Australian Federation of Air Pilots v Surveillance Australia Pty Ltd T/A Cobham Aviation Services Australia Special Mission
[2021] FWC 5162
•3 SEPTEMBER 2021
| [2021] FWC 5162 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Federation of Air Pilots
v
Surveillance Australia Pty Ltd T/A Cobham Aviation Services Australia – Special Mission
(C2020/4069)
SURVEILLANCE AUSTRALIA PILOT AND OBSERVER ENTERPRISE AGREEMENT 2016
[AE425429]
Airline operations | ||
COMMISSIONER HAMPTON | ADELAIDE, 3 SEPTEMBER 2021 | |
Dispute about matters arising under the enterprise agreement – fly in fly out arrangements for Pilots cancelled in the context of the Covid-19 pandemic and restrictions by governments – whether the Pilots agreed to change their home base for a temporary period – whether arrangements permitted by enterprise agreement – enterprise agreement does not prevent a change where a new genuine contract of employment is established but does not otherwise contemplate temporary changes to home bases – found that no new contracts of employment made given the absence of acceptance of offers – home bases not changed for the purposes of the enterprise agreement – whether external investigation into alleged conduct of senior manager appropriate – found not appropriate in all of the circumstances – determination made – observations and recommendation issued to deal with fall-out of the events leading to this dispute.
1. The background and nature of this matter
[1] The fallout from the COVID-19 Pandemic that hit Australia in March and April 2020 will be felt for many years to come. The adjustments that governments, businesses, workers and the community had to make at short notice had, and continue to have, consequences. This includes, as a result of the various lockdowns, border restrictions and reductions in airline operations. These events in March and April 2020 largely set the scene for this matter.
[2] The Commission has been dealing with a dispute resolution application made under s.739 of the Fair Work Act 2009 (the Act) by the Australian Federation of Air Pilots (AFAP). The matter concerns Pilots engaged by Surveillance Australia Pty Ltd T/A Cobham Aviation Services Australia – Special Mission (Cobham SM) under the terms of the Surveillance Australia Pilot and Observer Enterprise Agreement 2016 (Enterprise Agreement). The work in question involves the Pilots flying as part of the Cobham SM’s surveillance contract with the Australian Border Force (ABF).
[3] The matter was subject to an earlier decision of this arm of the Commission on 17 July 2020 1 (July 2020 decision), which effectively endorsed an agreement between the parties about one aspect of the dispute. Namely, the arrangements to conclude what was a temporary change in the basing arrangements for some of the Pilots. This decision should be read in conjunction with the July 2020 decision.
[4] Without outlining the entire context of the matter, the background is that some of the Pilots, who are also engaged as Captains (10 Pilots out of total cohort of approximately 56 ABF contract Pilots),2 were, at the relevant time engaged on what might be best described as Fly in – Fly out (FIFO) arrangements whereby they undertake their flying duties from an airport other than their nominated home port, on an equal time roster, generally on a 21-day on, 21-day off, basis. Until around early April 2020, the FIFO arrangements were generally (but not exclusively) facilitated by Individual Flexibility Agreements (IFAs) entered into in accordance with clause 1.14 of the Enterprise Agreement.
[5] Cobham SM operates 10 specially modified Dash 8 turbo propeller aircraft from 3 operational bases around Australia in support of the ABF contract. These bases are located in Broome, Darwin and Cairns (ABF base ports). Each of the FIFO Pilots was engaged or had agreed to new contract variations to their engagement on the basis that their home port would be other than one of the ABF base ports. In practice this created the need for Pilots to travel to and from various ports for the FIFO to operate; respectively: Rockhampton to Darwin, Adelaide to Darwin, Brisbane to Broome, Albury to Broome, Brisbane to Darwin, Bundaberg to Darwin, Brisbane to Darwin and Brisbane to Broome, amongst other transits.
[6] Although I will discuss the full legal import of these concepts within this Decision, the following notions arise from the terms of the Enterprise Agreement and the FIFO arrangements:
• Home Base – an airport near to where the Pilots reside which represents the point that the Pilots must attend and where Cobham SM will begin their transport (generally using commercial airlines) to the ABF base. The Pilots are also returned by Cobham SM to the home base at the conclusion of a deployment.
• ABF or Operational Base – an airport from where the FIFO Pilots fly their ABF deployments (roster swing). During a deployment, the FIFO Pilots are housed by Cobham SM in accommodation near to the ABF bases.
[7] I observe that in the case of the (non-FIFO) fixed-base Pilots, their home base and ABF base are generally the same. In all cases, the Pilots may be deployed to fly out of any of the ABF operational bases from time to time.
[8] In the context of the COVID-19 pandemic and the associated restrictions imposed by various governments, Cobham SM sought to, in effect, physically relocate the relevant FIFO Pilots from their home bases to one of the ABF base ports in order to reduce inter-state travel and for other risk-management purposes. In practical terms, the Pilots cooperated with this arrangement at short notice and temporary understandings, or at least, arrangements were put into place. This involved, in effect, each of the Pilots being relocated and working from one of the ABF base ports for a 3-month period, subject to extension by agreement. Whether the Pilots agreed to change their home base for the purposes of the Enterprise Agreement is in dispute. Cobham SM also unilaterally terminated the IFAs, something that was not supported by the AFAP or the Pilots. The temporary arrangements were due to progressively conclude from 27 June 2020; however, as a result of some further agreed interim measures, the temporary arrangements were extended and ultimately concluded on the basis set out in the July 2020 decision.
[9] The dispute about the process and the legal effect of the change in the basing arrangements during this period is the focus of this decision. In effect, the substance of the dispute is whether the FIFO Pilots had, by agreement, their home bases for the purposes of the Enterprise Agreement changed to one of the ABF bases for the period of the temporary arrangements, or alternatively, were deployed to the ABF bases without a change in home base.
[10] I also observe at the outset that there is no suggestion that the changes in basing arrangements were intended to permanently change the Pilots’ actual home bases. It was expressly a temporary change in the context of the immediate predicted impact of the COVID-19 pandemic including, in particular, the control measures introduced by the Commonwealth, State and Territory governments and associated changes to commercial airline schedules.
[11] It is common ground that the matter is properly before the Commission and that it is empowered by the terms of the FW Act, and the relevant dispute resolution provisions of the Enterprise Agreement, to determine the dispute about the proper application of that instrument.
[12] I observe that a subsequent review of the FIFO arrangements has been implemented by Cobham SM and a dispute 3 about this (the 2021 dispute) has been heard by another Member of the Commission. The 2021 dispute, understandably, became the priority for the parties in this matter and this contributed to the delay in conducting the final hearings of this application. The 2021 dispute was ultimately resolved by the parties, with the assistance of the Commission, and a Statement4 was issued by the Commission, in effect, confirming those arrangements.
[13] I also observe that, somewhat ironically, hearings associated with this matter have also been impacted and delayed multiple times by various COVID-19 related restrictions and State-based shutdowns from time to time. The parties and their representatives cooperated with each other and the Commission in that regard.
[14] In this Decision I have, for convenience, referred to the temporary arrangements in question as a “rebasing”. The substance of the arrangements remains in dispute and will be examined hereunder.
2. The scope of the arbitration
[15] The parties have agreed the following question to be determined by the Commission.
“In the case of each relevant Pilot, what was the Pilot’s Home Base for the purposes of the Surveillance Australia Pilot and Observer Enterprise Agreement 2016 during the relevant period when normal FIFO arrangements were not operating during 2020?”
[16] I will for convenience describe this question as the home base question.
[17] In essence, it is accepted between the parties that if entitlements arise under the Enterprise Agreement as contended by the AFAP and the Pilots, then those entitlements arise as a consequence of the Pilots being deployed away from their home base during the relevant period. The Pilots deny agreeing to change their home bases, including temporarily, during the relevant period and on that basis do not accept that each of their home bases changed for the purposes of the Enterprise Agreement.
[18] Cobham SM contends that each of the Pilots expressly or impliedly agreed to change their home bases during the relevant periods and that different home bases operated for present purposes. On that approach, no additional entitlements arise.
[19] The relevant period for present purposes is the period commencing the first day of travel for each Pilot departing their respective (then nominated) home bases to their operating base under what Cobham SM has described as being the “temporary basing” and concluding on the day they arrived from the ABF bases back to their respective home bases. The relevant period for each employee is not in dispute and ranges from around 4 months for most of the Pilots and up to around 6 months for 2 of the Pilots.
[20] In addition to the home base question, AFAP has sought, in effect, that the Commission determine that:
(a) Cobham SM engage an external agent, with no relationship to it, to conduct a review into the treatment of the Employees by the Cobham SM, Officers and employees of the Cobham SM;
(b) The external agent be agreed with the AFAP; and
(c) The report be made available to the AFAP, the Employees and the Commission.
[21] I will for convenience describe this aspect as the external investigation claim.
[22] Cobham SM contended that this asserted ‘second limb of the dispute’ is not part of the dispute to which these proceedings relate and that the Commission would not have jurisdiction to make a determination of the type sought. It asserts that in any event, these matters are irrelevant to the determination of the agreed home base question.
[23] I have, in determining the agreed question, had regard to the process and conduct of the parties associated with the temporary basing arrangements. Having done so, and given the nature of these proceedings, I do not consider that it is appropriate to determine that an independent investigation be conducted. I will explain my reasons for this approach at the conclusion of this Decision. As a result, I have not dealt with the issue as to whether the form of outcome sought by the AFAP in connection with the external investigation claim would be within the jurisdiction of the Commission. I also observe that other avenues remain available to the Pilots if sought.
[24] As to the home base question, I have ultimately determined that in the absence of a new/revised employment contract for each of the Pilots, the home base for present purposes was that specified in the most recent letters of offer (contracts) accepted by each of the Pilots which immediately preceded the rebasing events.
[25] The basis of my conclusions and the determination of the Commission are set out in the Decision that follows.
3. The immediately relevant terms of the Agreement and typical IFA provisions
3.1 The Enterprise Agreement
[26] The Enterprise Agreement is a stand-alone instrument and does not rely upon the relevant modern award. 5
[27] The most relevant definitions bearing upon this matter are contained in clause 1.2 as follows:
“1.2 DEFINITIONS
1.2.7 "Base" means the geographical location at which the aircrew member is located in accordance with Employer requirements.
… …
1.2.25 "Deployment" means where an aircraft terminates and/or aircrew complete their rostered duty at a location other than their home base.
… …
1.2.35 "Home Base" means the Base of appointment as identified in an Employee's Letter of Offer once having taken up residence if moving from another location.
… …
1.2.43 "Permanent Transfer'' means the acceptance by an Employee of an offer to transfer from one Home Base to another on a permanent basis.
… …
1.2.55 "Temporary Transfer" means where an Employee is transferred, which is not in relation to a deployment, to a location for the purpose of being temporarily utilised at that location.”
[28] The dispute resolution procedure (DRP) under the Enterprise Agreement is important in terms of the chronology of events and the impact of a dispute raised on behalf of the Pilots during the early stages of the events under consideration in this matter. Clause 1.12 provides as follows:
“1.12 DISPUTE RESOLUTION PROCESS
1.12.1 If a dispute arises in relation to this agreement, the NES (including subsections 65(5) or 76(4)), any associated matters pertaining to this agreement (including a dispute about whether a workplace right has been breached), the parties will, in the first instance, attempt to resolve the matter at the workplace by discussions between the employee or employees concerned and the relevant manager, or their respective representatives.
1.12.2 It is a term of this agreement that while the dispute resolution procedure is being conducted work shall continue normally, unless a employee has a reasonable concern about an imminent risk to his or her health or safety, and the subject matter of the dispute shall be preserved so as to maintain the status quo pending the resolution of the dispute.
1.12.3 An Employee who is a party to the dispute may be represented by the union or another representative.
1.12.4 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the Employee or employees and relevant supervisors and/or management.
1.12.5 If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to the General Manager or nominee for resolution.
1.12.6 If the matter is not resolved by the General Manager, a party to the dispute may refer the matter to the Fair Work Commission (FWC).
1.12.7 Fair Work Australia may deal with the dispute in 2 stages:
1.12.7.1 FWC will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion, making a recommendation; or issuing interim orders; and
1.12.7.2 if FWC is unable to resolve the dispute at the first stage, FWC may then:
(a) arbitrate the dispute; and
(b) make a determination that is binding on the parties.
Note: If FWC arbitrates the dispute, it may also use the powers that are available to it under the Act.
1.12.8 While the parties are trying to resolve the dispute using the procedures in this term:
1.1 2.8.1 an Employee must continue to perform his or her work as he or she would normally, unless he or she has a reasonable concern about an imminent risk to his or her health or safety; and
1.12.8.2 an Employee must comply with a direction given by the Employer to perform other available work at the same workplace, or at another workplace, unless:
(a) the work is not safe; or
(b) applicable occupational health and safety legislation would not permit the work to be performed; or
(c) the work is not appropriate for the Employee to perform; or
(d) there are other reasonable grounds for the Employee to refuse to comply with the direction.
1.12.9 The parties to the dispute agree to be bound by a decision made by FWC in accordance with this term.”
[29] The Enterprise Agreement defines its relationship with contractual terms as follows:
“1.6 CONDITIONS OF EMPLOYMENT
1.6.1 This Agreement, Employer policies and other contractual conditions (where applicable) will apply to an Employee's employment.
1.6.2 If there is any difference between Employer policy and this Agreement, the Agreement will prevail.
[30] At various time the parties have utilised the Flexibility Provisions of the Enterprise Agreement to enter into the IFAs. Clause 1.14 provides as follows:
“1.14 FLEXIBILITY PROVISIONS
1.14.1 The Employer and an Employee covered by this Agreement may agree to make an individual flexibility arrangement (I FA) to vary the effect of terms of the Agreement if:
1.14.1.1 the Agreement deals with 1 or more of the following matters:
(a) arrangements about when work is performed;
(b) overtime rates;
(c) penalty rates;
(d) allowances;
(e) leave loading; and
1.14.1.2 the arrangement meets the genuine needs of the Employer and Employee in relation to one or more of the matters mentioned in paragraph 1.14.1.1;and
1.14.1.3 the arrangement is genuinely agreed to by the Employer and Employee.
1.14.2 The Employer must ensure that the terms of the individual flexibility arrangement:
1.14.2.1 are about permitted matters under section 1 72 of the Act; and
1.14.2.2 are not unlawful terms under section 1 94 of the Act; and
1.14.2.3 result in the Employee being better off overall than the Employee would be if no arrangement was made.
1.14.3 The Employer must ensure that the IFA:
1.14.3.1 is in writing; and
1.14.3.2 includes the name of the Employer and Employee; and
1.14.3.3 is signed by the Employer and Employee and if the Employee is under 18 years of age, signed by a parent or guardian of the Employee; and
1.14.3.4 includes details of:
(a) the terms of the Agreement that will be varied by the arrangement; and
(b) how the arrangement will vary the effect of the terms; and
(c) how the Employee will be better off overall in relation to the terms and conditions of his or her employment as a result of the arrangement; and
1.14.3.5 states the day on which the arrangement commences.
1.14.4 The Employer must give the Employee a copy of the IFA within 14 days after it is agreed to.
1.14.5 The Employer or Employee may terminate the IF A:
1.14.5.1 by giving no more than 28 days written notice to the other party to the arrangement; or
1.14.5.2 if the Employer and Employee agree in writing - at any time.
1.14.6 Where requested to do so by an Employee subject to an IFA, the Employer must provide copies of the IFA made under this clause to the Employee's Union or other representative.”
[31] The Enterprise Agreement also provides allowances that may inform the determination of the dispute. Some of these allowances are also claimed by AFAP to arise from its view of the proper application of the Enterprise Agreement during the relevant period and include:
“5.6 VARIABLE ALLOWANCES
5.6.1 Own Accommodation Allowance
Where the Employee is deployed away from the Employee's home base and the Employer has agreed in advance that the Employee will provide his/her own accommodation, the Employee will be paid an Own Accommodation Allowance as prescribed in Schedule 1 of this Agreement in lieu of Employer provided accommodation (clause 7.3) and a Meal and Incidental Allowance (clause 5.6.4). In agreeing to pay this allowance, the Employer will consider the impact of these arrangements on crew coordination, transport and contactability.
5.6.2 Lack of Facilities Allowance
Where the Employee is deployed away from the Employee's home base and the Employer is unable to provide the Employee with reasonable accommodation in accordance with clause 7.3 of this Agreement, the Employee will be paid a Lack of Facilities Allowance as prescribed in Schedule 1 of this Agreement. This allowance will be paid in addition to any other allowances that the Employee may be entitled to under this Agreement.
5.6.3 Callout Allowance
A change to an employee's RDO at the Employee's home base with less than 24 hours' notice will only occur with the agreement of the employee. Where the employee does agree, the Employee will be paid a Callout Allowance as prescribed at Schedule 1 of this Agreement. This allowance is not applied to any Training or Senior Base Allowances as specified in subclause 5.5.1 of this Agreement.
This allowance is not payable during tactical operations away from the Employee's home base or under any circumstances where more than 24 hours' notice is provided.
5.6.4 Meal and Incidental Allowances
5.6.4.1 When the Employer deploys an Employee away from home base the Employee will be paid Meal and Incidental Allowances as prescribed in Schedule 1 of this Agreement.
5.6.4.2 A Meal Allowance will be paid if the Employee is deployed away from the Employee's home base and the Employee's deployment falls within the following meal times (rounded to the nearest 15 minutes);
Breakfast 0630 - 0800
Lunch 1200 - 1 330
Dinner1800 - 2000
5.6.4.3 The Incidental Allowance applies to each day of travel or part thereof.
5.6.4.4 When temporarily transferred to a location other than the Employee's home base for a period in excess of 28 days the Employee will be provided with accommodation that has cooking facilities and the Employee will be paid the Incidental Allowance as prescribed in Schedule 1 of this Agreement. No Meal Allowances will be payable.
5.6.4.5 Where the Employer provides the Employee with a meal, they will not be entitled to a meal allowance in accordance with clause 5.6.4.1 of this Agreement
… …
5.6.6 Daily Travel Allowance (Pre-Checked to Line)
5.6.6.1 On commencement of employment and where required to deploy away from the Employee's home base, an Employee will be paid a Daily Travel Allowance (Pre-Checked to Line) as prescribed at Schedule 1 of this Agreement for a period of 12 weeks or until being Checked to Line (whichever occurs first). This allowance is paid in lieu of the Meal and Incidental Allowances prescribed at clause 5.6.4 of this Agreement. However, where the training program extends beyond 12 weeks due to an Employee's failure to pass any portion of the training course, the employee will continue to receive the DTA until CTL.
5.6.6.2 Once Checked to Line or after 12 weeks of employment (whichever occurs first), an Employee will receive the full Meal and Incidental Allowances as prescribed at Schedule 1 of this Agreement.
5.6.6.3 The 12 week timeframe described in 5.6.6.1 and 5.6.6.2 does not apply to a "Low Flying Hours Pilot". Employees in this category will continue to receive a Daily Travel Allowance (Pre-Checked to Line) until they have been Checked to Line.
5.6.7 Additional Day Allowance
If an Employee does not receive RDOs as prescribed in clause 4.3 of this Agreement, the Employee will be paid an Additional Day Allowance as prescribed at Schedule 1 of this Agreement. This allowance is not applied to any Training or Senior Base Allowances as specified in clause 5.5. 1 of this Agreement.”
[32] One of the issues that arises is whether the Pilots attempted to repay certain payments that were made to them by Cobham SM associated with the status of the basing arrangements during the relevant period. In this regard, Cobham SM relies upon clause 5.8 of the Enterprise Agreement as follows:
“5.8 OVERPAYMENT/UNDERPAYMENT OF ENTITLEMENTS
5.8.1 In the event that an Employee is overpaid, the Employer must advise the overpayment and discuss re-payment options of the amount owing. The Employer will not seek recovery of any overpayment of either salaries or allowances for periods in excess of six months from the date of detection.
5.8.2 Where it is the intention of the Employer to deduct from pay an overpayment, then the Employer shall provide four weeks' written notice to the Employee and the deduction will not be greater than 10% of Gross Salary in any pay period or a negotiated amount. If an Employee has cause to dispute the Employer's decision or the proposed repayments will cause hardship, the Employee shall inform the Employer in writing within seven days and the Employer shall withhold deduction action until the matter is resolved.
5.8.3 Any overpayment not recovered from the Employee as at the date of the termination of the Employee's employment may be deducted from any other entitlements owed to the Employee.
5.8.4 Where the Employer underpays an Employee the Employer shall correct the underpayment as soon as practicable after being notified of the underpayment.”
[33] The consequences of a “transfer” of Pilots is set out in clause 5.10 in the following terms:
“5.10 TRANSFERS
In the event of a permanent transfer from one home base to another, the Employer and the Employee will negotiate the transfer considering the Employee's specific requirements using the following parameters as a guide.
5.10.1 Where transferred from one home base to another at the Employee's request the Employee will be responsible for all expenses associated with the Employee's relocation.
5.10.2 Where transferred from one home base to another in response to a formal Expression of Interest (EOI) the Employee will be responsible for all expenses associated with the Employee's relocation. Hotel accommodation will be provided by the Employer at the Employee's new location for a maximum of 14 days.
5.10.3 In a limited number of circumstances, the Employer may be able to assist with airfares if the Employee is required to deadhead travel for Employer related business at the time of removal (i.e. to attend a training course en-route to the Employee's new home base).
5.10.4 Where an Employee transfers from one home base to another upon the Employer's written direction, the Employer will provide relocation assistance in accordance with clause 5.11.”
[34] Relocation assistance is required in the circumstances contemplated in clause 5.11 of the Enterprise Agreement as follows:
“5.11 RELOCATION ASSISTANCE
5.11.1 Where the Employer has offered to provide Relocation Assistance as part of either an initial offer of employment or a transfer in accordance with clause 5.10.4 of this Agreement, the Employer will pay reasonable costs in accordance with the value and proportion specified in the Employer's letter of offer to the Employee for the following items;
5.11.1.1 The removal of the Employee's personal effects, household goods and furniture.
5.11.1.2 The removal of one car owned by the Employee or the Employee's dependents.
5.11.1.3 Storage of the Employee's goods and furniture where required for a period of up to 30 days.
5.11.1.4 Removal and storage insurance for the goods noted above for a period of up to 30 days.
5.11.1.5 Economy class airfares for the Employee and the Employee's dependents.
5.11.1.6 Reasonable accommodation and meals for the Employee and the Employee's dependents where the Employee elects to drive the Employee's vehicle (in the Employee's own time) to the new location for a reasonable period of time, taking into account the distance to be travelled.
5.11.1.7 A maximum of 14 days accommodation at the Employee's new location.
5.11.1.8 Connection fees for water, electricity, gas and telephone (landline only).
[35] Clause 7.2 provides the following with respect to the employment location of the Pilots:
“7.2 EMPLOYMENT LOCATION
7.2.1 An Employee will initially be employed at the home base nominated in the Employer's letter of offer. An Employee may be required to work in any location in Australia or around the world.
7.2.2 The provisions and conditions applicable to transfers from one home base to another are detailed in clause 5.10 of this Agreement.
7.2.3 An Employee shall not be required to conduct operations into a war zone or any area or location formally declared by the Australian Government as a war like zone, but the Employer may request volunteers for such operations.”
[36] The Enterprise Agreement provides as follows with respect to accommodation:
“7.3 ACCOMMODATION
Where the Employer requires an Employee to deploy away from the Employee's home base the Employer will provide accommodation of a reasonable standard, as determined by the Employer.
3.2 The typical terms of the IFAs
[37] The Enterprise Agreement term facilitating the making of the IFAs, clause 1.14, has been set out above. I observe that s.203 and s.204 of the Act provides the requirements for the inclusion of an IFA type provision within an enterprise agreement in the following terms:
“203 Requirements to be met by a flexibility term
Flexibility term must meet requirements
(1) A flexibility term in an enterprise agreement must meet the requirements set out in this section.
Requirements relating to content
(2) The flexibility term must:
(a) set out the terms of the enterprise agreement the effect of which may be varied by an individual flexibility arrangement agreed to under the flexibility term; and
(b) require the employer to ensure that any individual flexibility arrangement agreed to under the flexibility term:
(i) must be about matters that would be permitted matters if the arrangement were an enterprise agreement; and
(ii) must not include a term that would be an unlawful term if the arrangement were an enterprise agreement.
(2A) If, in accordance with this Part, the enterprise agreement includes terms that would be outworker terms if they were included in a modern award, the flexibility term must not allow the effect of those outworker terms to be varied.
Requirement for genuine agreement
(3) The flexibility term must require that any individual flexibility arrangement is genuinely agreed to by the employer and the employee.
Requirement that the employee be better off overall
(4) The flexibility term must require the employer to ensure that any individual flexibility arrangement agreed to under the term must result in the employee being better off overall than the employee would have been if no individual flexibility arrangement were agreed to.
Requirement relating to approval or consent of another person
(5) Except as required by subparagraph (7)(a)(ii), the employer must ensure that the flexibility term does not require that any individual flexibility arrangement agreed to by an employer and employee under the term be approved, or consented to, by another person.
Requirement relating to termination of individual flexibility arrangements
(6) The flexibility term must require the employer to ensure that any individual flexibility arrangement agreed to under the term must be able to be terminated:
(a) by either the employee, or the employer, giving written notice of not more than 28 days; or
(b) by the employee and the employer at any time if they agree, in writing, to the termination.
Other requirements
(7) The flexibility term must require the employer to ensure that:
(a) any individual flexibility arrangement agreed to under the term must be in writing and signed:
(i) in all cases—by the employee and the employer; and
(ii) if the employee is under 18—by a parent or guardian of the employee; and
(b) a copy of any individual flexibility arrangement agreed to under the term must be given to the employee within 14 days after it is agreed to.
204 Effect of arrangement that does not meet requirements of flexibility term
Application of this section
(1) This section applies if:
(a) an employee and employer agree to an arrangement that purports to be an individual flexibility arrangement under a flexibility term in an enterprise agreement; and
(b) the arrangement does not meet a requirement set out in section 203.
Note: failure to meet such a requirement may be a contravention of a provision of Part 3‑1 (which deals with general protections).
Arrangement has effect as if it were an individual flexibility arrangement
(2) The arrangement has effect as if it were an individual flexibility arrangement.
Employer contravenes flexibility term in specified circumstances
(3) If section 203 requires the employer to ensure that the arrangement meets the requirement, the employer contravenes the flexibility term of the agreement.
Requirement relating to termination of arrangement
(4) If the arrangement does not provide that the arrangement is able to be terminated:
(a) by either the employee, or the employer, giving written notice of not more than 28 days; or
(b) by the employee and the employer at any time if they agree, in writing, to the termination;
the arrangement is taken to provide that the arrangement is able to be so terminated.”
[38] Although the relevance of the various IFAs is in dispute, an understanding of some of the common terms is important to provide the complete context for the various propositions advanced in this matter.
[39] Each of the FIFO Pilots were given a letter offering the FIFO position along with, in most cases, the IFA. I will return to the significance of these letters at various points in this Decision.
[40] The precise terms of some of the IFAs varied; however, each had an introduction setting the context. For example, Captain Smart’s IFA, entered into during November 2017, reads in part as follows:
“Further to the company's information sessions around the DHC8 Captain attraction and retention initiatives, I am pleased to confirm our offer of a FIFO position at Full-Time (100% FTE) as Base Relief & Training/Checking Captain with an initial home base of Adelaide SA.
It is noted that you expressed interest in this offer/change in August 2017 and, upon your acceptance of this offer, this change will be effective from 1 September 2017 (commencement of a pay cycle).
In order to effect the nature of this offer, the terms and conditions of the FIFO DHC8 captain attraction and retention initiative will be covered by an Individual Flexibility Arrangement (IFA). The following items are provided for your consideration; with this letter being the IFA should you accept the terms and conditions. Please note, this offer/acceptance will replace any current or previous contract or IFA agreement upon taking effect.”
[41] In addition to specifying the nature of the position and the salary level, the common terms of the IFAs included clauses of the following nature (again using Captain Smart’s 2017 IFA as an example):
“Line Flying Duties
You will be rostered for flying duties as required and the Company will cover the airfares to position you for blocks of duty, this also applies when attending for SIM activities.
Expenses
Meal and incidentals in line with the SAPL EA when deploying from a Temporary Home Base during a Duty Cycle or when at the SIM.
Relocation
Our position is that a designated Home Base needs to be a capital city of your choosing, however, your preference for the Sunshine Coast or Gold Coast in Queensland is acceptable. Initially, you will operate out of Adelaide until such time as we mutually agree on an alternative home base and date for your relocation.
Once determined and agreed, any costs associated with relocating to a different home base from Adelaide will be borne by you. However, the company will assist you, if requested, by approving your access to the salary sacrifice options and repayment via payroll deductions over the agreed period.
The company will also provide up to 14 days hotel accommodation for you and your family at the time of your initial relocation from Adelaide to your new home base.
You have requested and we have agreed that you may request to vary your nominated home base after the initial relocation, however, apart from assistance with salary sacrificing transport costs, the company will not contribute to any other costs associated with your decision to relocate again. The company will not unreasonably refuse to agree a new location as long as it is a capital city and does not result in additional costs or constraints.
Duty Cycles on Rotation
You will continue to be employed pursuant to the Surveillance Australia Pilot and Observer Enterprise Agreement 2016 (EA) with the following changes as mutually agreed between you and the Company:
1. Intent of the FIFO Captain Role
a) To introduce an additional level of flexibility in responding to short notice or temporary operational requirements, and/or base pilot shortages due to leave or attrition;
b) To be assigned to a Base for each Duty Cycle - this may change each rotation.
c) To work as required across all Bases and areas of flight operations as part of the Company's strategy to reduce the pressures on rosters and current line pilots;
d) Assist in filling FO rosters when internal command upgrades occur and the resultant shortage during recruitment periods; and
e) Assist in pilot training and development programs as determined by level of training endorsement held.
2. Category of Employment
The position is offered as permanent full-time,
3. Duty Cycles
a) Rotating 21 night cycles of DUTY and 21 night cycles OFF. This will result in less roster availability and additional guaranteed days off over 17.4 x 21 night roster cycles.
b) FRMS provisions will still apply during the 21 night Duty Cycle, resulting in CA048 days when necessary. No RDOs will be rostered during the Duty Cycle.
c) Duty Cycle can be extended if:
• due to U/S aircraft;
• re-tasked on return flight;
• deployment extended at short notice; or
• Tactical Operations.
The Additional Day Allowance will be paid in lieu of varying Off Cycle if Duty Cycle Is extended as above.
d) Additionally, for reasons other than described in 3(c) above, a Duty Cycle can be extended as mutually agreed without application of the Additional Day Allowance being paid.
e) If, during your Off Cycle, you agree to our request to attend for duty at a location other than your FIFO home base you will be paid the Additional Day Allowance for each duty day.
4. Base Allocation & Accommodation
a) Under this IFA, you have nominated ADELAIDE as your FIFO Home Base.
b) EA Clause 7.2.1-You will be advised of your Temporary Home Base (designated Base) at the commencement of each duty cycle.
c) Where possible, self-contained accommodation will be provided when at a designated Base, however, this will not preclude the company from providing shared accommodation with other FIFO Captains where such accommodation provides for individual bath/toilet facilities.
5. Roster Implications
a) EA Clause 4.2.1 - rosters will cover rolling 21 night periods with the Duty Cycle roster available prior to commencing that rotation.
b) EA Clauses 4.2.5, 4.3.4, 4.3.5, 4.3.6 & 4.3.9 - there will be no restriction on changes to rosters at short notice during the term of a Duty Cycle. Accordingly, call-outs will not apply. Changes to rostered times during 21 night Duty Cycle cannot be refused unless on reasonable grounds.
c) Duty Cycles may be shown as rostered work or standby to enable availability within constraints of FRMS.
d) Expect deployments from designated Base each Duty Cycle where available.
6. Days Off
a) EA Clause 4.3.1 - All RDOs are included in the 21 night Off Cycle.
b) CA048 days will be applied to ensure compliance with maximum duty provisions contained in the FRMS.
7. Impact on Allowances
a) EA Clause 5.5.3 - No Location Incentive Allowance will be applicable.
b) EA Clause 5.6.4 - You will not be eligible for meal and incidental allowances unless deployed from the designated Base during that Duty Cycle.
c) You will be paid the Daily Travel Allowance of $56.63/day when at the designated Base.
d) On a day that you deploy from the designated Base, either the Daily Travel Allowance (DTA) or meal allowances will be paid, whichever is the higher amount. Both allowance types will not be paid for the same day.
e) Travel into or out of a Duty Cycle is not deemed deployment. However, if the travel does not have a meal provided in-flight (over the designated meal periods described in 5.6.4.2 of the EA) the OTA may be claimed.
f) EA Clause 5.6.8 - Hourly Flying Allowance will not be applicable - offset by the additional days off during the Duty Cycle (CAO 48 days) and additional days over course of 12 months included in the Off Cycles.
8. Leave
a) EA Clause 6.1- Annual Leave is included in the 8.7 x 21 night OFF Cycles each year. It is agreed that two (2) blocks of rostered duty off (6 weeks or 42 calendar days) per annum will be rostered and regarded as paid recreation leave and shown as such on the roster. Where greater than 21 days annual leave is desired, the Company may consider the request on the basis that the additional days greater than 21 will reduce the following Off Duty rotation - approval of any such request will be subject to operational requirements.
b) Any annual leave accrued at the time of commencing this IFA may be cashed-out (as per NES to a minimum of 28 days balance), or used in addition to the Off Cycle days where approved by the Company.
c) EA Clause 6.2 - Personal Leave as per the EA provision.
9. Travel
a) The Company will provide travel from/to ADELAIDE and the designated Base for each Duty Cycle.
b) EA Clause 7.4 - Travel to ADELAIDE at end of Duty Cycle can be rostered on same day as last turn of duty if mutually agreed, otherwise the travel will occur on Day 22. Travel to a designated Base for a Duty Cycle will be included in the first day of duty in that cycle and administrative duties can be completed within that same duty day if required.
c) EA Clause 7.5 - Cabcharge can be used at the designated Base for local flights.
d) Travel to/from place of permanent residence to ADELAIDE Airport (Home Base) is your responsibility.
10. Currency Training
EA Clauses 4.2.4 & 4.2.5 will not apply. On-line computer training can be completed during an Off Cycle. Face to face training, other than Simulator training and checking, will normally be accomplished during a Duty Cycle.
Recurrent Simulator and theory activities training may occur in the first seven (7) days of an Off Cycle.
11. Employee Benefit
This IFA enables you to continue your preferred employment with the Company whilst nominating a home base other than the normal Company operational bases to meet your work/life needs. The Company will pay transport costs to and from designated bases and provide accommodation whilst on a Duty Cycle.
12. Commencement Date
Upon your acceptance of this IFA, it will come into effect in regards to salary from 1 September 2017. In terms of Duty/Off cycles, your current rotations as FIFO will continue unless any change is mutually agreed.
13. Confidentiality
This agreement is between the Company and you and must remain confidential. However, the confidentiality requirement does not preclude you from discussing the content with your industrial representative or other party as required by law.”
[42] I observe that not all of the IFAs operated on the basis of a 21-day cycle with some operating around a 14-day cycle. Nothing of significance flows from this difference.
[43] As to base location, other IFAs have provided the following, by example:
“4. Base Allocation & Accommodation
a) Under this IFA, you have nominated (Brisbane) as your FIFO Home Base.
b) EA Clause 7.2.1 - You will be advised of your Temporary Home Base (designated Base) at the commencement of each duty cycle.
c) Where possible, self-contained accommodation will be provided when at a designated Base, however, this will not preclude the company from providing shared accommodation with other FIFO Captains where such accommodation provides for individual bath/toilet facilities.” 6
[44] None of the IFAs contained a termination provision and I will also return to this aspect in due course.
[45] Some of the FIFO Pilots (Captains Dyne, Connolly and Lee) did not have a formalised IFA before the relevant period. These Pilots were “direct entry” employees, who were engaged on the basis of the FIFO arrangements that would operate when they were “checked to line”, having passed the necessary checks and approvals. However, they did not, probably by omission, formally enter into an IFA with Cobham SM. Rather, each had letter of offer which, in effect, established their employment contract, directly confirmed the agreed home bases, and referenced the FIFO IFA arrangements. Further, another FIFO Pilot, Captain Andrews, was also a direct entry employee, but was subject to a formal IFA at the relevant time. I will also return to the significance of these circumstances.
4. The position of the AFAP
[46] The substance of the AFAP’s submissions on the home base question is as follows:
• It is uncontroverted that the Enterprise Agreement provides for home base, operating base, deployments and extended deployments. The only way a temporary home base may be expressly provided for is by way of an express appointment to a temporary home base under, and for the purposes of, the Agreement. For the purposes of the Agreement, the Agreement does not provide for temporary home base.
• The applicable home base of each Employee is not contentious. It is also not contentious that for the purposes of the Agreement a home base may be permanently changed. However, the Agreement does not provide for a temporary change of home base.
[47] The basis for that position is as follows:
• The combined terms of the IFA and the Agreement not only provide for extended deployments or, as described in the IFAs as duty cycles, but contemplate them to the point that it was, and remains, unnecessary to have terminated the IFAs.
• An employee may be deployed/located (regardless of the terminology) “to work”, or otherwise to perform their full range of duties as specified in clause 7.1 of the Agreement (and anywhere else in the Agreement) anywhere in Australia (or overseas), not only without their home base being impacted or required to change, but regardless of where or what their home base is. Returning to, and restating, clause 7.2.1:
“An employee will initially be employed at the home base nominated in the Employee’s letter of offer. An employee may be required to work in any location in Australia or around the world.”
• An employee’s home base may, for example, be Brisbane but the employee may perform work in Broome. It is not the IFA that provides for that scheme. It is the Enterprise Agreement, which operates compatibly with the IFA including on this point. Any representation to the contrary made by the respondent to any or all of the employees was made knowingly as false and was a deliberate misrepresentation. For reasons known only the respondent, it knowingly “threw the baby out with the bath water” and, it did so, with an intended detriment to the employees. The employees now merely seek to recover the price of that detriment.
• This leads to a conclusion that there was no requirement to change home base, notwithstanding there is no provision for temporary transfers from one home base to another home base. The Enterprise Agreement not only contemplates but expressly provides for each of the Employees to maintain their prescribed home bases while operating from another location, or base, as contemplated by a deployment. This means that each of the Employees did not need to be presented with an unreasonable demand to so-called “temporarily transfer” to a “temporary (home) base” as (wrongly and/or improperly) contended by Cobham SM. The provisions of the Enterprise Agreement actually contemplate an employee operating away from home bases for extended periods and prescribes the conditions for doing so, such as clause 1.13.7 in terms of stand down or clause 4.3.9 in terms of the entitlement to days off at home base.
• However, each IFA, at clause 3(d), provides “relief” for Cobham SM in having to meet any costs associated with, for example, the Additional Day Allowance. The respondent wittingly took a calculated risk of believing it would “get away with” forcing the employees off their IFA either permanently, or temporarily, or for the eventual purpose of reinstating them but in considerably lesser standards and terms. The respondent’s strategy was to “intimidate the employees into believing their employment was at risk”, then terminate IFAs and force the employees onto extended “one-way ticket” (literally) extended deployments, only to be expected to pay for their own fares home, including in circumstances where the respondent deemed them medically unfit to conduct flying duties. It is submitted that the evidence makes good this assertion.
• Cobham SM’s Head of Turboprop Operations, Mr Dierickx, accepted under cross-examination that it was not necessary for the FIFO Pilots to be in the operating base at the one time. He acknowledged it was feasible to cover the bases by half the pilots at a time for an agreed period, and then changing over with the other half. None of that required a change in home base. Mr Dierickx also acknowledged under cross-examination that under the clause 3(d) proposal involved any additional cost liability to Cobham SM because the additional day allowance would not be paid as per the IFA, the Pilots do not accrue annual leave and the accrued time off, whether on an equal time roster or not, could still be discharged while still maintaining operational requirements.
• The clear theme of each of the Pilots' evidence, and contrary to the respondent's position, is that the pilots offered to work under extended deployments based on clause 3(d) of the FIFO terms and conditions. Further, given that a dispute was raised by Captain Smart on 29 March 2020, prior to the relevant period commencing for any Pilot and prior to the letter being sent by Mr Russell Dyer, the then Vice President of the respondent on 30 March, the Pilots were entitled to believe that they had travelled into base, with the subject matter of the dispute that was notified days before, subject to the status quo terms on the Enterprise Agreement. In this instance, the status quo is plainly the FIFO operations that existed prior to the dispute, and those operations were based on an equal time roster, rotating from home base to an operating base and returning to home base. In terms of the Pilot's responsibility to continue to perform work normally, they must fulfil those terms of their employment and duty, and for the employer, it must not disturb that arrangement until permitted to do so, if at all, in accordance with the dispute resolution process. The employees must do nothing other than what they normally would do in complying with their obligation to work their 21/21 roster, or 14/14 in the case of Captain Andrews. And in performing their work, they must not do anything that would otherwise constitute non-performance of their normal work.
• The IFAs did not define the relevant home base. That is determined under clause 1.3.35 of the Enterprise Agreement. The scope of provisions able to be addressed in the IFA does not extend to determining the home base.
• Those home bases for each Employee did not change at all during each Employee’s relevant period, and entitlements accrue accordingly.
[48] As to the proper interpretation of the Enterprise Agreement, the AFAP contends that:
• An ambiguity cannot arise by substituting the existing and plain words of the Enterprise Agreement with other words, and/or by inserting new phrases into the Agreement as if those phrases are prescribed terms. The intended purpose of the respondent’s strategy is to cynically attempt to change the plain meaning of the existing words and phrases. There is no term “temporary home base”, or as relevant “temporary transfer” (other than as referred to herein), or “temporary base/basing” and certainly not in any application to the subject matter of limb three of the dispute.
• The respondent attempts to substitute existing plain words with other words that not only do not exist, but then assert that the substituted words mean the same as the existing words, but they do not. Moreover, in substituting the existing words and inserting new phrases, the respondent takes further liberties and actually re-reads the instrument as if those new words and phrases are the actual words and phrases. That does not create an ambiguity.
• The FWC must, in the first instance, be guided by the plain words of the Enterprise Agreement and in the absence of any ambiguity, the Agreement must be construed according to its plain words. The guiding plain words are those of what is a home base, and how it is defined, and then how is a home base changed and whether those express terms have been satisfied.
• Cobham SM’s approach does not successfully overcome clause 7.2.2 of the Enterprise Agreement which prescribes “the provisions and conditions applicable to transfers from one home base to another” by directing the parties to clause 5.10, which expressly makes provision only for “a permanent transfer from one home base to another …”. Further, if there were an intention to provide for temporary transfers the parties would have provided for same, and it would have been an easy exercise of drafting. The parties did not do so and did not over successive years of bargaining and multiple iterations of the Agreement.
• Clause 1.4 of the Agreement confirms that it is a comprehensive Agreement and sets out the full scope of rights, entitlements, and obligations of the parties and this extends to the issue of home base transfers.
• Clause 7.2.1 makes clear, and is reinforced by clause 7.2.2, that while the employee’s home base is as determined by the letter of offer, that determined home base neither precludes working in a location (anywhere in Australia or the world) other than that determined home base, nor does it require a change in home base – whether temporary or permanent. The “full scope of the rights, entitlements and obligations of the parties” in relation to clause 7.2.1 are made clear. The employer may have a right to require work in another location; and the employee may be required to do so, but neither has the effect of requiring the employee to change their home base.
• Indeed, the circumstances surrounding the alleged termination of the purported IFAs, and the associated conduct of officers of the respondent was not only the subject of formal disputation under the terms of the Agreement and persistently objected to by the Pilots, it was on admission of the respondent, challenged and strenuously objected to by the Pilots, including refusals to sign any concession sought by the respondent to purportedly forego their home base. Contrary to any proposition or inference otherwise by the respondent each of the Pilots at the relevant time were merely commencing their rostered “tour cycles”, while others were at that time already in situ on deployment in their operating base. While the latter were refused the right to return home, the former were subject to one-way airfares/tickets at the whim of the respondent. This issue was vigorously debated in the course of the first limb of the dispute and resolved in the manner it was. If it were not a matter in dispute, but a consent arrangement as disingenuously suggested by the respondent, it would not have required resolution in the manner it was resolved – by intervention of the Commission. Any suggestion of consent to a change of home base is unsustainable. Merely because the respondent refused to address the dispute at the time the dispute was lodged and before the respondent escalated the dispute does not mean it was not subject to a dispute.
• It matters little that there was no need to terminate the IFAs as the respondent did given the express terms of the IFAs (ie clause 3(d)), although it would have avoided all disputation and service delivery would have been assured given the pre-dispute undertakings and offerings of each of the Pilots, the motive does become relevant “including the overtly harsh treatment of each of the Pilots”, and that motive was afforded life opportunistically through COVID-19 – the motive to break the promises, guarantees and representations of permanency of FIFO given by the respondent to each Pilot in lieu of the $100,000 financial incentive. That motive was played out in the 2021 dispute. What we are now presented with is the respondent being held accountable for that conduct, and the consequences of the strategy to terminate IFAs which includes the fact that relevant entitlements under the Agreement flow as a result of the home base of each Pilot during the relevant period not being the operating base to which they were deployed on an extended basis.
[49] The AFAP further contends that none of the Pilots agreed to any change of their home base. This, it posits, is reinforced by the fact that none of the Pilots responded to accept either the first or second written offer made by Cobham SM in that regard. In addition, the AFAP contends that:
• Cobham SM asserts that the process was voluntary, and purported to conduct an EOI process which it could only do pursuant to clause 5.10.2 of the Enterprise Agreement. It was then bound to comply with its own rules of consent and agreement as promulgated by the respondent for the purposes of accepting a change in home base. This required a written acceptance of an offer.
• There was no obligation upon the Pilots to expressly reject the offers, if not accepted – they were rejected.
• Cobham SM made 2 different offers with the second offer replacing the first. To the extent that it is suggested that Captain Cullen responded positively to the first offer, he did not do so formally and he did not respond to the second offer.
• The respondent chose not to apply clause 5.10.4 of the Enterprise Agreement, instead went through the motions of applying clause 5.10.2. But in doing so, it never complied with its own rules of agreement or consent. And this is part of the reason behind the unequivocal obligation on the part of the respondent to ensure that consent is recorded as a formal and express acceptance of an offer issued, and in this instance mandated by the HR department as noted by Mr Dierickx in his evidence. It is beyond both comprehension and common sense that a person's home base, being what it is, family and home, is subject to intermittent change whenever the respondent feels the whim or urge to do so without the employee's formal and express consent or agreement.
• The evidence reflects that rather than travelling in accordance with the revised or rescheduled departure dates, the travel scheduled for each of the FIFO Pilots was in accordance with each of their scheduled cyclical travel dates, that is, their ordinary on-swings. There were already pilots in their operating bases at the time as part of their regular travel, or on the way up as part of their normal cycle. The exceptions to that being Captain Bonthorne, who was required to attend an employment-related medical appointment that coincidentally was scheduled on his regular travel day, and Captain Connelly, who was sick with flu-like symptoms and forced to delay his travel for two to three days. Once both were cleared by their aviation medicals, they travelled with what otherwise had been their normal travel dates.
• The FIFO Pilots attempted to return the payment made to them by Cobham SM, which was apparently provided on the basis of the change of home base, and the fact that the payments were not in fact repaid is not relevant as clause 5.8 of the Enterprise Agreement was not followed.
[50] Accordingly, the AFAP contends that the home base for each Pilot did not change and as a result, the provisions under the Enterprise Agreement now owing to each Pilot are:
• Clause 5.6.4 – Meal & Incidental Allowance – $129.22 per day prior to 1 July 2020; and then $132.06 per day after 1 July 2020.
• Clause 5.6.5 – In-flight Snack Allowance – $24.58 per flight between April and June (inclusive) 2020 due to non-availability of catering.
• Clause 4.3.9 – Additional Day Allowance for each rostered day off (RDO) at home less than 24 days in an 84 day period – $613.13 per RDO, plus 9.5% superannuation.
[51] In relation to the external investigation claim, the AFAP contended that more than one FIFO Pilot came forward and filed a complaint, and complaints were made to different people in management, and those complaints were not only shared, but reported to the General Manager, and that at least one of the complainants advised that other Pilots felt the same. Given the level of seniority of the person subject to the complaints, the relative positions of authority of each of the Pilots, and that it was he who had assumed or been the point of responsibility to give effect to the respondent's plan, there should have been a proper investigation.
[52] Further, it contends that none of the complainants were interviewed and Mr Dierickx was also not interviewed but merely asked for a few emails and was not questioned as to the allegations by Cobham SM’s Human Resources staff. As a result, the Commission should determine to require that a proper external investigation now be conducted.
[53] The AFAP contends that the answer to what was home base for each Pilot during the relevant period is as follows:
1. Captain Jamie Andrews | Brisbane |
[54] The AFAP led evidence from each of the Pilots concerned.
5. The position of Cobham SM
[55] The substance of Cobham SM’s position in relation to the home base question is as follows:
• The Enterprise Agreement defines ‘Home Base’ as, in summary, the base of appointment identified in each employee’s current letter of offer. The IFAs confirmed the relevant home bases for each Pilot in that context.
• In the circumstances of the emerging COVID-19 pandemic, such that the previous FIFO arrangements were not workable, Cobham SM terminated each Pilot’s then existing IFA and offered each Pilot a temporary base transfer agreement on certain terms.
• The termination of the IFAs meant that each Pilot’s home base as it had been identified in the IFA no longer applied. Further, each Pilot accepted the temporary base transfer agreement as a result of his or her conduct in working in accordance with that agreement and the terms of that agreement as they were provided to each Pilot in a ‘Temporary Base Transfer’ letter provided to each Pilot. Those terms included an express statement as to the Pilot’s home base during the relevant period.
• As a result, during the relevant period each Pilot’s home base was the home base expressly identified in the ‘Temporary Base Transfer’ letters provided to each Pilot. The nomination of the home base during the relevant period was a contractual agreement made between the parties.
• Further, even if the Commission were to conclude that some or all of the Pilots had not accepted the temporary base transfer on the terms that were provided to each Pilot, in circumstances where the IFAs had been terminated the Pilot’s letter of offer during the relevant period, for the purposes of identifying their home base identified in their letter of offer, must be the letter of offer that preceded each Pilot’s entry into his or her IFA. In many instances that leads to the same home base as was identified in the letter that governed each Pilot’s temporary base transfer agreement.
• There is nothing in the Enterprise Agreement that prohibits a temporary change (or transfer) of a Pilot’s home base, and (if it be correct) the fact that the Agreement does not expressly provide for a temporary transfer of home base is not determinative of the home base question.
[56] The submitted basis for the position advanced by Cobham SM is as follows:
• In order to deal with the circumstances that existed in the second half of March 2020, including the pending or actual closure of State borders, it sought expressions of interest (EOIs) from each of the Pilots to a temporary base arrangement, expressly stated as involving a transfer ‘to a new home base’. All of the Pilots responded positively to that EOI.
• After each of the Pilots replied to indicate their willingness to participate in the temporary base arrangement, and to identify their preferred new home base, the respondent then issued a letter to each Pilot providing written notice of the termination of the Pilot’s IFA; and issued a letter to each Pilot headed ‘Temporary Base Transfer’ that set out the terms of the base transfer and identified each Pilot’s new home base - as has already been described, most of the Pilot’s received such a letter on or around 29 March 2020 and then received a replacement letter in very similar terms dated 8 April 2020.
• The IFAs were no longer in force so as to constitute each Pilot’s current letter of offer and identify each Pilot’s home base for the purposes of the Agreement.
• Each of the Pilots should be taken as having accepted the letter (or letters) headed ‘Temporary Base Transfer’ as binding and as replacing any previous letter of offer or contract while the temporary base arrangement remained in place, and as a result, the March and April 2020 letters specified the relevant home base.
• Other than Captain Sorrell-Saunders (and arguably Captain Cullen, who emailed his thanks to Mr Dierickx after receiving his temporary basing arrangement), none of the Pilots responded in writing to those letters. Captain Sorrell-Saunders responded to the temporary basing arrangement on 2 April 2020, expressly agreeing to the arrangement. However, parties can accept offers by conduct. Where a party performs under the conditions of an offer, and that party was aware of the offer, the performance is evidence of acceptance. The principle has been applied to an employee commencing work after receipt of an offer, even if the employee has not expressly assented to the terms of the employer’s offer. 7
• Consideration existed for the temporary base agreements, as ultimately offered to the Pilots by means of the ‘Temporary Base Transfer’ letters. Each of the Pilots accepted an ex-gratia payment, and (with the exception of Captain Carty, who was already in Cairns) the Respondent provided accommodation at the temporary base and paid for transport to and from the temporary base for each of the Pilots. Additionally, the Pilots had been informed that the alternatives to continuing performing work under the temporary base arrangement and on the terms offered by the respondent were to take paid leave or likely be stood down without pay due to a stoppage of work beyond the respondent’s control. None of the Pilots indicated that they wanted those alternatives. By continuing to perform work rather than taking those alternatives, the Pilots avoided a ‘very substantial practical disbenefit’ and therefore also constituted real consideration.
• The law makes it clear that acceptance of an offer can be done in various ways, and in this case, some pilots express agreement was made in the circumstances, and in other cases the acceptance can be taken as occurring by way of the conduct of the parties. Where a party performs work under the conditions of an offer, and that party was aware of the offer, the performance is evidence of acceptance. Further, in these circumstances, there may be a duty to communicate rejection of the offer. 8 There is nothing in the Enterprise Agreement that suggests only the written acceptance of a Pilot can constitute an offer of acceptance and there is no basis for the contentions advanced by the AFAP in that context.
• While Captain Smart raised a dispute on 29 March 2020, proximate to the first ‘Temporary Base Transfer’ letters being provided to most of the Pilots (before some and after others), this cannot be taken to constitute a rejection of the terms set out in those letters (nor can it be a rejection of the second ‘Temporary Base Transfer’ letters). The notification of a dispute by Captain Smart on 29 March 2020 was expressly a dispute about ‘the lack of consultation regarding proposed changes to workplace hours and conditions for pilots on the a [sic] FIFO IFA’. The nature of that dispute did not extend to the implications of the temporary home base arrangement and does not amount to a rejection of the offer. Further, the status quo at the time that the dispute was raised on the 29th, there was a clear intention pursuant to the Agreement by each pilot that they accepted the positive interest in the EOI for the letter of offer to follow. That's what the status quo was, and the issuing of those letters of offer was completely consistent with what was the status quo at that time.
• To the extent that some of the Pilots claim in their witness statements that they proceeded to work in accordance with clause 1.12.2 of the Agreement (ie, maintaining the status quo), with some clarifying that they were specifically working on an extended duty cycle under their individual flexibility arrangements, this must also be rejected. First, it is not a claim that any of the Pilots made at the time. In any event, the IFAs had been terminated, and it was made clear to the Pilots that there was a stoppage of FIFO work due to border restrictions, and that absent a temporary base agreement, each Pilot would have to take leave or be stood down. Further, under the IFAs (cl 3), other than in certain circumstances that are not relevant to any of the Pilots who travelled to their new home base after the temporary home base arrangement was put in place, an extended duty cycle must be mutually agreed; and there was no such agreement. The fact that the IFAs were no longer in effect (and therefore the unavailability of extending duty cycles) was expressly put to the pilots by the Respondent. Again, the only offer put to the Pilots to work on a base during the relevant period was the offer of a temporary base arrangement. Further, the only available conclusion on the evidence is that by this point the Pilots were aware that they were not going to be continuing to work under their IFA or their existing FIFO terms, and in particular were not working pursuant to any extended duty cycle or ‘extended deployment’ under clause 3(c) or (d) of the former IFAs. In evidence, the majority of the Pilots acknowledged that EOI processes were not used for extended deployments. Additionally, Captain Bonthorne acknowledged that it was ‘highly unlikely’ that an extended deployment could extend to three months. The communications from Mr Dierickx, the letters headed ‘Temporary Base Transfer’, and the letters terminating the IFAs had made it clear to each Pilot that the proposal was for a temporary home base, and that they would not be working under their IFAs of their existing FIFO terms. That was then reinforced by the letter to each Pilot from Mr Dyer on 30 March 2020.
• The options of Pilots taking leave or being stood down were both legitimate and lawful. Therefore, in accordance with the principles applicable to contracts being vitiated by duress, even if any of the Pilots felt that he or she had no real choice other than to accept the temporary basing arrangements because of their individual financial or personal circumstances, there was no duress that would render invalid the Pilot’s acceptance of the ‘Temporary Base Transfer’ letters.
• The overall evidence shows that the Pilots were all willing, and even keen, to proceed on the temporary basing arrangement. They were all aware it was going to be (as was expected at the time) for a three-month period and had made arrangements with their families on that basis. None of the Pilots took up the alternatives of taking leave or remaining at home and potentially being stood down.
• There is nothing in the Enterprise Agreement that prohibits a temporary transfer of home base, or a change of home base for a limited period, or that means that such a change of home base would be inconsistent with the Agreement and thus invalid. The position is analogous to the non-contentious proposition that parties to a ‘permanent’ (or ongoing) employment contract are able to agree to vary terms of the employment contract on a temporary or fixed-term basis, provided such a variation is not expressly forbidden by the relevant industrial instrument or by statute. Clause 7.2.2 of the Enterprise Agreement when combined with clause 5.10 does not mean that any change of home base is deemed to be a permanent transfer of home base, or can only be done as a permanent transfer. Rather, clause 5.10 sets out certain parameters or entitlements for the purpose of negotiating the terms of a permanent transfer of home base, and clause 7.2.2 arguably extends those matters to any transfer from one home base to another. The interpretation that avoids inconvenience and injustice is that the Enterprise Agreement does not prohibit the parties making an agreement to change a Pilot’s home base for a finite period.
• The accepted principle, in private law, is that everything which is not forbidden is allowed. 9 Consistent with that principle, it is uncontroversial at common law that, absent a statute (or statutory instrument) restricting parties’ rights to do so, it is open for parties to agree to arrangements on a temporary basis. To that end, clause 1.4 of the Enterprise Agreement (consistent with its heading which states that it is concerned with the relationship of the Agreement with other awards and agreements) does not operate to prevent persons covered by the Agreement from making individual contract variations.10
• Some of the Pilots communicated about the possibility of returning the ex-gratia payments, although no Pilot ultimately took that step. In these circumstances, it was for the Pilots to make plain that their conduct amounted only to taking advantage of the proposal but not to submitting to the disadvantages if that was its position. 11 This was not done.
[57] Cobham SM also contends that the principles of estoppel are similar to the principles of equity, good conscience and the substantive merits of a matter and relevant to s.587 of the Act. In that regard, Cobham SM posits that the Pilots induced it to assume that they had accepted the terms of the temporary home base arrangement put to them, and the Respondent has acted on that basis by continuing to engage them and have them work at the temporary home base. In all the circumstances, the principles of equitable estoppel would be met in this case, estopping the Pilots from denying that either: (a) they accepted the temporary base transfer on the terms on which it was offered; or (b) that their representations made through communication and conduct were not an acceptance of the temporary base transfer on the terms on which it was offered.
[58] In relation to the remaining propositions advanced by the AFAP, Cobham SM contends that:
• There is nothing in the Enterprise Agreement that means that the IFAs did not properly specify the home base for the FIFO Pilots in that context and the termination of those agreements meant that they, and the nominated home base, no longer applied.
• The second letter of offer sent to the Pilots was, as set out in the evidence, provided to clarify the terms of the first letter. It was not a second nor a separate offer to the Pilots.
• There is no basis to suggest that the absence of signed acceptance of the offers following the EOI process means that the Pilots have not agreed to the rebasing. The Enterprise Agreement does not expressly or impliedly require this formality, there is no evidence of any policies requiring this step, and there is no basis to imply such into the process. The formation of a contract is to be tested objectively.
• The complaints of alleged intimidation by Mr Dierickx are unfounded and completely irrelevant to determining the answer to the home base question. They were investigated, including by interviewing Mr Dierickx, and found to be unsubstantiated.
• The AFAP has contended that the Pilots each proceeded to a base in accordance with their ordinary on-swing. This is inconsistent with the Applicant’s own submissions where it reveals that the only Pilots who travelled on their regular on-swing day was Captain Cullen and Captain Mattey. Therefore, each of the eight other Pilots travelled on a day other than their ordinary travel day for their on-swing. In these circumstances, even where the travel dates coincided with what would have been their ordinary rosters, the Pilots’ travel can only be viewed as conduct in accordance with, and therefore acceptance of, the temporary base agreements.
• The Pilots were given a genuine choice and there is no substance in submissions made by the AFAP about the alleged implications of refusing duty.
• There was, given the particular circumstances, an obligation upon the Pilots to expressly reject the offer and the absence of this means that they are estopped from now arguing the absence of an agreement.
• As to the potential to utilise clause 3(d) of the IFAs as an alternative, this is a distraction. The undisputed fact is that the IFAs were terminated, and none of the Pilots can have been under any misapprehension that they were transferring to or remaining at their temporary home base pursuant to extended duty cycle under clause 3(d) of the IFA. Further, clause 3(d) was not intended by the parties to allow for a long- term extension of some three months as this is entirely inconsistent with the purpose of the IFA itself and the purpose of duty cycle extensions. Even had the parties agreed to do an extension contrary to the intention of the IFA, there would have been numerous operational issues. This includes the scheduling of time off to maintain the general ‘equal time’ nature of the IFAs. This would have required rostering other pilots to fill those extended periods at operational bases upon the pilots return to their fly-in, fly-out arrangements. This is because the IFA terms are inconsistent with working a fixed-base roster, and that working a fixed- base roster is entirely inconsistent with the purpose and intention of the IFAs, the Respondent submits that the terms of the IFA could not continue to apply during the relevant period. Additionally, the Respondent submits that an arrangement under clause 3(d) of the IFAs would not have relieved the pilots of their dissatisfaction. A number of pilots made it clear that the issues they had experienced were largely to do with the time they had spent away from their families.
[59] As a result, Cobham SM submits that, for the purposes of the Enterprise Agreement, each Pilot’s home base during the relevant period was set out in the temporary base transfer letters as follows.
Pilot | Home Base during the Relevant Period |
Jamie Andrews | Darwin |
Mark Bonthorne | Broome |
Belinda Carty | Cairns |
Mark Connolly | Darwin |
Brodie Cullen | Darwin |
Nate Dyne | Darwin |
Anthony Lee | Broome |
Cameron Mattey | Broome |
Daryl Smart | Darwin |
David Sorrell-Saunders | Broome |
[60] In the alternative, Cobham SM contends that in circumstances where the IFAs have been terminated, if the Commission were to find that the ‘Temporary Base Transfer’ letters did not constitute each Pilot’s current letter of offer for the purposes of the definition of ‘home base’ in the Agreement, it would then be necessary to go back to the letter of offer preceding the IFAs, which would in those circumstances effectively be ‘revived’. For Captains Carty, Cullen, and Sorrell-Saunders, that leads to the same home base as was identified in the letter that governed each Pilot’s temporary base transfer arrangement. Further, the only option open to the Commission for the other Pilots would be to use the home base from which those Pilots actually lived and worked during the relevant period.
[61] In relation to the external investigation claim, Cobham SM contends that the Commission should ignore the references to the alleged ‘persistent intimidation, harassment and torment of the employees at the hands of the respondent’. It suggests that submissions of that nature are merely sweeping generalisations without reference to any particular evidence and fail to have regard to the unprecedented and rapidly evolving circumstances in which it and the Pilots found themselves in during the second half of March 2020. Such submissions also fail to have regard to the ways in which the Respondent had regard to the circumstances of the individual pilots.
[62] Cobham SM led evidence from the following of its senior employees:
| • Ludo Dierickx | Head of Turboprop Operations; |
| • Tom Smallwood | Chief Pilot; |
| • Anthony Davis | Head of Pilot Training; and |
| • Julianne van Kessel | (Former) Human Resources Business Partner. |
[209] APAF additionally contends that the EOI process, without confirmed acceptance, did not lead to agreement. That is, an EOI is just that, an expression of interest but is not a statement of intent, let alone an acceptance of an offer. There was no acceptance, and none can be construed, because consent in this case required an “unequivocal, affirmative act.” 89 Further, according to the AFAP, the fact that Cobham SM improved the original rebasing offer to deal with Pilots’ concerns confirms that the Pilots had not accepted the earlier proposals. As a result, there was no new agreement (contract) reached between the parties to change the home bases.
[210] For its part, Cobham SM contends that the Pilots, by virtue of their words and conduct, led Cobham SM to the reasonable objective belief that they had accepted the rebasing offers. As outlined earlier, Cobham SM puts an additional submission that the Pilots were required to express reject the rebasing proposal. That submission is concisely put in the following terms:
“Here, each of the Pilots were told prior to the offers of the temporary basing arrangement that the only circumstances in which they would be able to work was in accordance with the temporary basing arrangement – the other options put to them were taking leave or being stood down. In light of these communications and after reasonable consideration of their options, each of the Pilots took deliberate steps to positively express their interest, and then subsequently to travel to and commence working at the temporary home base consistently with the temporary basing arrangements. They were aware at all times of the Respondent’s intentions and the terms on which an extended period of working from an operational base was being offered, and each Pilot acted in a way to receive the very real benefit of those offers. … ….” 90
[211] Cobham SM relied upon Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd 91 (Empirnall) and other similar authorities, and further denies that the dispute notified on behalf of the Pilots constituted rejection.
[212] In Empirnall, McHugh JA (with whom Samuels JA agreed) stated, 92 in effect, that in some circumstances, an offeree may be under a duty to communicate rejection of the offer, and that a failure to do so will bind them to the contract because, “knowing the terms of the offer and the offeror’s intention to enter into a contract, [the offeree] has exercised a choice and taken the benefit of the offer”.
[213] Each of the Pilots had expressed interest in the rebasing proposal and the first base transfer letter had been provided to each Pilot, with the exception of Captain Carty, prior to them travelling or staying on the ABF base beyond the normal swings. However, as found earlier, the Pilots initial response was to cooperate with the practical rebasing at short notice to assist the company and did not represent an agreement to formally change their contractual arrangements at that point. The dispute was raised prior to the travel, except in the case of Captain Lee. In all cases, Cobham SM was aware of continuing concerns from the Pilots about the rebasing proposal, and indeed this led them to providing an updated rebasing proposal. In practical terms, the Pilots stayed at the ABF bases on arrangements that were consistent with fixed base rosters; however, they had little choice at that point given the realities of the situation and the joint commitment of all parties not to put the ABF work at risk. Further, the dispute that was being heard by the Commission for much of the relevant period included the notion on behalf of the Pilots that the FIFO arrangements should not have been terminated and should be resumed as soon as possible, and that the temporary arrangements were not consistent with the Enterprise Agreement.
[214] In that light, although each of the Pilots did not expressly reject the formal proposal for the new contract, they did not accept it. This included that despite the requirement set out on each proposal that the Pilots sign “to indicate your acceptance”, no contracts were signed. Further, and in any event, the Pilots did not stay silent, and given the notified dispute, related exchanges and other elements set out in the chronology, I do not consider that by their actions or inactions, including by travelling or staying at the ABF bases, any of them accepted the rebasing contract on the terms proposed by Cobham SM. In reality, the Pilots responded to the EOI and cooperated at very short notice with practical rebasing in the best interests of Cobham SM and themselves. However, they did not accept the new employment contracts.
[215] The Pilots received a payment (described as being ex-gratia and based upon 14 days of daily travel allowance) from Cobham SM that was consistent with the rebasing proposal, but not with their entitlements under previous arrangements. In mid-May 2020, some of the Pilots advised Cobham SM payroll that they had been “overpaid” the allowance.
[216] Captain Smart subsequently received the following response:
“Given the cancellation of the Individual Flexibility Agreements (IFAs) and your previous expression of interest in the Temporary Base Transfer, the subsequent term and conditions of the new base transfers were outlined in the letter dated 8 April 2020. This included the exgratia payment of $825.02 which indicated it will be paid in the next available pay run being the pay of 14 April 2020.
Should you wish to forego the ex-gratia payment of $825.02 as part of the letter dated 8 April 2020 and revoke this being paid in the future can you please confirm this so we can organise repayment in the next pay run.
If you have any further questions please let me know.” 93
[217] There is no evidence that any of the Pilots repaid or forewent the payment. Clause 5.8 of the Enterprise Agreement as relied upon by Cobham SM is not directed to the circumstances where an employee considers that they have been overpaid and is irrelevant for present purposes. The fact of the payment confirms that Cobham SM considered that the new arrangements were in place. The fact that the Pilots considered that they were being “overpaid” indicates that they did not have the same view. The subjective views of the parties are not relevant. The absence of the return of the payment is marginally indicative of the fact that the new arrangements were operative. However, for reasons largely set out above, and the fact that the payment was expressed to be an “ex-gratia” payment, little attaches to this aspect.
[218] The AFAP contends that the Pilots were coerced into the rebasing arrangements. For reasons set out above, I do not need to finally determine this aspect. However, it is relevant to the external investigation claim.
[219] Whilst there are many definitions of the concept, the following appears to be apposite at least in the sense that it may be relied upon as a basis to potentially void an agreement made.
[220] Historically, to "coerce" required wrongful, illegitimate or illegal action or, at least, the negation of choice. 94 The decision of the Full Federal Court in Schanka v Employment National (Administration) Pty Ltd 95("Schanka") provides some authoritative guidance, although it related to the meaning of the word "duress" in s 170WG under the Workplace Relations Act 1996 (Cth).
[221] The Full Court in Schanka also cited, with apparent approval, a passage from the judgment of McHugh JA in Crescendo Management Pty Ltd v Westpac Banking Corporation 96 ("Crescendo") which included the following:
"Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress."
[222] The decision in Crescendo also cited with approval a passage from the advice of Lord Wilberforce and Lord Simon of Glaisdale in Barton v Armstrong 97 which included:
"...in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate the consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained - advice, persuasion, influence, inducement, representation, commercial pressure - the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion." 98
[223] The chronology of events and the circumstances of both Cobham SM and the FIFO Pilots leading to the “rebasing” illustrate that these were difficult times with immediate time and logistical pressures. There is no doubt that the Pilots felt pressured to make important decisions at very short notice and, at least in terms of travelling to the ABF bases, did so without a full knowledge of the formal arrangements intended by Cobham SM. I have also found that Cobham SM did not consult about the changes as contemplated by the Enterprise Agreement and that the status quo under the DRP was not respected in the manner that would have been expected. I observe that this was likely to be the product of the perceived urgency that existed at that time rather than any deliberate strategy. As discussed earlier, hindsight would suggest that some of this urgency was unwarranted but a realistic understanding of the events and circumstances at the time is informative.
[224] However, I do not consider that the Pilots were coerced into travelling or staying at the ABF bases as part of these events so as to void any agreement that might otherwise have been made. The fear of being stood down (having to take leave without pay), being the only practical alternative for most of the Pilots and referred to by some, 99 does not represent operative coercion or duress. The implied pressure to cooperate in the circumstances and to avoid any potential for sanction, lead to the same conclusion. These aspects, and the other elements relied upon by the AFAP, do not mean that the Pilots were denied a choice in a relevant legal sense.
[225] I observe that the AFAP also contended that “no Pilot was required to agree a change of home base at the end of the so-called temporary basings. That is, there were no EOIs issued to unchange any purported temporary change of home base, i.e., to change to a permanent home base. All that happened in terms of recommencing FIFO was the reissue of the IFA. The cover letter that provides for the agreement to change home base was excised from the package, properly so, leaving only the IFA.” 100 This, it contended, meant that there was no agreement in the first place. The difficulty with this submission is that the return to the earlier arrangements was part of a comprehensive agreement reached between the parties and noted in the July 2020 Decision. The fact that the reinstated IFAs would be offered (and accepted) to confirm the arrangements was a fundamental part of that resolution. As a result, I do not consider that anything turns on how this was arranged.
[226] In summary, primarily as a result of the absence of acceptance of the rebasing offer, I do not consider that the Pilots agreed to, or entered into a new/revised contract of employment with Cobham SM for, the new “home base”. The case for Captain Andrews, Captain Cullen and Captain Sorrell-Saunders is marginally less clear given that at least some initial response was made to the rebasing offers. Captain Andrews simply sought some latitude in terms of the travel (commencement) date. 101 Captain Cullen thanked Mr Dierickx for the good news and sought to finalise the agreement in the following week.102 Captain Sorrell-Saunders also expressed thanks for the offer and indicated that he was happy to help with the temporary transfer as previously discussed.103 However, these responses are not an express acceptance of the actual contract and each was, in effect, also party to the dispute notified by Captain Smart and most of the other considerations apply. As a result, on balance, I consider that the same findings also follow in their case.
[227] Given these findings, it is not necessary for the Commission to further deal with Cobham SM’s contention in relation to estoppel. That is, the Pilots did not elect to enter into the new contracts and then seek to resile from them. 104 In addition, for reasons outlined above, the circumstances of the “rebasing” and the subsequent offers did not mean that a binding agreement was made as a result of any failure to communicate a rejection of the offer. As a result, the basis upon which Cobham SM contends that an estoppel could operate, has not been established.
[228] I turn now to the second issue; namely whether if an agreement had been made, was this a change in home base within the meaning of the Enterprise Agreement. Given the above findings, it is also not necessary that I make a conclusive finding on this aspect; however, some observations may be relevant.
[229] I have earlier found that Cobham SM and a Pilot can agree to change home base through a new/revised employment contract. However, although the term “home base” was used in the offers, the actual change that was contemplated was not, in my view, a change to the home base of the Pilots in the sense contemplated by the Enterprise Agreement. That is, despite some reference in the original offer 105 to the Pilots potentially setting up a “permanent residence” in the new “home base”, this was not reflected in the second offer and there was never any real suggestion that the home base of the Pilots would actually change for the period of the temporary rebasing. That is, there was no real sense in any of the arrangements communicated to the Pilots in which they would be relocating their homes and this was never objectively intended. Rather, it was a change to require the Pilots to temporarily remain at a location associated with the ABF base – albeit for good reason at the time. This was the substance of the arrangement and this is much more consistent with working on an extended deployment as contemplated by the terms of the Enterprise Agreement discussed earlier in this Decision.
[230] As a result, even if there were new contracts made, which I do not accept, I doubt that they would have established new home bases for the Pilots within the meaning of the Enterprise Agreement.
Conclusions on the home base question
[231] Given that the process did not lead to an agreed change to the home bases, but the IFAs and FIFO arrangements were cancelled, what then was the Pilots’ home base during the relevant period?
[232] The options would appear be:
• The home base specified in the most recent letters preceding the rebasing events, engaging the Pilots on the FIFO arrangements; or
• The home bases applying prior to the most recent appointments on the FIFO arrangements that preceded the rebasing events.
[233] For reasons set out earlier, I do not consider that the original offers of employment for the Pilots are determinative of the home base for present purposes, unless they were in connection with the most recent employment contract – such as for the direct entry Pilots.
[234] I consider that in the absence of a new contract, the home base for present purposes was that specified in the most recent letters (offers of employment/variation) that were accepted by each of the Pilots and which immediately preceding the rebasing events. For the Pilots, these letters also engaged them in connection with the FIFO arrangements. Whilst these contracts underpinned the FIFO arrangements, more relevantly, they also represented the basis of the Pilots’ employment and their employment contracts for the purposes of the Enterprise Agreement. The IFAs were made in that context but did not by themselves determine the home base or replace the employment contract. As a result, in my view the termination of the IFAs did not, in the absence of a subsequent contrary contract between the relevant parties, mean that those underpinning contracts and their specification of the home base for each Pilot became irrelevant. The same must apply for the direct entry Pilots, including those without any formal IFA.
[235] Accordingly, in the case of the direct entry Pilots, the home base for the relevant period was:
• Captain Lee, Brisbane as specified in his letter of offer on being Checked to Line.
• Captain Dyne, Brisbane as specified in his letter of offer on being Checked to Line.
• Captain Connolly, Bundaberg as specified in his letter of offer on being Checked to Line.
• Captain Andrews, Brisbane as specified in his letter of offer on being Checked to Line (and noted in the IFA he operated under prior to the relevant period).
[236] In the case of the other Pilots, the home base for the relevant period was:
• Captain Smart, Adelaide
• Captain Carty, Sydney
• Captain Mattey, Brisbane
• Captain Sorrell-Saunders, Albury
• Captain Cullen, Rockhampton
• Captain Bonthorne, Brisbane
8.5 The external investigation claim
[237] AFAP’s fundamental submission on this aspect is that serious complaints were raised by many of the FIFO Pilots about the alleged conduct of Mr Dierickx associated with the events canvassed in this Decision. Given his seniority, AFAP contends that there should have been a proper investigation.
[238] Further, AFAP contends that none of the complainants were interviewed and that Mr Dierickx was also not interviewed but merely asked for a few emails and was not questioned as to the allegations by HR. As a result, it posits that the Commission should determine to require that a proper external investigation now be conducted.
[239] Amongst other matters, Cobham SM contends that there was an investigation conducted which found that the complaints were unsubstantiated.
[240] The evidence 106 indicates that Cobham SM requested that Mr Dierickx provide some documents and that he was questioned over the phone about some aspects of the complaints as part of the internal investigation. However, the Pilots making the complaints were not interviewed and other than the confirmation of the outcome, there was no information provided to the Pilots as to the basis of the findings. I have reservations as to whether what occurred was a thorough and independent investigation of the kind that was warranted at the time.
[241] However, as would be clear, I have in determining the agreed question, had regard to the process and conduct of the parties associated with the temporary basing arrangements. This included the conduct of, and role played by, Mr Dierickx. Having done so, and given the nature of these proceedings, I do not consider that it is appropriate to determine that an independent investigation now be conducted. Amongst my reasons for this approach is that the events that led to the complaints are now many months ago and occurred in a particular, difficult and unique context. I observe that just as in the case of the Pilots and the impact of their immediate cooperation with the “rebasing” changes, the conduct of Cobham SM and Mr Dierickx, must be fairly assessed in the practical context in which it occurred. Further, I have not found that the Pilots’ were coerced and although with the benefit of hindsight, mistakes were made by Cobham SM including what would have appeared to have been a lack of understanding about their individual circumstances and this impacted upon Pilots, I do not consider that it is the interests of the parties that these matters now be the subject of a further investigation. I also observe that as a result of subsequent developments, the FIFO arrangements have ceased and some of the FIFO Pilots have left the employment of Cobham SM. 107
[242] Given this conclusion, I have not dealt with the issue as to whether the form of outcome sought by the AFAP in connection with the external investigation claim would be within the jurisdiction of the Commission in this particular matter. I also observe that other avenues remain available to the Pilots should the necessary grounds exist. 108
[243] I do recognise that the events dealt with in this Decision have done damage to working relationships between the remaining (former) FIFO Pilots and some members of senior management. Given the nature of the work undertaken by the Pilots and the regulatory and professional environment in which it takes place, this is not helpful and should be addressed. I RECOMMEND that the parties recognise the impact upon these relationships and that they take steps to rebuild them. This might involve mediation between the relevant employees and/or a reset of how operational change decisions/disputes are handled, such as accessing joint interest-based dispute resolution training of the kind offered under the Commission’s Cooperative Workplaces jurisdiction.
9. Conclusions and determination
[244] The parties have agreed the following question to be determined by the Commission.
“In the case of each relevant Pilot, what was the Pilot’s Home Base for the purposes of the Surveillance Australia Pilot and Observer Enterprise Agreement 2016 during the relevant period when normal FIFO arrangements were not operating during 2020?”
[245] For reasons set out above, I consider that the home base for present purposes was that specified in the most recent letters (contracts of employment) immediately preceding the rebasing events. The details are set out at [235] and [236] above.
[246] I will leave to the parties the implementation of the consequences of this determination in relation to any payments due to each of the relevant Pilots, including whether there should be a set off for the ex-gratia (daily travel allowance payments). Liberty is granted to either party to apply to the Commission if these consequences cannot be resolved.
[247] For reasons outlined earlier, I do not consider that the external investigation claim should be accepted. I have recommended that steps be taken by the parties to rebuild the senior relationships that have been damaged by the events considered in this Decision.
[248] The Commission so determines.
COMMISSIONER
Appearances:
D Stephens of the Australian Federation of Air Pilots with D Smart for the AFAP, the Applicant.
S Bakewell and M Eleftheriou of EMA Consulting, with permission, with K Zeidler for Surveillance Australia Pty Ltd T/A Cobham Aviation Services Australia - Special Mission, the Respondent.
Hearing details:
2020
By Video Hearing
December 16, 17.
2021
Adelaide
March 29.
By Video Hearing
June 28.
Final written submissions:
Cobham SM – 12 July 2021.
The AFAP – 15 July 2021.
Printed by authority of the Commonwealth Government Printer
<PR733012>
1 [2020] FWC 3367.
2 Statement of Mr Erskine - exhibit R1 Cobham SM employed a total of some 98 Pilots, including on other contracts, at the time. Another FIFO Pilot was the eleventh FIFO Pilot but by that time he had tendered his resignation.
3 C2020/8478 – a further application made under s.739 of the Act.
4 PR729995 – issued on 19 May 2021 by Anderson DP.
5 Clause 1.4 of the Enterprise Agreement.
6 Captain Andrews’ IFA of June 2019.
7 Relying upon Empirnall Holdings Pty Ltd v Machon PaullPartners Pty Ltd (1988) 14 NSWLR 523.
8 Ibid.
9 Charles Samford, ‘Law, Institutions and the Public/Private Divide’ (1991) 20 Federal Law Review 185, 201; Bruce Dyer and Mark Aronson, Judicial Review of Administrative Action (5th ed, Lawbook Co, 2013) [6.290]. See also Brownlie v State Pollution Control Commission (1992) 27 NSWLR 78, 85.
10 Relying upon Qube Ports Pty Ltd v Maritime Union of Australia [2018] FCAFC 72 (“Qube v MUA”) and Workpac v Rossato (2020) 278 FCR 174; [2020] FCAFC 84.
11 Relying upon Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 (“Brambles”).
12 C2020/4069.
13 Smart – exhibit A1 at pars 5 to 8.
14 Supplementary questions and answers document issued 15 August 2017 – DS-2.
15 DS-3.
16 ND-09. Reference to the capacity to terminate IFAs was also removed around this time from the FIFO terms and conditions document issued by Cobham SM.
17 DS–4.
18 DS–5.
19 By text message – LD20.
20 For example Captain Dyne original statement – exhibit A18 at 26.
21 LD1
22 LD2.
23 LD25.
24 LD36.
25 LD47.
26 LD52.
27 LD60.
28 LD69.
29 LD72.
30 LD84.
31 LD97.
32 LD107.
33 LD120.
34 LD130.
35 LD34.
36 DS-15.
37 DS-16.
38 DS-17.
39 DS-22.
40 LD19.
41 LD30.
42 LD75.
43 LD135.
44 DS-19.
45 DS-20.
46 DS-12.
47 Mr Smallwood – DS-17.
48 [2006] FCA 1039.
49 Ibid at [44].
50 Ibid [52]–[53].
51 Final written submissions at 142 to 144.
52 These issues have not been the subject of any discussions as required under the DRP of the Enterprise Agreement and is not referenced in the agreed question to be determined. See Seo v Bindaree Food Group Pty Ltd[2021] FWCFB 2691 at [66].
53 LD44.
54 LD74.
55 LD114.
56 LD104.
57 LD41.
58 LD17, LD57, LD80 and LD127.
59 LD114.
60 The ADA is provided for at clauses 4.3.6-4.39 of the Enterprise Agreement.
61 Exhibit R5 – paras 21 and 22.
62 Acknowledged by Mr Dierickx – transcript PN3374 to PN3380.
63 Clause 3(d) of the IFAs.
64 [2017] FWCFB 3005.
65 See also Paper Australia Pty Ltd t/a Australian Paper v Australian Manufacturing Workers’ Union [2017] FWCFB 1621 at [21].
66 [1929] AR (NSW) 498 at 503; See also City of Wanneroo v Holmes (1989) 30 IR 362 (at 378-379) and Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2].
67 Re Aurora Energy Enterprise Partnership Agreement 2002 – 2005, [2008] AIRC 1074, at para 17; See also National Union of Workers v Plexicor Australia [2008] AIRC 1134.
68 (1993) 40 FCR 511, 517-8.
69 This decision must be applied having regard to the fact that the instrument in that matter was an award of the Commission rather than an enterprise agreement made between the employer and a majority of the employees at the time of approval. See also AWU v Pasminco Australia Ltd and ors (2003) 131 IR 1 for the caution required in this regard.
70 [2013] FWCFB 8557.
71 “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Skilled Engineering Ltd [2003] FCA 260, [18].
72 BP (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283 cited by the High Court in Byrne & Frew v Australian Airlines Ltd [1995] HCA 24 at paragraphs 12 -13.
73 AB v Tabcorp Holdings Limited[2015] FWCFB 523 at [11].
74 See Construction Forestry Mining and Energy Union v The Australian Industrial Relations Commission and Another [2001] HCA 16; (2001) 203 CLR 645, Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FWCFB 2019 and Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82.
75 Now Air Pilots Award 2020.
76 Clause 2 of the Modern Award.
77 Clause 2 of the Modern Award.
78 Clause 1.2.43 of the Enterprise Agreement.
79 Shop Distributive and Allied Employees Association v Woolworths SA Pty Ltd [2011] FCAFC 67 [16], relying on Amcor v Construction, Forestry, Mining and Energy Union (2005) 224 CLR 241, [96].
80 [2018] FCAFC 72.
81 Quoted at [63] of Qube v MUA.
82 At [70].
83 (2020) 278 FCR 179; [2020] FCAFC 84. This particular aspect does not appear to have been contradicted by the High Court in WorkPac Pty Ltd v Rossato [2021] HCA 23.
84 AIRC Print S0253.
85 (2003) 133 FCR 438.
86 Ibid per Marshall J.
87 Ibid per Wilcox J at par 3.
88 DS-17.
89 AFAP closing written submissions.
90 Cobham SM final written submissions at 87.
91 (1988) 14 NSWLR 523.
92 Ibid at 534-535.
93 Response from Mr Calabro, 17 April 2020.
94 National Workforce v AMWU (No 2) (1997) 76 IR 200 at 221; Allen v Flood [1898] AC 1 at 98, 128-9; Hodges v Webb [1920] 2 Ch 70 at 86-7; White v Riley [1921] 1 Ch 1; and Goddard v Osborne (1978) 35 FLR 122).
95 [2000] FCA 202; (2000) 170 ALR 42.
96 (1988) 19 NSWLR 40 at 46.
97 [1973] 2 NSWLR 598 at 633.
98 See also Gibbons v Wright [1954] HCA 17, 91 CLR 423 and the caution expressed as to the finding of economic duress by Finn J in Australasian Meat Industry Employees Union v Peerless Holdings Pty Ltd [2000] FCA 1047 at par 54.
99 Transcript PN570 (M Bonthorne); transcript PN1522 (M Connolly); transcript. PN294–295 (D Smart).
100 AFAP final submissions at PN3673
101 LD-30.
102 LD-75.
103 LD-135.
104 See the discussion of the concept of approbation and reprobation in Fried v National Australia Bank Ltd [2000] FCA 910 at [30] to [31].
105 LD34.
106 Transcript PN2986 to PN2998.
107 Confirmed in [2021] FWC 2880 at [37].
108 Such as an application under s.789FC of the Act.
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