Australian Federation of Air Pilots v Skywest Airlines Pty Ltd

[1996] IRCA 163

DECISION NO:  163/96

CATCHWORDS

INDUSTRIAL LAW - interpretation of clause 16 of the Skywest Airlines Pty Ltd Pilots’ Agreement 1986 - allegation that respondent failed to comply with the decision of a Grievance Board - proper constitution of a Grievance Board - whether consent of the parties can confer jurisdiction - whether Grievance Board procedure is in the nature of private arbitration

Industrial Relations Act 1988 s 178

National Union of Workers and Others v Pacific Dunlop Tyres Pty Ltd and Another (1992) 37 FCR 419, 427.

Re Skywest Aviation Pty Ltd, Full Bench, Australian Industrial Relations Commission, Print J8753, 1 August 1991.

Thomson Australian Holdings Proprietary Limited v The Trade Practices Commission and Others (1981) 148 CLR 150, 163.

No. VI 4203 of 1995

AUSTRALIAN FEDERATION OF AIR PILOTS v SKYWEST AIRLINES PTY LTD

JUDGE:         Marshall J
PLACE:         Melbourne
DATE:           3 May, 1996

IN THE INDUSTRIAL RELATIONS      )
  )
COURT OF AUSTRALIA             )
  )

VICTORIA DISTRICT REGISTRY    )  No. VI 4203 of 1995

BETWEEN:              AUSTRALIAN FEDERATION
  OF AIR PILOTS

Applicant

AND:  SKYWEST AIRLINES PTY LTD
  Respondent

JUDGE:         Marshall J

PLACE:         Melbourne

DATE:           3 May, 1996

ORDER

THE COURT ORDERS THAT:

1.The application be dismissed.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS      )
  )
COURT OF AUSTRALIA             )
  )

VICTORIA DISTRICT REGISTRY    )  No. VI 4203 of 1995      

BETWEEN:              AUSTRALIAN FEDERATION
  OF AIR PILOTS

Applicant

AND:  SKYWEST AIRLINES PTY LTD

Respondent

JUDGE:         Marshall J

PLACE:         Melbourne

DATE:           3 May, 1996

REASONS FOR JUDGMENT

By application dated 8 August 1995, the applicant, Australian Federation of Air Pilots, (“AFAP”) sought the imposition of a penalty upon the respondent, Skywest Airlines Pty Ltd, (“Skywest”) for a breach or non-observance of the Skywest Airlines Pty Ltd Pilots’ Agreement 1986 (“the award”), pursuant to s178 Industrial Relations Act 1988 (“the Act”).

The relevant breach of the award was alleged to be the failure of the respondent to comply with the decision of a Grievance Board made under clause 16 of the award on 10 May 1991.  The award was made by the Flight Crew Officers Industrial Tribunal (“the tribunal”) on 21 August 1987, with the consent of each party to it, i.e., AFAP and Skywest.

Clause 16 of the award provides as follows:-

“16 - GRIEVANCE PROCEDURES

The grievance procedures under this Agreement are as follows:

A.(i)       Subject to this Agreement, these procedures shall apply to any dispute on any matter including the termination of a pilot’s services, whether by summary dismissal or notice.  Notwithstanding anything contained in this clause or any other clause of this Agreement, these procedures shall not apply to any matters relating to negotiations of a new Agreement or variations to this Agreement.

(ii)For the purpose of this clause ‘pilot’ shall include a ‘group of pilots’.

(iii)Upon a matter arising the pilot shall raise the matter in writing with the Chief Pilot who shall fully investigate the matter and reply to the pilot within 7 working days.

(iv)In the event that the pilot is dissatisfied with the decision of the Chief Pilot he may appeal in writing to the General Manager Commercial Operations who shall further investigate the matter and reply to the pilot within 7 working days.

(v)In the event that the pilot is dissatisfied with the decision of the General Manager the matter may be referred to the Grievance Board as constituted hereunder.  The Board shall be chaired by a person to be mutually agreed by the parties.  The other members of the Board shall be one representative of the Federation and one representative of the Company.  Where no suitable person is available or agreement cannot be reached on such a person the matter shall be referred to the Tribunal.

(vi)The Grievance Board shall hear and determine the matter and the decision of the Board shall be final and conclusive.

B.The parties shall at all times confer in good faith and without undue delay and in matters involving the termination of a pilot the steps under this grievance procedure shall be completed prior to the expiration of notice given under this Agreement.

C.While the above procedure is being followed work shall continue normally in accordance with this Agreement.

D.No party shall be prejudiced as to final settlement by the continuance of work in accordance with this clause.

E.In the event of a party failing to observe these procedures, the other party may take such steps as are open to it to resolve the matter or proceed to the next step or steps under this procedure.”

On and from 1 March 1989 the tribunal ceased to exist and its functions were subsumed by the Australian Industrial Relations Commission (“the Commission”).

The background facts relevant to the application before the Court are largely not in dispute.  They are as follows.

On 21 August 1989, Neville Roddan, a member of the AFAP and employee of Skywest, wrote to the Chief Pilot of Skywest in the following terms:-

“Dear Mal,

During August 1988 I successfully bid for a BA-31 command assignment in Perth.  At the time of bidding the only minimum requirements for these assignments were those specified in CAO 82.3 and my aeronautical experience met these.

After awarding the BA-31 command assignments the Company then imposed additional requirements not based on any legal industrial agreement.

On January 9th, 1989 I commenced the BA-31 engineering ground school.  To meet Company requirements I was checked to the line as a First Officer on March 1st 1989 with the intention of upgrading to Captain when my experience met those requirements.  During this period I have been paid C402 Captain’s salary and as the Company imposed requirements have no legal basis I seek the balance of full BA-31 Captains salary from March 1 1989.

This letter is the first stage of the formal grievance procedure and I request your reply accordingly.”

On 22 August 1989, the Chief Pilot replied to Mr Roddan as follows:-

“Dear Neville,

Reference your letter dated 21/8/89 claiming BA-31 command salary from the time you were checked to line as a First Officer, I must advise that command salary is not payable until you are ‘checked to line’ as a Captain.

The Company minimum experience requirements for BA-31 command are not required to form part of our Industrial Agreement as you have not been prevented from bidding and being awarded a BA-31 command.

The Company does have the right to stipulate minimum experience requirements before you can exercise command privileges under these circumstances.

I therefore regret that I am unable to support your grievance claim.”

On 7 September 1989, Mr Roddan wrote to the General Manager of Skywest in the following terms:-

“Dear Sir,

On August 21st, I submitted a formal grievance to the Chief Pilot regarding my present pay level.  The details of my claim are contained in that letter.

In his rejection of my grievance I do not believe Captain Latham adequately addressed my claims.  I therefore bring stage two of this formal grievance to your attention.”

On 11 June 1990, Mr Roddan wrote to the Managing Director of Skywest in the following way:-

“Dear Sir,

I wish to bring your attention to my letter dated 7th September 1989.  This letter was stage two of the formal grievance procedure regarding payment of BA-31 Captains salary in accordance with my assignment.

I advise that I am continuing with this grievance and give you a second opportunity to reply.

After reconsidering this matter I request payment effective from March 25th 1989, being the first day after the completion of fifty hours of line flying as a first officer.  This I believe is a fair estimation of the date I should have achieved command status.

This letter is also stage two of a formal grievance and I request your reply accordingly.”

On 18 June 1990, Mr Douglas, the Operations Manager of Skywest, wrote to Mr Roddan in these terms:-

“Dear Neville,

We refer to your letter dated 11 June 1990 and confirm the company minimum experience requirements for BAe31 command are not required to form part of our industrial agreement as you have not been prevented from bidding and being awarded a BAe31 command.

The company does have the right to stipulate minimum experience requirements before you can exercise command privileges under these circumstances.

I therefore regret that I am unable to support your grievance claim.”

On 28 June 1990, Mr Roddan replied to Mr Douglas in the following terms:-

“Dear Trevor,

With regard to your letter dated 18th June 1990 I find this response to stage two of my grievance unsatisfactory.

I therefore request this grievance be taken to stage three and be heard before a grievance board as per Clause 16 of the Skywest Pilots Award.”

On 5 October 1990, Mr Cox, an Industrial Officer employed by AFAP, sent Mr Douglas a facsimile transmission in the following terms:-

“Dear Sir,

You will recall I raised with yourself and Capt. Slaven the matter of Capt. N. Roddans’ Grievance regarding his J31 assignment in Perth.

You will no doubt recall our conversation following the National Wage Case proceedings where you raised the issue of a second pilot in a similar position and sought our response as to how their cases may be handled.

I telephoned Capt. Slaven prior to leaving Perth at that time and suggested how best this could be resolved i.e. the financial position for the period of time the pilots would have been on the aircraft and the appropriate notice period for downgrading.  The matter was left for the company to respond.

To date I have received no response and I would now seek your formal position in respect to Capt Roddans’ Grievance so that the matter may be pursued without delay.”

On 17 October 1990, Mr Douglas replied to Mr Cox as follows:-

“Dear Mr Cox,

We refer to your letter dated 5 October in respect to First Officer Neville Roddans’ Grievance regarding his J31 assignment that we in fact raised with you in Perth.

At Neville Roddans’ request we did not proceed with the Grievance any further until his return from leave.

Neville Roddan has now returned and has indicated that he now wishes to go to the next stage of the Grievance procedure.”

On 22 October 1990, Mr Cox again wrote to Mr Douglas.  This further letter was as follows:-

“Dear Sir

Further to your letter of 17 October regarding N Roddan’s grievance, the Federation wishes to proceed this to the final stage of the grievance procedure as outlined in clause 16 of the Skywest Pilots Agreement 1986.  For this purpose we seek your comment as to a suitable chairman for the Grievance Board.  The Federation would suggest one of perhaps the following three:

Commissioner Maher - Australian Industrial Relations Commission

Commissioner Leary,

or

Commissioner Martin - WA Industrial Relations Commissions.

We look forward to your early response.”

On 21 December 1990, Mr Cox wrote to Commissioner Leary in the following terms:-

“Dear Commissioner

In pursuance of Section 16 of the Skywest Pilots Agreement 1986, the Federation requests you to convene a Grievance Board in accordance with Sub clause A (v).  The grievance relates to by-pass pay for Captain N Roddan.  We would request this matter be listed in Perth at a mutually convenient time.

The Federation, in accordance with the steps outlined in the procedures, has attempted to find a mutually agreed Chairman.  As the Company has not responded to this request the Federation has now taken steps in order to bring an early resolution to the grievance.”

A copy of that letter was sent to Mr Douglas.

On 1 February 1991, a Notice of Listing was sent by the Australian Industrial Registry for a hearing by Commissioner Leary on 25 February 1991 regarding “By-pass Pay for Captain N. Roddan”.

On 5 February 1991, Mr Moloney, an advocate acting on behalf of Skywest wrote to the Industrial Registrar in the following terms:-

“Dear Sir,

RE:C. NO. 22270/90 SKYWEST AIRLINES PTY LTD AND AFAP -      GRIEVANCE HEARING

I refer to the above matter, and the notification of hearing listed for 25th February, 1991.

I would seek that the Commission re-list this matter to a later date during this same week, as I have previous Full Bench commitments in Brisbane on an on-going matter in the Child Care Industry.

As it is our intention to call evidence from one (1) witness, we would also require some time for a briefing with the Company.  Accordingly, I would ask that the matter be listed at the Commission’s convenience on Friday, 1st March, 1991.

We envisage that the Company’s evidence and submission would occupy approximately one (1) hour.

A copy of this advice has been forwarded to the AFAP.”

The AFAP had arranged for a Captain Charlesworth to be present at the hearing as the representative of AFAP for the purposes of clause 16A(v) of the award.  The hearing was re-scheduled to commence on 28 February 1991.  However, on 27 February 1991, Skywest summonsed Captain Charlesworth to appear as a witness on its behalf.

As at 28 February 1991, the following situation applied in relation to clause 16 of the award:-

• There was a dispute between a pilot and AFAP on the one hand and Skywest on the other as to Mr Roddan’s entitlements under the award to by-pass pay in accordance with clause 24D of the award, which provides as follows:-

“The Company may defer a pilot’s promotion for a maximum of one hundred and twenty (120) days from the commencement of training of the more junior pilot.  When a pilot’s promotion in grade or status is deferred for any reason other than his not having the promotional criteria or failing to reach the required standard of flight proficiency, or not applying for a vacancy or training vacancy and he is by-passed by a less senior pilot, he shall be paid as from the date of that by-pass, the total remuneration he would have received had he not been by-passed.  By-pass pay shall commence from the date of the pilot commencing to receive the rate of pay applicable to the promotional vacancy.”

• The pilot had raised the matter with the Chief Pilot.

• The Chief Pilot had replied to the pilot within 7 working days.

• The pilot had appealed in writing to the General Manager.

• The General Manager had not replied to the pilot within 7 working days.

• A reply from Skywest was received approximately nine months after the pilot’s appeal, 7 days after a further written appeal had been sent by him to the “Managing Director”.

• AFAP had sought to refer the matter to a Grievance Board.

• The pilot was dissatisfied with the decision of Skywest and requested a hearing of his grievance “before a grievance board as per clause 16 of the Skywest Pilots Award”.

• AFAP had suggested three names to Skywest from which a chairman might be chosen to chair the Grievance Board which would hear and determine Mr Roddan’s grievance.

• Skywest and AFAP had not “mutually agreed” on a chairman to chair the Grievance Board.

• Skywest had not provided a person to be its representative on the Grievance Board.

• AFAP was in a position to supply its representative in lieu of Captain Charlesworth.

On 28 February 1991, the “matter” which was the subject of the Notice of Listing of 1 February 1991 came on for hearing before Commissioner Leary in Perth.  Prior to the commencement of the hearing, Commissioner Leary and the two respective advocates, Mr Cox (AFAP) and Mr Moloney (Skywest) had a discussion in chambers.  Mr Cox and Mr Moloney each gave evidence before the Court as to the contents of the discussion.

Mr Moloney testified that the prime purpose of the discussion in chambers “... was to attempt to see if we could reach agreement on the composition of a grievance board, and perhaps then how the matter may proceed from there.” (transcript page 24).  He also testified that he “... did not agree to the establishment of a three member grievance board and  ... objected to the Commission sitting as a grievance board on its own.” (transcript page 25).

Mr Moloney also said that at the end of “the discussions”, Commissioner Leary said that she was “... going to proceed to hear and determine this matter, whether you are here or not.” (transcript page 25).  He said that he was in doubt as to whether she intended to do so as a one person Grievance Board or as the Commission.

Mr Moloney said that Skywest treated the matter as one which went directly to the Commission in the absence of agreement about a chairman of a Grievance Board.  He said that there was no indication in the hearing before Commissioner Leary that it was being conducted as a Grievance Board.  An objective reading of the transcript of proceedings before Commissioner Leary, in my opinion, leads to a contrary conclusion.  That transcript (dated 28.2.91) was tendered as an exhibit before the Court.  At page 2 the Commissioner said:-

“Are these usually - I mean, you’ve got to make allowances, this is only my second one.  Are they normally run as private conferences?”

At page 3, Mr Moloney is quoted as saying:-

“... I am not aware that these matters are held in camera and I don’t know that there’s anything actually in the grievance procedures”.

A little later, on the same page of transcript, Mr Moloney said:-

“I’ve been involved in a couple more of them than what the commission has had the opportunity to be involved in and it’s never been a problem.”

Mr Moloney was there, and later, referring to the fact that the proceedings before a Grievance Board may be held in camera or in public.

Mr Moloney ultimately conceded under cross-examination before the Court that he “was referring to grievance boards” at page 3 of the transcript before the Commissioner.

He also testified that it was in his mind during the discussions with Mr Cox and the Commissioner that the matter would in any event go to the “tribunal” under the grievance procedure which would be the same person as a one person Grievance Board should the Commissioner proceed in the latter way.


           Mr Cox testified as follows:-

• He complained about Skywest not having a representative to sit on the Grievance Board.

• Mr Moloney said he could not understand his complaint as the chairman usually determined the issue.

• Mr Moloney said he would be happy to have Commissioner Leary sit on her own, constituting the Grievance Board.

I accept Mr Cox’s account of what occurred in the Commissioner’s chambers and prefer it to Mr Moloney’s account.  Mr Cox, in giving his evidence, had a clearer recollection of the discussion with Commissioner Leary than did Mr Moloney.  His account of the relevant conversation is more consistent with the transcript of the hearing before the Commissioner than Mr Moloney’s account.  That is, it is clear that the proceedings were conducted as if the Commissioner sat alone but as the Grievance Board, by consent of the parties.

It is trite law that the consent of the parties cannot confer jurisdiction on a person or body which has, in truth, no jurisdiction to embark upon a particular task.  See Thomson Australian Holdings Proprietary Limited v The Trade Practices Commission and Others (1981) 148 CLR 150, 163 and National Union of Workers and Others v Pacific Dunlop Tyres Pty Ltd and Another (“NUW”) (1992) 37 FCR 419, 427. The consent of Skywest and AFAP to Commissioner Leary constituting the Grievance Board on her own did not make the proceedings before the Commissioner proceedings before a Grievance Board. No properly constituted Grievance Board was established as no representatives of AFAP or Skywest were on the Board. The decision of Commissioner Leary, given on 10 May 1991 and contained in Print J7668, was not a decision of a Grievance Board. Therefore, no relevant breach of the award is established by the failure of Skywest to comply with that decision.

Mr Borenstein, counsel for AFAP, submitted that Skywest and AFAP had each waived its right to have its representatives on the Grievance Board.  It was further submitted that Skywest is estopped from relying upon its inducement to AFAP to have the Board constituted by a chairman alone.  As Mr Borenstein put it:-

“... we would say that what has happened here is that the parties have waived their entitlement to appoint a representative and have agreed that the board partly constituted would proceed to hear the matter.” (transcript page 71)

Mr Borenstein conceded (in light of NUW at 428) that for the Court to accept that submission it would have to be assumed that the Grievance Board procedure in clause 16 of the award is in the nature of a private arbitration. He was not able to refer the Court to any authority in support of the proposition that proceedings before Grievance Boards so established are in the nature of private arbitration proceedings.

I do not consider proceedings before a Grievance Board established under the award to be proceedings by way of “private arbitration” or in the “nature of private arbitration”.  As in NUW, there was no express agreement for Commissioner Leary to act as a private arbitrator.  Also, as in NUW, no such agreement can be implied.  The parties had agreed that the Commissioner act as the Grievance Board established by clause 16 of the award and not as a private arbitrator.

The Grievance Board clause in the award provides for the establishment of a Board in the circumstances set out in clause 16.  The Grievance Board is a body which may be established as a result of the exercise of power by the Commission in part settlement of an industrial dispute between AFAP and Skywest.  It is not a body which exists to conduct private arbitration between those parties.  It exists to provide an efficient method to resolve grievances of persons whose terms and conditions of employment are governed by the award.  Unfortunately, it appears that, at least in 1991, Skywest and AFAP did not work together in co-operation to ensure such efficiency.  As a Full Bench of the Commission said in August 1991 in Re Skywest Aviation Pty Ltd, Print J8753:-

“... we observe that quick, common sense procedures within awards for addressing grievances are highly desirable and consistent with both the objects of the Industrial Relations Act 1988 and specific provisions within the Act (s.91, s.131). We believe that it is desirable that such procedures exist and work effectively. A joint commitment and adherence to the principles underlying grievance processes is essential to their effective operation. Such procedures cannot achieve their purpose when selectively observed by one party or the other.

It is clear to us that problems exist in relation to the operation of clause 16, grievance procedures, of the Skywest award.  The clause as drafted lacks detail and clarity in places and, on the submissions put to us is susceptible to conflicting interpretation as to its operation.  It seems to us that such problems are tolerable and would not detract significantly from the effectiveness of the grievance process if the parties exercise some flexibility and some degree of co-operation in giving effect to the clause.  However where tension exists between the parties and they wish to argue technical points and points of interpretation, the clause as currently drafted has limited utility in providing a common sense, quick and non-adversarial process for resolving grievances.

We recommend that the parties consult as a matter of urgency in an attempt to reach some common understanding as to the operation of the current clause, so as to allow it to meet its purpose effectively, and, if necessary, to jointly revise the clause to overcome its current deficiencies.”

Having found that the Grievance Board was not properly constituted when it purported to hear Mr Roddan’s grievance and that in hearing the grievance, Commissioner Leary was not engaged in a hearing in the nature of a private arbitration, the alleged breach of the award by Skywest is not made out.  The application of AFAP must be dismissed.  I do not find it necessary, therefore, to deal with the submission of Skywest that if the proceedings before  the Commissioner constituted the proceedings of a valid Grievance Board, the Board ultimately purported to exercise judicial power by finding in Mr Roddan’s favour and holding that he was entitled to by-pass pay.

I certify that this and the preceding 16 pages are a true copy of the Reasons for Judgment herein of his Honour Justice Marshall.

Associate:  

Date:  

Counsel for the Applicant:  H. Borenstein
Solicitor for the Applicant:  Mahony Galvin Rylah

Counsel for the Respondent:  F. Parry
Solicitor for the Respondent:  Freehill Hollingdale & Page

Date of hearing:  21 March 1996
Date of judgment:  3 May 1996