined) on permanent hire, pay to the fund (as defined) an amount equal to 3% of total salary provided for in part B or part C of this award.
(ii)The employer shall in respect of each engagement of a casual pilot as per clause 37, pay to the fund (as defined) an amount equal to 3% of the total salary payable.
(iii)The employer shall remit contributions to the fund on a monthly basis.
(iv)The employer may suspend for the applicable period contributions made on behalf of an employee if the employee is absent for reasons other than annual leave, long service leave, sick leave, workers’ compensation or other authorised absences.
(v)Except as provided in subclause (b) of this clause, the obligation upon the employer to make a superannuation contribution under this clause shall be in addition to, and remain distinguishable from, any contributions being made by the employer to any existing superannuation fund.
(b)(i) Employers may reach an agreement with the federation to be exempted from the operation of this award, in relation to superannuation, provided that the parties agree to the use of an alternative scheme which conforms to the Commonwealth Government’s operational standards for occupational superannuation funds.
(ii)Agreement for such exemption shall not be unreasonably withheld.
(iii)Where an employer desires to gain an exemption and no agreement is reached, either party shall retain the right to refer the matter to the tribunal for determination.
(iv)Applications for exemptions as per paragraph (i) of this clause must be lodged with the federation by not later than 31 March 1988.
(v)An employer who has reached agreement per paragraph (i) or was subsequently dealt with by the Tribunal in accordance with paragraphs (iii) and (iv) shall appear in schedule D of this award.
One of the employers appearing in Schedule D which was also inserted on 14 July 1989 was “Lloyd Helicopters (South Australia)”. It is not clear to me whether that exempted employer was identical with the present respondent. If it was, cl 38 has never applied to the respondent and the claim for imposition of a penalty for non-payment of superannuation contributions must fail.
Each of the pilots named in cl 5 of the statement of claim was a co-pilot employed on helicopters under Part C of the Award which was headed “OFFSHORE HYDROCARBON AND GAS OPERATIONS” and which included cl 49 in its original form. It was clear that lower rates of remuneration were prescribed for pilots in command of single engine helicopters than for those engaged in “all other” helicopter “operations” to which the third column of cl 49 applied before 1995. For the Federation, it was argued that the third column of cl 49 should be construed as applying to all other helicopter pilots whether command or co-pilots. In support of this argument, reference was made to the definition of “pilot” in s 88H which was to be found in Part IIIA of the Conciliation and Arbitration Act 1904 constituting the Flight Crew Officers’ Tribunal which made the Award. That definition which is now to be found in a slightly altered form in Schedule 1 to the Workplace Relations Act 1996 was:
“Pilot” includes a pilot in command, co-pilot or pilot of any other description.
Mr Borenstein who appeared for the Federation also referred to cl 4(a) of the Award which provided:
This Award shall be binding upon the employers named in Schedules “A” and “B” hereto and upon the Australian Federation of Air Pilots (hereinafter referred to as the “Federation”) as to all pilots, whether members of the Federation or not, engaged as pilots in helicopter operations.
The Award contained no definition of the term “pilot” as such but the word did appear in these definitions forming part of cl 3:
...
2. “Check pilot” means a pilot who is approved pursuant to the Air Navigation Orders by the Department of Aviation to conduct, and who does so conduct at the direction of employer, flight proficiency tests for the issue and/or the renewal of pilots’ licences and/or ratings and who certifies to the competency of pilots so tested.
3. “Chief pilot” means the pilot appointed by the employer and who is approved by the Department of Aviation, to perform the duties and responsibilities of the Chief pilot.
...
6. “First officer” of a multi-crew helicopter shall mean a pilot not endorsed on that type to fly in command.
...
8. “Home base” means the base at which the pilot has his normal home or his point of recruitment as mutually agreed and shown on his letter of recruitment.
9. “Pilot – in charge” means a pilot, other than the Chief pilot who, at the direction of the employer, supervises the duties of other pilots in addition to his regular duties.
10. “Standby or reserve time” shall mean time spent at home or place of accommodation when the pilot is available for call out or duty whether or not the pilot is actually called to duty. The reserve span shall not exceed 12 hours duration and the period of standby or reserve will be nominated on the roster.
11. “Training pilot” means a pilot, other than a Check pilot, who at the direction of the employer performs flying instruction and/or training duties.
12. “Transfer” means the movement of a pilot from one home base to another home base.
Clause 5 of the Award under the heading “CONTRACT OF EMPLOYMENT” provided for general terms of employment of any “pilot”, used without qualification, to whom the Award applied. By way of example I refer to paras (a) and (b) of that clause which stipulated:
(a) A pilot shall be engaged to perform duties as a pilot on a contract of permanent hire or as provided in subclause (c) and on no other basis.
(b) A pilot on engagement shall be provided with a letter of employment in the format shown in Appendix 2 confirming the pilot’s terms of engagement.
Similar indiscriminate references to “pilots” or “a pilot” recur throughout other provisions of general application in the Award. A reference to a specific category of pilot occurs in cl 37 which provides:
Casual pilots may only be engaged subject to the provisions of Letter of Agreement No. 1 of this Award. Any agreement for the employment of casual pilots shall not be unreasonably withheld by the Australian Federation of Air Pilots.
Letter of Agreement No 1, so far as is relevant, was in these terms:
Upon the AFAP being notified in writing by an employer (or his representative employer organisation acting on his behalf) of the need to employ casual helicopter pilots, the employer shall observe the following:
1.Circumstances should exist whereby it can be demonstrated by an employer (if required) that employment by him of an additional pilot cannot be justified, and provided that a pilot who is out of work due to retrenchment by that employer shall be offered such casual employment first, the employer may employ a pilot on a casual basis.
2.An employer may utilise pilots engaged on casual hire to fly up to an absolute maximum of the three hundred (300) flying hours in the aggregate in any period of one year.
3.The limitations prescribed in paragraph 2 of this Agreement may upon application by an employer and with agreement of the AFAP, be varied by mutual consent and each such case will be treated on its merits.
4.A pilot on casual hire shall be paid for each flying hour or part thereof an hourly rate which shall be calculated by dividing the third year annual salary in the salary scale appropriate to the work in question as determined by clauses 40 and 41, PART B and clauses 49 and 50, PART C of this Award, by the figure of 800 and adding to the resultant amount a loading of twenty-five percentum (25%) to compensate for the casual nature of the engagement. The resultant figure shall be the hourly rate of pay for a pilot on casual hire and shall, subject to paragraph 5 of this Letter, be paid for each flying hour or part thereof.
5.A pilot who is to be employed on a casual basis shall be paid a minimum of four (4) hours pay at the rate prescribed in paragraph 4 of this Letter on each occasion he is so engaged.
6.Casual pilots shall maintain a copy of such duty and flight time record which shall be made available to the employer if such casual pilot is engaged by more than one employer during any calendar month.
7.Casual pilots shall maintain a duplicate duty and flight time record and it shall be the duty of such pilots to ensure that the record is signed at the end of each calendar month by the employer(s) who have engaged the pilot during such month.
The divisor of 800 referred to in paragraph 4 of Letter of Agreement No 1 was apparently derived from the maximum number of hours in a year which a pilot (other than a casual) could be required to work without overtime under cl 44 of the Award.
Part B of the Award provided, in cl 40, as follows for salaries for helicopter pilots engaged in general aviation:
(a) The following shall be minimum annual salaries for Helicopter Pilots engaged in General Aviation:
Single Twin Twin
Year Engine 0-9000 LBS Over 9000 LBS
$ $ $
1 24460 26119 27776
2 25305 26963 28622
3 26149 27806 29467
4 26994 28653 30311
5 27840 29499 31155
6 28684 30342 32001
7 29528 31186 32845
8 30372 32031 33690
9 31218 32875 34533
Service credit formula
(b) Pilots engaged by an employer after 11/11/1981 shall be entitled to the following service credits.
Prior experience Incremental
creditsSingle Engine
Experience 3000 helicopter command hours 1 year
6000 " " " 2 years
9000 " " " 3 years
Total maximum credit 3 yearsTwin Engine
Twin Command on aircraft types operated by the employer 1 year
per type
Maximum twin credit 2 years
Current Aust IFR Helicopter Class 3 or higher 2 years
Any other IFR Helicopter lapsed or otherwise 1 year
Maximum IFR Credit 2 yearsTotal maximum twin credit 4 years
The list of “reserved matters” for the purposes of Part B of the Award was to be found in cl 46 and made no reference to co-pilots or first officers but contained only these items:
Media operations
Superannuation
It was accepted that the second column of cl 49 in its original form which prescribed salary rates for “single engine command” helicopters had no application to co-pilots because aircraft of that type could not accommodate more than one pilot. However, reference was made to the former cl 50 which ordained that “a pilot who is required to hold an instrument flying rating shall be paid the following additional amounts ... Co-Pilot - $1944 pa”.
That stipulation, it was argued, implied that the instrument flying rating allowance for a co-pilot was to be paid in addition to remuneration prescribed for a co-pilot earlier in the Award. The only place, so the argument proceeded, where that basic prescription could be found was the third “all other operations” column of cl 49.
The variation of the Award in 1995 which saw the insertion of the new cl 50 in place of the former cl 49 clearly confined the higher rates for “all other operations” (other than single engine command of aircraft up to 9000 lbs) to “command pilots”. That reflected the insertion which occurred at the same time of the following new clause in Part A of the Award:
39 – CO PILOTS SALARY
The co-pilot of an aircraft will be 70 per cent of the appropriate on-shore or off-shore command rate as defined in Parts B and C of this Award. A co-pilot will go onto the company seniority list and commence a six month probationary period. After two years, there will be an assessment and if successful, the co-pilot will be reclassified as a senior co-pilot and paid at the single engine command rate or if he was to fail the assessment, then he would remain at the co-pilot level until successful in passing the assessment. Progression of senior co-pilot will be on the basis of the provisions contained in subclause (e) of clause 6.
By way of a preface to his reasons for making the 1995 variation, Commissioner Palmer said [Print M5112] p 1:
This decision deals with a consequential application made by the Federation pursuant to the Work Value Principle contained in the Review of Wage Fixing Principles [Print L4700].
As background to the application the Federation said that the current award [Helicopter Pilots (General Aviation) Award 1987] was made by consent between the parties and since its inception has only been varied by the effect of National Wage Case decisions and in a limited way in 1991 via the structural efficiency principle.
It is central to the Federation’s case that no proper base was established in the award by way of fixing rates of pay based on an examination of the duties of pilots and an analysis of equipment now in service.
The Federation also asserts that this is a relatively new industry which has been subject to very considerable change in the last several years.
At p 5 of the same decision, the Commissioner summarised in these terms the case which had been advanced before him by the Federation:
The AFAP asserts that, based on the evidence and the inspections, an appropriate outcome in this case would see base salaries increased by 25 per cent, effective 1 June 1995, and that the Co-pilots salary scale be based on 75 per cent of the Captain for a maximum period of one year prior to moving to the same salary as a single engine captain.
Areas in which the Federation say there has been significant change include:
·Additional training, Crew Resource Management, Dangerous goods, extensive operations manuals, Helicopter underwater emergency training and quality assurance programs.
·Greater risks associated with long overwater flights, fire equipment (Napalm etc.), emergency patient transfers, night flying and hot refuelling.
·Reduction of CAA services such as flight service units and control towers.
This has produced greater workload in the cockpit and the pilot responsibility for operational control.
·Increased complexity of equipment and navigation systems.
·Requirement for simulator training.
·The lack of salary adjustment to keep pace with the aviation industry generally, or in offshore with other parts of the workforce, shown at exhibit AFAP3.
·The role of the Co-pilot in the two crew environment.
The employers’ case in respect of co-pilots was summarised as follows at p 6 of the same decision:
The Co Pilot of an aircraft will be paid 70% of the appropriate on-shore or off-shore command rate. Co Pilots will go onto the seniority list and commence the six months’ probationary period. After two years, there will be an assessment and if successful, the Co Pilot will be reclassified as a Senior Co Pilot and paid at the single engine command rate or if he was to fail the assessment, then the pilot would remain at the Co Pilot level until successful in passing the assessment. Progression of Senior Co Pilots will be on the basis of the provisions contained in sub-clause (E) of clause 6 of the Award.
The Commissioner’s indication of his decision included this point at p 6:
·That I should adopt the formula provided by the employers for the regulation of Co-pilots salaries.
The relevant reason for that part of the decision was contained in the last point on p 7:
·The role of the Co-pilot has changed significantly – through CRM and standards enhancement he/she has become a full team member rather than an “assistant” of whom nothing historically was required. Today the Co-pilot is expected to perform to the same standard as the command pilot.
In my view, the difficulties, which have been exposed by the present application, of interpreting the Award as it has evolved between 1988 and 1995 are largely attributable to a failure consistently to maintain a distinction between the undefined expression “co-pilot” and the defined phrase “first officer”.
“Co-pilot”, in its ordinary English meaning, connotes one who pilots an aircraft in conjunction with, and usually by way of assistance to, another, senior, pilot. Thus, the expression is defined in the Oxford English Dictionary 2nd Edn. as “a second pilot of an aeroplane”. That definition is consistent with the statutory definition of “pilot” as it originally appeared in s 88H of the Conciliation and Arbitration Act. I am unable to construe the Award in the form in which it was cast by consent between 1988 and 1995 as not providing rates of salary for “co-pilots” in the sense which I have just indicated. For one thing, subject to the exigencies of seniority and the rosters provided for respectively by cll 6 and 14 of the Award, an employee might, on one flight or during part of his or her employment, fly as a “co-pilot” and on other flights, or at other times, as the senior or command pilot and, at yet other times, as the sole pilot. In those circumstances it could hardly be suggested that the entitlement to a rate of salary prescribed by the Award was suspended while the employee could be identified as a “co-pilot” and revived if, perhaps on the same day, he or she flew solo or as the senior or command pilot.
The only indication in the Award that the salary rates prescribed in what was originally cl 49 were not to apply to “co-pilots” in the sense just discussed was the list of “reserved matters” in cl 55 which included “first officer’s salary”. However, “first officer”, as already pointed out, was defined in the Award in a way which limited its meaning more narrowly than that of “co-pilot” as I consider the latter expression should be understood. “First officer” comprehends only a pilot of a multi-crew helicopter “not endorsed on that type to fly in command”. That Award definition was predicated on a qualification, not on the function performed by the particular pilot or the capacity in which he or she flew an aircraft at any given time. It follows that a pilot possessing the requisite licence endorsement would not be caught by the “matters reserved” provision in cl 55 notwithstanding that he or she invariably flew as a co-pilot.
Ordinarily, it can be assumed, as Mr Borenstein for the Federation argued, that an Award provision expressed in a general way to regulate a matter as central to the relation of employer and employee as salary is intended to apply to all the employees whom its language is capable of comprehending. In the present case, however, one is confronted by the express identification as a reserved matter in cl 55 of “first officer’s salary”. Some guidance as to the construction of a “matters reserved” clause can be gleaned from the observations of Mason, Brennan and Deane JJ in Metal Trades Industry Association v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 where it was indicated, at 649:
Of course it is inevitable that there are some matters with which a comprehensive general industry award fails to deal, either because the parties are content to accept the application of State law, eg, workers’ compensation, or because it has been considered that an award cannot validly deal with the matter, eg, superannuation and pension benefits (Reg v Hamilton Knight; Ex parte Commonwealth Steamship Owners Association (1952) 86 CLR 283, a decision which may require reconsideration in the future).
As to the actual operation of a leave reserved clause, their Honours went on to observe, at 650:
A problem of another kind arises when an award reserves leave to apply with respect to a specific matter not otherwise dealt with in the award, as does cl 16 of the Professional Scientists Award. Does the award relevantly deal with the matter? The answer must be in the affirmative, unless it emerges on an examination of the award that the matter is intended to be subject to State law pending the inclusion of some provision dealing with the matter specified.
The reservation in cl 55 of the Award as originally framed was of “first officer’s salary”. That suggests that the whole issue of what salary was to be prescribed by the Award for first officers had been reserved for consideration during the life of the Award which was expressed in cl 4 to be two years from 16 December 1987. The reservation was not of a possible adjustment up or down of the rate of salary already prescribed by the Award for first officers. Indeed, no reason has been suggested by evidence or by the language of the reservation why rates of salary for that relatively narrow class of employee alone might require adjustment during the ensuing two years.
The interpretation which I have given to the salary prescription in cl 49 of the Award as it originally appeared can be reconciled with the stipulation of a casual rate in cl 37 if, as I infer, the employment as casuals of first officers as defined was not contemplated by the framers of the Award. Similarly, the reference in the former cl 50 to an “additional amount” for a co-pilot required to hold an instrument flying rating appears to imply that a “first officer” being a pilot not endorsed to fly in command of a multi-crew helicopter would never be required by his or her employer to hold an instrument flying rating. If there were such a requirement, the pilot would be taken out of the narrow class of co-pilot comprehended by the leave reserved clause and would attract the salary prescribed by the third column of the former cl 49.
The acceptance which I have imputed to the industry that the narrow group of less qualified pilots defined as “first officers” was excepted from the salary prescription contained in the Award appears to have been shared by Commissioner Palmer when he said in his 1995 decision:
The role of the Co-pilot has changed significantly ... he/she has become a full team member rather than an “assistant” of whom nothing historically was required. Today the Co-pilot is expected to perform to the same standard as the command pilot.
That acceptance also explains why “first officers” between 1987 and 1995 were paid, without apparent demur by the Federation, at a rate of approximately 65% of the command pilot’s salary.
It will be apparent from these reasons that a question necessary to resolve the present application remains open. That is whether any of the persons named in paragraph 5 of the statement of claim was employed for any part of the period under inquiry otherwise than as a “first officer” as defined. I shall adjourn the hearing of the application to a date to be fixed to enable evidence to be addressed to that question and to give the parties an opportunity to make submissions as to the final orders to be made in the light of that evidence and these reasons. If necessary, the question raised above regarding superannuation can be addressed at the same time.
I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.
Associate:
Dated: 30 October 1998
Counsel for the Applicant: Mr H Borenstein Solicitors for the Applicant: Mahony’s Counsel for the Respondent: Mr A Cavanough QC
with Mr B LawrenceSolicitors for the Respondent: Blake Dawson Waldron Date of Hearing: 13 November 1997 Date of Judgment: 30 October 1998
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