Australian Federation of Air Pilots v Regional Express Holdings Ltd t/a Regional Express

[2017] FWCFB 4182

[2017] FWCFB 4182

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Australian Federation of Air Pilots
v
Regional Express Holdings Ltd t/a Regional Express
(C2017/2391)

VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER SIMPSON

SYDNEY, 21 AUGUST 2017

Appeal against decision [2017] FWC 2126 of Deputy President Clancy at Melbourne on 13 April 2017 in matter number C2016/6218.

Introduction

[1] The Australian Federation of Air Pilots (AFAP) has lodged an appeal against a decision of Deputy President Clancy issued on 13 April 2017 1 (Decision). The Decision was made pursuant to s.739 of the Fair Work Act 2009 (FW Act) in the exercise of arbitration powers conferred upon the Commission by clause 35, Dispute Resolution Procedure, of the Regional Express Pilots’ Enterprise Agreement 2014 (Agreement). The dispute the subject of the arbitration concerned the interpretation of clauses 54.5 and 60.1 of the Agreement which deal respectively with reimbursement of a pilot’s actual reasonable personal expenses as a result of temporary transfer away from Home Base (clause 54.5) and the payment of the Daily Travel Allowance (DTA) (clause 60.1). The AFAP’s appeal is only concerned with the Deputy President’s conclusion concerning the proper interpretation and application to temporary transfers of clause 60.1 of the Agreement. It contends that the Deputy President erred as to the construction of clause 60.1, and consequently that the Decision insofar as it concerns this issue should be quashed. The Deputy President’s conclusions regarding clause 54.5 are not challenged by the AFAP in the appeal.

[2] The Agreement applies to Regional Express Holdings Ltd (Regional Express), all pilots employed by Regional Express and the AFAP. The provision of the Agreement the subject of the dispute and this appeal, clause 60.1, provides for the payment of a “Daily Travel Allowance” (DTA) of $6.28 per hour. The AFAP contended before the Deputy President that pilots undertaking a temporary transfer were entitled to the payment of the DTA for the entirety of the period of the transfer from sign on at home base to sign off at home base. Regional Express’s position was that the DTA was only payable for duty directly associated with flying duties, which would not include non-working days or time spent resting or sleeping between sign on and sign off at home base. It was not in dispute that, at the time of the Decision, clause 60.1 had not previously been applied in the context of a temporary transfer, although it appears that no pilot had prior to the dispute been compulsorily directed to undertake a temporary transfer. The Deputy President determined the dispute concerning clause 60.1 in a manner broadly consistent with Regional Express’s position.

Relevant provisions of the Agreement

[3] It is necessary to set out a number of provisions of the Agreement other than clause 60.1 which were referred to in the Decision and in the submissions before us. Firstly, clause 3 of the Agreement defines a number of terms used in the Agreement. The following definitions are of relevance:

3.6 “Base network” means all the ports that are normally associated with a particular crew base for the purposes of rostering.

3.20 “Deadhead Travel” means all travel performed at the direction of the Employer not associated with the actual operation of the aircraft but required for the purpose of the positioning for a Tour of Duty or returning to Home Base or base of temporary transfer after a Tour of Duty. For the purposes of this Agreement, Deadhead Travel time will be regarded as duty time.

3.21 “Designated Day Off” means a day on which a Pilot is rostered to be free of all duty in their Home Base or base to which they have been temporarily transferred and will extend from 2200 hours on the previous day until 0600 hours on the following day.

3.23 “Duty” means a task or series of tasks that Pilots are required to perform under the terms of their employment with the Company. These tasks include but are not limited to pilotage, flight-planning, pre-flight inspections, training, Deadhead Travel, and other duties as prescribed in this Agreement.

3.24 “Duty Time” means all time on duty in accordance with the CAOs and this Agreement.

3.25 “Duty Period” means the period from sign on to sign off. A Duty Period may commence on one day and conclude on a subsequent day.

3.34 “Layover” means any occasion a Pilot is away from his or her Home Base or base of temporary transfer between sign-off time and sign-on time for a continuous period exceeding nine hours.

3.40 “Out-of-base duty” means a duty performed outside of a crew members' normal base network, or base of temporary transfer and that would normally be assigned to crew members of another crew base. Simulator checks are not considered an out-of-base duty.

3.41 “Out-of-base layover” means a layover that results from performing an out-of-base duty.

3.53 “Tour of Duty” is defined as the complete time a Pilot is away from Home Base or base of temporary transfer. A Tour of Duty may include a number of Duty Periods when operating from a base other than Home Base or base of temporary transfer, as well as Deadhead Travel.

[4] Clause 53 deals with permanent transfers of pilots. The concept of a permanent transfer is defined in clause 53.1:

53.1 Subject to clause 53.2, a "permanent transfer" means the transfer of a Pilot from one Home Base to another where the period of the transfer is expressed prior to the transfer to be in excess of 180 calendar days.

[5] Clause 53.2 provides that, by agreement, a temporary transfer may exceed 180 days in duration, in which case clause 54 applies. Clause 53.5.3 deals with accommodation where a pilot is permanently transferred by Regional Express, and provides:

53.5.3 Where a Pilot is transferred to a new Home Base the Employer will provide appropriate accommodation (as provided for in clause 59) until the Pilot is able to obtain suitable permanent accommodation. The provision of such accommodation will be limited to a period of up to two weeks.

[6] The subject matter of temporary transfers is dealt with in clause 54 of the Agreement. The concept of a temporary transfer is defined in clause 54.1 as follows:

54.1 A transfer or transfers shall be taken to be temporary where the number of days spent on temporary transfer in any 12 calendar months will not exceed 180 days, or such longer period as may be agreed between the Pilot and the Employer.

[7] Clauses 54.3-54.6 deal with issues concerning accommodation and expenses for pilots on temporary transfers:

54.3 Until such time as agreed alternative accommodation becomes available the provisions of clause 59 will apply to a Pilot on temporary transfer. Such agreed alternative accommodation will be provided at the Employer's cost.

54.4 Where the temporary transfer is to be for a period in excess of 28 days the Employer will provide travel for the Pilot's spouse and each dependant child under 21 years of age to join the Pilot when the agreed alternative accommodation is occupied by the Pilot. Where agreed alternative accommodation has not been found within 28 days of the commencement of the temporary transfer and provided the unexpired period of transfer is at least a further 28 days, the spouse and each of the Pilot's dependant children will be entitled to travel and accommodation at the Employer's cost.

54.5 In the case of a temporary transfer a Pilot will be reimbursed any actual reasonable personal expense as a result of such transfer away from Home Base.

54.6 If a Pilot on temporary transfer encounters special or unforeseen circumstances affecting the adequacy of either expense arrangements or the terms of transfer, the Pilot will be allowed additional expenses, subject to the approval of the Employer, and either the Pilot or the Employer may raise for attention any inadequacy of terms of the transfer.

[8] Clause 59 deals with the subject matter of accommodation of pilots as follows:

59 ACCOMMODATION

59.1 When a Pilot in the course of their employment is absent on Layover from their base, they will be provided by the Employer with appropriate accommodation (as defined in clause 3.4 of this Agreement).

59.2 To the extent possible, a list of approved places of accommodation will be compiled on the basis of mutual consultation between the Employer and the RexPC. The Company agrees to investigate complaints received in writing regarding accommodation within seven working days.

59.3 A party proposing a change to the existing accommodation will notify the other party of the proposal. If no agreement is reached, the parties seeking the changes may refer the proposal to the Disputes Settlement Procedure for determination and in such circumstances the existing arrangements will continue until the matter is determined.

59.4 On a Layover where no appropriate accommodation (as defined in clause 3.4) is available, the Employer will provide the best accommodation available and the Pilot will be entitled to a hard lying allowance of $99.25 per night, Indexed to CPl.

59.5 If the Employer and a Pilot agree, a Pilot may arrange and pay for their own accommodation and meals, and the Employer will pay an allowance of $87.57 for capital city ports and $75.89 for all other ports, Indexed to CPI, and will be deemed to have discharged the obligations in this clause. In such cases the Pilot will give at least 36 hours Notice of intention to provide own accommodation to allow the Company to cancel the original booking without penalty. This shall not apply where the Pilot has been called out within the 36 hour period.

59.6 Notwithstanding the above, a Pilot attending a ground school on initial employment in their designated Home Base is responsible for the provision of accommodation, at their own expense. A Pilot allocated a based at other than that where the ground school is to be held will be provided with appropriate accommodation which may include serviced apartments (as agreed with the RexPC) whilst away from their Home Base.

[9] Clause 60.1, which directly concerns the DTA, provides in its entirety:

60 DAILY TRAVEL ALLOWANCE

60.1 Pilots will be paid a Daily Travel Allowance ("DTA") of $6.28 per hour for each hour of duty directly associated with flying duties. For the purposes of calculating the DTA, duty time is defined as those hours encompassed from sign on at Home Base to sign off at Home Base.

60.2 Where Pilots are required to attend ground courses, conferences and other activities not defined as flying duties at the Employer's direction, and at their Home Base, said Pilots will be reimbursed all applicable meal expenses incurred as a direct result of attendance. No reimbursement will apply if a meal of an agreed standard is supplied by the Employer.

Reimbursement of meals will be at the following rates, when more than 30 minutes fall between the period specified. These allowances are Indexed to CPl.

Meal Period Allowance (as of 1 July 2014)

Breakfast 0630-0800 $24.63

Lunch 1200-1330 $27.61

Dinner 1800-2000 $47.47

60.3 At a base other than their Home Base, Pilots will be reimbursed any reasonable expenses including meals (as defined in clause 60.2), incurred as a direct result of their attendance, and be provided accommodation in accordance with clause 59 of this Agreement.

60.4 At a base or place other than their Home Base, Pilots will be paid DTA in accordance with clause 60.1 above, on those days where deadhead travel has been undertaken or flying duties have been conducted, immediately prior to or immediately after attendance inclusive of that time spent in attendance.

60.5 Where an entitlement to DTA exists no reimbursement for meals will apply during such period.

60.6 The hourly rate for the purposes of the DTA is calculated by dividing the daily rate specified in the Australian Public Service "SES Travelling Allowance Determination" by 24.

60.7 When the Australian Public Service SES- Travelling Allowance Determination amount is varied, the DTA in this Agreement will be changed in accordance with the formula set out in clause 60.6.

The Decision

[10] The Deputy President concluded that clause 60.1 had a plain meaning and was not ambiguous, and accordingly there was no basis to have regard to surrounding circumstances. 2 His reasoning and conclusion concerning the construction of the provision were as follows (footnotes omitted):

“[31] The two sentences in Clause 60.1 work together. The first sentence of the clause provides that an entitlement to DTA will be triggered where duties directly associated with flying duties are performed. The second sentence stipulates the span of hours within which such performance must occur.

[32] It seems to me an entitlement to DTA can be triggered when a pilot undertakes a temporary transfer. What is required for this to occur is that there be duties “directly associated with flying duties” performed during the period between sign on at Home Base and sign off at Home Base. The AFAP submitted that the only two relevant tours of duty for the purposes of Clause 60.1 are the deadhead travel out of Home Base and the deadhead travel to Home Base because these are when the sign on and sign off at Home Base occur, with the result that DTA is payable for the entire period in between. I agree with this submission only to the extent that those two tours of duty will delineate the period within which the DTA can be claimed.

[33] Under the 2014 Agreement, a “Tour of Duty” includes “Deadhead Travel.”  This is regarded as duty time and includes both travel required for the purpose of the positioning for a Tour of Duty and returning to Home Base after a Tour of Duty. A Tour of Duty may include a number of other Duty Periods when operating from a base of temporary transfer and these will involve signing on and off. The AFAP acknowledged such sign-ons and sign-offs occur during a temporary transfer but said these denote flight and duty times. This is somewhat illusory. The qualifying factor for DTA is that duties “directly associated with flying duties” must be performed and I do not regard non-working days or time spent resting and sleeping between sign-ons and sign-offs during a temporary transfer as duties falling within the meaning of “duty directly associated with flying duties”. I reject the AFAP proposition that simply being on a temporary transfer means a pilot is doing something directly associated with flying duties.

[34] Clause 3.23 of the 2014 Agreement defines “Duty” as a task or series of tasks that pilots are required to perform under the terms of their employment. A non-exhaustive list of tasks is outlined. The key characteristic is that a duty requires performance. For DTA to become payable, duties must be performed, they must be directly associated with flying duties and they must be performed within the span of time between sign on at Home Base and sign off at Home Base.

[35] As I have found Clause 60.1 has a plain meaning and there is no ambiguity, there is no basis for me to draw on evidence of surrounding circumstances to contradict the plain language of the 2014 Agreement.”

Submissions

AFAP’s submissions

[11] The AFAP contended that the entire period of a temporary transfer, from sign on until sign off at home base, involved “duty directly associated with flying duties”, and the Deputy President erred by determining otherwise. In support of this contention, it submitted:

• the basis for the DTA was the inconvenience and difficulty associated with being absent from home, and on temporary transfer as with out-of-base layovers that absence was directly associated with flying duties;
• time resting and sleeping during an out-of-base layover attracted the payment of the DTA, and was no different in principle to time spent resting and sleeping on a temporary transfer;
• the second sentence of clause 60.1 had to be read with the first sentence, and defined duty time for the purpose of the first sentence as being all time from sign on to sign off at home base;
• the definition in the second sentence modified the general definition of “duty time” in clause 3.24;
• clause 60.2 served the function of identifying duties which were not directly associated with flying duties, and notably did not include reference to resting and sleeping time;
• in predecessor agreements, clauses 60.1 and 60.2 had formed a single provision, and this supported the proposition that clause 60.2 operated as an exclusion from the operation of clause 60.1;
• Regional Express’s argument at first instance that a temporary transfer involved a change to the pilot’s home base, so that the payment of the DTA was confined to the period from sign on to sign off at the base of the temporary transfer, was contrary to the definition of home base in clause 3.32 as “the base at which the Pilot from time to time is permanently domiciled”, and also contrary to clause 8.7 which provided that a pilot terminated on temporary transfer had to be returned to the home base at the employer’s expense;
• it was also to be noted that a number of the provisions of the Agreement used the expression “Home base or base of temporary transfer”, which made clear that the two things were never intended to be the same;
• the conclusion reached by the Deputy President about the interpretation and application of clause 60.1 was not the position advanced by Regional Express at first instance, and was not consistent with the way Regional Express had paid the DTA since at least 2001 with respect to out-of-base layovers.

AFAP’s historical analysis

[12] The AFAP also submitted that the historical circumstances of the origin and the use of the entitlement to DTA were relevant to understanding the intended meaning of clause 60.1 and supported its position. Its historical analysis proceeded on the premise that the fact that Regional Express was formed out of two companies, Hazelton Airlines (Hazelton) and Kendell Airlines (Kendell) in 2001, made the industrial instruments previously applicable to those companies relevant. In respect of Hazelton, it was first covered by the Pilots’ Supplementary Airlines Award 1988 (1988 Award). Clause 25 of the 1988 Award provided:

25. Accommodation - Allowances & Entitlements

A (i) When a pilot in the course of his employment is absent on layover from his base he shall be provided by his employer with such first class accommodation and meals as are provided in the area.

(ii) (a) To the extent possible a list of approved places of accommodation and arrangements for meals shall be compiled on the basis of mutual consultation between the employer and his pilot.

(b) A party proposing a change to the existing accommodation or meal arrangements shall notify the other party of the proposal. If no agreement is reached the party seeking the change may refer the proposal direct to a grievance board for determination and in such circumstances the existing arrangements shall continue until the grievance board determines the issue.

B. First class accommodation and meals

(i) On layover a pilot will be provided with first class accommodation and meals during the period specified at no cost to the pilot and additionally the layover allowance as per subclause F hereof will be paid.

(ii) The employer may provide first class accommodation only and my [sic] mutual agreement with the pilot, pay the specified meal and layover allowances as per subclause F hereof.

C. Other than first class accommodation

(i) On the layover where no first class accommodation is available the employer shall provide the best accommodation available, meals or meal allowances as prescribed in subclause F hereof, a layover allowance and a hard lying allowance of $53.20 in respect of each layover.

D. In special circumstances to suit a pilot’s convenience, the pilot may be paid, by mutual agreement with the employer, the amount of $75.10, on any layover in return for which the pilot shall be responsible for securing his own accommodation and meals and the employer shall be deemed to have discharged his obligations under subclause B and C herein.

E. Where a pilot commences a tour of duty from a layover port, which involves duty in excess of thirty (30) minutes in a meal period, defined in subclause F hereof he shall be provided with a meal or pay the appropriate meal allowance.

F. Meal allowance as referred to above, where more than thirty (30) minutes fall between:

0630-0800 hours
1200-1330 hours
1800-2000 hours

shall be:
breakfast - $11.80
lunch - $13.60
dinner - $30.70

Layover allowance
Australia and dependencies - $12.50
Elsewhere - $21.90

G. Camping out

. . .

[13] The AFAP pointed out that under clause 52 of the 1988 Award, clause 25 applied to pilots on temporary transfer “until such time as agreed alternative accommodation becomes available”. Such agreed alternative accommodation was to be provided at the employer’s cost.

[14] In 1994 Hazelton became bound by the Hazelton Air Services Pty Ltd Pilots’ Enterprise Bargaining Agreement 1994 (1994 Hazelton Agreement). Clause 4 of the 1994 Hazelton Agreement provided that it was to be read and interpreted in conjunction with the 1988 Award, provided that the agreement would take precedence to the extent of any inconsistency. Clause 13 provided:

13. DAILY TRAVEL ALLOWANCE:

For the purpose of calculating the daily travel allowance duty time is defined as those hours encompassed from sign on at home base to sign off at home base.

Pilots shall be paid a daily travel allowance of $3.23 per hour for each hour of duty time,

PROVIDED THAT:

13.1 In lieu of clause 25(a) of the Pilots’ Supplementary Airlines Award 1988 the following shall apply:

(a) (i) When a pilot in the course of his/her employment is absent on layover from his/her base he/she shall be provided by Hazelton with such first class accommodation as is available in the area.

(ii) (A) To the extent possible list of approved places of accommodation shall be compiled on the basis of mutual consultation between Hazelton and its pilots.

(B) A party proposing a change to the existing accommodation shall notify the other party of the proposal. If no agreement is reached the party seeking the change may refer the proposal direct to a grievance board for determination in such circumstances the existing arrangements shall continue until the grievance board determines the issue.

13.2 In lieu of clause 25(c) of the Pilots’ Supplementary Airlines Award 1988 the following shall apply:

(c) On the layover where no first class accommodation is available Hazelton shall provide the best accommodation available and a hard lying allowance of $53.20 in respect of each layover.

13.3 The following clauses of the Pilots’ Supplementary Airlines Award 1988 shall no longer apply to pilots covered by this agreement.

13.3.1 Clause 25(b);
13.3.2 Clause 25(d);
13.3.3 Clause 25(e);
13.3.4 Clause 25(f);
13.3.5 Clause 26(a)(i);
13.3.6 Clause 26(c);
13.3.7 Clause 30;
13.3.8 Clause 42(g)(ii);
13.3.9 Clause 42(l).

13.4 Pilots covered by this Agreement shall no longer be entitled to the allowances stipulated in the following clauses of the Pilots’ Supplementary Alliance Award 1988:

13.4.1 Clause 27(a);
13.4.2 Clause 42(f)(ii).

[15] The AFAP submitted that the DTA in the 1994 Hazelton Agreement was the sum of the breakfast, lunch, dinner and layover allowances from clause 25F of the 1988 Award, divided by 24 (with a 2 cent discrepancy). It pointed out that a similar methodology was retained in clause 60.6 of the 2014 Agreement. Thus the DTA introduced by the 1994 Hazelton Agreement was effectively in lieu of the meal and layover allowances in the 1988 Award and, the AFAP submitted, was designed to compensate pilots for being away from home and the resulting difficulties and inconvenience including the loss of efficiencies around bulk food purchasing, storage and meal preparation.

[16] Next, the AFAP referred to clause 7 of the Hazelton Airline Pilots’ Enterprise Agreement 1996 (1996 Hazelton Agreement), which provided:

7. DAILY TRAVEL ALLOWANCE

(a) Pilots shall be paid a daily travel allowance of $3.23 per hour for each hour of duty time directly associated with flying duties, provided that:

(b) For the purpose of calculating the Daily Travel Allowance, duty time is defined as those hours encompassed from sign-on at home base to sign-off at home base, with the following exclusions covering the cases of duty time not directly associated with flying duties;

(c) Where pilots are required to attend ground courses, conferences and other activities not defined as flying duties, and at Hazelton’s direction;

(i) at their home base, pilots shall be reimbursed any reasonable expenses incurred as a direct result of attendance;

(ii) at a base or place other than their home base, pilots shall be reimbursed any reasonable expenses incurred as a direct result of attendance, and be provided accommodation in accordance with clause 8 of this Agreement;

(iii) at a base or place other than their home base, pilots shall be paid DTA in accordance with paragraph (a) above of this clause, on those days where dead head travel has been undertaken or flying duties have been conducted, immediately prior to or immediately after attendance inclusive of that time spent in attendance;

(iv) the detail of what constitutes ‘reasonable expenses’ shall be determined from time-to-time as required and outlined in a letter of agreement between the company, the AFAP and the HAPC.

(d) The following clauses for the Pilots’ Supplementary Airlines Award 1988 shall no longer apply to pilots covered by this Agreement:

Clause 25(B)
Clause 25(D)
Clause 25(E)
Clause 25(F)
Clause 26(a)(i)
Clause 26(c)
Clause 30

[17] The AFAP submitted that the 1996 Hazelton Agreement saw the introduction of the expressions “flying time associated with flying duties” and “duty time not associated with flying duties”, with clause 7(b) identifying the exclusions falling with the latter category. The AFAP then referred to clause 7 of the Hazelton Airlines Pilots’ Enterprise Agreement 1997 (1997 Hazelton Agreement), which modified the drafting of the previous clause 7 as follows:

7. DAILY TRAVEL ALLOWANCE

(a) Pilots shall be paid a daily travel allowance of $3.23 per hour for each hour of duty time directly associated with flying duties.

(b) For the purpose of calculating the daily travel allowance, flight duty time is defined as those hours encompassed from sign-on at home base to sign-off at home base for the purpose of conducting flying duties.

(c) Notwithstanding paragraph 7(b), the following exclusions cover cases of duty time, where pilots are required to attend ground courses, conferences and other activities at Hazelton’s direction, not defined as being associated with flying duties: …

[18] Clause 7 of the Hazelton Airlines Pilots’ Enterprise Agreement 1998 (1998 Hazelton Agreement) again modified the drafting of clause 7 in the preceding agreement as follows:

7. DAILY TRAVEL ALLOWANCE

Pilots shall be paid a daily travel allowance of $3.27 per hour for each hour of duty time directly associated with flying duties, provided that;

For the purpose of calculating the Daily Travel Allowance, duty time is defined as those hours encompassed from sign on at home base to sign off at home base, with the following exclusions covering the cases of duty time not directly associated with flying duties;

Where pilots are required to attend ground courses, conferences and other activities not defined as flying duties, and at Hazelton’s direction;

(i) at their home base, pilots shall be reimbursed any reasonable expenses incurred as a direct result of attendance;

(ii) at a base or place other than their home base, pilots shall be reimbursed any reasonable expenses incurred as a direct result of attendance, and be provided accommodation in accordance with clause 8 of this Agreement;

(iii) at a base or place other than their home base, pilots shall be paid DTA in accordance with paragraph (a) above of this clause, on those days where dead head travel has been undertaken or flying duties have been conducted, immediately prior to or immediately after attendance inclusive of that time spent in attendance;

(iv) the detail of what constitutes ‘reasonable expenses’ shall be determined from time-to-time as required and outlined in a letter of agreement between the company, the AFAP and the HAPC.

The following clauses for the Award shall no longer apply to pilots covered by this Agreement:

Clause 25(B),(D),(E)and(F)

Clause 26(a)(i)and(c)

Clause 30

Pilots covered by this Agreement shall no longer be entitled to the allowance stipulated in Clause 27(a) of the Award.

Hazelton undertakes to provide appropriate personnel and facilities to carry out loading and/or unloading of aircraft.

[19] The AFAP then referred to the DTA provisions of the Hazelton Airline Pilots’ Enterprise Agreement 2000 (2000 Hazelton Agreement) as follows:

57.1 Pilots shall be paid a daily travel allowance of $3.60 (effective and backdated 1 September 1998) per hour for each hour of duty time directly associated with flying duties. For the purposes of calculating daily travel allowance, duty time is defined as those hours encompassed from sign on at home base to sign off at home base.

57.2 Where pilots are required to attend ground courses, conferences and other activities not defined as flying duties at Hazelton’s direction, and at their home base, said pilots shall be reimbursed all applicable meal expenses incurred as a direct result of attendance. No reimbursement will apply if a meal of an agreed standard is supplied by the company.

[20] The AFAP said that the 2000 Hazelton Agreement made separate provision for temporary transfer, but did not exclude the application of the DTA to pilots on temporary transfer.

[21] The AFAP submitted that the following key conclusions could be drawn from the above history:

(1) The DTA was the successor to the meal and layover allowances in the 1988 Award. It was intended to compensate for the inconvenience and difficulty associated with being away from home, and consequently it could be expected that the DTA would apply for the entire period that the pilot was on temporary transfer.

(2) Where the predecessors to the 2014 Agreement identified the “exclusions covering the cases of duty time not directly associated with flying duties”, they were “ground courses, conference and other activities at Hazelton’s discretion”, and did not include temporary transfers.

[22] In respect of Kendall, the AFAP first referred to the Kendell Airlines Pilots’ Enterprise Agreement 1997 (1997 Kendell Agreement). Under the 1997 Kendell Agreement, pilots received the accommodation allowances and entitlements provided for in the 1988 Award, but no entitlement to DTA was provided for. This changed in the Kendell Airlines Pilots’ Enterprise Agreement 1998 (1998 Kendell Agreement), which in clause 57 retained the accommodation allowances and entitlements but introduced the DTA as an alternative in respect of meals:

57.1 When a pilot in the course of his employment is absent on layover from his base he shall be provided by the company with such first class accommodation and meals or DTA.

57.1.1 To the extent possible a list of approved places of accommodation and arrangements for meals (where agreed) shall be compiled on the basis of mutual consultation between the company and the pilots.

57.1.2 A party proposing a change to the existing accommodation or meal arrangements shall notify the other party of the proposal. If no agreement is reached the party seeking the change may refer the proposal direct to the disputes procedure for determination and in such circumstances the existing arrangements shall continue until the matter is determined.

First class accommodation and meals

57.2 On layover a pilot will be provided with first class accommodation and DTA.

The company may provide first class accommodation only and where DTA is not paid by agreement, pay the specified meal and layover allowances as per subclause 57.5 hereof.

Other than first class accommodation

57.3 On the layover where no first class accommodation is available the company shall provide the best accommodation available, DTA or meals or meal allowances as prescribed in subclause 57.5 hereof including layover allowance and hard lying allowance of $53.20 in respect of each layover.

…

57.6 Daily travel allowance

In lieu of the above allowances for meals the company shall pay an amount of $3.27 per hour for each hour of duty. The calculation commences from 45 minutes before departure of the first flight until 15 minutes after arrival of the last flight in the duty period. The amount will move in line with Australian Taxation Office approval.

[23] The 1998 Kendell Agreement also provided for temporary transfers as follows:

52.4 On completion of a temporary transfer assignment a pilot shall be granted one day free of all duty for each week or part thereof in respect of a period of transfer at home base.

52.4.1 Until such time as agreed alternative accommodation becomes available the provisions of clause 57 shall apply to a pilot on temporary transfer. Such agreed alternative accommodation shall be provided at the company’s cost.

[24] The AFAP submitted that the Kendell history likewise demonstrated that the DTA was payable in lieu of meal and layover allowances, and was applicable to temporary transfers.

Regional Express’s submissions

[25] Regional Express submitted that the Deputy President’s conclusion that clause 60.1 had a plain meaning was correct, and accordingly there was no basis to have regard to surrounding circumstances to displace that plain meaning. Practical content was given to the meaning of the clause by the Deputy President as follows:

(a) The two sentences in clause 60.1 worked together. The first sentence created the obligation to pay; the second sentence defined the span of hours in which that pay obligation would operate.

(b) On a temporary transfer, two tours of duty created the boundaries within which the allowance was payable: the Deadhead Travel from Home Base, and the Deadhead Travel back to Home Base.

(c) Within those boundaries, the qualifying trigger was duty “directly associated with flying duties”. In other words, non-working days or time spent resting and sleeping on a temporary transfer did not trigger the allowance.

[26] Contrary to the AFAP’s submissions, the expression “directly associated with flying duties” was not ambiguous, and the AFAP’s reliance upon earlier instruments did not demonstrate such ambiguity. The most that could be inferred from the earlier instruments was that the parties had regard to them, but earlier alleged intentions associated with those agreements, which applied to now extinct airlines, could not be transplanted onto the common intention with respect to the current Agreement.

[27] Regional Express further submitted that there was no prior custom and practice which could support the interpretation advanced by the AFAP. There was no existing practice of paying the DTA on temporary transfers, and the AFAP’s reliance on the fact that the DTA was paid in relation to layovers was an impermissible use of a perceived inequality in treatment in order to demonstrate ambiguity. Layovers were different because they remained part of a single tour of duty (as defined). The DTA would equally apply to a layover which occurred during a temporary transfer. The Agreement otherwise exhaustively compensated pilots for temporary transfers by affording notice, accommodation, travel for spouses and dependents, and reimbursement of expenses. The distinction was logical because, on a layover, there was limited opportunity to pre-arrange means and incidentals, while on a temporary transfer there was adequate opportunity for such pre-arrangement. This distinction led to a sensible industrial outcome. If the DTA was payable on a 24-hour, 7-day basis on a temporary transfer, there would be no work left to do for the qualifier “directly” in the expression “duty directly associated with flying duties”, since there would be no duty to which the DTA did not apply.

[28] At the hearing, the parties were invited to make further written submission concerning whether clause 54.5 had application to meal expenses incurred by a pilot while on a temporary transfer. Regional Express submitted that clause 54.5 did apply to such meal expenses, provided that the pilot was not on duty, with the DTA being applicable when the pilot was on duty. The AFAP submitted that clause 54.5 did not apply to meal expenses.

Consideration

Is permission to appeal required?

[29] Both parties proceeded on the basis that it was necessary for the AFAP to obtain permission to appeal. We do not consider this is correct. Clause 35.1(e) of the Agreement provides (emphasis added):

(e) Where a dispute over the application of the Agreement is unable to be resolved by conciliation, the Employer or the Federation may refer the matter to Fair Work Australia to arbitrate the dispute and make a determination. Such a determination is binding upon the parties subject to the right to appeal the determination to a Full Bench of Fair Work Australia.

[30] The Commission acts as a private arbitrator when it resolves disputes pursuant to the dispute resolution procedure in clause 35 of the 2014 Agreement. Its functions and powers derive from the clause itself. Clause 35(1)(e) expressly confers an independent right of appeal upon a disputant party, and thus modifies the operation of s.604. 3 There is therefore no basis to for us to treat the matter as one requiring permission to appeal.

Operational context

[31] A number of practical operational matters, which were not in dispute, provide the context for the determination of the dispute in this matter:

(1) All of Regional Express’s pilots have a “Home Base” as defined in clause 3.32 of the 2014 Agreement, being the base at which they normally start and finish their flying duties.

(2) Under clause 40.1, pilots are assigned to “Tours of Duty”, as defined in clause 3.53, which consists of the period a pilot is away from base. A tour of duty may consist of one or more “Duty Periods”, defined in clause 3.25 to mean a period from sign on to sign off. A tour of duty may involve duty periods which commence and/or finish at a location other than the pilot’s base. It may also include “Deadhead Travel”, which as defined in clause 3.20 is required travel where the pilot is not involved in the operation of the aircraft but is being transported to a location from which a period of duty will be performed or being returned to home base after performing a period of duty.

(3) Pilots may be required to stay overnight, as part of a tour of duty, at a location other than their base. This is a “Layover”, which is defined in clause 3.34, and necessarily involves a period of resting and sleeping.

(4) Pilots may, as part of a tour of duty, be required to perform “Out-of-base duty” (defined in clause 3.40), which is duty performed outside of the pilot’s “Base Network” (defined in clause 3.6). The base network of a pilot consists of the ports that are normally serviced from the pilot’s home base.

(5) The performance of out-of-base duty may require an out-of-base layover (defined in clause 3.41) - in other words, an overnight stay at a location other than the pilot’s base while performing out-of-base duty.

(6) A pilot may be the subject of a temporary transfer under clause 54, which means that the pilot performs duty from a base other than his or her home base for a period not exceeding 180 days (unless extended by agreement). During a temporary transfer, the pilots perform tours of duty starting and finishing at the base to which the pilot has been temporarily transferred.

(7) Pilots may also be permanently transferred under clause 53, in which case the pilot changes home base.

[32] A further and critical contextual matter is that both parties took the position that the 2014 Agreement required the payment of the DTA to pilots while on a layover, including an out-of-base layover. The practice adopted by Regional Express over a long period was consistent with this common position. The pilot’s accommodation is paid for by Regional Express during a layover, but there is no separate payment or reimbursement for meals, which are treated as covered by the DTA. It necessarily follows that the DTA may be payable when the pilot is not performing any actual work duties and may be resting or sleeping.

Interpretation of clause 60

[33] Bearing this context in mind, we turn directly to the terms of clause 60. The clause may be characterised as having the following structure:

• clause 60.1 establishes the entitlement to the DTA;
• clause 60.2 refers to activities (“Where pilots are required to attend ground courses, conferences and other activities not defined as flying duties”) which, when they are performed at home base, are subject to a separate regime of payments for reimbursement of meal expenses (that is, the DTA is not applicable);
• clause 60.3(as the parties agreed) is applicable to the activities referred to in 60.2 where they occur away from the pilot’s home base, and provides for reimbursement of reasonable expenses including meals and the provision of accommodation by Regional Express;
• clause 60.4 also applies (again, as agreed by the parties) to the activities described in clause 60.2 where they occur away from home base, and provides that the DTA is applicable to flying duties or deadhead travel occurring immediately before or after such activities and inclusive of the time spent in attendance at such activities;
• clause 60.5 provides that where there is an entitlement to the DTA, there cannot be any reimbursement for meals; and
• clause 60.6 and 60.7 provide for the quantification and adjustment of the DTA.

[34] One inference which can immediately be drawn from clause 60 as a whole is that the function of the DTA is, wholly or primarily, to compensate pilots for the cost of meals while away from home. This is apparent from clauses 60.2 and 60.3, which provide for alternate mechanisms to reimburse meal expenses where the DTA does not apply, and clause 60.5, which makes it clear that there is no separate entitlement to reimbursement of meals where the DTA is payable. In respect of accommodation, there is a separate and extensive regime established by clause 59, which is applied to temporary transfers in a particular way by clause 54.3.

[35] The first sentence of clause 60.1 provides that the DTA is payable “for each hour of duty directly associated with flying duties”. The second sentence then provides that, for the purpose of the DTA, “duty time” is defined as “those hours encompassed from sign on at Home Base to sign off at Home Base”. In the Decision, the Deputy President considered that clause 60.1 was not ambiguous, and as earlier set out read the clause on the basis that the DTA applied to those hours of duty directly associated with flying duties which fell within the period encompassed by sign on and sign off at home base. The Deputy President then went on to conclude that non-working days or periods spent resting or sleeping could constitute duty directly associated with flying duty.

[36] With respect, we cannot agree that clause 60.1 is unambiguous or that its text plainly supports the approach adopted by the Deputy President, for three reasons. First, although the 2014 Agreement contains a comprehensive definitions clause (clause 3) which gives meanings to most of the specialist expressions used in the 2014 Agreement, no specific definition is assigned to the expression “duty directly associated with flying duties” used in the first sentence of clause 60.1. Nor is the more confined expression “flying duties” defined. These expressions are inherently ambiguous in their application to the variety of duties and obligations required to be discharged by pilots under the terms of the 2014 Agreement. The term “Duty” is defined, as earlier set out, but the qualifier attached to this term in the first sentence casts doubt as to the application of that definition.

[37] Second, the second sentence establishes a special definition of “duty time” for the purpose of calculating the DTA which presumably supplants the general definition of that expression in clause 3.24. What is unclear is how that special definition operates with regard to the expression of the DTA entitlement in the first sentence, which does not actually use the expression “duty time”. The Deputy President effectively treated the special definition as applying only to the expression “each hour of duty” in the first sentence, so that the entitlement applied that subset of “duty time” which could be characterised as being directly associated with flying duties. However we consider that the special definition of “duty time” in the second sentence could equally be read as applying to the whole of the expression “each hour of duty directly associated with flying duties”. On that approach, everything between sign on and sign off at home base is covered, and there is no need to examine further whether the time spent in between is directly associated with flying duties.

[38] Third, insofar as layovers, including out-of-base layovers, are covered by the DTA (as the parties agreed), it is unclear how the plain meaning identified by the Deputy President could support that outcome. Although layovers may be characterised as falling in between sign on and sign off at home base, they involve resting and sleeping, and thus cannot constitute “duty directly associated with flying duties” as that expression was interpreted by the Deputy President. The plain meaning assigned to the provision by the Deputy President would necessarily mean that the DTA was not payable on layovers, contrary to the common position of the parties and longstanding practice.

[39] Having identified ambiguity in clause 60.1, it is permissible to take into account evidence of surrounding circumstances, including the historical context, to aid the interpretation of the 2014 Agreement and resolve the ambiguity (although it is equally permissible to take into account the historical context in order to assist in determining whether ambiguity exists in the first place). 4 The historical context referred to by the AFAP has, we consider, greater utility than submitted by Regional Express. It may readily be inferred from the history of the predecessor instruments that the regime for the payment of the costs of accommodation and meals for pilots working and staying away from home in the 2014 Agreement was not made of whole cloth for that agreement, but represented a development of provisions which evolved over a series of predecessor industrial instruments. The specific conclusions we would draw from that context are as follows:

• The 1988 Award represented the starting point in the history. It relevantly provided that pilots on temporary transfers would either be provided with meals or be paid meal allowances covering breakfast, lunch and dinner. The only exception to this was where “agreed alternative accommodation becomes available”, although the position with meals when such accommodation was arranged was unclear. Presumably such accommodation was something other than hotel/motel accommodation.
• The DTA first developed in the 1994 Hazelton Agreement was payable on the basis of duty time, defined as those hours from sign on to sign off at home base. There was no reference to “duty directly associated with flying duties”, so it is clear that the DTA was payable for the entirety of a temporary transfer. The DTA was payable exclusive of the meal provisions in clause 25 of the 1988 Award. Further, it was calculated by adding the breakfast, lunch and dinner allowances in clause 25F of the 1988 Award and dividing them by 24, and was thus quantified to cover all meals in a day (providing they fell within the sign on-sign off parameters), not just those occurring during periods of work within a day.
• In clause 7(a) of the 1996 Hazelton Agreement, the expression “duty time not directly associated with flying duties” was used for the first time in relation to the DTA. It was used to refer to specific activities to which the DTA did not apply: “...where pilots are required to attend ground courses, conferences and other activities not defined as flying duties, and at Hazelton’s direction”. In respect of those activities, a separate regime applied which was similar in structure to that currently found in clauses 60.2-60.4. Thus the DTA continued to apply to the entirety of temporary transfers notwithstanding the introduction of the new expression.
• Clause 7(a) of the 1997 Hazelton Agreement introduced the qualifier “for each hour of duty time directly associated with flying duties” in relation to the DTA entitlement. However clause 7(b) then defined “flight duty time” as the hours “encompassed from sign on at home base to sign off at home base for the purpose of conducting flying duties”. The relationship between clause 7(a) and (b) was clearer compared to the first and second sentences of the current clause 60.1. “Flight duty time” was apparently used synonymously with “duty time directly associated with flying duties”, and only required that it be “for the purpose of conducting flying duties” (underlining added). Clause 7(c) then referred to the excluded activities currently found in clause 60.2. They were stated to be “...cases of duty time ... not defined as being associated with flying duties...”. Thus anything else which fell within the definition of “flying duties” or “flight duty time” might be subject to the DTA, and this included the entirety of temporary transfers.
• The first sentence of clause 7 of the 1998 Hazelton Agreement expressed the entitlement to the DTA in the same way as the first sentence of the current clause 60.1. However the second sentence made it clear that the identified activities excluded from the DTA (being essentially the same as those currently found in clause 60.2) were those “covering the cases of duty time not directly associated with flying duties”. That is, the specifically excluded activities constituted an exhaustive statement of the instances of duty time which were not directly associated with flying duties. The entirety of temporary transfers thus remained subject to the DTA entitlement.
• The DTA entitlement in the 2000 Hazelton Agreement was essentially expressed in the same way as in the 2014 Agreement. The drafting in clause 57 appears to be a restructuring of that in clause 7 of the 1998 Hazelton Agreement, but no intention to alter the scope or application of the DTA is apparent.
• The 1997 Kendell Agreement applied the relevant provisions of the 1988 Award, but the 1998 Kendell Agreement established the DTA as an alternative to the provision of meals, and applied it to temporary transfers, without exception, until such time as “agreed alternative accommodation becomes available” (which was at the expense of the employer). Again we presume such accommodation was non-hotel/motel accommodation.

[40] The overall conclusion we draw from this is that the DTA was developed to replace award meal entitlements which applied to all meals taken during temporary transfers, at least until alternative accommodation arrangements were arranged. The Hazelton and Kendell Agreements all applied the DTA to temporary transfers, and did not exclude any part of temporary transfers from the application of the DTA, subject to the Kendell requirement that DTA would cease to apply once agreed alternative accommodation became available.

[41] The Regional Express pilots’ agreements of 2002, 2005 and 2011 all retained the DTA entitlement essentially in the form it appeared in the 2000 Hazelton Agreement. The 2014 Agreement did not change that situation. The inference we draw from the historical context is that the 2014 Agreement was intended to maintain the long-established position that the DTA was payable for all hours between sign on and sign off at home base, including on temporary transfers, but not for ground courses, conferences and other activities of a like nature. This supports an interpretation of clause 60.1 whereby the special definition of “duty time” in the second sentence of the clause is one which applies to the whole expression “each hour of duty directly associated with flying duties”, so that the entirety of any absence from home base, whether on a tour of duty involving a layover, out-of-base duty or a temporary transfer, is covered by the DTA entitlement. The only exceptions are those activities specifically described in clause 60.2.

[42] The following contextual and other considerations support this interpretation and militate against the approach preferred by the Deputy President:

(1) The interpretation supported by the historical context is consistent with the payment of the DTA on layovers, including out-of-base layovers. As earlier stated, the approach taken by the Deputy President cannot be reconciled with payment of the DTA on layovers. Regional Express tried to distinguish layovers on the basis they occurred within a single tour of duty, unlike temporary transfers. We do not accept the validity of that distinction. Clause 60.1 makes no reference to the DTA being payable only during tours of duty. It could easily have used that expression if that was the intention.

(2) Similarly, the 2014 Agreement uses the expression “base of temporary transfer” where it is intended to distinguish the base from which a pilot operates during a temporary transfer from his or her home base. In particular clauses 3.20, 3.34, 3.53 and 31.1.1 all refer to the “Home Base or base of temporary transfer”. If the same or similar language had been used in the second sentence of clause 60.1, there would have been no doubt that non-working time while on a temporary transfer - that is, time between tours of duty - would not fall within duty time for the purpose of the calculation of the DTA. However that language was not used.

(3) The interpretation supported by the historical context produces a sensible industrial outcome. Pilots located away from home and staying in hotel accommodation usually lack the opportunity of buying food in bulk and preparing it themselves, with the concomitant reduction in cost. That is so even where the meal is taken during a non-work period. It is a common employment and industrial practice to compensate employees by way of a travelling allowance for this. The approach taken by the Deputy President leaves the pilot to bear the entire expense of all meals consumed in non-working time on a temporary transfer.

(4) The alignment of the DTA with the Australian Public Service SES Travelling Allowance Determination is notable. APS travelling allowances compensate for all meals throughout the day on stays away from home, not simply those taken during working hours.

(5) The Deputy President (in paragraph [34] of the Decision) brought the definition of “Duty” in clause 3.23 to bear in concluding that non-working time during temporary transfers did not fall within the DTA entitlement. However, that approach would necessarily also lead to layovers being excluded from the payment of the DTA, contrary to the historical practice. The second sentence of clause 60.1 departs from the general definition of “Duty Time” in clause 3.24, which is itself dependent on the definition of “Duty” in clause 3.23. That makes the application of the “Duty” definition inapt.

(6) The use of sign on time and sign off time at home base as the markers for the period in which the DTA was payable is consistent with the way in which temporary transfers operate. Sign on and sign off time (as those expressions are defined in clauses 3.49 and 3.50) are associated with the commencement and completion of a tour of duty respectively. A temporary transfer necessarily starts with a deadhead travel tour of duty consisting of deadhead travel from home base to the base of transfer, and likewise ends with a tour of duty from the base of transfer to home base. As the definition of “Tour of Duty” in clause 3.53 makes clear, a tour of duty can be comprised of deadhead travel.

[43] We do not accept Regional Express’s submission that the expense of meals in non-working time while on temporary transfer is accommodated by clause 54.5.The expression “personal expense” is inapt to describe payment for meals, and the 2014 Agreement usually expressly refers to meals where it deals with meal expenses (for example, clauses 59.5, 60.2, 60.3 and 60.5). As a practical matter, it seems unlikely that reimbursement for actual expenses incurred that are deemed to be reasonable would be intended to be the mechanism for pilots to recover their daily meal expenses. Clause 54.5 appears to have been derived from clause 52(f) of the 1988 Award, which provided; “In the case of a temporary transfer a pilot shall be reimbursed any actual reasonable personal expense to which he shall be put as a result of such transfer away from his home base”. As earlier set out, clause 52(e)(i) of the 1988 Award separately provided that clause 25, which provided for the provision of meals or the payment of meal allowances, to temporary transfers (at least until agreed alternative accommodation was arranged). Clause 52(f) could not be read therefore as being concerned with meal expenses. That historical context supports the conclusion we have reached about clause 54.5 of the 2014 Agreement.

[44] For the above reasons, we prefer the approach to the interpretation and application of clause 60.1 advanced by the AFAP, and consider that the conclusion reached about this by the Deputy President was not the correct conclusion. We would add one caveat to this. Clause 59.5 allows for a pilot and Regional Express, by agreement, to make an arrangement whereby the Pilot arranges and pays for his or her own accommodation and food and is paid an allowance of a specified amount. We see no reason why such an arrangement could not be entered into on a temporary transfer, in which case the obligation to pay the DTA may be displaced. However the allowance amounts specified appear wholly inadequate to cover accommodation and meals, and it may be that clause 54.3, which also refers to “agreed alternative accommodation” being arranged at the employer’s cost, contemplates that the specified allowances would only cover meals. These issues were not fully argued before us, and it is not necessary for us to finally determine them; it is sufficient to identify that, by agreement, an arrangement may be made on a temporary transfer which involves a departure from the requirement to pay the DTA.

Determination

[45] We determine the appeal as follows:

(1) The appeal is upheld.

(2) The Decision ([2017] FWC 2126) is quashed.

(3) The dispute between the parties (C2016/6218) is determined on the basis that clause 60.1 of the Regional ExpressPilots’ Enterprise Agreement 2014requires a pilot on temporary transfer to be paid the Daily Travel Allowance for the entirety of the period from sign on at home base to sign off at home base, subject only to clause 59.5.

VICE PRESIDENT

Appearances:

C Dowling of counselinstructed by J Lauchland on behalf of the Australian Federation of Air Pilots.
L Howard of counsel instructed by J Wickworth on behalf of Regional Express Holdings.

Hearing details:
2017.
Melbourne:
14 June.

Final written submissions:

Respondent’s submission, dated 6 July 2017.
Appellant’s submission, dated 13 July 2017.

 1  [2017] FWC 2126

 2   Decision at [30]

 3   See AMWU v Silcar Pty Ltd[2011] FWAFB 2555 at [15]-[28]; SDAEA v Woolworths Limited[2013] FWCFB 2814 at [22]; TWU v Linfox Australia Pty Ltd at [24]-[25]

 4   Short v FW Hercus Pty Ltd [1993] FCA 72, (1993) 46 IR 128 at 134-136 per Burchett J; AMWU v Berri Pty Limited[2017] FWCFB 3005 at [114]

Printed by authority of the Commonwealth Government Printer

<Price code C, PR595261>