Australian Federation of Air Pilots v National Jet Systems Pty Ltd T/A Cobham Aviation Services

[2015] FWC 8588

[2015] FWC 8588

FAIR WORK COMMISSION

DECISION

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

Australian Federation of Air Pilots
v
National Jet Systems Pty Ltd T/A Cobham Aviation Services
(C2015/6068)

VICE PRESIDENT WATSON MELBOURNE, 21 DECEMBER 2015

Dispute about matters arising under the enterprise agreement – interpretation of agreement – responsibility for removal expenses – whether transfer at Pilot’s request or company direction – Fair Work Act 2009, s.739.

Introduction

[1] This decision concerns an application for the Fair Work Commission (the Commission) to deal with a dispute. The application is made by the Australian Federation of Air Pilots (AFAP) under s.739 of the Fair Work Act 2009 (the Act) and concerns the entitlement pursuant to the terms of the National Jet Systems Pty Ltd Pilot Enterprise Agreement 2012 (the Agreement) of Captain Sean Larkin, a Pilot of National Jet Systems Pty Ltd T/A Cobham Aviation Services (NJS), to receive reimbursement of removal costs consequent upon his transfer from Darwin to Hobart.

[2] The matter was listed for conference on 8 October 2015 and 23 October 2015. The parties were unable to reach a resolution and the AFAP requested that the matter be listed for arbitration. At the hearing of the matter Mr S. Lutton appeared on behalf of the AFAP with Ms D. Cain, and Mr S. Bakewell of counsel appeared on behalf of NJS, with Mr D. Steel.

[3] The dispute comes to the Commission by way of the dispute settlement procedure in the Agreement. This clause relevantly provides:

“20. Settlement of Disputes Procedure

In the event of a disagreement regarding a matter arising under this Agreement, or in
relation to the NES, (including subsections 65(5) OR 76(4)), the following Dispute
Resolution Process (DRP) is to be followed.

…

20.5 If the dispute is unable to be resolved at the workplace, and all agreed steps for resolving it have been taken, the dispute may be referred to the FWC for resolution by mediation and/or conciliation and, where the matter in dispute remains unresolved, arbitration, at the request of either party.

20.6 If arbitration is requested the FWC may exercise all procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

20.7 It is a term of this Agreement that while the dispute resolution procedure is being conducted work shall continue normally, unless a pilot has a reasonable concern about an imminent risk to his or her health and safety. However, the Pilot will perform alternative work identified by NJS, whether at the same or another workplace, that is safe and appropriate for the employee to perform, provided it is reasonable to do so. The subject matter of the dispute shall be preserved so as to maintain the status quo pending the resolution of the dispute.

20.8 The decision of the FWC will bind the parties subject to any right of appeal.

20.9 The FWC shall have the power to do all such things as are necessary within the limits of the Act for the just resolution and determination of the dispute. For the absence of doubt, the powers of the FWC include (but are not limited to) conducting workplace inspections and issuing interim orders, directions, statements or final determinations.”

[4] I am satisfied that the parties have empowered the Commission to arbitrate this dispute under the terms of the Agreement.

Background

[5] NJS operates Boeing 717 aircraft for Qantas. It supplies Pilots, Cabin Crew and Engineers to Qantas under a commercial arrangement. Qantas is NJS’s only customer.

[6] The parties have reached agreement on an Agreed Statement of Facts relevant to the determination of this dispute. The agreed facts are as follows:

“1. An Enterprise Agreement – National Jet Systems Pty Ltd Pilot Enterprise Agreement 2012 (EA) covers the employment relationship between the employer (NJS) and their employee Captain S. Larkin. The Agreement also covers the Australian Federation of Air Pilots (AFAP). The Agreement has a “Settlement of Disputes Procedure” at Clause 20.

2. Clause 11.(2) “Duties and Obligations of a Pilot” of the EA contains the following:

“Each Pilot will:

(2 ) after due consultation on terms and conditions and at the direction of NJS, perform duties in any part of the world in which NJS may from time to time be permitted to operate.”

3. Clause 17 “Transfers” of the EA contains details of the obligations of the parties in relation to Pilot transfers.

4. Captain S Larkin commenced employment with National Jet System Pty Ltd on 14 November 2011 as a First Officer.

5. Captain S Larkin was successful in obtaining his preference in response to an Expression of Interest (EOI) G01/14. A consequential vacancy for a role as Captain based in Canberra was available for which Captain S Larkin accepted the offer of Command Upgrade Training in a letter dated 12 March 2014 in order to take up this role. On 23 June 2014 an approved base swap with an existing Darwin Captain allowed Mr Larkin to take up the command position (Captaincy) in Darwin with the other Captain moving to Canberra.

6. NJS provides contractual services to Qantas and is provided with Qantas Boeing 717 aircraft by Qantas to do so.

7. Qantas ceased scheduling services that were operated by NJS though Gove in the Northern Territory effective from August 2014.

8. The ceasing of scheduled services through Gove resulted in a reduction of Flying Hours required for NJS Pilots located in Darwin from August 2014.

9. On 11 September 2015 Mr. Russell Dyer, General Manager Airline Services (NJS) communicated in a memo to all staff that NJS had reached agreement with its customer (Qantas) to operate two additional aircraft on behalf of the customer (Qantas).

10. On 11 September 2015, advice was provided to AFAP and TWU representatives and the then members of the National Jet Systems Pty Ltd Pilot Consultative Committee via e-mail detailing proposed changes to Pilot requirements. The changes identified a total of 24 vacancies for Pilots across 5 of the 7 bases operated by National Jet Systems Pty Ltd. That same advice identified potential reductions of 3 Captain and 2 First Officer positions in the Darwin base.

11. On 14 September 2015 the AFAP lodged with Fair Work Commission (FWC) a Form F10 – Application for the Commission to Deal with a Dispute in Accordance with a Dispute Settlement Procedure.

12. On 18 September 2015 representatives of the AFAP and representatives of NJS met in Adelaide to discuss the proposed changes to Pilot requirements.

13. On 18 September 2015 NJS issued an Expression of Interest G01/15 detailing 24 Pilot vacancies across 5 bases.

14. On 8 October 2015 a FWC Conference was held via telephone with VP Watson.

15. On 14 October 2015 representatives of the AFAP and representatives of NJS met in Adelaide for a consultation meeting arising out of the conference held with VP Watson on 8 October 2015.

16. On 23 October 2015 a FWC conference was held with VP Watson.

17. On 7 October 2015 Captain S Larkin lodged his preferences document in response to the Expression of Interest (EOI) AS G01/15.

18. Captain S Larkin listed his preferences on the EOI AS G01/15 as Darwin - No. 1, Hobart - No. 2 and Cairns - No. 3. It is noted that the EOI AS G01/15 did not advertise a vacancy in Darwin.

19. Captain S Larkin also annotated on his EOI AS G01/15 the following:

“I am submitting this EOI without prejudice as to my entitlements under the agreement, including the company meeting reasonable moving costs”.

20. On 16 October 2015 Captain S Larkin was advised verbally by Captain Ewart (NJS) that he has been successful for a stated preference for a move to Hobart. This verbal offer was confirmed via e-mail.

21. On 18 October 2015 Captain S Larkin provided an e-mail acceptance of the move to Hobart as a Captain.

22. On 20 October 2015 Captain S Larkin was provided with a letter from NJS detailing the offer of a “permanent base transfer” to Hobart which included the statement “As per the NJS Pilot Enterprise Agreement, transfer costs will be at your own expense.”. Captain S Larkin provided NJS with his signed acceptance and understanding of the offer dated 20 October 2015.

23. The EOI AS GO1/15 in regard to the 24 vacancies for pilots has been completed with all vacancies and consequential vacancies being filled with the exception of one (1) vacancy held for a Directed Transfer that is currently in discussion with a pilot and his representative the AFAP.

24. NJS has also in regard to responding to its contractual requirements with Qantas, to service the additional two aircraft commenced employment of 19 additional pilots.”

[7] The parties supplemented these agreed facts through the evidence of Captain Larkin, Mr Simon Lutton, Executive Director of AFAP, Mr Simon Ewart, Chief Pilot of Cobham Airline Services Business Unit, Mr Russell Dyer, General Manager of the Cobham Airline Services Business Unit, and Mr Geoffrey Bowels, Human Resources Manager for the Cobham Airline Services Business Unit.

[8] Captain Larkin’s evidence is that he does not wish to be transferred from Darwin, in particular due to the recent birth of his first child, his wife having a position to return to in Darwin following maternity leave, and having recently bought property in the Northern Territory.

[9] Captain Larkin gave evidence that he participated in the EOI process so as to indicate a preference as to where he would be directed, given that his seniority and the downsizing of Darwin made it unlikely that he could remain in his current position in Darwin. If he had not participated in the EOI process, Captain Larkin understood that NJS would have directed him to whichever base it saw appropriate.

[10] Captain Larkin gave evidence that he signed the letter of 20 October 2015 from NJS detailing the offer of a “permanent base transfer” to Hobart which included the statement “As per the NJS Pilot Enterprise Agreement, transfer costs will be at your own expense.” However, Captain Larkin’s evidence is that he did so because he believed he had already made his position clear in his preferences document and he was aware that the dispute resolution process had already been enacted by the AFAP.

[11] The evidence of Captain Ewart is that the process of voluntarily enacting an EOI, followed by the voluntary acceptance of an offer by the Pilot, has always been considered by the Respondent to be an action at the Pilot’s request and not an action directed by the Respondent. According to its records, NJS has never paid the transfer costs for a Pilot who has changed base/position as a consequence of being appointed under an EOI.

The Relevant Clauses of the Agreement

[12] The clauses in dispute are as follows:

“17.2 A Pilot when permanently transferring from one base to another at the Pilots request will bear all expenses associated with that transfer. However, at the request of the Pilot, NJS may agree to provide payment for costs incurred and subsequently recover such costs by salary sacrifice of a mutually agreed amount.

17.3 If a Pilot is either posted to a base on appointment or is permanently transferred from one base to another at the direction of NJS, the Pilot shall be provided with suitable accommodation by NJS for a maximum period of 14 days or until permanent accommodation is obtained, whichever is the lesser. While occupying such accommodation the Pilot shall be paid meal and layover allowances to a maximum of 7 days at the rate prescribed in Clauses (1) and (2) of Schedule 2.

17.4 A Pilot when permanently transferring from one base to another at NJS direction shall receive payment from NJS for expenses resulting from the removal as follows:

(1) all personal effects, household goods and furniture;
(2) a maximum of two cars owned by the Pilot or spouse;
(3) storage of goods and furniture where required for up to 30 days;
(4) removal and storage insurance for the possessions noted above for up to 30 days;
(5) penalties associated with the early termination of a residential rental lease;
(6) economy class airfares for the Pilot, spouse including de facto and dependent children to the Pilot's new base; and
(7) actual out-of-pocket expenses for fuel, accommodation and meals where the Pilot elects to self-drive a vehicle as provided for at Clause 17.4(2), except that the amount of reimbursement to the Pilot shall be no greater than NJS's obligation to the Pilot under Clauses 17.4(2) and 17.4(6).

The cost of moving any additional belongings (e.g. animals, boats, additional vehicles etc.) may at the request of the Pilot and agreement by NJS, be paid by NJS and subsequently recovered from the Pilot by salary sacrifice of a mutually agreed amount in accordance with the relevant legislation.

The Question for Determination

[13] The parties have agreed that the dispute is to be determined by answering the following question:

“By entering into the EOI Process is Sean Larkin’s consequential transfer to Hobart covered by Clause 17.2 (“pilot’s request”) of the National Jet Systems Pty Ltd Pilot Enterprise Agreement 2012 (EA) or do clauses 17.3 and 17.4 (“NJS direction”) of the EA apply”

Principles of Interpretation

[14] The principles for interpreting terms of enterprise agreements are well established by various High Court and Federal Court decisions. They were recently summarised by a Full Bench of the Commission as follows 1:

“1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(b) notorious facts of which knowledge is to be presumed;

(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the agreement;

(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”

[15] I will apply these principles to the interpretation of the Agreement.

The Applicable Clause of the Agreement

[16] The agreed question requires a determination as to the appropriate subclause in Clause 17 that applies to Captain Larkin’s factual circumstances. It is accepted by the parties that either 17.2 or 17.3 applies—both cannot apply and one or other must apply.

[17] The AFAP submits that the Agreement does not contain any clauses which state or support the proposition that by entering into the EOI process Captain Larkin’s consequential transfer to Hobart is covered by Clause 17.2 (Pilot’s request).

[18] The AFAP further submits that the interpretation of clause 17 which has been taken by NJS is inconsistent with a plain reading of the phrases “pilot request” and “at company direction.”

[19] The AFAP submits that a plain and fair interpretation of what constitutes “pilot’s request” in Clause 17 of the Agreement does not support the notion that by indicating non-preferred options, Captain Larkin is requesting to be transferred.

[20] NJS submits that there is nothing uncertain or ambiguous about the terms “at the request of the Pilot” in Clause 17.2. It submits that the provisions of clauses 17.3 and 17.4 are equally unambiguous. “Request” means “to ask for something, politely or officially.” 2 It means that the Pilot has requested the transfer in question. The terms “at the direction of NJS” mean that NJS has directed the pilot to transfer. “Direct” means “to order someone, especially officially.”3

[21] NJS submits that it is clear that the authors of the Agreement sought to distinguish a case where the transfer was at the Pilot’s request, in which case the Pilot bears the costs of the transfer, or the Pilot was directed by NJS to transfer, in which case NJS bears the cost of the transfer.

[22] NJS submits that as these terms are clear and unambiguous, the notion of what is a fair understanding does not apply. What is required is an assessment of the facts as to whether the Pilot requested the transfer or NJS directed the transfer.

[23] In my view the parties to the Agreement have formulated the sub-clauses of clause 17 in view of the normal circumstances of a transfer of location. When a transfer occurs it is commonly the result of a request by either the employer or the employee. The clause imposes responsibility for removal costs on the initiating party.

[24] The circumstances concerning Captain Larkin involve an unusual element. The transfer occurred in conjunction with a reduction in the number of pilots in Darwin. The evidence establishes that this is unprecedented to the knowledge of current NJS managers. Captain Larkin did not wish to leave Darwin. However he also did not want to be transferred to a port which involved disadvantage to him and his family compared to other available ports. His first preference expressed in his Expression of Interest form was Darwin. He made a notation on the form seeking to reserve his rights to seek reimbursement under clause 17.2.

[25] In my view the facts do not involve the pure application of either clause 17.2 or clauses 17.3-17.4. It is therefore necessary to determine which parts of clause 17 better fit the circumstances of Captain Larkin.

[26] Clause 17.2 requires the Pilot’s request to transfer from one base to another. Captain Larkin did not request to transfer from Darwin. He did request to transfer to Hobart, should Darwin no longer be available.

[27] Clauses 17.3 and 17.4 require a direction by NJS of a transfer from one base to another. At the time of the Expression of Interest, NJS had not directed Captain Larkin to move from Darwin. It then processed Captain Larkin’s second preference of a transfer to Hobart.

[28] In my view the essence of the change with respect to Captain Larkin was the movement away from Darwin. He did not wish to move but NJS’s business circumstances dictated that he do so. The necessity for a move is the key ingredient and the most appropriate clause is that which applies to the initiator of the move. In my view NJS was the initiator of the move away from Darwin. But for NJS’s business position, and Captain Larkin’s position on the seniority list, he would have remained in Darwin. NJS was effectively the initiator of his transfer although the chronology does not strictly bear this out. In my view it is appropriate to look at the substance of the matter rather than the form.

[29] It follows that clauses 17.3 and 17.4 are the more appropriate clauses in the case of Captain Larkin.

[30] I determine the dispute by answering the question:

Question:

“By entering into the EOI Process is Sean Larkin’s consequential transfer to Hobart covered by Clause 17.2 (“pilot’s request”) of the National Jet Systems Pty Ltd Pilot Enterprise Agreement 2012 (EA) or do clauses 17.3 and 17.4 (“NJS direction”) of the EA apply”

Answer:

Clauses 17.3 and 17.4 apply.

VICE PRESIDENT

Appearances:

Mr Lutton, S with Ms Cain, D on behalf of AFAP.

Mr Bakewell, S of counsel with Mr Steel, D on behalf of NJS.

Hearing details:

2015.

Adelaide.

11 December.

Final written submissions:

AFAP on 24 November 2015.

NJS on 8 December 2015.

 1   [2014] FWCFB 7447.

 2   Cambridge English dictionary.

 3   Cambridge English dictionary.

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