Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited

[2021] HCATrans 100

[2021] HCATrans 100

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S242 of 2020

B e t w e e n -

COMMUNICATIONS ELECTRICAL ELECTRONIC ENERGY INFORMATION POSTAL PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

First Applicant

THE AUSTRALIAN WORKERS’ UNION

Second Applicant

“AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION” KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS’ UNION (AMWU)

Third Applicant

TRANSPORT WORKERS’ UNION

Fourth Applicant

and

QANTAS AIRWAYS LIMITED ACN 009 661 901

Respondent

Application for special leave to appeal

KIEFEL CJ
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 21 MAY 2021, AT 11.20 AM

Copyright in the High Court of Australia

____________________

MR M. GIBIAN, SC:   May it please the Court, I appear with MR A.M. SLEVIN for the applicants.  (instructed by Maurice Blackburn Lawyers)

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR. M.J. FOLLETT for the respondent.  (instructed by Ashurst)

KIEFEL CJ:   Yes, Mr Gibian.

MR GIBIAN:   May it please.  As your Honours will have seen, this matter concerns the operation of the stand‑down provisions of the Fair Work Act, which have obtained some recent prominence as a result of the COVID‑19 pandemic.  The question raised is whether employees stood down in response to a stoppage of work caused by the pandemic are entitled to access certain leave entitlements under the national employment standards, specifically personal/carer’s and compassionate leave.

The issue raised as to the operation of sections 524 and 525 of the Fair Work Act concern important provisions of national legislation applying to all national and system employees covered by that Act.  It is an issue in relation to which there were differing views expressed in the Federal Court, and in relation to which there is little authority appropriate for a grant of special leave. 

In our submission, the employees are entitled to take, and be paid, with respect to periods of personal/carer’s leave and compassionate leave during a period they would otherwise be stood down, if circumstances exist enlivening the entitlement to take that leave. 

That is the case for two alternative reasons, either, as reasoned by Justice Bromberg in the Full Court, the employee is not stood down during a period in which they are unable to perform work for reasons enlivening the entitlement to take those forms of leave, or because the employee is not taken to be stood down, by reason of section 525(b) when entitled to be absent from the employment on leave, which was the position the unions put in the Federal Court.

Can I just note three matters of background?  Firstly, Qantas initially stood down employees by notices in late March 2020.  The notices identified defined periods of the stand‑down between two and four weeks initially.  The practical issue is what happened during those periods if the employees became ill or had circumstances entitling the employees to take personal/carer’s or compassionate leave. 

Secondly, the position identified to the employees and maintained throughout the proceedings was that the employees, if stood down, would not be entitled to the usual wages, but could access other leave entitlements, annual, long‑service, and parental leave, but two particular types of leave only, personal/carer’s leave and compassionate leave, would not be available and would not be paid.

Thirdly, the power of Qantas to stand down employees necessarily arose from statute or from industrial instrument, there being no common law right to stand down the employees if no useful work could be found for them. Here, the stand‑downs relied either upon the statutory power in section 524(1) or, with respect to other employees, clause 18 of one of the enterprise agreements at issue known as the Alliance Agreement.

KIEFEL CJ:   Mr Gibian, the first ground of appeal which appears in special leave book 104 at paragraph 2 says that:

The majority of the Full Court should have found that Qantas is not authorised by ss 524 or 525 . . . to stand down or withhold payment due to an employee during a period on which the employee is taking personal/carer’s leave or compassionate leave.

That appears to challenge the lawfulness of the stand‑down.  Is the respondent not correct to observe that the matter has been argued at all points below on the basis that there was a lawful stand‑down?

MR GIBIAN:   We readily acknowledge that the reasoning of the primary conclusion of Justice Bromberg in dissent in the Full Court departed from the way in which we argued the case in that his Honour concentrated upon whether it was implicit within ‑ ‑ ‑

KIEFEL CJ:   Well, his Honour’s reasons might have encouraged you to take a different tack, but the respondent is correct, is it not, to say that the case below has been conducted on the basis of the legality of – that there was a lawful stand‑down?

MR GIBIAN:   Yes, your Honour, that is right.  The question that is raised – the approach of Justice Bromberg is really, we would say, the flipside of the same issue, namely that is, there was no issue raised below and there is no issue raised now as to whether there were circumstances that existed affecting Qantas’ business by reason of the pandemic that meant that the employees could not be lawfully usefully engaged.

KIEFEL CJ:   Well, I am sorry, I do not understand the first ground of appeal.  It is premised upon Qantas not being authorised to stand down.  It is premised on exactly the reverse of how the matter was conducted below.  So, how are we supposed to understand that ground?  I am sorry, I am reading from the second ground, paragraph 2.  I think you realised that.

MR GIBIAN:   Yes, your Honour, I understood.

KIEFEL CJ:   Yes.

MR GIBIAN: I did, your Honour, yes. Well, your Honour, we say it can be approached in two ways, that is, the approach of Justice Bromberg was that it is implicit within section 524 that the – the fundamental issue is as to whether the leave entitlements in the national employment standards are overridden by the stand‑down provisions.

We say they were not. The approach of Justice Bromberg in his primary conclusion was that it was implicit in section 524 that employees were not stood down if the reason they cannot be usefully employed is that the employees were – or circumstances existed entitling them to take personal/carer’s or compassionate leave because they were sick or providing care to their family or the like. The alternative way of approaching it, which is the way we approached it below, is that that is accommodated by section 525 - - -

KIEFEL CJ:   Which effects a broad exclusion on your argument run below.

MR GIBIAN:   Yes.

KIEFEL CJ:   It effects a broad exclusion from the operation of any stand‑down.

MR GIBIAN:   Yes.

KIEFEL CJ:   That is how you argued it below.

MR GIBIAN:   It is.

KIEFEL CJ:   Why should you not be restricted on any grant of special leave to that argument?

MR GIBIAN:   Because, your Honour, we think the first argument is also purely a matter of construction in relation to which there is no relevant factual dispute.  That is, we do not – did not and do not – contend that the circumstances of the pandemic did not result in Qantas being unable to usefully employ the employees as a result of the travel restrictions and the like.

The question raised is purely one of construction, that is, in that event, how does that circumstance interact with the entitlement of an employee to take leave under either section 97 or 105 of the Act, if the employee is sick or providing care for their family or the like.  That is an issue which does not raise any new or different factual issue, and which is, at least as an alternative, able to be considered in this Court.

The issue is whether section 525 is confirmatory of the position implicit in 524, or whether it is itself an operative exclusion. In either event, it comes - - -

KIEFEL CJ:   That is your alternative argument, is it not?

MR GIBIAN:   Yes, it is.

KIEFEL CJ: It depends upon the distinction between “leave” and “absence” in section 525?

MR GIBIAN:   It essentially depends on whether or not the section intends to draw some distinction between what is leave and what is an authorised absence – your Honour is right.  In our submission, there is no sensible distinction that can be drawn between the two concepts, both as a matter of ordinary language and understood in the context of the Fair Work Act.  In our submission, an entitlement to take leave is an authorisation to be absent from the employment.

KIEFEL CJ:   This is a pure question of construction.

MR GIBIAN:   Yes, it is, your Honour.

KIEFEL CJ:   What was wrong with the majority’s approach?  It seems fairly orthodox.

MR GIBIAN: Your Honour, in our submission, as to section 525, the primary issue brought against us – or argued against us in that respect – firstly is it does depend upon there being a distinction able to be drawn between leave and authorised absence, as I say. We do not think that is consistent with ordinary language – is also not consistent with the provisions of the Act.

As I say, there are only two examples of what was said to be an authorised absence able to be identified, those relating to community service activities and jury service, and public holidays.  Even the example with respect to community service activities in section 108 is within what is Division 8 of Part 2-2, itself entitled “Community Service Leave”.  The Act itself does not seem to draw that distinction.

Secondly, the consequence of the judgment of the majority is that all forms of leave or absence are able to be accessed and entitled to be paid during a period the employee would otherwise be stood down under 524 except for compassionate or - - -

KIEFEL CJ: The approach taken by the majority seems to be, in relation to section 525, that paragraph (b) is talking about an absence other than by taking leave authorised by the employer. Would you agree with that?

MR GIBIAN:   That was their approach, yes, your Honour.

KIEFEL CJ:   Is there anything wrong with that approach?

MR GIBIAN:   There is – that, firstly, it posits that there is a distinction between an authorised absence and leave.

KIEFEL CJ:   Yes, I see.

MR GIBIAN:   Secondly, it is adopted in circumstances in which – as the majority acknowledged at paragraph 45 – there was no sensible policy or purposive rationale identified as to why personal/carer’s leave and compassionate leave, alone, would be treated differently in circumstances of a stand‑down than other forms of leave or absence.  There does not seem to be any policy or other justification as to why the Fair Work Act would adopt that approach.

Thirdly, in our submission, 525 – and, particularly, 525(b) – is properly to be understood as a catch‑all provision intended to encompass any circumstance in which the employee is entitled or:

is otherwise authorised to be absent from his or her employment –

It must accommodate circumstances in which the absence is authorised by various types of instrument – be they statute, industrial instrument, enterprise agreements, or contracts.  Such absences may be described in various different ways in those instruments and the provision can only be sensibly understood as intended to encompass any such absence, however so described.

That approach does not leave subsection (a) with no work to do, as Justice Bromberg explained.  At least, it encompasses a circumstance in which the employer authorises or agrees to the taking of leave in the absence of an entitlement, such as annual leave in advance.

KIEFEL CJ: Their Honours, in the majority, took a purposive approach to section 525 – its construction – did they not?

MR GIBIAN:   They were of the view ‑ ‑ ‑

KIEFEL CJ:   It was both textual - it was textual to begin with but was largely influenced by what their Honours saw the purpose of a stand‑down to be. 

MR GIBIAN:   Their Honours were of the view that “purpose” did not take the argument very far, one way or the other.  Ultimately, although their Honours were unable to identify any policy reason as to why different types of leave or absence would be treated differently and acknowledge that leave or absence were not clearly defined concepts within the concept of the Act ‑ ‑ ‑

KIEFEL CJ:   I think what I had in mind was paragraph 86:

For the stand down provisions to operate in the way that has been described is consistent with their character in providing authority to an employer to be relieved of the requirement to make payments to employees during a period when the employees cannot usefully be employed because of one of the circumstances specified in s 524(1).

That appears to me to be having regard to the purpose of a stand‑down and that influences the view one takes of section 525.

MR GIBIAN: Yes. I had in mind what their Honours said at paragraph 73 under the heading “Evident purpose of s 525” in which they concluded at the top of page 64 of the application book that:

both constructions are consistent with the general purpose that may be discerned.

Ultimately, their conclusion appeared to flow from an acceptance that there was some distinction to be drawn between a leave and an absence.

KIEFEL CJ:   Now, in relation to your third ground for special leave, is it not a difficulty for you that this simply involves the construction of one paragraph of one enterprise agreement?  It has no wider general application.

MR GIBIAN:   We accept that, your Honour, and to which we would add that it was accepted below that the outcome, so far as the application of the statutory provisions were concerned, would flow for the employees covered by – those employees covered by the enterprise agreement provision, because sections 55 and 56 of the Acts do not permit the exclusion of an entitlement under the national employment standards.  So, to the extent that that provision had a less beneficial outcome, or a less favourable outcome for the employees so far as their leave entitlements were concerned, it would have no effect.

GLEESON J:   Do you take any issue with the last two sentences of paragraph 97 of the majority judgment?

MR GIBIAN:   Yes, your Honour, the entitlement under, relevantly, sections 99 and 106 is to be paid the employee’s base rate of pay for their ordinary hours on the period of the leave. It is not necessarily the same as the wages that they would have earned.  Unless there is anything further, those are our submissions.

KIEFEL CJ:   Yes, thank you.  Yes, Mr Gleeson.

MR GLEESON:   Your Honours, could I deal with the three proposed grounds in turn.  The first ground, which is said to be the primary argument, and is apparently the only substantive ground of appeal proposed, you see that from page 104.  Paragraph 2 is the substantive ground of appeal in respect to the Act.  It raises an issue which, as we have established in writing, is wholly outside the forensic controversy below.  The consequences of that, were the Court to grant leave are, number one, you would have the benefit of no analysis of the issue by Justice Flick at first instance or the majority in the Full Court.

Secondly, you would be asked to grant relief and allow the appeal on a ground which is outside the pleadings below and the notice of appeal to the Federal Court below, because the declaration which is now sought, paragraph 4(b)(ii), which adventitiously seeks to pick up what Justice Bromberg contemplated at paragraph 177, is outside the pleadings and the ground of appeal below.

The third significance, your Honour is, we submit there is a significant unfairness, when it has been carefully clarified at first instance what the issues are – your Honours see that in the letters from page 157 and following – for a party to simply turn up in this Court and say we would like to run a different case outside our pleadings, which potentially has evidentiary significances and potentially – your Honour the Chief Justice asked about the language of ground 2, it is an attack upon the authority to stand down and therefore seeks a declaration of an unlawful stand‑down, which one might think would arguably create contraventions and expose Qantas to civil penalties, none of which was within the contest below.  For those reasons, we would submit ground 1 is inappropriate.

GLEESON J:   What are the evidentiary issues that might arise?

MR GLEESON: What his Honour Justice Bromberg seems to contemplate – your Honours will see this between paragraphs 120 and 123 – he seems to have a three‑step argument about section 524. The first step, paragraph 120, which his Honour commences with the curious language:

It may be accepted that –

the first step is an assertion that:

an employee cannot be usefully employed –

during any period in which the employee otherwise could take leave or have the benefit of an authorised absence. Now, that step is a step of law, not evidence. It is one that we would submit is unsupported by anything in the Act. So, that is the premise for his Honour’s analysis of this new point. His second step, paragraph 121, last sentence is that the taking of leave or authorised absence is not specified in section 524 as a cause – that is true, we accept that step.

The third step where the evidence may come in, your Honour Justice Gleeson, is in paragraph 123, where his Honour says that he is going to impose a sole cause test upon section 524(1). You see that particularly in the last sentence. Now, any case involving causation, when one is arguing about sole cause, multiple causes, alternative causes, would normally be considered against evidence. This question of causation in paragraph 123 has come completely out of the blue.

So, your Honours, the only other thing I would say on the first – the so-called primary argument – is that premise in paragraph 120 simply cannot be sustained.  His Honour seems to be saying that, if I take leave as I am entitled to, for instance annual leave, I am unable to be usefully employed while I am on annual leave.  Well, of course, in most cases, it would be the exact opposite – there would be plenty of useful work the employer can offer me, but annual leave is an entitlement which allows me to be relieved of that obligation to be ready, willing and able.

Now, if that premise of his Honour is unsustained, then the whole of his analysis on 524 collapses, and in that regard if your Honours could go to page 11, paragraph 19, there is an extract from one of the classic judgments in the field of Justice Morling in Townsend v General Motors in 1983 where in the quote his Honour explained – this was in the context of an award – but useful employment must be looked at from the perspective of the employer.  Is there net economic benefit or advantage which I can obtain by asking this person to do certain work?  So once useful employment is looked at from the perspective of the employer, paragraph 120 collapses.  Once that collapses, the whole of his Honour’s argument collapses.

Your Honours, could I move to the second ground, which was the case below.  As I have observed implicitly it has no ground of appeal attached to it.  It has no orders sought in respect to it.  What it has to confront is the careful reasoning of construction of the majority which really runs between paragraphs 74 and 90 on the Act. 

Now, with respect, Mr Gibian this morning has made no distance towards showing error in those paragraphs of construction, let alone error that might be of general application. What the court does in 75 is analyse the role of section 524(1). In 76 it then analyses that section 525 provides two instances where the effect of the stand‑down will be undone while those instances apply, and it thus directs attention to whether those particular circumstances apply during the stand‑down.

At paragraph 79, the principal textual difficulty with the argument is it simply cannot sit with section 525(a) because that provision which your Honours have, inter alia, at page 130 accepts from the stand‑down the period in which the employee is taking paid or unpaid leave that is authorised by the employer. So, the clear decision there is to pick up those earlier parts of the Act which are expressed in terms of the taking of leave and then attaching a further condition to it that it must be authorised by the employer.

Now, the argument Mr Gibian ran below was that in effect one can ignore those words “that is authorised by the employer” because in any case where the taking is not authorised you simply slip down into paragraph (b) and you say “otherwise authorised to be absent”.  Now, the majority correctly reasoned what is the whole point of paragraph (a) being worded as it is if what you really meant to say was “taking paid or unpaid leave whether authorised or not”, which is his argument.  That is what was intended to be said.  You would never express paragraph (a) in that fashion.

KIEFEL CJ:   Are you saying that it has to proceed on the basis that it is already authorised?

MR GLEESON:   Yes.  Your Honour’s question about purpose, the purpose underneath this is twofold:  firstly, there is the purpose of the stand‑down, which is to provide financial relief in extraordinary circumstances subject to limits; and, secondly, there is the purpose of why do you attach authorisation?  What it is saying is that it is an exception to the stand‑down and it must meet both the interests of the employee who wants to take the leave – it cannot be forced on the employee – and it must meet the interests of the employer to authorise the leave and thereby take it outside the stand‑down.

The classic example would be, as has happened with Qantas and others, if people wish to use annual leave entitlements and it suits the employer for them to do so and use up those entitlements, then that autonomy of the parties is respected by paragraph (a), that is why authorisation is there, and (b) is there for those cases in the Act which, in fact, use the very language of (b).  They speak in terms of authorised absences and the majority correctly identified some examples.  The classic example is public holidays, which is on page 127, section 114.  There is the very language:

entitled to be absent from . . . employment on a . . . public holiday –

and then in similar language, back on page 123, section 108, community service leave, especially jury leave; 111, payment for certain jury leave.  So those paragraphs of the majority correctly dealt with the construction issue.

KIEFEL CJ:   Mr Gleeson, what did the majority make of the note to section 525, could you remind me?

MR GLEESON:   They found that it supported their view, which you can see at paragraph 88 on page 68 and, of course, the note is constructed on the basis that Justice Bromberg’s primary argument cannot be correct.  It says you:

may take paid or unpaid leave (for example, annual leave) –

the classic example:

during all or part of a period during which the employee would otherwise be stood down under subsection 524(1).

So it confirms that some form of accepting or carve‑out work has been done by 525, whereas if Justice Bromberg were correct the note should have said: for the avoidance of doubt what we are telling you in section 525 has already been laid down as the law in section 524 and you would never have worded a provision like section 525 if that is what you were doing.

Your Honours, on the final issue, it does concern one provision in one industrial agreement and, further, if your Honours see that agreement on page 69, the manner in which it is expressed – firstly, at paragraph 92, the primary clause 18.1.1, says:

Subject to the following, Qantas may deduct payment for –

a day where the employee cannot be usefully – be performed because of strike, et cetera.  So that is the primary rule, you may deduct, it is subject to the following.  Well, what follows looks like it is going to be an exception.  Then you do see the two exceptions in paragraph 95.  There is an exception where the employee elects to take some annual leave, and then there is a rule, “must not deduct” on public holidays subject to certain terms.  So, fairly clearly, the structure of that provision is – general rule is, may deduct a payment during a strike, exception one, exception two, and Mr Gibian cannot bring himself within either of the exceptions.  Unless your Honours have a question, they are our submissions.

KIEFEL CJ:   Yes, thank you, Mr Gleeson.  Anything in reply, Mr Gibian?

MR GIBIAN: Just briefly three matters. Firstly, a suggestion was made that there would be some different consequence in terms of penalty for an unlawful or an unauthorised stand‑down. There is no penalty for stand‑down, per se. If there is any consequence by reason of a failure to make payments with respect to leave that would be the same consequence whether that arises by the implicit operation of section 524 or by the operation of section 525.

Secondly, so far as the purpose is concerned, we accepted that the purpose of stand‑down in a general sense was to provide a measure of financial relief to employers. But that ought be understood as limited to the financial consequences of the type of stoppage, industrial action or interruption of machinery contemplated by section 524 – most notably, of course, wages for the performance of work that is not required in one of

those circumstances.  The leave liability arises if an employee is unable to attend work for one of the reasons and would arise irrespective of the requirements of the employer. 

Thirdly, so far as authorised absences was concerned, our learned friend’s argument is essentially that there are only two such authorised absences contemplated by section 525(b), namely public holidays and community service activities. I have already noted that community service activities are referred to in the heading, at least, as a type of leave. Furthermore, they do not grapple with the reality that 525 has to address absences authorised in various types of instruments, be they contract, industrial instrument or statute. Unless I can assist further, your Honours.

KIEFEL CJ:   Thank you, Mr Gibian. 

In our view, the principal proposed ground of appeal involves a significant departure from the basis upon which this matter was conducted below and involves relief different from that sought by the applicant.  There is no reason to doubt the correctness of the construction of the relevant statutory provisions reached by the majority of the Full Court, which was the question raised by the applicant below.  The other proposed ground involves the construction of a paragraph of an enterprise agreement.  No question of general principle arises.  For these reasons, special leave is refused. 

I think, Mr Gibian, you have accepted that in these circumstances costs should go to the respondent?

MR GIBIAN:   Yes, your Honour.

KIEFEL CJ:   Thank you.  Special leave is refused with costs.

MR GIBIAN:   May it please.

KIEFEL CJ:   The Court will adjourn to reconstitute.

AT 11.54 AM THE MATTER WAS CONCLUDED