Australian Federation of Air Pilots v Regional Express Holdings Ltd

[2016] FWC 7774

[2016] FWC 7774

FAIR WORK COMMISSION

DECISION

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

Australian Federation of Air Pilots
v
Regional Express Holdings Ltd
(C2016/3239)

COMMISSIONER CAMBRIDGE SYDNEY, 2 NOVEMBER 2016

Dispute settlement procedure - interpretation of terms of enterprise agreement - disputed terms dealing with payments for personal leave on account of sickness - entitlement for payment of sick leave without medical certificate - no ambiguity established - interpretation of terms provided.

[1] This Decision is made in respect of an application that was taken under 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 5 April 2016, and it was made by the Australian Federation of Air Pilots (the AFAP), and taken against Regional Express Holdings Ltd (the employer or Rex).

[2] The Commission was empowered to deal with this matter by virtue of a DSP which can be found at clause 35 of the Regional Express Pilots’ Enterprise Agreement 2011 (the 2011 Agreement). However, on 18 August 2016, the 2011 Agreement was replaced by the Regional Express Pilots’ Enterprise Agreement 2014 (the 2014 Agreement). Although the 2014 Agreement contained a DSP in identical terms to that contained in the 2011 Agreement, there was no evidence that the circumstances of the dispute which gave rise to the application continued to occur, and had been advanced through the procedural requirements of the DSP contained in the 2014 Agreement.

[3] Therefore, by way of application of the authority established by the Decision of the Full Bench of the AIRC in Stephenson v Abetz (Stephenson), 1 the Commission does not, strictly, have the powers of private arbitration required to be able to make a binding determination of the application. The Parties were aware of this potential jurisdictional impediment but, nevertheless wished to have the matter proceed to Hearing and determination.

[4] The Parties indicated that the dispute which had arisen under the terms of the 2011 Agreement had not been resolved, and the contested terms of the 2011 Agreement were replicated in the 2014 Agreement. The Parties indicated that they would be assisted by the Commission’s determination of the dispute which had properly arisen during the period of operation of the 2011 Agreement, and which was in effect, an on-going issue of dispute under the 2014 Agreement.

[5] The application was the subject of unsuccessful conciliation proceedings held on 12 April 2016. The matter has subsequently advanced to arbitration proceedings which involved a Hearing conducted in Sydney on 2 and 29 August 2016.

[6] At the Hearing, the AFAP was represented by Mr J Lauchland. Mr Lauchland introduced evidence by way of three witness statements made by two individuals, neither of whom was required for cross examination.

[7] The employer was represented by Ms P Tran. Ms Tran introduced evidence from two witnesses, both of whom were cross examined by Mr Lauchland. Ms Tran also adduced evidence in the form of a witness statement from an individual who was unable to attend as a witness, and the contents of this statement were treated with appropriate caution.

[8] Mr Lauchland and Ms Tran both made oral submissions in elaboration of documentary material that each had filed on behalf of the respective Parties.

Background

[9] There was essentially no factual contest between the Parties about the circumstances which gave rise to the dispute in this matter.

[10] A pilot employed by Rex, Mr Nick Young, did not attend for work as rostered on 21 and 22 April 2015. Mr Young claimed payment for this two day absence under the personal leave provisions of the then operational 2011 Agreement. Mr Young submitted a medical certificate in respect of the second day of absence, and he sought to have the first day of his absence treated as a day that would be paid as sick leave without the requirement for the production of a medical certificate.

[11] Rex paid Mr Young sick leave in respect to the second day of his absence, 22 April 2015, and it refused to pay him for the first day of his absence, 21 April 2015. Mr Young disputed the refusal by Rex to pay him for the first day of his absence, and subsequently this matter was advanced on his behalf by the AFAP.

[12] Rex confirmed that it would not pay Mr Young sick leave in respect to the first day of his absence (21 April 2015) because it interpreted the terms of the relevant provisions of the 2011 Agreement to not provide for an entitlement in respect to the absence of Mr Young on that day. Rex interpreted the relevant provisions of the 2011 Agreement to provide for payment for a day of sick leave without the production of a medical certificate only if that day was separate from another day of absence, including, as in the particular case of Mr Young, a day for which a medical certificate was provided.

[13] Therefore, the dispute has involved a contest as to whether the terms of the 2011 Agreement, which are now replicated in the 2014 Agreement, provide an entitlement for sick leave payment to any pilot who claims sick leave payment for a day without a medical certificate, when that day is contiguous with any other day of absence. The Parties accepted that the resolution of the dispute involved the Commission making a determination of the correct construction that should be given to the following terms now contained in the 2014 Agreement:

“50.3.7 Subject to clauses 50.3.3 and 50.3.8, a certificate from a duly qualified medical practitioner must accompany any application for paid personal leave.

50.3.8 The Employer will grant paid sick leave to a Pilot without production of a medical certificate to the extent of four separate days in any one calendar year..”

[14] It was not in dispute that these two subclauses, (50.3.7 and 50.3.8) needed to be read in combination, and that the reference to subclause 50.3.3 in subclause 50.3.7 was irrelevant to the contested construction question. Therefore, the focus of the contested construction involved the meaning that should be given to the word “separate” appearing in subclause 50.3.8 of the 2014 Agreement.

The AFAP Case

[15] In short summary, the AFAP has asserted that the word “separate” appearing in subclause 50.3.8 of the 2014 Agreement (or subclause 49.3.8 of the 2011 Agreement), meant separate from other days of sick leave without a medical certificate.

[16] Mr Lauchland from the AFAP, made submissions which referred to the Decision of a Full Bench of this Commission in the matter of The Australasian Meat Industry Employees Union v Golden Cockrell Pty Limited  2 (Golden Cockerel). Mr Lauchland submitted that applying the principles for interpretation of enterprise agreements as established in the Golden Cockrell Decision, it was necessary to first determine whether the words appearing in subclause 50.3.8 had a plain meaning or if they contained some ambiguity.

[17] Mr Lauchland submitted that the text of the contested subclauses had a plain meaning. According to the submissions made by Mr Lauchland, that plain meaning was that pilots were entitled to take four days of sick leave without a medical certificate per calendar year, and the only restriction was that each day of this leave must be separate from other days of sick leave without a medical certificate.

[18] It was further submitted by Mr Lauchland that the plain meaning for the words of the contested subclauses was supported by an examination of surrounding circumstances, including evidence of the development of the particular words of the subclauses when introduced into the 2011 Agreement. In this regard, Mr Lauchland noted that the words that were ultimately settled upon for subclause 49.3.8 of the 2011 Agreement were those proposed at the time by the AFAP.

[19] The submissions made by Mr Lauchland referred to the negotiations which occurred as part of the bargaining that led to the making of the 2011 Agreement. According to the submissions of Mr Lauchland, there was a common intention of the Parties to include terms in the 2011 Agreement which stopped a previously permitted practice which allowed pilots to take up to 4 consecutive days of sick leave without the provision of a medical certificate which covered any of those days.

[20] Consequently, according to the submissions made by Mr Lauchland, the word “separate” appearing in subclause 50.3.8 of the 2014 Agreement can only be seen to relate to other forms of leave in the same provision, namely sick leave without a medical certificate. Mr Lauchland submitted that the only restriction on pilots accessing this particular sick leave was that each occurrence must be separate from another day of sick leave without a medical certificate.

[21] It was further submitted by Mr Lauchland, that if the word “separate” was to have been given a broader meaning, as has been asserted by Rex, to involve a requirement that the sick leave without a medical certificate must be separate from any other day of absence, such a substantial change of this nature would have been part of the explanatory material that accompanied the negotiations at the time. Mr Lauchland submitted that the absence of any documentary record of such a significant change supported that the plain meaning that should be provided for the word “separate” was confined to being separate from any other day of sick leave without a medical certificate.

[22] Mr Lauchland made further submissions which dealt with the prospect that some ambiguity might be established in respect of the contested terms of the subclauses. In this regard, Mr Lauchland submitted that a consideration of the context and purpose of the particular provisions would not support the interpretation that was advanced by Rex. Mr Lauchland referred to the particular circumstances which had initiated the dispute, and he suggested that there would likely be similar circumstances arising whereby a pilot might think that her or his particular sickness would be only short-term. However, if the sickness continued or worsened, and the particular pilot saw a medical practitioner on the second day of absence, as was the case with Mr Young, in the absence of the medical practitioner backdating any certificate, the pilot would be denied sick leave for the first day of absence.

[23] In summary, Mr Lauchland submitted that the interpretation that was proposed by Rex went well beyond the actual wording of the subclauses. Mr Lauchland submitted that the interpretation proposed by Rex would mean that any day of sick leave without a medical certificate which adjoined any other absence or leave day would not be recognised as one of the four separate days of sick leave entitlement arising under subclause 50.3.8 of the 2014 Agreement. Mr Lauchland urged the Commission to reject such a construction, and to instead confirm that the only restriction on pilots accessing the leave provided by subclause 50.3.8, was that each occurrence must be separate from another day of sick leave without a medical certificate.

The Employer’s Case

[24] Ms Tran appeared for Rex, and she made submissions which rejected the interpretation of the contested terms of the Agreements as was advanced by the AFAP. Ms Tran referred to the written submissions which had been filed on behalf of Rex.

[25] The submissions made by Rex referred to terms that were contained in the industrial instrument which preceded the 2011 Agreement, and which allowed for the practice of pilots to take up to 4 consecutive days of sick leave without the provision of a medical certificate in respect to any of those days. According to the submissions made by Rex, there was no contest that in the negotiations that resulted in the relevant terms contained in 2011 Agreement, the AFAP representatives accepted that the taking of multiple sick days without a medical certificate was not appropriate use of the provisions for sick leave to be provided in respect to a number of single day absences without the provision of a medical certificate.

[26] Consequently, according to the submissions made by Rex, the changes that were introduced into the 2011 Agreement sought to prevent pilots from having consecutive days of sick leave without a medical certificate for all of those days. Rex submitted that the word “separate” meant a day that stood alone, and was followed by working days and could not be part of other paid sick days.

[27] According to the submissions made by Rex, the privilege of claiming sick leave without the production of a medical certificate was to enable pilots not to have to go and consult a doctor for illness that was serious enough to prevent work on the day but not serious enough to warrant a visit to the doctor. Rex submitted that the word “separate” was used to prevent pilots from abusing the system by adding on a couple of days to their annual leave by claiming sick leave.

[28] In further submissions, Rex stated that it was not unreasonable to suggest that there was nothing prohibiting a medical practitioner from issuing a medical certificate to include the previous day that was under scrutiny. Rex submitted that its interpretation of the contested provisions of the Agreements accorded with the spirit and intent of the Parties in circumstances which were designed to prevent abuse of sick leave entitlements.

[29] Ms Tran submitted that any pilot with consecutive days of sick leave should be providing a medical certificate which covered all of those days. In the particular case of Mr Young, Ms Tran said that if it had come to the employer’s attention earlier they would have sought permission to talk to the doctor personally about the matter.

[30] Consequently, it was submitted by Rex that the correct construction to be given to the use of the word “separate” in the context of the contested subclauses of the Agreements, meant separate from any other day of absence including a day for which a medical certificate was provided.

Consideration

[31] The dispute in this instance has involved a contest regarding the correct interpretation or construction that should apply to particular terms of an enterprise agreement. In the particular circumstances of this case, the dispute arose in respect of particular terms contained in the 2011 Agreement, and those terms have been replicated in the 2014 Agreement. As the 2011 Agreement was replaced, the DSP which provided the Commission with the powers of private arbitration for the dispute no longer exists. However, as the relevant terms which are now reflected in the 2014 Agreement are a matter of on-going contest, the Parties have accepted that, notwithstanding the absence of strict compliance with the current DSP, the Commission should provide for resolution of the contested terms which are now contained in the 2014 Agreement.

[32] The approach to resolving questions of contested interpretation/construction of the terms contained in an enterprise agreement involves application of the principles established in the Golden Cockerel Decision. Both Parties acknowledged and referred to the Golden Cockrell Decision, and in particular, the principles which are set out at paragraph 41 of that Decision which are in the following terms:

“[41] From the foregoing, the following principles may be distilled:

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.”

[33] Further, in respect to resolving matters of contested construction, the question of the conduct of the Parties in connection with the contested terms, has been examined in the following extract from the Full Bench Decision in Essential Energy v Australian Municipal, Administrative, Clerical and Services Union and Others  3 (Essential Energy):

“[23] In addition, there is one well-established further principle relevant to the interpretation of industrial instruments, including enterprise agreements, which we consider to be relevant, namely that it is not permissible to take into account the conduct of parties which occurs after an industrial instrument is made as an aid to interpret that industrial instrument.”

[34] It is also relevant to refer to the paragraphs which immediately precede the extract quoted above from the Essential Energy Decision, and which includes the often cited extract from a Judgement of Madgwick J in Kucks v CSR Limited  4 (Kucks):

“But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”

[35] Accordingly, the principles as established by the Full Bench Decisions in Golden Cockerel and Essential Energy have been adopted, and relevantly applied in this instance to the contested construction of the terms of the 2014 Agreement. Further, the approach to the interpretation of the terms of the 2014 Agreement has been undertaken cognisant of the guidance provided by various Judgements including that in Kucks.

The Meaning of Separate Days

[36] In this instance the contested construction question has focused upon the meaning that should be given to the words “separate days” as they appear in subclause 50.3.8 of the 2014 Agreement. These words need to be examined in the context of the full text of the two subclauses which give rise to the distinctly different interpretations urged by the respective Parties. For the purposes of this analysis the two subclauses are repeated as follows:

“50.3.7 Subject to clauses 50.3.3 and 50.3.8, a certificate from a duly qualified medical practitioner must accompany any application for paid personal leave.

50.3.8 The Employer will grant paid sick leave to a Pilot without production of a medical certificate to the extent of four separate days in any one calendar year..[Sic]”

[37] Subclause 50.3.7 deals with the evidence requirements for the payment of personal leave and stipulates that, other than in respect to subclauses 50.3.3 and 50.3.8, a medical certificate is required to access the entitlement to payment for personal leave. Subclause 50.3.3 involves circumstances associated with leave in respect of upper respiratory tract infection and is not relevant to the current dispute. Subclause 50.3.8 contains the terms which are central to the alternative interpretations advanced by the respective Parties.

[38] The unambiguous intention of subclause 50.3.8 is to provide for circumstances which alter or relax the evidence requirements that are stipulated by subclause 50.3.7. Subclause 50.3.8 establishes circumstances where the evidence requirements of subclause 50.3.7 involving the provision of a medical certificate are not required. These circumstances involve “four separate days in any one calendar year.”

[39] Essentially, the AFAP contended that the “four separate days” means days that are separated from another day of sick leave for which a medical certificate is not provided. Alternatively, Rex argued that “four separate days” means a day separate from a day involving any other absence including, as was the case with Mr Young, another day of sick leave which was covered by a medical certificate.

The Question of Ambiguity

[40] The approach to resolving the contested construction question should logically commence with an examination of the relevant words, so as to discern whether or not these words contain some ambiguity. It is well established that the approach to resolving questions of contested construction should focus upon providing the words under examination with their plain and ordinary meaning, unless for some cogent reason such ordinary meaning is inappropriate and unavailable.

[41] In this instance, I have been unable to discern the ambiguity attributed to the words “separate days” as was advanced by Rex. The plain and ordinary meaning to be given to the words “separate days” would be logically confined to days which satisfy the relaxation of the evidence requirements that would otherwise apply pursuant to subclause 50.3.7. To construe “separate days” to mean days that are separated from any other absence would introduce a broadening of the meaning of those words where they appear in the context of a subclause that is describing particular circumstances where more stringent evidence requirements have been relaxed. In effect, the interpretation urged by Rex would require the notional inclusion of additional words beyond those that appear in subclause 50.3.8.

[42] The plain and unambiguous meaning of the words “separate days” as they appear in subclause 50.3.8, was supported by evidence of surrounding circumstances, particularly that involving the mischief that the Parties sought to address when these words were introduced into the 2011 Agreement. The terms contained in the industrial instrument which preceded the 2011 Agreement allowed pilots to take up to 4 consecutive days of sick leave without providing a medical certificate for any of those days. The Parties accepted that any relaxation of the evidence requirements for sick leave was not intended to allow for any consecutive days of sick leave without a medical certificate. The common intention of the Parties was to introduce terms which maintained an entitlement to four sick days per calendar year without a medical certificate, but which could not be taken together. Consequently, the terms “separate days” were used to indicate that no two or more consecutive days of sick leave without a medical certificate could be taken as paid sick leave.

[43] Further, there was evidence of clear practical difficulties arising if, as was asserted by Rex, the meaning of the words “separate days” was extended to include any other day of absence. For instance, a single day sick leave absence without a medical certificate could not be taken on a day before or after a pilots “weekend” (rostered days off). As was identified by the evidence from witnesses called by Rex 5, there was no suggestion from these individuals that a pilot would be denied sick leave for a single day absence without a medical certificate because that day adjoined the pilot’s “weekend”.

[44] Consequently, when properly considered in the context of the text of the Agreements, the words “separate days” appearing in subclause 50.3.8 of the 2014 Agreement, can be given a plain meaning. That plain meaning is logically confined to the circumstances that the subclause introduces as occasions when the evidence requirements of subclause 50.3.7 are avoided. These circumstances are the days that are the subject of subclause 50.3.8, namely any one of the four days in a calendar year for which a pilot is entitled to paid sick leave without the production of a medical certificate.

Conclusion

[45] In this case, the application was made in respect to a DSP found in an Agreement which, subsequent to the filing of the application, no longer had any force or effect, that is, after 18 August 2016. Consequently, the Commission is strictly not empowered to exercise arbitration powers in order to provide for the determination of the application. Notwithstanding this jurisdictional impediment, the Parties have accepted that it would be appropriate for the Commission to provide a determination of the dispute which, in a practical sense, involved on-going contest about terms that are now contained in the 2014 Agreement.

[46] The determination of the dispute has involved a requirement to settle a contested construction question arising from particular terms contained in the 2014 Agreement. The contest has primarily focussed upon the terms contained in subclauses 50.3.7 and 50.3.8. In particular, the Parties advanced competing propositions as to the construction that should be given to the words “separate days” appearing in subclause 50.3.8.

[47] The competing propositions for construction of the terms of the Agreements have been evaluated and balanced. The contested terms of the Agreements have been examined having regard for evidence of surrounding circumstances, so as to determine whether an ambiguity exists.

[48] Upon analysis, and application of the principles for resolution of questions of contested construction as primarily established by the Golden Cockerel Decision, I have concluded that the disputed terms of the 2014 Agreement can be given a plain and ordinary meaning, and an ambiguity has not been established.

[49] Following a careful consideration of the contested terms of the 2014 Agreement, the proper construction that should be given to the words “separate days”which appear in subclause 50.3.8 of the 2014 Agreement, confines those words to days of sick leave for which no medical certificate is provided. In summary, these words cannot be given a construction which would broaden their meaning to encompass other days of leave or absence which may be taken in accordance with other provisions of the 2014 Agreement.

[50] In view of the determination made as to the correct construction and interpretation that should be given to the contested terms of the Agreements, the following practical summation is provided:

The terms of the 2011 and 2014 Agreements establish that any pilot, (who has not already utilised the four single days in a calendar year which entitle her or him to sick leave without the requirement to produce a medical certificate), is entitled to payment of sick leave without a medical certificate for a single day of absence even if that day adjoins another day of absence or leave, the only exception being that if the adjoining day is another day of sick leave without a medical certificate, then the pilot is only entitled to payment in respect to a single day of sick leave.

[51] It follows that in respect to the particular circumstances of Mr Young, (assuming that he had not already utilised the four single days in the 2015 calendar year which entitled him to sick leave without the requirement to produce a medical certificate), Rex was obliged to make payment of sick leave to Mr Young in respect to his absence on 21 April 2015.

[52] Consequently, the application made by the AFAP has been granted. The interpretation of the contested terms of the Agreements as was asserted by the AFAP has been confirmed to be correct. The dispute is determined accordingly.

COMMISSIONER

Appearances:

Mr J Lauchland appeared for the Australian Federation of Air Pilots.

Ms P Tran appeared for Regional Express Holdings Ltd.

Hearing details:

2016.

Sydney:

August 2, 29.

 1   Stephenson v Abetz [PR952743], (28 October 2004).

 2   The Australasian Meat Industry Employees Union v Golden Cockrell Pty Limited [2014] FWCFB 7447.

 3   Essential Energy v Australian Municipal, Administrative, Clerical and Services Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; The Association of Professional Engineers, Scientists and Managers, Australia [2015] FWCFB 1981.

 4 Kucks v CSR Limited [1996] IRCA 166 (19 April 1996), 66IR182.

 5   See Transcript, PN138 and PN211-PN213.

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