Australian Federation of Air Pilots v Regional Express Holdings (No 2) - [2024] FedCFamC2G 1360

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Australian Federation of Air Pilots v Regional Express Holdings (No 2) [2024] FedCFamC2G 1360

File number: MLG 788 of 2015

Judgment of: DEPUTY CHIEF JUDGE MERCURI

Date of judgment: 16 December 2024

Catchwords:
INDUSTRIAL LAW – FAIR WORK – on remittal from the Full Court of the Federal Court – lengthy procedural history – initial application filed in 2015 – Letter from company to prospective employees – Full Court found letter contained threats to take adverse action – whether the Letter was sent with an intention to prevent the exercise of workplace right – consideration of chief operating officer’s evidence both at the first trial and re-trial – witness found to be credible – finding that letter not sent for proscribed purpose – section 340 and 343 claims not made out

PRACTICE AND PROCEDURE – procedural issue – whether judgment can be delivered when court advised after judgment reserved the respondent was placed in administration – operation of section 440D of the Corporations Act 2001 (Cth) – liberty to apply

Legislation:
Corporations Act 2001 (Cth) s 440D

Fair Work Act 2009 (Cth), ss 340, 341, 342, 343, 360 and 361

Cases cited:
Australian Federation of Air Pilots v Regional Express Holdings (No 2) [2020] FCCA 219

Australian Federation of Air Pilots v Regional Express Holdings Limited [2021] FCAFC 226

Australian Federation of Air Pilots v Regional Express Holdings Limited [2023] FedCFamC2G 764

Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41

Curnow Consulting Pty Limited v JPD Media and Designs Pty Ltd t/a Durie Designs (No 3) [2018] NSWSC 827

Lucas v Zomay Holdings Pty Ltd [2019] FCA 830

National Tertiary Education Industry Union v Commonwealth of Australia [2002] FCA 441

National Union of Workers v Qenos Pty Ltd [2001] FCA 178

Qantas Airways Ltd v Transport Workers’ Union of Australia [2023] HCA 27

Re Tolco Pty Limited [2016] NSWSC 1069

Rhind v Deliveroo Australia Pty Ltd (Administrator’s Appointed) [2023] FedCFamC2G 50

X Pty Ltd v Milstead [2015] FamCAFC 50

Division: Division 2 General Federal Law

Number of paragraphs: 166

Date of last submissions: 14 June 2024

Date of hearing: 9 May 2024

Place: Melbourne

Counsel for the Applicant: Ms E Levine (direct brief)
Mr H Crosthwaite (direct brief)

Counsel for the Respondent: Mr L Howard

Solicitor for the Respondent: Clayton Utz
ORDERS

MLG 788 of 2015

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
AUSTRALIAN FEDERATION OF AIR PILOTS

Applicant

AND:
REGIONAL EXPRESS HOLDINGS

Respondent

ORDER MADE BY:

DEPUTY CHIEF JUDGE MERCURI

DATE OF ORDER:

16 DECEMBER 2024

THE COURT ORDERS THAT:
1.The parties have liberty to apply.

Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
DEPUTY CHIEF JUDGE MERCURI:
INTRODUCTION

Before the court is an application in which the applicant claims that the respondent contravened sections 340 and 343 of the Fair Work Act 2009 (Cth) (‘the Act’).
PRELIMINARY ISSUE
Before dealing with the substantive issues before me, I need to address a preliminary issue which has arisen since the court advised the parties on 6 December 2024 that judgement was due to be delivered in this matter on 11 December 2024.
On 10 December 2024, the court was put on notice (for the first time) that the respondent is currently in administration. In correspondence from the administrators, the court was advised that they would not appear on 11 December 2024 and said in that correspondence:
…We otherwise advise the Court that as a consequence of the operation of section 440D of the Corporations Act 2001 (Cth), in circumstances where the company is under insolvent external administration the Proceeding cannot be continued against the Company without the Administrators’ consent or the leave of the Court.
The administrators indicated that these proceedings could not therefore continue without the consent of the administrator or by leave of the court and furthermore the administrator was not in a position to, and did not, consent to the continuation of the proceeding.
At 8:11 am on 11 December 2024, the applicant provided the court with written submissions addressing the court’s capacity to hand down judgment in this matter. On 11 December 2024, the applicant appeared by counsel, but there was no appearance for the administrators of the respondent.
In circumstances where the applicant had filed detailed submissions about the court’s power to hand down judgement in this matter, I indicated that I would adjourn the delivery of judgement to 9:30 am on 16 December 2024 to provide the administrators to file any written submissions on this question, should they wish to do so. At 5:08 pm on 11 December 2024 my chambers were advised by email that the administrators will not be making any written or oral submissions in advance of the adjourned judgment delivery hearing.
There is no suggestion that the respondent was in administration during the hearing which was conducted before me. At the conclusion of that hearing on 14 June 2024, I reserved my decision in this matter.
At no point since that date, until 10 December 2024, was the court advised that the respondent was in administration. Notwithstanding that the correspondence from the administrators indicated that administrators were appointed to the respondent on 30 July 2024.
Section 440D of the Corporations Act 2001 (Cth) provides:
S 440D          Stay of proceedings
(1)    During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a)with the administrator’s written consent; or
(b)with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
(2)    Subsection (1) does not apply to:
(c)a criminal proceeding; or
(d)a prescribed proceeding.
There is authority of the Federal Court, the Victorian Supreme Court and the New South Wales Supreme Court which have adopted the approach that if an administrator is appointed once judgement is reserved, the court may hand down it’s judgement and indicate the orders that it would have made had s 440D not applied. The court cannot however, based on these authorities, make orders without the administrator’s consent or by leave of the court. For completeness, I note that by virtue of s 58AA, the Federal Circuit and Family Court of Australia (Division 2) is not a court within the meaning of s 440D(1)(b) which could in any event grant leave.
The applicant has referred the court to a decision of my fellow judge in Rhind v Deliveroo Australia Pty Ltd (Administrator’s Appointed) [2023] FedCFamC2G 50 (‘Rhind’) in which His Honour Judge Neville found that s 440D did not permit him from handing down a written judgement that could have an impact on the rights and entitlements of the applicant. That decision, in my view, is distinguishable from the present matter.
I note that in Rhind, his Honour was faced with a situation whereby judgement was reserved on 5 September 2022 and the court was advised in writing on 16 November 2022 that administrators were appointed to the respondent. Moreover, the court was further advised on 21 December 2022, that upon the imminent execution of a Deed of Company Arrangement, that the respondent would be deregistered.
In that context, his Honour said, at [15]:
… for reasons that follow, which essentially accept the submission by or on behalf of the Administrators, in the Court’s view, and pursuant to the Court’s own motion pursuant o s 140 of the FCFCOA Act: (a) the current litigation should be stayed for 12 months; and (b) in light of the Respondent Company being de-registered, and absent any Application to re-register the Respondent Company within 12 months of the date of its de-registration, and absent any Application in a relevant Court as specified in s 58AA of the Act within the next 12 months of the date upon which the Respondent is de-registered, there will issue a self-executing Order by which all outstanding Applications, and any matters relating thereto, shall be dismissed. The about course should be taken as ‘indicative Orders’ having regard to any possible issue arising under s 440D of the Act. Otherwise, the matter will be immediately removed from the active case-pending list.
Relevantly, section 140 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides:
The Federal Circuit and Family Court of Australia (Division 2) has power, in relation to matters in which it has jurisdiction, to:
(a)make orders of such kinds, including interlocutory orders, as the Court considers appropriate; and
(b)issue, or direct the issue of, writs of such kinds as the Court considers appropriate.
The applicant also helpfully pointed me to a decision of the Family Court of Australia which also appears to suggest that judgement cannot be delivered after an administrator has been appointed (X Pty Ltd v Milstead [2015] FamCAFC 50) (‘Milstead’). That decision related to an application for orders adjusting the property interests of the parties to a de facto relationship. With respect, again that decision is distinguishable from the present circumstance as in that case, the trial judge, did not simply hand down his reasons for judgement and indicate the orders that he would otherwise have made, but in fact made orders affecting an entity in administration.
At first instance, X Pty Ltd was joined as a party to the property proceedings. After judgement was reserved at first instance, but before judgement was delivered and orders were pronounced, X Pty Ltd was placed into voluntary administration. An application was brought by the de facto husband for the proceedings against the administrators appointed to X Pty Ltd, be stayed until further order. The trial judge proceeded to hand down judgment and make orders, affecting, among others, the administrator of X Pty Ltd.
On appeal to the Full Court of the Family Court of Australia (Thackray, Strickland & Tree JJ) it was submitted that all orders made by the trial judge ‘were made contrary to s 440D … of the Corporations Act 2001 (Cth)’. In considering whether the trial judge in delivering judgement and making orders that he did, ‘proceeded with’ a proceeding against a party in administration for the purposes of s 440D, the Full Court considered the history of s 440D.
At [41] of Milstead, the Full Court said:
… the purpose for the initial enactment of what is now s 440D of the Corporations Act was to, so far as possible, and insofar as the company was not the moving party, freeze the financial circumstances of the company in question, to permit the administrator to devise a plan of action for the future of the company in conformity with the statutory objects of s 435A. … Given that purpose, it would be anomalous if s 440D permitted the adjudication upon extant proceedings, either against the company or in relation to its property, to nonetheless conclude by judgement during the moratorium period. That is because a judgement may create rights and liabilities which otherwise do not exist either at law or in equity, or adjust rights. The judgement in question is a good example of that, in that it created a liability on the part of X Pty Ltd which did not exist prior to judgement, and further required Property M to be sold to satisfy he debt just created if it was not paid within 60 days.
Ultimately at [55], the Full Court concluded that the primary judge should not have proceeded to deliver judgement and make orders. The Full Court therefore set aside the orders made by the primary judge and remitted the matter to the primary judge for rehearing. The Full Court said:
… Of course, what his Honour then does with the proceedings will depend on the stage of the administration of X Pty Ltd. His Honour though would not be able to continue with proceedings insofar as they affect X Pty Ltd or its property interests unless s 440D is complied with.
As stated, X Pty Ltd related to a situation in which the trial judge, not only delivered judgement and indicated the orders that they would have made against the company in administration but actually made orders which had the potential to affect the assets of that entity.
Moreover, and notwithstanding the reasoning in X Pty Ltd, there have been a number of more recent decisions in both the Federal Court of Australia and in the New South Wales Supreme Court, which have adopted the course proposed by the applicants in this matter. The applicant has set out those cases and the reasoning at paragraph [9] of its written submission. In Lucas v Zomay Holdings Pty Ltd [2019] FCA 830, His Honour Justice O’Callaghan conducted a hearing on 16, 17 and 20 May 2019. It appears from his written reasons for judgement that on 29 May 2019, he was informed that an administrator had been appointed that day to the respondent. At paragraph [89], his Honour set out the declaration and orders that he would have made had the administrator not been appointed. He proceeded, at [90], only to make an order that the parties have liberty to apply. In doing so, he went on to say:
… The administrator and the parties can take advantage of the liberty to apply to re-list the proceeding at their option.
In Re Tolco Pty Limited [2016] NSWSC 1069, Brereton J said, at [2]:
Administrators were appointed to the defendant on 31 July 2015, shortly after the hearing, while judgement was reserved. Pursuant to Corporations Act 2001 s 440D, proceedings against the company were thereby stayed. Initially, the administrators took the position that no further steps should be taken in relation to the matter. TFGS submitted that s 440D did not stay the delivery of a reserved judgement, which it sought. Tolco by its administrators did not require a judgement, but left the matter in the hands of the court. In those circumstances, and being of the view that even if s 440D did not stay the delivery of a reserved judgement, it had the effect that no orders could be made without the administrator’s consent or leave of the Court, delivery of judgement was deferred pending the outcome of the administration. However, there have been no further communication from the parties or the administrators, this judgement will indicate the decision of the Court without, at least at this stage, making formal orders.
Brereton J then went on to publish his reasons and simply order that the matter be adjourned to the Corporations Judge directions list. See also Curnow Consulting Pty Limited v JPD Media and Designs Pty Ltd t/a Durie Designs (No 3) [2018] NSWSC 827 at [12].
Having regard to these authorities, I am satisfied that it is open to me to publish my reasons, set out the orders that I would have made, absent the application of s 440D and provide the parties with liberty to apply should they wish to do so.
Given the lengthy history of this matter, the fact that the administrator was apparently appointed in July 2024 and that no indication has been given as to the possible or likely outcome of that appointment or the timeline within which any decisions about the future of the respondent will be made, it is in the interests of the administration of justice that the parties are advised of my reasons for judgement and the order that I would have made, save for the operation of s 440D. However, the only order that I can make is to give the parties liberty to apply.
I therefore, now, set out the reasons for judgement that I had proposed to delivery on 11 December 2024.
PROCEDURAL BACKGROUND
This matter has a lengthy procedural history. The application was initially filed on 15 April 2015. I don’t propose to set out the procedural history in detail however, I note that, relevantly, after various interlocutory hearings, and appeals from those determinations, the applicant’s substantive application was heard and determined by Judge Blake (Australian Federation of Air Pilots v Regional Express Holdings (No 2) [2020] FCCA 219) (‘BJ Judgement’).
The Federation appealed the BJ Judgement. That appeal was heard and determined by the Full Court of the Federal Court in Australian Federation of Air Pilots v Regional Express Holdings Limited [2021] FCAFC 226 (‘FC Judgement’). The conclusions reached by the Full Court are set out at paragraphs [193] to [195] of the FC Judgement which relevantly provides:
193The appeal will be allowed in part.
194The primary judge’s orders to the extent that the Federation’s claim of contravention of s 345 of the FW Act was dismissed should stand to that extent.
195Otherwise, the Federation’s claims that REX contravened s 340 and s 343 of the FW Act must be remitted to the Federal Circuit and Family Court of Australia (Division 2) for rehearing in accordance with these reasons. …
In August 2023, the matter came before another judge of the FCFCOA (Division 2) to consider how the retrial ought to be undertaken. His Honour Judge Forbes’ decision on that procedural issue is Australian Federation of Air Pilots v Regional Express Holdings Limited [2023] FedCFamC2G 764 (‘FJ Judgement’).
In the FJ Judgement, his Honour considered how the rehearing would be conducted. As noted at paragraphs [24] and [25] of the FJ Judgement, the parties differed as to how this ought occur. Put simply, the Federation argued that a hearing de novo was required in respect of the remaining claims under ss 340 and 343 of the Act. The Respondent submitted that the retrial ought to ‘be conducted as a continuation of the first trial, with further submissions on the remitted issues based on the evidence that has already been adduced and with the parties being bound by the way in which they conducted the initial trial (subject to any application to reopen)’.[1]
[1] FJ Judgment at paragraph [26].
At paragraphs [47] to [49] of the FJ Judgment, His Honour relevantly resolved this issue as follows:
47I accept the Federation’s submission that there is no requirement for it to seek leave to reopen its case. The Full Court has ordered that the outstanding issues be remitted for rehearing in accordance with the Court’s reasons. In my view, it is implicit in that order, and having regard to the Court’s reasons, that the outstanding claims will require (at the very least) the author of the letter and the respondent’s central witness, Mr Howell, to give evidence under cross-examination and for that evidence to be evaluated by the new judge. Only then can the Court determine whether the respondent made the threats for reasons that included a prohibited reason (for the purposes of s 340) and whether there was an intention by the respondent to negate choice (for the purposes of s 343).
48That is not to say that the entire first instance proceeding must be replayed as if it never occurred. I anticipate that the parties may be content to rely upon the evidence in chief of some witnesses and the transcript record of their cross examination and re-examination. I also anticipate, in light of the first instance and Full Court judgements, that the parties are in a position to substantially agree on most facts. In respect of any witness who is required for cross examination, I would anticipate that cross-examination would be much more confined and targeted than it was at first instance. These are all matters in relation to which case management orders can be directed.
49The rehearing ordered by the Full Court is qualified by its finding that the letter at the centre of the dispute conveyed a threat as alleged by the Federation. Accordingly, the questions which remain for determination are:
(1)whether the respondent made the threat for a prohibited reason or reasons which included a prohibited reason as a substantial and operative factor in contravention of a s 340 of the FW Act; and
(2)whether in making the said threat there was an intention by the respondent to negate choice in contravention of s 343 of the FW Act.
…
52… For the remaining matters to be determined in accordance with the Full Court’s reasons, the parties must be afforded the opportunity to adduce evidence on those matters and for that evidence to be tested under cross-examination. It is a matter for each party to determine what evidence they wish to rely on and the extent to which they are content to proceed on whatever is already before the Court or whether that needs to be supplemented in some way.
…
54In the present case, the Full Court has plainly expressed the view that the remaining questions cannot be heard and determined without hearing and evaluating the evidence of Mr Howell. In order for me to rehear the matter in accordance with the Full Court’s reasons, the respondent must be able to adduce evidence to rebut the presumption in s 361 and the applicant must be afforded the opportunity to test that evidence under cross-examination. Whether that will require any more than Mr Howell been (sic) called and cross-examined is a matter for the parties.

The matter was then adjourned to a further directions hearing and the parties were directed to confer with a view to providing a consent minute of orders for the further hearing and determination of the remitted questions. By consent the parties agreed to certain procedural orders ultimately made by His Honour Judge Forbes on 1 September 2023.
The matter was then listed before me for a final hearing on 9 May 2024 with an estimate of two days.
FACTUAL BACKGROUND
The factual background is set out at paragraphs [2] to [19] of the FC Judgment which I do not propose to repeat but which I adopt for the purposes of these reasons. These reasons are to be read together with those paragraphs of the FC Judgment.
At the centre of the issues that are raised in this matter is the letter that was sent by Mr Howell on 5 September 2014 to three shortlisted applicants for the pilot training course (‘the Letter’). Given its centrality to the issues that arise for determination in this re-trial, it is appropriate to set the Letter out in full as set out at paragraph [19] of the FC Judgement (with paragraph numbers included).
1.   You are being considered for a position in the Regional Express Cadet Pilot (RECP) programme. We consider this is a very special honour as it means you have been assessed to have among the best technical/academic aptitudes amid the thousands of applicants we have on record.
2.   However, for us at Regional Express (REX), pure technical skills alone are not enough. We are looking for Cadets who will acknowledge the privilege of this life-changing opportunity and commit to paying back to the Company by being fiercely loyal and company-minded and by going way above and beyond the call of duty especially in times of needs for the Company. This will provide the best chance for the Company to remain resilient and strong in this very tough industry and enable the Company to raise the next generation of Cadets and aspiring airline pilots.
3.   We expect you to honour all your commitments for at least the first 7 years of your career with the REX Group.
4.   We have encountered many Cadets in the past who promised us the Earth in order to be selected for the RECP programme, but once selected they very quickly show their true colours. Even simple requests like volunteering to stay at the [Academy] accommodation are refused when overnighting for simulator checks. Senior management and directors regularly stay at the [Academy] accommodation when on official visits and yet some Cadets find that this is not good enough for them (when they were perfectly fine with it for 9 months of their Cadet training) and instead choose to stay at the local motel, costing the Company more than $100 per night extra.
5.   You should be aware that the REX Group considers such Cadets to be totally lacking in integrity in breaking their solemn undertakings given earlier. The REX Group will not allow any pilot lacking in integrity to hold a command and will not consider him/her to be suitable for entry into the PICUS programme which is a pre-requisite to holding a command.
6.   For us to gauge if you would fit the profile of the type of Cadets we are looking for, we would like you to prepare a hand-written motivation letter telling us what this life-changing opportunity means to you and giving us your solemn promise to give back to the Company by volunteering to undertake various activities and actions.
7.   You should give specific examples of these activities and actions, like the one we have cited above, on the different concrete ways that you are willing to give back to the Company for this extraordinary opportunity and privilege afforded to you. Your final selection will be largely determined by how far you are motivated to go above and beyond the call of duty for the Company as detailed in the list of examples you will provide.
8.   If you are selected, we expect you to honour not only the contractual obligations spelt out in your letter of employment and the Enterprise Bargaining Agreement, but also the solemn promises/commitments that you have articulated in your motivation letter. We therefore urge you to think carefully before you promise or commit to anything; your word is your bond and we reserve the right to respond accordingly if your break your word. So do not pursue this application for the RECP programme if you have the slightest doubts about your ability to honour your commitments over the next 7 years.
It is not in dispute that a letter in these terms was sent to three prospective cadets.
At page 1094 of the court book prepared in this matter is an earlier iteration of the letter that Mr Howell’s predecessor had sent to prospective cadets. It was in the following terms:
You are being considered for a position in the Regional Express Cadet Pilot programme. We consider this a very special privilege as it means you have been assessed to have among the best technical/academic aptitudes amid the thousands of applications we have on record.
However, for us at Regional Express, pure technical skills alone are not enough. We are looking for Cadets who will acknowledge this privilege and pay back to the Company for this life-changing opportunity by being fiercely loyal, company-minded and by going above and beyond the call of duty, and in good faith helping the Company out in its times of need. We have an expectation you will honour this commitment for at least the first 7 years of your career with Regional Express.
This commitment is not only for the Company. By helping Regional Express to be a strong and viable regional airline, you will also be assisting future generations of budding aviators to have their life-long ambitions realised just as you did so yourself. You will also be paving the way forward in regional Australia to ensure a lasting legacy of the finest regional airline in the world.
We would like you to prepare a hand written letter, telling us why you are deserving of the cadetship and what this opportunity means to you. We also want you to give us your solemn promises on what you commit to Rex and the regional communities if selected to be a cadet pilot. We also would like to hear of any other novel and additional ways you would like to voluntarily contribute to the Rex Group/regional communities that are over and above the duties promulgated in the Enterprise Bargaining Agreement.
If you are selected, we expect you to honour not only the contractual obligations, but also the promises/commitments that you have articulated in your hand written letter. You should be aware of the serious ramifications on the rest of your career of not upholding your commitments – your motivation letter could be shared with your future employers when reference checks are requested - as all reputable institutions will have a very dim view of any professional who breaks solemn commitments.
We encourage you to think carefully before you promise or commit to anything; your word is your bond and so do not pursue this application if you have the slightest doubt about your ability to honour your commitments over the next 7 years.
ISSUES
Following the appeal, and given the Full Court’s findings at paragraphs [159] to [160] that the Letter contained the ‘employment threat’ and the ‘sanction threat’, the issues which remain for determination by this court are whether:
(a)the respondent contravened s 340 by engaging in adverse action for a proscribed reason; and/or
(b)the respondent contravened s 343 by engaging in or threatening to take action against a person with an intent to coerce them into exercising, not exercising or proposing to exercise a workplace right at all or in a particular way.
The focus of both inquiries is on what motivated the respondent, through Mr Howell; who it is conceded by all, was the decision maker in this instance.
LEGISLATION
Before turning to address these issues, it is appropriate to set out the legislative framework within which that assessment is to be made and the relevant evidence.
Adverse Action
Section 340 of the Act relevantly provides:
(3) A person must not take adverse action against another person:
(e)because the other person:
(i)has a workplace right; or
(ii)has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(f)to prevent the exercise of a workplace right by the other person.
Section 341 of the Act identifies the circumstances in which a person has a workplace right, relevantly for present purposes.:
(1) A person has a workplace right if the person:
(a)is entitled to the benefit of, or has a role or responsibility under a workplace law, workplace instrument or order made by and industrial body;
(b)…
Section 342(1) of the Act then sets out, in table format, the circumstances in which a person takes adverse action against another person. Item (2)(a) of that table provides that adverse action is taken by a prospective employer against a prospective employee if the prospective employer refuses to employ the prospective employee. Furthermore, Item (2)(b) of the table states that adverse action is also taken by a prospective employer against a prospective employee if the prospective employer discriminates against the prospective employee in the terms and conditions on which the prospective employer offers to employ the prospective employee.
Relevantly for present purposes, s 342(2) of the Act provides:
(2) Adverse action includes:
(a)threatening to take action covered by the table in subsection (1); and
(b)…
Read together, therefore, the respondent’s conduct constitutes adverse action as, in sending the Letter, it has been found to have threatened to refuse to employ a prospective cadet, or threatened to discriminate against a prospective cadet in the terms and conditions upon which employment might be offered. Such action would be in breach of s 340 if it can be established that such threats were made for a proscribed reason.
In this case, the claimed proscribed reason is that the adverse action was taken because the recipients of the Letter ‘had a workplace right’ or ‘to prevent’ the recipients of the Letter from exercising a workplace right, if and when they became an employee of the respondent.
Coercion
It is also claimed that in sending the Letter, the respondent breached s 343 which relevantly provides:
(1) A person must not organise or take, or threaten to organise or take, any action against another person, or a third person, to:
(a)exercise or not exercise, or propose to exercise or not exercise, a workplace right; or
(b)exercise, or propose to exercise, a workplace right in a particular way.
Reasons for action
Section 360 of the Act relevantly provides:
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
(Emphasis added)
Section 361 of the Act further states:
(1) If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
Workplace right
It is not in dispute that, at all relevant times, pilots employed by the respondent had a right under the applicable enterprise agreement to stay in ‘appropriate accommodation’ as defined when on a layover. This right existed under both the Regional Express Pilots Certified Agreement 2005 (‘the 2005 Agreement’) and the Regional Express Enterprise Agreement 2011, which commenced operation in September 2012 (‘the 2012 Agreement’).
It is also not controversial that a workplace right includes a right to which a person may become entitled to in the future. In Qantas Airways Ltd v Transport Workers’ Union of Australia [2023] HCA 27, the plurality said:
34The reference in s 341(1)(a) to a person having a workplace right if the person is entitled to the benefit of a workplace law or workplace instrument is sufficiently broad to encompass a present entitlement under a workplace law or workplace instrument to receive a benefit at some future stage of the employment relationship on the occurrence of a contingency. In this way, s 341(1)(a) has a forward-looking dimension. For example, s 108 provides that an employee who engages in an eligible community service activity, such as jury service or volunteer bushfire fighting, ‘is entitled to be absent from his or her employment’ in certain circumstances. An employee ‘has’ a workplace right in the nature of an entitlement to the benefit of s 108, although the circumstances for asserting that entitlement have not arisen and may never arise.
…
41The evident object of s 340(1) is to protect workplace rights by protecting persons from adverse action for specified reasons connected with their holding or exercise of workplace rights. The provision affords scope for lawful adverse action to achieve any number of objectives, provided that the action is not substantively actuated by a purpose or reason inimical to a person holding or exercising workplace rights. Importantly, adverse action will not offend s 340(1) if taken with mere awareness of an effect on another person’s workplace rights. Instead, adverse action will only offend the section if it is taken for a proscribed reason: ‘because’ the person against whom it is taken has a workplace right or has (or has not) done something in relation to the exercise of a workplace right within the scope of s 340(1)(a), or ‘to prevent’ the exercise of a workplace right by that person within the scope of s 340(1)(b). As already noted, the proscribed reason must be a substantial and operative reason for taking the adverse action against the other person.
…
45The focus of s 340(1)(b), in prohibiting adverse action ‘to prevent the exercise of a workplace right’, is the future exercise of a workplace right, not the present existence of a workplace right. The words ‘to prevent’ as has been emphasised, are directed to a substantial and operative reason for the taking of the adverse action and mean, in this context, ‘in order to prevent’ or ‘with a view to preventing’. To ‘prevent’ is to preclude the occurrence of an anticipated event or to render the event impractical or impossible by anticipatory action. To ‘prevent the exercise of a workplace right’ encompasses stopping or putting an obstacle in the way of exercise of a presently held right. But equally, it encompasses putting an obstacle in the way of exercising a right that may arise at some future date.
Having regard to these principles and the operation of s 342(1) Item 2(a) and (b), it is apparent that adverse action can be taken by a prospective employer against a prospective employee, by reference to a workplace right which might become exercisable in the future.
HOW TO ASSESS THE REASONS FOR SENDING THE LETTER
As noted, the central question before the court is whether the adverse action was taken because the recipients had a workplace right, or to prevent the recipients from exercises a workplace right or for reasons which included these proscribed reasons for the purposes of s 340 and similarly whether the respondent had an intention to negate choice for the purposes of s 343. This requires a consideration of why the Letter was sent and, relevantly, whether the proscribed reason was a substantial and operative reason for the adverse action.[2]
[2] Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 at [103]-[104] and [127].
In Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 (‘Barclay’), French CJ, and Crennan J, as their Honours then were, identified the approach to this task in the following terms:
5The task of a court in a proceeding alleging a contravention of s 346 is to determine, on the balance of probabilities, why the employer took adverse action against the employee, and to ask whether it was for a prohibited reason or reasons which included a prohibited reason. This appeal was concerned with identifying the correct approach to that task.
…
45This question is one of fact, which must be answered in light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.
…
60… it is erroneous to treat the onus imposed on an employer by s 361 as being made heavier (or rendered impossible to discharge) because an employee affected by adverse action happens to be an officer of an industrial association. Further, the history of the relevant legislative provisions reveals no reason why the onus must now be different if adverse action is taken while an employee engages in industrial activity – like a person who happens to be an officer of an industrial association, a person who happens to be engaged in industrial activity should not have an advantage not enjoyed by other workers.
61Central to the respondents’ argument on this appeal was the contrary and incorrect view that Mr Barclay’s status as an officer of an industrial association engaged in lawful industrial activity at the time that Dr Harvey took adverse action against him meant that Mr Barclay’s union position and activities were inextricably entwined with the adverse action, and that Mr Barclay was therefore immune, and protected, from the adverse action. If accepted, such a position would destroy the balance between employers and employees central to the operation of s 361, a balance which Parliament has chosen to maintain …
62Secondly, it is a related error to treat an employee’s union position and activity as necessarily being a factor which must have something to do with adverse action, or which can never be dissociated from adverse action. It is a misunderstanding of, and contrary to, Bowling to require that the establishment of the reason for adverse action must be entirely dissociated from an employee’s union position or activities. Such reasoning effectively institutes an interpretation of the relevant provisions indistinguishable from that of Isaacs J in Pearce, which was rejected in Bowling. The onus of proving that an employee’s union position and activity was not an operative factor in taking adverse action is to be discharged on the balance of probabilities in the light of all the established evidence.
63Thirdly, it is appropriate for a decision-maker to give positive evidence comparing the position of the employee affected by the adverse action with that of an employee who has no union involvement.
Their Honours Gummow and Hayne JJ, as they then were, further stated:
127In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a ‘substantial and operative factor’ as to constitute a ‘reason’, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.

Heydon J, as his Honour then was, also said in Barclay:
141… The assessment of a witness’s mental processes is an assessment of that witness's state of mind. … Of course, ‘mere declarations’ by a witness as to his or her ‘mental state’ may not be sufficient to discharge the appellant’s burden of proof under s 361. External circumstances could put into questions the reliability or credibility of those declarations. But Dr Harvey’s evidence did not consist only of ‘mere declarations’. There was nothing to suggest that her evidence was incorrect.
…
146To search for the ‘reason’ for a voluntary action is to search for the reasoning actually employed by the person who acted. …
…
149In this Court, the respondents contended that s 346 of the Act ‘is not confined to the subjective intent of the decision-maker’. They argued:
“The ‘real reason’ for the adverse action may comprise a multiplicity of reasons, some of them ‘subjective’ in the sense that they refer to an intention, belief or other state of mind of the actor and others of which are objective in the sense that they refer to extrinsically ascertainable facts which comprise the context in which the action was taken. However, the inquiry to ascertain the real reason or reasons is objective. The decision maker may or may not be in a position to give dispositive evidence of the real reasons for the adverse action.”
The respondent did not make it plain what precise meaning the words ‘objective inquiry’ would have in this context. The language of the Act does not support the respondents’ submission. The international instruments to which Australia is party and on which the respondents relied do not support it either. Nor do the authorities to which the respondents referred. One of those authorities, for example, was Mason J’s judgement in General Motors-Holden’s Pty Ltd v Bowling, with which Stephen and Jacobs JJ concurred. In that case, his Honour was considering the purpose of an earlier version of the Act. His Honour held that its purpose was to place on the defendant the onus of proving ‘that which lies peculiarly within his own knowledge’.
Moreover, in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41 (‘BHP Coal’) at [7], the plurality said:
The focus of the enquiry as to whether s 346(b) has been contravened is upon the reasons for Mr Brick taking the adverse action. … The enquiry involves a search for the reasoning actually employed by Mr Brick. The determination to be made by the court is one of fact, taking account of all the facts and circumstances of the case and available inferences.
The plurality in BHP Coal went on to say:
8In Board of Bendigo Regional Institute of Technical and Further Education v Barclay [No1], French CJ and Crennan J observed that it would ordinarily be difficult for an employer who has taken adverse action to discharge the onus of proof in s 361 without calling direct evidence from the decision-maker as to his or her reasons. The court is not obliged to accept such evidence. It may be unreliable for a number of reasons. For example, other objective evidence may contradict it.
…
19Section 346 does not direct a court to inquire whether the adverse action can be characterised as connected with the industrial activities which are protected by the Act. It requires a determination of fact as to the reasons which motivated the person who took the adverse action.
...
21In the present case, the reasons found by the primary judge to actuate Mr Brick’s decision did not include Mr Doevendans’ participation in industrial activity, or his representing the views of the CFMEU. To the contrary, his Honour found that Mr Brick had not been motivated by such considerations. This was consistent with the reasons given by Mr Brick in evidence accepted by his Honour, which related to the nature of Mr Doevendans’ conduct and what it represented to Mr Brick about Mr Doevendans as an employee.
22The primary judge then went on to consider whether Mr Doevendans’ conduct constituted an industrial activity in the relevant respects. The only inference which can be drawn from this additional reasoning is that, because the adverse action was based upon the sign which Mr Doevendans held and waved, this activity must be taken as one of the reasons for the action. That is to say no more than that the adverse action had a connection, in fact, to the industrial activity. The connection may necessitate some consideration as to the true motivations of Mr Brick, but it cannot itself provide the reason why Mr Brick took the action he did. That enquiry was concluded by his Honour’s earlier findings. His Honour, in effect, wrongly added a further requirement to s 361, namely that the employer dissociate its adverse action completely from any industrial activity.
(Emphasis added)
Similarly, in a separate judgement, Gageler J, as his Honour then was, said, after referring to Barclay:
85 … The unanimous holding in that case was that, read in the context of ss 360 and 361 of the Act and of its legislative history, the word ‘because’ in s 346 of the Act connotes the existence of a particular reason as an operative and immediate reason for taking adverse action. Where the adverse action taken is in consequence of a decision made by a responsible individual within a corporation, the existence or non-existence of a particular reason as an operative and immediate reason for taking that adverse action turns on an inquiry into the mental process of that individual.
…
87Two aspects of the background to the decision in Barclay are important to an understanding of the significance of that conclusion. The first was that evidence of the chief executive officer accepted by the primary judge did include prominently amongst the reasons for taking the adverse action the fact that the employee had sent an email to other employees. The second was that the majority in the Full Court of the Federal Court had made additional findings. …
Justices Hayne and Crennan each dissented.
In light of the High Court’s reasoning in Barclay and BHP Coal, the applicant accepts that evidence given by the decision maker as to their intent can, if accepted, discharge the onus of proof under s 361 of the Act. However, the applicant submits that, in determining this factual issue on the balance of probabilities, when the court has regard to all the facts and circumstances of the case and available inferences, it cannot be satisfied in this instance, that the respondent has discharged the onus of proof on this question.
In these proceedings, the court must therefore enquire into the reasons which motivated Mr Howell to send the Letter. His direct evidence will be important, but not necessarily determinative, of that question. It remains open to the court to reject his evidence, for example if it were to find that his evidence lacks credibility, or that there is other evidence, or inferences which can be drawn from the evidence, which goes to the issue and which contradicts his direct evidence or ought otherwise to be preferred.
FC JUDGMENT
Before turning to the evidence upon which this court is to determine why the Letter was sent, it is helpful to set out in some detail the relevant findings and analysis of the Full Court in the FC Judgment.
At paragraph [157], the Full Court held that:
… in determining whether a threat was made, purpose is relevant at two levels. First, to constitute a threat, the communication itself must communicate an intent to take adverse action or, in other words, a warning of an intention to take adverse action for the purpose of intimidating a person which, viewed objectively, will induce a belief that it will be carried into effect. As Bromberg J stated in FWU v AWU at [54], threatening to take action ‘must involve an expression of an intimidatory purpose’. This expression of purpose goes to the content of the communication, and not to the subjective purpose of the person responsible for the communication. Second, threating to take adverse action against another person will constitute adverse action if the threat is made for one of the prohibited reasons referred to in s 340(1). This invites attention to the question why the adverse action was taken, and whether a prohibited reason was a substantial and operative reason for the action … For this enquiry under s 361 adverse action against a person will be presumed to be action taken for an alleged prohibited reason, or for reasons that included an alleged prohibited reason, unless the person responsible for taking the adverse action proves otherwise. This a question of fact to be determined on the whole of the evidence but where the reason might be peculiarly within the knowledge of the decision-maker responsible for the action, whose direct evidence may be relevant, and if accepted may discharge the onus … There will likely be cases where the meaning that a person responsible for a communication intended to convey will be relevant to the reasons why the communication was made, and whether any prohibited reason was a substantial and operative reason for the communication.
The Full Court then went on to say:
158Having regard to the above principles, we respectfully consider that the primary judge erred in his consideration of whether the Letter conveyed threats substantially to the effect alleged by the Federation. … the primary judge referred to the evidence of Mr Howell and made findings as to his intention in writing the Letter. It is not at all clear whether these findings were made as part of his Honour’s consideration of whether the Letter conveyed the threats alleged, or whether the findings related to Mr Howell’s purpose in sending the Letter. His Honour’s conclusions at J [70] that the adverse action claims must be dismissed is a rolled-up conclusion that does not appear to be the product of sequential stages of analysis that distinguish between the objective meaning of the Letter and the subjective purpose of Mr Howell. Because the question whether the Letter constituted a threat is objective, the findings about Mr Howell’s intention in writing the Letter were not relevant to the question whether the threats were made.
159In our judgement, assessed objectively the Letter conveyed to the cadets an implied threat that REX would not employ them if they did not proffer a solemn promise to volunteer to stay at the Academy when staying overnight for simulator checks rather than staying at the local motel. … Although the understanding of the three cadets is not determinative of the objective question whether the Letter conveyed the first threat, it is telling that by their written responses to the Letter each of the three cadets addressed the question of accommodation in terms that conveyed a willingness to stay at the facilities at the Academy.
160In our judgement, the Letter also contained a second related threat, which was that if the cadets did not honour a commitment made to stay at the Academy, then they would be sanctioned in their employment. …
161As we indicated at [157] above, the meaning that a person responsible for a threat of adverse action intended to convey may be relevant to the reasons why the communication was made, and therefore whether any prohibited reason was a substantial and operative reason for the communication. On this issue, the primary judge proceeded on the basis that the appellant bore the onus of demonstrating that the threats were made for the prohibited reason alleged, whereas it is accepted that pursuant to s 361(1) of the FW Act the onus was on REX in accordance with the principles discussed by the High Court in Barclay to which we referred above. By its notice of appeal, the Federation alleges that the primary judge was in error in failing to consider, and in failing to find that a reason for sending the Letter was to prevent the exercise of workplace rights by the recipients once employed by REX, which was the alleged purpose. The Federation seeks a finding on appeal that REX made the threats for the relevant prohibited reason, and in argument senior counsel for the Federation submitted that this court was in as good a position as the primary judge to make those findings.
…
165We do not accept the submission on behalf of the Federation that this court is in as good a position as the primary judge to make findings about whether REX has discharged its onus of showing that a relevant prohibited purpose was not included as a substantial and operative reason for making the threats. …
166 … we are not persuaded that there was any error in his Honour’s findings about Mr Howell’s intent in sending the letter to the extent that his Honour did not accept submissions on behalf of the Federation that Mr Howell had made admissions in the course of his evidence.
167However, the question whether REX discharged the onus under section 361 of the FW Act, when read in conjunction with s 360, was not an issue that the primary judge addressed by reference to those provisions, or by reference to the principles discussed in Barclay. Further, to the extent that the primary judge addressed the intention or purpose of Mr Howell, that assessment was undertaken on the premise that the Letter did not convey any threats. Because the primary judge rejected the claim that the Letter threatened adverse action, his Honour did not address himself to the question whether, on the assumption that the Letter threatened adverse action, the threat was made for the purpose of preventing the cadets from exercising their workplace right to the benefit of the 2011 Agreement. While the primary judge found … that Mr Howell ‘did not intend to refuse to employ a person who did not stay at the Academy’, that finding did not squarely address the prohibited purpose that had been alleged.
…
169For the above reasons, the question whether REX made the threats, for reasons that included a prohibited reason as a substantial and operative factor will have to be remitted to the Federal Circuit and Family Court of Australia (Division 2).
The Full Court then when on to consider whether the primary judge erred in rejecting the Federation’s claim that the respondent had taken action or threatened to take action, with an intent to coerce, in breach of s 343 of the Act. In that context, the Full Court said:
170 Section 343 of the FW Act proscribes the taking of action with intent to coerce a person to exercise, or not exercise, or propose to exercise or not exercise a workplace right … including in a particular way. It is settled that coercion itself requires the satisfaction of two elements: (1) negation of choice; and (2) the use of unlawful, or illegitimate, or unconscionable means to exert pressure to negate the choice … The intent aspect of the expression ‘intent to coerce’ in s 343 applies to the negation of choice element referred to in the authorities, but not to the use of unlawful, or illegitimate, or unconscionable means, which is an objective element … The evidentiary presumption in s 361(1) of the FW Act applies to an allegation of an intent to negate choice for the purposes of an alleged contravention of s 343.
171 … The primary judge relied on the terms of the Letter in support of what is at least an implicit conclusion that there was no intention by REX to negate choice. As we have explained, we have concluded that the primary judge was in error in finding that the Letter did not convey threats of adverse action.
172 The primary judge’s reasons for rejecting the Federation’s claim that REX intended to negate choice relied on a mixture of findings in relation to Mr Howell’s intention in sending the Letter, and the terms of the Letter itself, which his Honour held did not convey the threats that were alleged, and did not amount to a denial of choice. The objective meaning of a communication may be relevant to the question whether in making the communication there was an intention to negate choice. This is particularly so if the communication was held not to convey the alleged threats, or to deny choice, because there would be some tension between a finding that objectively no threats were conveyed, and a finding that nonetheless there was a subjective intention to negate choice.
173 In our view, the findings as to objective meaning of the Letter which formed part of the primary judge’s reasoning … in relation to whether there was an intention to negate choice cannot be severed from his Honour’s other reasons concerning the purpose of the Letter, with the result that the components of the reasons cannot be disentangled. Because the primary judge’s finding that no threats were conveyed by the Letter has been shown to be in error, a material element of his Honour’s reasoning in rejecting the alleged intent for the purpose of the claimed contravention of s 343 of the FW Act must be reconsidered. …
MR HOWELL’S EVIDENCE
The court, as presently constituted, now has had the benefit of hearing direct evidence by Mr Howell about these matters. It also has before it the transcript of the proceedings in the first trial before his Honour Judge Blake.
Although the Federation initially objected to reference being made to the transcript of the first trial, ultimately both parties sought to rely upon that transcript in-part, although for different purposes.
The respondent sought to rely upon it to show the consistency in Mr Howell’s denials about his reasons for sending the Letter. The Federation for its part sought to rely upon the transcript of the first trial to show inconsistencies in Mr Howell’s evidence, although the Federation maintained that primacy must be given to Mr Howell’s evidence in this trial.
The Federation also submits that the evidence of Mr Howell in the first trial was ‘mixed’ and that in several instances, Mr Howell gave evidence which does not support the respondent having discharged its onus under s 361 of the Act.
The respondent submits that when Mr Howell’s evidence is considered in its totality, the court should find that his evidence has been consistent, that his credibility has been unchallenged, and that he acted for the reasons stated, namely, not for a proscribed reason.
By way of background, Mr Howell deposed to the cost of the RECP programme being approximately $130,000, of which the cadets pay an initial non-refundable fee of $25,000 with the remainder provided by the respondent in two loans, a Study Loan of $80,000 and a scholarship loan of $25,000.[3]
[3] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [21].
Mr Howell details how the loans are repayable,[4] namely, if the cadet is offered employment with the respondent after completing the RECP programme and remains in employment for at least seven years, there is a significant financial benefit to them.
[4] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [21].
Mr Howell deposes in his affidavit filed on 22 March 2019 that:
To date, Rex has spent approximately $35 million in respect of AAPA and RECP Programme. Due to this significant investment, and for the reasons mentioned above regarding the life changing opportunity we are providing and the need to ensure that we are getting the right calibre of person who is the right fit for the Company, I think it is only fair that we are able to judge the character of the person to get an idea as to whether or not I think they will honour their commitments. As such, I will often ask candidates during this interview whether they have any issues with the 7 year commitment to Rex to which they usually reply along the lines of ‘absolutely not’. I will also ask them about what sort of things they are prepared to do to go above and beyond – for example, whether they would be prepared to wash an aircraft or to help out with graduation ceremonies or other events. …[5]
[5] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [36].

Mr Howell goes on to say in his affidavit:
The final stage of the interview process involves me sending a letter to the candidates requesting that they provide a handwritten motivation letter to the Company. The letter essentially asks candidates to confirm in writing some of the things discussed with them during the interview process. That is, to explain what this life-changing opportunity means to them, to give examples of various activities and actions that they are prepared to do for the Company and to promise to the Company that it will commit to those actions.[6]
[6] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [39].
Mr Howell also gave evidence about the progression of a pilot with the respondent, including that at an appropriate point in time a pilot may be considered for the Pilot in Command Under Supervision Program (‘PICUSP’). Relevantly, Mr Howell stated ‘(p)lacement in PICUSP is entirely at the discretion of Rex’s Flight Operations Department using a CASA sanctioned framework and pilots are advised that strong emphasis is placed on command aptitude and attitude’.[7]
[7] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [43].
In relation to the Letter, Mr Howell gave the following evidence in his affidavit:
47.I provided an example in the Rex Letter of cadets who have broken their solemn undertakings provided to the Company by volunteering to stay at the accommodation at AAPA for an overnight simulator check but then refusing to do so. I provided this as an example only. I was not requiring the shortlisted candidates to promise or commit in their motivation letter to volunteer to stay at the accommodation at AAPA for an overnight simulator check. I was also not referring to any particular cadet or employee and had no specific example of this occurring in my mind. It was just an example of the type of commitment that someone could make and then not later comply with.
…
49.… My intention behind the Rex Letter, and in requesting the motivation letter from the shortlisted candidates, was not to make the shortlisted candidates give up any right they have or will have to stay at a particular accommodation but was to ask what type of person they are – are they about the team or are they only about themselves? If they give a commitment to do something (whatever that may be) will they honour it?
50.What I wanted from the motivation letter was for the shortlisted candidates to give examples and commitments about how they will go above and beyond the call of duty – it was not a requirement or even an expectation that they would commit to staying at the AAPA accommodation. They could commit to this but if, and only if, it was something that they were happy to commit to and prepared to follow through with. This was true for any commitment they gave.
Mr Howell further deals with the reasons why he sent the Letter as follows:
The choice of accommodation played no part in my decision to send the Rex Letter to the prospective cadets of the RECP Programme. I have not at any time threatened anyone if they did not stay at the AAPA accommodation and I have not required anyone to forgo their right to stay at the Mercure. My decision to refer to the AAPA accommodation in the Rex Letter as an example of where persons had not adhered to commitments had nothing to do with the choice of accommodation but rather was an example about people who break their word.[8]
[8] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [88].
Mr Howell also gives evidence as to why the respondent considers integrity to be so important. Relevantly, he said he sent the Letter to the three named recipients:
… because the integrity and character of the shortlisted candidates was a very important consideration for entry into the RECP Programme. As I have explained above, Rex has had a long experience with early pilot attrition, which makes the assessment of the integrity and character of candidates a critical exercise. … The statements that I made in the Rex Letter, including the request for the short listed candidates to provide a motivation letter articulating the solemn promises and commitments they are prepared to give to Rex, was only intended to assist Rex in ascertaining the character and integrity of the shortlisted candidates and whether they should be granted the life-changing opportunity, access to the RECP Programme and unsecured loan of $105,000.[9]
[9] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [89].
Mr Howell deposes that ‘there was no other reason for sending the motivation letter’ to the recipients.[10]
[10] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [90].
APPLICANT’S SUBMISSIONS
The Federation submits that the court should not accept Mr Howell’s denials for the following reasons:
(a)Mr Howell made admissions under cross-examination that the Letter was sent for a prohibited purpose;
(b)Mr Howell is not a credible witness;
(c)when regard is had to the circumstances in which the Letter was sent, Mr Howell’s denials ought not be accepted; and
(d)similarly, the terms of the Letter itself is not consistent with Mr Howell’s evidence that he did not send them for a prohibited reason.
The Federation therefore submits that having regard to each of these matters, the presumption has not been displaced by the respondent and the respondent therefore should be taken to have contravened both ss 340 and 343 of the Act.
CONSIDERATION
I will address each of these submissions in turn.
Admissions
Did Mr Howell concede that he sent the letter for a proscribed reason for the purposes of s 340?
It is submitted for the Federation that the court should find that Mr Howell admitted, under cross-examination, that the Letter was sent for a proscribed reason and that this admission is dispositive. In this regard, the Federation relies upon the following exchange:
Federation Counsel: I suggest to you – I put to you that a substantial and operative reason you wrote [the Letter] was to extract the commitment from the recipients to stay at the academy rather than a hotel in Wagga Wagga?
Mr Howell:Correct.[11]
[11] Court transcript dated 9 May 2024 at page 79, lines 34 to 36.
The respondent urges the court not to accept this submission and says that this exchange must be read in context of the entirety of the evidence given by Mr Howell, including evidence given in re-examination. In this context, the following exchange occurred in re-examination:
Rex Counsel:             … you were asking (sic) questions about why – or the reasons you sent the letter at the end of that cross-examination. … well, there was a lot of those questions in various parts. But in essence, the evidence was that you were seeking commitments to establish integrity, or what have you. Now just to be clear, can you explain why you sent those letters to the cadets?
Mr Howell:Your Honour, … the fact that it was a life-changing opportunity because there is no other program like it where they can get a loan of $105,000 unsecured, that – I guess it was a means of due diligence for us to make sure that the people that we were considering accepting into the program were people that were truthful and were honest. So it was more of a morality test to see if these people – even the smallest commitment – and I think I mentioned it before, over the years there has been people, and I’ve always asked them, ‘what’s your strength’. Might be a gym instructor, could be a cook, could be a plumber, could be an engineer. And I’ve said, ‘well, if we called upon you to assist with doing any of those things at the campus to help everyone, would you do that’. And they’ve said, ‘Yes, of course, I will do that’. So to me, that’s their strength. And I’ve said, ‘Well you need to consider that as a commitment if you’re ever called upon’, and the same as people that would say to me that ‘if the company is in need for crewing requirements, we were short of captains or first officers, that if you called me on a day off and I didn’t have anything in particular on and I could help out, I will help you out’. They still get paid for it and they get paid – rewarded very, very well. So they’re the sort of things that we’re looking for. To me, they’re tangible things. They’re not motherhood statements where people would say ‘I will give 100 per cent’ or ‘I will do the job the best that I can’. To me, they’re things that are just part and parcel of your employment. These are things where I would consider a person has integrity if they were to be asked to follow through at a later time. And I’ve never, ever had to do that and ask a person to fulfil whatever they did or whatever they honoured in their letter. And $105,000 is a lot of money. And, as I mentioned, there’s normally 10 on each course. And, I mean, I think we all know how difficult it is to get that sort of money through any … banking institution. And all we’re asking for is someone to give us - … their word is their honour. So it’s more of a morality test or check.[12]
[12] Court transcript dated 9 May 2024 at page 85, lines 11 to 42.
…
Rex Counsel:             So can you just explain to her Honour the answer you gave this afternoon … which was to the effect that it was a … you answered yes to a question that it was a substantial and operative reason of yours that you wanted pilots to stay at AAPA?
Federation Counsel:     Your Honour, I object. That’s not the question that was put. I have a note of the question and it wasn’t … it’s not how it was put.[13]
[13] Court transcript dated 9 May 2024 at page 86, lines 35 to 47.
…
Rex Counsel:             All right. … This is my solicitor’s note where the question was:
I put to you that the substantial and operative reason for the letter was to extract a commitment to stay at the hotel rather than the Mercure.
And you answered yes to that; do you recall giving that answer?
Mr Howell:No.
Rex Counsel:             No?
Mr Howell:Sorry.
Rex Counsel:             … Well, can you just explain, well, why you gave that answer. I mean, and if you can’t – is that – well, is that a true answer?
Mr Howell:Well, to be a bit honest, I’m a bit confused about the question because I can’t recall exactly the context of what I’m supposed to be responding to. I’m sorry, I just – it’s not making a lot of sense to me.[14]
[14] Court transcript dated 9 May 2024 at page 87, lines 11 to 24.
…
Rex Counsel:             … there was a question asked to you in the afternoon, and I will read it out one more time:
I put to you that a substantial and operative reason for the letter was to extract commitments to stay at AAPA rather than the Mercure.
Do you recall that question any more?
Mr Howell:Vaguely, I do yes.
Rex Counsel:             And you gave an answer, ‘yes’. Do you recall giving that answer?
Mr Howell:Yes
Rex Counsel:             … Can you just explain why you gave that answer in light of your evidence this morning about workplace rights to her Honour?
Mr Howell:Your Honour, there was never an intention, one, to take away anyone’s workplace rights. That the memorandum that was referred to with the two boxes that the crew had to complete. That needed to be done in order for us to manage the accommodation. And there is also a requirement in the regulations that pilots must acknowledge or respond to notices issued by the company. And the other part is that if they were to stay at AAPA, they would get to enjoy FAC meals, the gym, the dining room, a car and not have to use any of their allowances.
Rex Counsel:             Okay. So why then did you put in the letter … the reference to staying in AAPA?
Mr Howell:Because they would be people that are company minded and, in doing so, it’s for the betterment of the business, which they’re part of. It’s not just about them.[15]
[15] Court transcript dated 9 May 2024 at page 88, line 28 to page 89, line 4.
Mr Howell’s evidence given in response to the question from the counsel for the Federation referred to above must be read in context. When viewed in context, I do not find that Mr Howell agreed that he sent the Letter for a proscribed reason. He has consistently maintained that the Letter was sent as a means of assessing the integrity of potential cadets and whether, if they were employed, they were committed to supporting the company and honouring their commitments, whatever they might be. The question that is relied upon by the Federation was not the only question asked of him about the reason for including the reference to staying at AAPA in the Letter.
I find that when the exchange with Mr Howell set out at paragraph [84] above is considered in the context of his evidence overall, I find that it is not a concession which disposes of this matter.
Mr Howell’s credibility
The Federation submits that the court should reject Mr Howell’s evidence on the basis that he lacks credibility, in part because he gave inconsistent evidence to that given in the first trial. For example, in the opening few moments of cross-examination in the re-trial before me, the following exchange occurred:
Federation Counsel: So you don’t agree with me when I ask you whether by above the call of duty, you mean above and beyond the things that would otherwise be required by the contract of employment or the EBA?
Mr Howell:Not in the context that you’re offering that question, no.[16]
[16] Court transcript dated 9 May 2024 at page 37, line 45 to page 38, line 2.
Counsel for the Federation then referred Mr Howell to his evidence in the first trial, where the following exchange occurred:
Federation Counsel:     Way above and beyond the call of duty means going above and beyond what they are contractually required to do?
Mr Howell:Well, yes.
Federation Counsel:     It means going above and beyond what they are required to do by the enterprise agreement?
Mr Howell:I would never expect them to do anything in the EBA that they – again, at the end of the day there is a clause in there that if both parties are happy with that, that’s it’s ok to do that
Federation Counsel:     And so going above and beyond means, doesn’t it, going above and beyond what is required by the enterprise agreement?
Mr Howell:Yes.[17]
[17] Court transcript dated 16 October 2019 at page 117, lines 18 to 27.
After putting this to Mr Howell, counsel for the Federation asked whether this evidence given in the first trial was correct, to which he replied in the affirmative.[18] In that context, the following then occurred:
Federation Counsel: And so you stand by that statement now, do you?
Mr Howell:Yes, with context.
Federation Counsel: So moments ago when … I asked you, by above and beyond the call of duty, you mean above and beyond the things that that would otherwise be required by the contract of employment and the EBA, and you disagreed with me. That was incorrect?
Mr Howell:Well, what I was trying to say was that there is nothing in the enterprise agreement that requires the crew, when they finish a flight, to assist the flight attendant to clean the cabin and fold the seatbelts and wipe down the tray tables. That’s not in the EA, but they all do it as a team effort because they’re company-minded and that is going above … and beyond the call of duty. And that’s not in the enterprise agreement, but they do it.[19]
[18] Court transcript dated 9 May 2024 at page 38, lines 44 to 46.
[19] Court transcript dated 9 May 2024 at page 39, lines 3 to 11.
I do not accept that this inconsistency goes to Mr Howell’s credit. His response to counsel’s initial question was a qualified ‘no’. When provided more context, he conceded the point.
Mr Howell’s consistent evidence has been that integrity was the issue, not the way in which a prospective cadet demonstrated integrity. He conceded however that a prospective cadet could demonstrate that they were company-minded, which the respondent was looking for, by being willing to assist the company to save money. In this context, the following exchange occurred:
Federation Counsel:     You’ve accepted that, in 2013/2014, company profits were down?
Mr Howell:Correct.
Federation Counsel:     You were tasked with curtailing costs; correct?
Mr Howell:Correct.
Federation Counsel:     Having pilots commit to stay at the academy would curtail costs; correct?
Mr Howell:Among other things, correct.
Federation Counsel:     The issue of pilots not committing to stay at the academy was a point of discussion and concern for Rex just before the letters were sent in 2014; correct?
Mr Howell:Correct.
Federation Counsel:     You thought staying at the hotel instead of the academy was wasting company money?
Mr Howell:Saving company money, correct.
Federation Counsel:     Staying at the hotel instead of the academy was wasting company money?
Mr Howell:Correct.
Federation Counsel:     You came up with the example of the academy and the letters sent between July and September 2013 – 2014 on your own?
Mr Howell:Sorry, could you repeat - - -
Federation Counsel:     You came up with the example of staying at the academy, as an example of solemn promise and the sort of thing cadets should volunteer to do all on your own; correct?
Mr Howell:It wasn’t all on my own but it’s my signature. Correct.
Federation Counsel:     Because it was important at the time?
Mr Howell:Yes.
Federation Counsel:     But it was an issue that was significant to the company, having people stay at the academy?
Mr Howell:Correct.
Federation Counsel:      … You’re not seriously suggesting, are you, that, in those circumstances, a senior person like you, the chief operating officer, just happened to pluck the academy as an example of things people should promise without wanting and hoping that cadets would commit to stay there to save money?
Mr Howell:Of course I wanted them to stay there to save money.[20]
[20] Court transcript dated 9 May 2024 at page 78, line 27 to page 79, line 26.
It is submitted for the respondent that the court should accept Mr Howell’s consistent evidence. Evidence in which he has been subject of extensive cross-examination over a number of days and, now, over a period of many years.
When regard is had to the totality of evidence given by Mr Howell, it is apparent that in key aspects, his evidence has remained consistent throughout these proceedings. It is not surprising in litigation in which the same witness has been cross-examined on two separate occasions in respect of the same issues with a period of almost five years in between that there is likely to be some differences in the way that the evidence is expressed. At times, it is apparent that Mr Howell became somewhat confused as to what was occurring in 2014 as compared to what had occurred subsequently. Overall, however, Mr Howell’s evidence in this matter has relevantly remained consistent. I also had the benefit of observing him in giving his evidence. I found that he was considered and tried to answer questions asked of him in a frank and open manner. I did not find him to be evasive or contradictory.
In cross-examination, Mr Howell was careful to understand the questions asked so that he could give honest and truthful answers.
For example, when asked about the increase in the number of pilots that were likely to stay in Wagga Wagga following the acquisition of a simulator there, Mr Howell said that they had two simulators and that each simulator check involved three people so there would not be a significant increase in the number of pilots going through Wagga Wagga due to that.
In this context, again he was taken to his evidence at the first trial in which he agreed when it was put to him that one of the consequences of the new simulator was that there was going to be a significant increase in the number of pilots that were overnighting in Wagga Wagga.[21] When asked about the apparent inconsistency in his evidence at the re-trial on this issue, Mr Howell said:
I guess this is a long time ago. The word ‘significant’. Everything has changed. Back then we were operating essentially one simulator, which then there would have been quite a significant requirement. But it’s very hard for me – because I’m thinking now, it’s very hard to go back to 2014. Because we’re using two simulators now. So I stand by what I said there … a significant number, because of the hours that we were expecting to put through the simulator, but that never really eventuated.[22]
[21] Court transcript dated 16 October 2019 at page 109.
[22] Court transcript dated 9 May 2024 at page 49, lines 10 to 16.

Mr Howell was clearly trying to remember what was happening at Wagga Wagga back in 2014. I do not accept that he was evasive or inconsistent in his evidence, when regard is had to the time that had elapsed between the events which were the subject of these proceedings and the re-trial.
Mr Howell was consistent in saying that if pilots stayed at the AAPA, the company was able to save money, and this was for the benefit of not only individual pilots but the business as a whole, and therefore all staff. He was also consistent in his evidence that the company tried to encourage pilots to stay at the AAPA when in Wagga Wagga by providing additional benefits, such as free meals and the use of a car. He was also consistent in his evidence that whilst Rex tried to make staying at the AAPA more attractive, it recognised that individual pilots had a right, if they chose to exercise it, to stay at the Mercure or any other approved accommodation under the applicable EA. I do not accept that Mr Howell’s evidence in this regard was inconsistent or that the manner in which he gave his evidence in this regard supports the proposition that he was not a credible witness.
Mr Howell maintained through lengthy cross-examination that his intention in sending the Letter was to assess the integrity of the cadets. He was keen to get a sense from them of what they could contribute to the wellbeing of the organization. Moreover, he maintained that if a person gave an undertaking to do something, whatever that might be, then he would expect them to carry it through and that if they did not do so, then he would view them as lacking integrity. It was in this context therefore that he asked them to consider what undertaking they were prepared to give. I accept his evidence that it was not his intention in sending the Letter to prevent them from exercising a workplace right if and when they became employees. Rather, his intention was to have the cadet understand the need for integrity in the role that they were seeking to take.[23]
[23] See court transcript dated 9 May 2024 at page 72, lines 18 to 31.
The Federation further claims the court should make an adverse credibility finding on the basis that Mr Howell gave ‘inflated and inaccurate evidence about the degree to which early pilot attrition was a significant problem for REX from FY13 to FY15’ and that this provided another basis upon which the court should find that Mr Howell was not credible.
Mr Howell’s evidence about pilot attrition, set out at paragraph [89] of his affidavit, must be viewed in the context of his earlier affidavit evidence at paragraphs [9] to [15] where Mr Howell set out in more detail circumstances regarding the pilot attrition issue. Relevantly, at paragraph [9] he deposes:
Pilot attrition had been a major operational issue for Rex since it commenced operations. … For example, in 2002/2003, the annualised attrition rate for Rex Pilots was approximately 19% … This high turnover rate amongst pilots was concerning for Rex as it caused significant additional costs to Rex … which was still in the start-up phase at the time.
Mr Howell then goes on to give details about steps that the company took to address the high attrition rate, which for various reasons were not successful and which ultimately led to the idea to create its own cadet program through the RECP programme and to establish the AAPA.
At paragraphs [16] to [18] of his affidavit, Mr Howell then gives more details about the establishment of the RECP programme and the AAPA, which officially opened on 27 May 2010.
At paragraph [26], Mr Howell again addresses the pilot attrition issue in his affidavit, stating:
Today, pilot attrition is still an issue for Rex. In the current financial year (FY19) to date, Rex has lost 30 out of a total 270 pilots. In the previous three financial years, Rex has lost a total of 164 pilots. Whilst Rex is better positioned because of the RECP Programme, Rex still struggles to maintain its schedule given the world-wide pilot shortage.
Mr Howell’s evidence in cross-examination was not inconsistent with this evidence when considered as a whole. He maintained that although there had been some improvement in the attrition rate over the years, that pilot attrition remained a problem for Rex at the relevant time. The fact that the RECP programme improved the attrition issue for Rex, reflected in the annual reports in evidence, does not give cause to question Mr Howell’s credibility. I accept his evidence that attrition was a significant problem in the early days of the company and that it was moved to put in place particular steps to curb that issue, including by introducing the RECP programme.
It was also submitted for the Federation that the fact that the annual reports state that attrition was at an all-time low in the period from 2013 to 2015 suggests that the reason given for Rex wanting to test the integrity of prospective cadets ought not be accepted. I do not accept this submission. First, the annual reports do not establish that attrition was no longer an issue. At their highest, they simply say that attrition was at an all-time low. Whilst at an all-time low, it may still be a problem for the company.
But in any event, pilot attrition was not the only reason why it was important to assess the integrity of prospective cadets. Mr Howell also refers to the fact that simply participating in the RECP programme is a life-changing opportunity and that part of the assessment of the integrity of the potential cadet goes to assessing whether they should be granted this opportunity and importantly provided with an unsecured loan of $105,000.[24]
[24] Affidavit of Neville Howell filed on 22 March 2019 at paragraph [89].
Mr Howell’s evidence about pilot attrition does not lead me to reject his direct evidence on the basis of credibility.
Surrounding circumstances
The Federation further submits that the court should not accept Mr Howell’s evidence when regard is had to the circumstances surrounding the Letter being sent. It is submitted that those circumstances, including the timing of the letters being sent, supports a finding by the court that a substantial and operative reason for sending the Letter was because of a workplace right or to prevent its exercise.
The Federation in particular points to the following factors in support of this submission:
(a)Rex spent $35 million on building the AAPA and since 2010, it had been used to accommodate the cadets;
(b)since it was constructed, Rex had unsuccessfully sought to have the AAPA approved under the relevant EA as ‘appropriate accommodation’, including commencing proceedings in the Fair Work Commission regarding this issue;
(c)in the 2013/2014 financial year Rex, whilst profitable, saw profits decline and it was part of Mr Howell’s role to curtail expenditure;
(d)in early 2014 Rex introduced a new simulator in Wagga Wagga which would increase the number of pilots staying overnight in Wagga Wagga to undertake their biannual simulator check, and if those pilots agreed to stay at the AAPA rather than at the Mercure or other appropriate accommodation, Rex could save money;
(e)in April 2014, at a meeting of the Rex Pilot Committee, the issue of accommodation for simulator training was discussed – the minutes of that meeting relevantly record that the company would like to use the AAPA for pilots staying overnight in Wagga Wagga and that advice was provided that currently the AAPA is not approved under the EA as appropriate accommodation. The action items arising from this discussion state:
REXPC to discuss trial at AAPA
GF to provide estimated date of commencement of using the facility.
(f)between April and June 2014, the issue of whether Rex could use the AAPA for staff undertaking simulator tests in Wagga Wagga continued to be discussed and the Rex Pilot Committee continued to refuse to approve the AAPA for the purposes of the EA;
(g)after notification from the Federation that the AAPA would not be approved for the purposes of the EA, pilots were asked to submit a form indicating their preference as to where they wished to stay whilst undertaking simulator training in Wagga Wagga, the choice being between the AAPA and the Mercure hotel;
(h)Mr Howell commenced in the role of Chief Operating Officer (‘COO’) on 1 July 2014;
(i)the following day on 2 July 2014, Rex published a newsletter, Friday Files, in which it contained the information about the new simulator which commenced operation in April 2014 and which ‘from the 7^th July, the simulator schedule will gain momentum and some flight crew can expect a visit to the Regional Express Simulator Centre at AAPA within the next 12 months’. The newsletter went on to say:
I would ask everyone rostered for simulator duties at AAPA to exercise patience as the Sim Technicians become more accustomed with this new device and the logistics associated with its daily operations. Rex management also hopes that pilots using the simulator would volunteer to use the accommodation at AAPA instead of wasting money at the local hotel.
(j)On 4 July 2014, Mr Howell authorised a memorandum to be issued to pilots asking them to nominate where they would like to stay when they are in Wagga Wagga (‘the Memorandum’). In the Memorandum, it is stated:
All pilots are asked to return this form by Wednesday 9^th July. Those who do not return the form by the due date will be accommodated at AAPA.
(k)On 20 July 2014, after consultation with the Federation, Mr Howell withdrew the Memorandum.
Mr Howell agreed that it was more costly for pilots who were in Wagga Wagga overnight to stay at one of the approved hotels rather than if they were to stay at the AAPA.
Mr Howell also agreed that, in April 2014, there were attempts to have the accommodation at the AAPA classified as appropriate accommodation under the EA but that the Rex Pilot Committee ultimately did not approve that. He also conceded that at the time, he was keen to try and save costs where he could.
Mr Howell also conceded that whilst pilots had the right to stay at the Mercure, Rex would have had a preference for them to stay at the AAPA.[25]
[25] Court transcript dated 9 May 2024 at page 54, lines 6 to 7.
Mr Howell was asked about the Friday Files document which was published a day after he took on the role of COO, which contained the following statement:
… Rex Management also hopes that all pilots using the simulator would volunteer to use the accommodation at AAPA instead of wasting money at the local hotel.
Mr Howell conceded that he was aware of that document, that that reflected the view of management and that that also reflected his view as part of the management team. Mr Howell did not accept that this was telling pilots to volunteer, but rather maintained that it was asking people to volunteer. He also conceded that he hoped that they would volunteer and that if they did so that this would allow the company to save some money. Mr Howell also accepted that this view was held notwithstanding that he understood that staying at a local hotel like the Mercure was a right under the enterprise agreement.
When Mr Howell was taken to the Memorandum which again requested that pilots indicate their preference as to where they wish to stay when attending simulator duties in Wagga Wagga. The Memorandum contained the following statement:
… Those who do not return the form by the due date will be accommodated at AAPA.
Mr Howell conceded that this form was sent, and also agreed that in sending this form, it reflected that ‘Rex really wanted people to stay at the academy to save money’.[26] In making this concession however, Mr Howell went on to say:
Well, yes. It was. But I still consider it to be a reasonable request, and they are obliged to respond to operations notices.
[26] Court transcript dated 9 May 2024 at page 57, line 34.
Again, in making this concession, I found Mr Howell to be trying to answer the questions put to him in a frank and truthful way. He was not seeking to obfuscate or evade answering questions by reference to what may or may not ultimately be in the respondent’s interests in these proceedings.
In relation to the Memorandum, when asked whether he authorised this, Mr Howell said at the re-trial that he could not recall whether he did or not in 2014, but he went on to say that there was no need for him to authorise such a memorandum. He was then taken to his evidence in the first trial on this issue where the following exchange occurred:
Federation Counsel: … Did you authorise that memo to be sent?
Mr Howell:If it was 4 July 2014 I must have.[27]
[27] Court transcript dated 16 October 2019 at page 113.
When it was again put to him in the re-trial that he did authorise the Memorandum, Mr Howell responded:
Well, that’s what I said back then. So that must have been the case. But in the normal course of my duties, this is fly ops. I don’t have anything to do with it.[28]
[28] Court transcript dated 9 May 2024 at page 59, lines 2 to 4.
It was then put, repeatedly, to Mr Howell that the effect of the Memorandum was that if employees did not return an administrative form, that their workplace rights could be disregarded. Mr Howell did not accept this and put an alternative perspective. However, in this context, the following exchange occurred:
Federation Counsel:     So if they didn’t return, they didn’t bother to return the form, their workplace right could be disregarded; correct?
Mr Howell:It was never about diminishing anyone’s workplace right, ever.
Federation Counsel:     That was the practical effect, wasn’t it, Mr Howell?
…
… if you had regard to their workplace right and they didn’t submit the form, I suggest to you what you do is you allocate them to their entitlement, which is to stay at a hotel. You would agree with that, wouldn’t you?
Mr Howell:Yes.
Federation Counsel:     And by not doing that, you were disregarding that entitlement. Correct?
Mr Howell:Putting it the way you have, the answer would be yes.[29]
…
Federation Counsel:     And all this was driven towards ensuring that the maximum number of individuals possible were accommodated at the academy when overnighting in Wagga Wagga, correct?
Mr Howell:Well, I go back to what I referred to before. We need to plan. And if people don’t tell us where they choose to stay, sometimes the Mercure won’t even be available. So is that taking away someone’s workplace right? The Mercure might be full. There are times in Wagga when all hotels are full.[30]
[29] Court transcript dated 9 May 2024 at page 60, lines 30 to 44.
[30] Court transcript dated 9 May 2024 at page 61, lines 5 to 10.
I accept that Rex preferred if pilots volunteered to stay at the AAPA rather than the Mercure when in Wagga Wagga, as this would save the company money. I also accept that the issue of whether the AAPA was approved accommodation for the purposes of the EA was and remained a live issue between Rex and the Rex Pilot Committee in 2014. Indeed, Mr Howell conceded these matters.
I also accept that Rex, and relevantly, Mr Howell, was aware that it could not force an employee to stay at the AAPA. Mr Howell was aware that pilots had a right under the enterprise agreement to stay at the Mercure when in Wagga Wagga including when undertaking simulator checks. I also accept that there is no evidence before the court that Rex in fact took action against a pilot who they chose not to stay at the AAPA whilst in Wagga Wagga. I also accept that at some point after the Letter was sent, they were amended to remove the express reference to the AAPA. Those matters, however, are not determinative.
The question for this court is: what was the intention of Rex at the time that it sent the Letter to the relevant prospective cadets? If a substantial and operative reason included to prevent the exercise of a workplace right, that will be sufficient to make out a breach of s 340 of the Act.
The fact that Rex had a preference that pilots who were in Wagga Wagga overnight stayed at the AAPA and that if they did so, it would result in a costs saving for the airline, is not sufficient to make out a case that Rex sent the Letter because the recipients had a workplace right or to prevent the exercise of such a workplace right. I therefore do not accept that the court ought to reject the evidence of Mr Howell by reference to the circumstances at the time the letter was sent.
Terms of the Letter
Finally, the Federation relies on the terms of the Letter itself to support its submission that the court should conclude that Mr Howell sent the Letter because of, or to prevent the exercise of, a workplace right to appropriate accommodation.
The Federation relies upon the fact that the Full Court has found in the FC Judgment that the Letter in fact does contain threats that a recipient would not be employed unless they volunteer to stay at the AAPA and a further threat that they would be sanctioned if they broke that promise. It is submitted that the court can, and should, infer that in making these threats, Mr Howell was motivated to prevent the exercise of a workplace right.
The Letter has been found to contain the employment threat and the sanction threat. It is also relevant that whilst Mr Howell acknowledged and accepted, as he must, that the Full Court had found, objectively speaking the Letter contained those threats, but maintained that when he prepared the Letter, he did not have a subjective intention to convey those threats. I accept that that was his subjective intention.
Ultimately, the terms of the Letter are one factor in considering whether Mr Howell’s denials ought be accepted, but are not, in my view, determinative.
Evidence at first trial
The applicant also submits that to the extent that regard is had to the evidence given by Mr Howell at the first trial, the court should have regard to instances during the first trial where Mr Howell expressly acknowledged that he had sent the Letter because of a workplace right or to prevent the exercise of a workplace right.
For reasons similar to those expressed above, when regard is had to the evidence given by Mr Howell in its entirety, I do not find that he conceded that the reason, or an operative and substantial part of the reason, for sending the Letter was a proscribed one. Mr Howell’s evidence, when viewed as a whole, was that he sent the Letter to give prospective cadets an opportunity to explain how they would repay the company for the once-in-a-lifetime opportunity that they were being afforded if offered a place at the RECP programme. He wanted them to understand that once a commitment was given, irrespective of the commitment, that it should be honoured and that if it was not honoured, then the person would be viewed as lacking integrity. The actual commitment given was not the point. Rather, it was the fact that a commitment was given.
Other matters
The respondent submits that, in considering whether it has discharged the onus of proof, the court can have regard to the impact of the Letter on the recipients. Relevantly, it is said for the respondent that a recipient who did not commit to not stay at the AAPA, was nonetheless admitted into the RECP programme. Moreover, in the case of Ms Carr, it is submitted, notwithstanding that she did indicate a preparedness to stay at the AAPA in her initial response, that response was found not to be compelling and she was asked to provide an amended response. It is submitted that this is evidence that Rex’s intention in sending the letter was not to elicit a commitment not to stay at the Mercure as alleged.
I am not persuaded by this submission. The issue for the court is whether Rex had the requisite intent. Intent and impact are not the same. And in any event, as noted by the Full Court, all recipients made mention of the issue of pilots staying at the AAPA, including Mr Manna who, although he did not undertake expressly to stay there, did indicate in terms that he would have no difficulty staying at the AAPA.

The respondent further submits that the ‘proof is in the pudding’ so to speak, namely that the evidence is that no one who has stayed at the Mercure whilst in Wagga Wagga, has been prejudiced in their career progression. Again, respectfully, this does not address the issue at hand. It is not alleged in these proceedings that Rex has prevented anyone from accessing their workplace rights, including being permitted to stay at the Mercure. Rather, the allegation is that in sending the Letter, Rex took adverse action by threatening prospective employees either because, once employed, they would have a workplace right, or to prevent them from exercising the said workplace right, once employed.
Further it is submitted for the respondent that in circumstances where it is about to enter into an arrangement with a prospective cadet which could result in either:
(a)a seven-year commitment from the cadet if employed;
(b)or a situation where the cadet might be required to repay the unsecured loans if they leave before the expiry of the seven-year agreed period;
that Rex would want to assess their integrity as a basis to determine whether they are likely to live up to their obligations.
This is particularly so, in circumstances where, at the time, Rex was providing significant unsecured loans to enable the prospective cadet to undertake their training. Those loans would become immediately payable, together with interest, if the prospective cadet was offered a place in the RECP programme and then left before completing seven years of service. Of course, whilst Rex had the right to immediate repayment of the loan and 10% compounding interest if such an employee left before completing seven-years’ service, there was a risk that the employee would not have the funds to repay that debt, thereby resulting in a loss to Rex. Similarly, if the cadet remained in employment for the full seven years, then they would get significant financial benefit from the training arrangements.
It is in this context that the respondent says that it was important to assess the integrity of the prospective candidate. It is submitted that these circumstances are consistent with Mr Howell’s evidence about the reason why he says Rex sent the Letter.
There is some merit to this argument. Ultimately, it is not for this court to determine whether or not a commitment in a letter of intent is the best way to assess a prospective cadet’s integrity. It is clear from the evidence that this process had been in place for some time before the Letter was sent in 2014, albeit in different terms. It is evident that the issue of integrity and commitment to the company was something sought prior to July 2014. Mr Howell’s evidence is that what Rex was looking for was evidence that an applicant would go above and beyond and that if they made a commitment that they would stand by that commitment.
FINDINGS – SECTION 340
Having considered this matter carefully, and in particular having considered the evidence given by Mr Howell in these proceedings, I make the following findings.
I accept that in sending the Letter, Mr Howell intended to obtain a commitment from the prospective cadet which would demonstrate their integrity and through which they were prepared to help the company if required in the future. I accept Mr Howell’s evidence that he did not intend to convey to the cadets that a commitment to stay at the AAPA was required. Rather, I accept that he intended that cadets understood that if they made a commitment, the expectation was that they would be required to uphold that commitment.
I also accept Mr Howell’s evidence that the reference to staying at the AAPA was simply an example of the type of commitment that might be accepted if that was a commitment that the cadet felt comfortable making.
Mr Howell’s evidence in this regard has been consistent throughout these proceedings.
When regard is had to the totality of the evidence before me, I accept Mr Howell’s evidence that the reason why he sent the Letter was not because the recipients had a workplace right or to prevent the cadets from exercising a workplace right, but rather as stated by Mr Howell, it was to invite them to provide a commitment of something they were prepared to do which would demonstrate that they understood the significant opportunity they were being provided with, were committed to support the organisation and also that they were prepared to help the company should that become necessary at some point in the future. I do not accept that Mr Howell’s denials that he was motivated, even in part, by a proscribed reason, is ‘inherently improbable’, to use the words of Weinberg J in National Union of Workers v Qenos Pty Ltd [2001] FCA 178 at [134].
I accept Mr Howell’s evidence was that his concern was about the commitment that each cadet gave rather than whether that commitment related to staying at the AAPA. His evidence in this regard, when considered in totality, was not inherently improbable.
For each of these reasons, I find that the respondent has displaced the presumption in s 361 of the Act. I therefore accept that Mr Howell, and therefore Rex, did not send the Letter to the recipients because they had a workplace right or to prevent them from exercising a workplace right.
The s 340 claim is therefore not made out.
COERCION CLAIM
It is submitted for the Federation that two remaining issues arise for determination in relation to the coercion claim. First, whether the respondent has discharged the presumption that in sending the Letter, containing the employment threat and the sanction threat, Rex intended to negate the choice of the recipients to exercise their workplace right to stay at approved accommodation. And if so, the second issue is whether, in doing so, Rex employed unlawful or illegitimate means.
Again, whether Rex had the requisite intent is to be assessed by reference to Mr Howell’s evidence, although for reasons discussed earlier, the court is not obliged to accept his denials. It must assess his credibility and in doing so, weigh it together with other evidence and available inference, which may call his credibility into question.
It is submitted for the applicant that Mr Howell expressly admitted under cross-examination that a reason why he wrote the Letter was:
… to exert some pressure on [the] recipients to show integrity … by committing to stay at the academy and then not reneging on it down the track …[31]
[31] Court transcript dated 9 May 2024 at page 80, lines 1 to 3.
This concession again, must be viewed in context. I note the following exchange in the re-trial:
Federation Counsel:      And I suggest to you that a substantial and operative reason you wrote the letter was to put pressure on the recipients who didn’t promise to stay at the academy, not to backtrack on that promise down the track, because you wanted to be clear that if they did renege, they would not progress to [PICUS] or command, correct?
Mr Howell:It has never happened.
Federation Counsel:     But you wanted to make that point clear, correct?
Mr Howell:Well, they’re your words, not mine. That’s not what the intent was.
Federation Counsel:     The intent was to exert some pressure on these recipients to show integrity by not reneging – by committing to stay at the academy and then not reneging on it down the track, correct?
Mr Howell:Putting it that way, yes.[32]
[32] Court transcript dated 9 May 2024 at page 79, line 38 to page 80, line 3.
When viewed in context, Mr Howell conceded no more than that he wanted to ‘exert some pressure’ on the recipients to show integrity. This is consistent with his evidence overall. That is, his focus was on integrity by making and standing by a commitment, not on the specific nature of the commitment given.
In addition, it was submitted for the reasons discussed in relation to the s 340 claim, that Mr Howell ought not be considered a credible witness. For similar reasons to those set out above, I do not accept this submission.
The Federation also relied on the context in which the Letter was sent and the terms of the Letter itself, as further bases on which to conclude that the respondent has not displaced the presumption in s 361 of the Act. For similar reasons to those set out above, I do not accept these submissions.
In considering the claim under s 343, it is important to note that requisite intent that must be established is the intent to negate choice and that a high degree of compulsion is required. What is required is more than just an intent to influence, persuade or induce.
In National Tertiary Education Industry Union v Commonwealth of Australia [2002] FCA 441 at [103], where Weinberg J said:
The approach to the expression ‘intent to coerce’ taken in each of the authorities set out above makes it clear that what is required is an intent to negate choice, and not merely an intent to influence or to persuade or induce. Coercion implies a high degree of compulsion, at least in a practical sense, and not some lesser form of pressure by which a person is left with a realistic choice as to whether or not to comply.
His Honour then went on to say:
104 I am fortified to some degree in my view that this is the correct meaning to ascribe to the expression ‘intent to coerce’ by the observations of Lord Romilly MR in Ellis v Barker (1871) 40 LJ Ch 603. His Lordship accepted that coercion may take an infinite number of forms. However, he noted that the moment that a person who influences another does so by threatening to take away something he then possesses, or by preventing him from obtaining an advantage he would otherwise have obtained, it then becomes coercion and ceases to be persuasion.
…
110 The distinction drawn between a promise or threat, on one hand, and actual coercion on the other, is instructive. It suggests that a high degree of pressure is required in order to amount to coercion. …
…
112If my view of the interpretation to be accorded to the expression ‘intent to coerce’ in s 170NC is correct, it is clear that the NTEU has failed to establish that the respondents have contravened that section. The offer of an additional two per cent on top of existing operating grants, though subject to the need to satisfy the criteria contained in the Guidelines, can hardly be said to form the basis of an inference that the respondents intended to overbear the will of the institutions, and negate their choice. The evidence does not support any such conclusion. The additional funds may be ‘significant’, as far as those institutions are concerned. However, there is nothing to indicate that they are so vital as to negate any realistic choice on the part of those institutions, compelling them to include in any certified agreements terms which meet the criteria set out in the Guidelines.
113 I accept that the evidence demonstrates that the institutions of higher education in this county, or many of them, are under significant financial pressure. I have no doubt that any additional funding would be keenly sought, and would be of substantial benefit to those institution in their struggle to maintain reasonable standards in teaching and research.
…
115However, there remains a clear distinction between offering a person an incentive to do something, and acting with intent to coerce. An incentive, no matter how powerful, can still, as a matter of practical reality, be refused. Coercion involves negation of choice.
116Even if I were to construe the expression ‘intent to coerce’ in the broader manner for which the NTEU contended, I would still conclude that it had failed to establish its case against the respondents. Coercion requires conduct which is relevantly unlawful, illegitimate or unconscionable. The implementation of policy by a democratically elected government, however contentious in political or moral terms that policy may be, is not easily translated into conduct which is in any relevant sense ‘illegitimate’ or ‘unconscionable’.
The question therefore for this court on remittal is whether the respondent in issuing the Letter, which the Full Court has found contained the two threats as set out earlier in these reasons, had an intent to negate choice by the prospective cadets to assert their workplace right to stay at an approved accommodation rather than stay at the AAPA. The onus of showing that this was not the case, is on Rex.
FINDINGS – SECTION 343
Having heard from Mr Howell, I accept that it was his (and the respondent’s) preference if the cadets, once employed, agreed to stay at the AAPA on the basis that that would save the company money. I also accept that if a cadet made a commitment to stay at the AAPA, Rex would expect that person to honour that commitment.
However, Mr Howell also gave evidence that he was aware that the prospective cadets once they became employees would have a right under the enterprise agreement to stay at an approved accommodation and could not be compelled to stay at the AAPA. He also gave evidence that the only way that pilots could stay at the AAPA was with their agreement. I therefore find that in sending the Letter, the respondent intended to influence, persuade or induce prospective cadets, if they made a commitment to stay at the AAPA, to honour that commitment once employed. However, I am not satisfied on the balance of probabilities that Mr Howell, and therefore Rex, intended to negate the choice of prospective cadets to assert their workplace right to stay at an approved accommodation rather than stay at the AAPA.
Whilst the Full Court has found that the Letter did contain threats that if the cadets did not provide a promise to stay at the AAPA they might not be employed, or that their career progression might be impeded, that is not determinative of whether the respondent intended to coerce the cadets. The issue remains what the intention was when the letter was sent. For the reasons given, notwithstanding the terms of the letter, itself, I accept Mr Howell’s evidence that he did not intend to negate choice in the requisite sense when he sent it.
Having come to this view, it is not necessary to consider whether Rex employed unlawful or illegitimate means.
The section 343 claim is therefore not made out.
CONCLUSION
For each of these reasons, I would, save for the operation of s 440D of the Corporations Act2001 (Cth), have ordered that the applicant’s application be dismissed.
In the circumstances, and for the reasons set out earlier, the appropriate course is to publish my reasons, to indicate, as I have done, the order that I would have made absent the statutory stay in s 440D, and provide the parties with liberty to apply.
I therefore order that the parties have liberty to apply.

I certify that the preceding one hundred and sixty-six (166) numbered paragraphs are a true copy of the Reasons for Judgment of Deputy Chief Judge Mercuri.
Associate:
Dated: 16 December 2024

File number:	MLG 788 of 2015
Judgment of:	DEPUTY CHIEF JUDGE MERCURI
Date of judgment:	16 December 2024
Catchwords:	INDUSTRIAL LAW – FAIR WORK – on remittal from the Full Court of the Federal Court – lengthy procedural history – initial application filed in 2015 – Letter from company to prospective employees – Full Court found letter contained threats to take adverse action – whether the Letter was sent with an intention to prevent the exercise of workplace right – consideration of chief operating officer’s evidence both at the first trial and re-trial – witness found to be credible – finding that letter not sent for proscribed purpose – section 340 and 343 claims not made out PRACTICE AND PROCEDURE – procedural issue – whether judgment can be delivered when court advised after judgment reserved the respondent was placed in administration – operation of section 440D of the Corporations Act 2001 (Cth) – liberty to apply
Legislation:	Corporations Act 2001 (Cth) s 440D Fair Work Act 2009 (Cth), ss 340, 341, 342, 343, 360 and 361
Cases cited:	Australian Federation of Air Pilots v Regional Express Holdings (No 2) [2020] FCCA 219 Australian Federation of Air Pilots v Regional Express Holdings Limited [2021] FCAFC 226 Australian Federation of Air Pilots v Regional Express Holdings Limited [2023] FedCFamC2G 764 Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41 Curnow Consulting Pty Limited v JPD Media and Designs Pty Ltd t/a Durie Designs (No 3) [2018] NSWSC 827 Lucas v Zomay Holdings Pty Ltd [2019] FCA 830 National Tertiary Education Industry Union v Commonwealth of Australia [2002] FCA 441 National Union of Workers v Qenos Pty Ltd [2001] FCA 178 Qantas Airways Ltd v Transport Workers’ Union of Australia [2023] HCA 27 Re Tolco Pty Limited [2016] NSWSC 1069 Rhind v Deliveroo Australia Pty Ltd (Administrator’s Appointed) [2023] FedCFamC2G 50 X Pty Ltd v Milstead [2015] FamCAFC 50
Division:	Division 2 General Federal Law
Number of paragraphs:	166
Date of last submissions:	14 June 2024
Date of hearing:	9 May 2024
Place:	Melbourne
Counsel for the Applicant:	Ms E Levine (direct brief) Mr H Crosthwaite (direct brief)
Counsel for the Respondent:	Mr L Howard
Solicitor for the Respondent:	Clayton Utz

MLG 788 of 2015
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	AUSTRALIAN FEDERATION OF AIR PILOTS Applicant
AND:	REGIONAL EXPRESS HOLDINGS Respondent

ORDER MADE BY:	DEPUTY CHIEF JUDGE MERCURI
DATE OF ORDER:	16 DECEMBER 2024