Australian Licenced Aircraft Engineers Association, The v Forstaff Aviation Services
[2012] FWA 9127
•15 NOVEMBER 2012
[2012] FWA 9127 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Australian Licenced Aircraft Engineers Association, The
v
Forstaff Aviation Services
(C2012/491)
Airline operations | |
COMMISSIONER GREGORY | MELBOURNE, 15 NOVEMBER 2012 |
Alleged dispute regarding an allowance.
Introduction
[1] This is an application by the Australian Licensed Aircraft Engineers Association (ALAEA) under s.739 of the Fair Work Act 2009 (the Act). It concerns a dispute with Forstaff Aviation Services Pty Ltd (Forstaff) about the application of clause 27 - “Parity and Variation,” commonly known as the Parity clause, in the Jobs Australia (Aircraft Maintenance and Refurbishment) Avalon Site Agreement 6 1[the Forstaff Agreement]. The clause sets out a mechanism by which existing employee entitlements in the Agreement are to be varied or alternatively reviewed following changes in the terms and conditions of employment of certain employees at Qantas.
[2] In summary, the clause provides for the automatic flow on of changes in some cases, but in other situations provides a mechanism by which changes at Qantas are to be reviewed and considered in terms of their relevance to employees covered by the Forstaff Agreement.
[3] The current dispute has been triggered following the creation of new allowances applying to Qantas employees following the Aircraft Engineers (Qantas Airways Limited) Workplace Determination 2012 2 [the Workplace Determination] made by a Full Bench of Fair Work Australia on 23 January 2012. Clause 44 and Tables 6 and 7 of Appendix B of the Workplace Determination provide for those allowances to be paid in recognition of requirements consequent to a new licensing regime inserted in the Civil Aviation Safety Regulations 1998. They recognise additional training Licenced Aircraft Maintenance Engineers [LAMES] can be required to undertake as part of this change.
[4] Clause 27 of the Jobs Australia (Aircraft Maintenance and Refurbishment) Avalon Site Agreement 6 states in full:
27. PARITY AND VARIATION.
27.1 In the event of a dispute occurring about interpretation of the terms of this Agreement, reference should be made to;
27.1.1 The comparable terms of the Licensed Aircraft Engineers (Qantas Airways Limited) Enterprise Agreement IV or its successor
27.1.2 In respect to the classification structure for the unlicensed engineers, maintenance operators, store persons and aircraft workers contained in Clause 8 of this Agreement, to the comparable terms of the ACTU SBU (Qantas Airways Limited) Enterprise Agreement IV or its successor; and
27.1.3 In respect to the classification structure for clerical staff contained in Clause 8 of this Agreement, to the comparable terms of the Australian Services Union (Qantas Airways Limited) Enterprise Agreement IV 1998 or its successor
27.2 Unless otherwise provided for elsewhere in this Agreement, wage rates and allowances in this agreement shall be increased from time to time by the same movement in wage rates, allowances and pay/classification structure changes for similar classifications, in Qantas and applied from the applicable dates in Qantas. The parties will file the agreed wage rates and classification changes with FWA.
27.3 The parties will review condition changes that have occurred in the relevant successors to the Qantas agreements referred to in Clauses 27.1.1, 27.l.2 and 27.1.3to determine and agree on conditions variations appropriate to the company, to maintain at least parity. The review will take place at the earliest of either:
27.3.1 the expiry of this Agreement; or
27.3.2 18 months after any successor Agreement in Qantas (made after the date of approval of this Agreement) has come into operation.”
[5] The issue for determination is accordingly whether the new allowances in the Workplace Determination applying to Qantas LAMES should now have application to employees at Forstaff under clause 27.2 of the Forstaff Agreement, or whether they should be dealt with in accordance with the process and timeframe set out in clause 27.3. In this context both the ALAEA and the Respondent have acknowledged the critical words in terms of the determination of this issue are the words in clause 27.2 “...wage rates and allowance in this agreement...”
[6] The dispute was referred into conference on 18 May 2012 pursuant to clause 22 - Disputes Avoidance and Settlement Procedure in the Forstaff Agreement, but was unable to be resolved. The ALAEA subsequently requested Fair Work Australia list the matter for Arbitration. Directions for filing written submissions and any witness statements were issued. Neither party took issue with the Tribunal’s ability to deal with the matter. I am also satisfied the dispute resolution procedure in clause 22 of the Forstaff Agreement and the subject matter of the dispute allow the Tribunal to deal with it in accordance with s.739 of the Act.
The Submissions
[7] Both parties relied in large part on the written submissions and supporting documentation each provided to the Tribunal.
[8] The ALAEA, in its submissions, made reference to the Workplace Determination. Clause 44 and Tables 6 and 7 of Appendix B provides for and sets out the detail of new allowances that can be paid to Qantas employed LAMES in recognition of a new licensing regime inserted in the Civil Aviation Safety Regulations 1998. The ALAEA indicated the allowances relate to new requirements imposed by the Civil Aviation Safety Authority (CASA) as part of a new alignment with existing European regulations. The European Aviation Safety Agency (EASA) Conversion allowance, for example, is paid in recognition of training undertaken by mechanical LAMES holding a B1 limited licence that results in the limitation being removed and a full B1 licence being held. Similarly, the EASA Recognition allowance acknowledges existing licences are now recognised by CASA under the new system. An employee with that licence would now be required to have an understanding of and abide by the requirements of those new regulations.
[9] In terms of sub-clause 27.2 the ALAEA submits the plain and practical intention of those provisions is, in its words, to ensure parity between Qantas and Forstaff employees and provide for “equal pay for work of equal value”. This is to be achieved by benefits which directly affect remuneration being applied to employees of Forstaff from the same date as they apply at Qantas. It submits there is nothing in the clause which suggests that new allowances established in respect of employees at Qantas “...are to be treated any differently from existing allowances, wage rates or classifications which are increased.” 3 It also submits the allowance should not be treated as a “condition” that can be subject to clause 27.3; to do that would make clause 27.2 meaningless and disregard its effect and intention. It continued to indicate:
“The objective intention of the clause, that changes to Qantas agreements which directly affect remuneration flow directly to employees of Forstaff from the same operative date, has been demonstrated on a number of occasions even in circumstances when the changes to the Qantas agreement is not specifically provided for in the Parity clause.” 4
[10] The ALAEA also suggested if their position was not accepted employees could be required to undertake training because of the new CASA requirements and not receive any additional payments, whereas their counterparts directly employed at Qantas receive an allowance in recognition of that training and the understandings gained.
[11] Forstaff provided an amount of detail in its submissions about the development of the so called “parity clause.” It indicated the purpose of the clause has been to require parties to the various agreements in place at Avalon since 1998 to consider the impact of changes to agreements covering comparable employees at Qantas. The wording of the clause has evolved over time, however, in the Respondent’s submission:
“.. it is not the intent of the Parity clause to mirror each and every provision in the Qantas agreements but instead is intended to automatically flow on wage and allowance increases and movements in existing classification structures and then, at defined times, review additional terms and conditions agreed in the Qantas agreements and negotiate terms that, on balance, provide similar outcomes.” 5
[12] It points to a number of examples where entitlements provided to Forstaff employees differ from those provided to LAMES at Qantas. For example, Qantas has a 15 level classification structure whereas the structure at Forstaff has only 12 levels, having been increased from 10 in previous agreement negotiations. It submits this demonstrates terms in the Forstaff Agreement are not intended to automatically replicate those provided to employees at Qantas, and changes to Qantas arrangements do not automatically flow on. Forstaff also submits:
“From the history of the Parity clause as outlined in these submissions, it is apparent that the persons drafting EBA 1V intended to facilitate the automatic flow-on of changes in wage rates and existing allowances from the Qantas agreement. In addition to these automatic changes, the drafters also intended to conduct periodic reviews of the agreement, in order to negotiate amendments in EBA 1V and its successors and to maintain parity between the two agreements as a whole.
The combination of these two parts of the Parity clause was intended to enable wage increases to flow automatically, and to allow for a review of overall conditions of employment (including pay levels, classifications and new benefits and allowances) to be conducted at periodic intervals.” 6
[13] In terms of the allowances in the Workplace Determination it submits, firstly, the Conversion allowance is dependent on Qantas nominating an employee to undertake the required training to convert to a full EASA licence. It notes in practice the work carried out by Forstaff employees means they will not likely be required to undertake this training to have their licences converted. It continues to note the recognition licence is payable upon employee qualifications being reissued under the new aviation regulations. It is an automatic function of the regulation changes, and does not actually require any changes to work practices or work requirements. It should, in its submission, simply be treated as a point of difference between the Qantas and Forstaff agreements to be dealt with in accordance with clause 27.3 of the Forstaff Agreement.
[14] In its submission the words “...wage rates and allowances in this agreement...” contained in clause 27.2 are “...paramount to the meaning and operation of this clause...” The clause is not intended to automatically include new additional entitlements created at Qantas. In its submission clause 27.3 instead provides the vehicle by which parties can review any changes to the Qantas agreements and then consider what changes need to be made to the Forstaff agreement in accordance with the timeframe set out.
[15] In addition, and in response the submission by the ALAEA that mechanical LAMES at Qantas could be required to undertake training because of the new CASA requirements, but not receive any additional payments, Forstaff referred to the provisions in clause 8.3.8 of the current Forstaff Agreement which state:
“The value of further training packages, and/or the introduction of other aircraft types or series, shall be negotiated and agreed by the company and employee(s), and when requested by an employee(s) a representative of their choosing which may include a union representative, prior to their introduction.”
[16] Mr Melhuish indicated in the proceedings, on behalf of the Respondent:
“That is a mechanism in the agreement that provides for the parties to discuss any future training packages and agree on their worth. So I don’t think there’s any danger in any finding of today’s dispute resulting in someone having to be trained on equipment or another aircraft type or whatever, without at least their being a debate on payment.” 7
The Law to be Applied
[17] Both parties made submissions about the principles of agreement construction and each made reference to a number of the established authorities in regard to this issue. The relevant principles are generally well established. The decision of Madgwick J. in Kucks v CSR Limited 8 (Kucks) has been referred to often in this context, including by each of the parties in the present matter. It dealt with the interpretation of an award provision. Madgwick J. stated:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.” 9
[18] Whilst made in the context of an award the approach in that decision has also been adopted in relation to the construction of an industrial agreement. In Australian Meat Industry Employees Union v. Coles Supermarkets Australia Pty Ltd 10 Northrop J stated:
“The increase in the number of certified agreements gives rise to an area of possibly greater dispute as to the construction of provisions contained in the agreements. The parties may adopt a multitude of different structures and methods of terminology. No common pattern may develop. Nevertheless certified agreements are to be construed adopting the same methodology as that used in construing awards. In Kucks v CSR Limited (1996) 66 IR 182 Madgwick J., sitting as a judge of the Industrial Relations Court of Australia, at 184 expressed his opinion on the legal principles to be applied in construing awards under the Act. I agree with that statement of principles. They have even stronger application to certified agreements.” 11
[19] That view has been approved in a number of subsequent decisions. In Amcor Limited v Construction Forestry Mining and Energy Union 12 Kirby J. stated:
“The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given ...should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties that negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements I agree with the following passage in the reasons of Madgwick J. In Kucks v. CSR Ltd, where his Honour observed ....” 13
[20] Kirby J. then continued to cite the extract from Kucks already referred to in paragraph [17] of this decision.
[21] In addition, if a clause is ambiguous or susceptible to more than one meaning extrinsic evidence is admissible in an endeavour to remove that ambiguity. The often referred to authority for this proposition is the decision in Codelfa Construction Pty Ltd v. State Rail Authority of New South Wales 14 and the Judgement of Mason J. when he stated:
“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.” 15
[22] The Applicant also made reference to the decision of a Full Bench of Fair Work Australia in Cape Australia Holdings Pty Ltd T/A Total Corrosion Holdings Pty Ltd v Construction, Forestry, Mining and Energy Union 16. The Full Bench stated in that matter:
“As to the general approach to the construction of enterprise agreements the observations of French J., as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo) 17are apposite:
‘[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘...ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).” 18
[23] The Full Bench continued to note that despite His Honour’s observations being made in the context of an award the same principles apply to the interpretation of agreements.
[24] In summary, those decisions indicate the objective is to search for the meaning intended by the parties, and to give effect to its evident purpose. What might be fair or just should not be put in place of what others intended. If a clause is ambiguous or capable of more than one meaning extrinsic evidence can be admitted to remove that ambiguity. However, it should not contradict the language if it already has a plain meaning. In addition, when two or more possible meanings exist the Tribunal should look to the objective framework of facts within which the agreement came into existence, and the parties presumed intention in that setting.
The Decision
[25] The issue for determination in this matter was stated at the outset. It concerns how new conversion and recognition allowances applicable to mechanical LAMES at Qantas, following the Workplace Determination made by the Full Bench of Fair Work Australia in January 2012, should be dealt with under sub-clauses 27.2 and 27.3 of the existing Forstaff Agreement. Both parties made submissions about the intent of sub-clauses 27.2 and 27.3. Those provisions have evolved over a series of agreements since Forstaff first took on the heavy maintenance of some Qantas aircraft at the Avalon site in 1998. They are clearly intended to maintain a relationship between entitlements provided to LAMES, who continue to be directly employed by Qantas, and those working for Forstaff on the maintenance of Qantas aircraft.
[26] The clause provides for two ways in which this is to be achieved. Firstly, clause 27.2 refers to wage rates and allowances in the Forstaff Agreement. It continues to indicate they are to be:
“...increased from time to time by the same movement in wage rates, allowances and pay/classification structures for similar classifications, in Qantas and applied from applicable dates in Qantas...”
[27] Sub-clause 27.3 continues then to deal with condition changes that have occurred in the relevant successors to previous Qantas agreements “...to determine and agree on conditions variations appropriate to the company, to maintain at least parity.” Any such changes are to be reviewed at the earliest of either the expiry of the current Agreement or 18 months after any new agreement made by Qantas subsequent to approval of the current Agreement.
[28] It was acknowledged by both parties the words in sub clause 27.2 “...wage rates and allowances in this agreement...” go to the essence of what the Tribunal is being asked to determine in this matter. Further, the authorities referred to previously confirm the language in an agreement should not be contradicted if it already has a plain meaning. The intention should also be to give effect to the evident purpose.
[29] As indicated previously the change in employee entitlements at Qantas that have given rise to the current applications by the ALAEA concern two allowances established by the Workplace Determination; an EASA Conversion allowance and EASA recognition allowance. The nature of these allowances and how they came about has been described at an earlier point in this decision and does not require further elaboration. However, they are clearly new allowances to be paid to certain Qantas employees whose licences have been required to be upgraded to reflect new CASA imposed requirements.
[30] Against this background and having considered all the submissions and evidence provided by the parties in this matter I am not satisfied the creation of these new allowances are changes that come within sub-clause 27.2 and require an automatic consequent change to the current entitlements of Forstaff employees. As the parties have acknowledged the critical words in that sub-clause are “...the wage rates and allowances this Agreement...” In terms of parity with Qantas employees that is what the sub-clause is concerned about; reflecting changes in the conditions provided to employees at Qantas that impact on “...existing wage rates and allowances in this Agreement”. I am accordingly satisfied the clause requires the equivalent wage rates and allowances must first exist in the Forstaff Agreement before changes to the entitlements provided to employees at Qantas can have any application. In the absence of that precondition changes that occur at Qantas are to be considered and dealt with in accordance with the process set out in sub-clause 27.3. The clause cannot, in my view, be read as widely as the ALAEA contends by requiring any benefit of a type that affects remuneration at Qantas to be applied to employees at Forstaff from the same date as at Qantas. If that was intended it would be expected the Forstaff Agreement would have stated that clear intention. It does not. It specifically refers instead to “...wage rates and allowances in the Agreement.” Any other changes at Qantas are to be considered in the context of sub-clause 27.3.
[31] In coming to this conclusion I do not agree with the submission that it implies clause 27.2 has no work to do. Whilst clause 27 is entitled “Parity and Variation” the agreement concluded between the parties at Forstaff clearly accepts and understands that parity of employment entitlements between employees at Qantas and Forstaff will not exist at all times. Where changes occur at Qantas that impact on wage rates and allowances already existing in the Forstaff Agreement clause 27.2 has work to do. Similarly sub-clause 27.3 applies when other changes in subsequent Qantas arrangements occur. It was also indicated by Forstaff that different employment conditions already exist at Qantas and Forstaff with some allowances and a different classification structure being highlighted in this context.
[32] It follows as a consequence of this decision that the new conversion and recognition allowances that now apply at Qantas, and which triggered this application, are changes that should be considered in the context of sub-clause 27.3 of the Forstaff Agreement.
[33] One further consideration is also worthy of mention. Forstaff made reference to the potential relevance of sub-clause 8.3.8 in the Forstaff Agreement to the training and licence requirements that emanate from what CASA now requires. If Forstaff requires employees to undertake training to convert current qualifications, or if employee qualifications are re-issued under the new regulations, the relevance of the provisions in sub-clause 8.3.8 might also need to be considered by the parties in the context of those changes.
COMMISSIONER
Appearances:
S. Purvinas with B. Stewart and V. Lecky on behalf of The Australian Licensed Aircraft Engineers Association.
P. Melhuish with J. Troeth on behalf of Forstaff Avalon Pty Ltd.
Hearing details:
2012:
Melbourne
30 May.
1 AE884104
2 AG891046 PR519230.
3 Exhibit P1at paragraph 17.
4 Exhibit P1 at paragraph 23.
5 Exhibit M1 at paragraph 18.
6 Exhibit M1 at paragraphs 33 - 34.
7 Transcript PN93.
8 (1996) 66 IR 182.
9 (1996) 66 IR 182 at page 184.
10 (1998) 80 IR 208.
11 (1998) 80 IR 208 at page 212.
12 [2005] HCA 10.
13 [2005] HCA 10 at [96].
14 (1982) 149 CLR 337.
15 (1982) 149 CLR 337 at page 352.
16 [2012] FWAFB 3994.
17 (2006) 153 IR 426 at [53]
18 [2012] FWAFB 3994 at [7].
Printed by authority of the Commonwealth Government Printer
<Price code C, AE884104 PR530631>
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