Fair Work Ombudsman v Jetstar Airways Ltd

Link copied
Case Copied 31 min read

FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33

Citation: Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33
Parties: FAIR WORK OMBUDSMAN v JETSTAR AIRWAYS LTD (NZBN 9429036201136), JETSTAR GROUP PTY LTD (ACN 003 901 353) and JETSTAR AIRWAYS PTY LTD (ACN 069 720 243)
File number(s): NSD 495 of 2012
Judge(s): BUCHANAN J
Date of judgment: 6 February 2014
Catchwords: INDUSTRIAL LAW – penalty – breach of modern award – pilots required to bear the cost of training by deductions from salary – unauthorised deduction from pilot’s salary – whether breach was flagrant or wilful – whether need for deterrence – where penalty should be fixed to ensure that the risk of contravention is not seen as an acceptable cost of doing business
Legislation: Air Pilots Award 2010 (Cth), cl 16.5
Fair Work Act 2009 (Cth), ss 14, 45, 323(1), 324, 324(2), 345(1)(a), 550(2)(c)
Cases cited: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249
Date of hearing: 19 December 2013
Place: Sydney
Division: FAIR WORK DIVISION
Category: Catchwords
Number of paragraphs: 58
Counsel for the Applicant: Mr JJE Fernon SC and Ms E Raper
Solicitor for the Applicant: Fair Work Ombudsman
Counsel for the Respondents: Mr F Parry SC and Mr R Dalton
Solicitor for the Respondents: Herbert Smith Freehills

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

FAIR WORK DIVISION

NSD 495 of 2012
BETWEEN:

FAIR WORK OMBUDSMAN
Applicant
AND:

JETSTAR AIRWAYS LTD (NZBN 9429036201136)
First Respondent

JETSTAR GROUP PTY LTD (ACN 003 901 353)
Second Respondent

JETSTAR AIRWAYS PTY LTD (ACN 069 720 243)
Third Respondent

JUDGE:

BUCHANAN J

DATE OF ORDER:

6 FEBRUARY 2014

WHERE MADE:

SYDNEY

THE COURT DECLARES THAT:

1.The Second Respondent, Jetstar Group Pty Ltd (ACN 003 901 353), contravened:

1.1section 45 of the Fair Work Act (“the FW Act”) in that as an employer covered by the Air Pilots Award 2010 (Cth) (“the Award”), it employed six cadet pilots (namely, Mosca, Wladyslawski, Stockley, Webster, Hull and Hessell) in circumstances where it had required them to do line training and required them to bear the cost of that training and failed to reimburse them for these costs, contrary to the requirements of clause 16.5 of the Award; and

1.2section 323(1) of the FW Act (by failing to pay all wages in full to Thomas Hessell).

2.The Third Respondent, Jetstar Airways Pty Ltd (ACN 069 720 243), pursuant to s 550(2)(c) of the FW Act, was involved in each of the contraventions set out in paragraph 1 and is thereby taken to have engaged in the same contraventions.

THE COURT ORDERS THAT:

3.The Second Respondent pay the following penalties pursuant to s 546(1) of the FW Act to a total amount of $45,000 for the declared contraventions in paragraph 1 above, being:

3.1a penalty of $20,000 in respect of its contravention of…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Fair Work Ombudsman v Jetstar Airways Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2014] FCA 33
Decision Date

CaseChat Overview and Summary

This case involved proceedings brought by the Fair Work Ombudsman against Jetstar Airways Ltd and two of its subsidiaries, Jetstar Group and Jetstar New Zealand, concerning alleged breaches of the Fair Work Act 2009 (Cth) and the Air Pilots Award 2010 (Cth). The allegations centred on Jetstar Group and Jetstar Airways requiring pilots to bear the cost of training by making deductions from their salaries, a requirement not authorised by the Award. The court had to determine whether these deductions constituted unauthorised deductions from salary and whether the breaches were flagrant or wilful, necessitating a deterrent penalty.

The legal issues before the court included whether Jetstar Group and Jetstar Airways contravened sections 45 and 323(1) of the Fair Work Act by requiring pilots to bear the cost of training through salary deductions without proper authorisation. Additionally, the court needed to consider whether Jetstar Airways, as a parent company, was involved in these contraventions under section 550(2)(c) of the Fair Work Act. The central question was the appropriate penalty to impose to ensure deterrence, considering the need to prevent such breaches from being seen as an acceptable cost of doing business.

The court found that Jetstar Group and Jetstar Airways had indeed contravened the provisions of the Fair Work Act. It was determined that the breaches were not flagrant or wilful but required a penalty to ensure deterrence. The court concluded that a penalty of $45,000 for each of the respondents was appropriate. This amount was calculated to reflect the seriousness of the breaches while also considering the financial impact on the respondents.

The court ordered Jetstar Group to pay a penalty of $45,000, comprising $20,000 for the contravention of section 45 and $25,000 for the contravention of section 323(1). Similarly, Jetstar Airways was ordered to pay $45,000, considering its involvement in the contraventions. Both penalties were to be paid to the Consolidated Revenue Fund of the Commonwealth within 28 days. The proceedings were dismissed in all other respects, and no order was made as to costs.

Orders

Orders of the court

3. The Second Respondent pay the following penalties pursuant to s 546(1) of the FW Act to a total amount of $45,000 for the declared contraventions in paragraph 1 above, being:

3.1 a penalty of $20,000 in respect of its contravention of s 45 of the FW Act in respect of clause 16.5 of the Award; and

3.2 a penalty of $25,000 in respect of its contravention of s 323(1) of the FW Act.

4. The Third Respondent pay the following penalties pursuant to s 546(1) of the FW Act to a total amount of $45,000 for the declared contraventions in paragraph 2 above, being:

4.1 a penalty of $20,000 in respect of its involvement in the contravention of s 45 of the FW Act in respect of clause 16.5 of the Award; and

4.2 a penalty of $25,000 in respect of its involvement in the contravention of s 323(1) of the FW Act.

5. All pecuniary penalties imposed by the Court, pursuant to s 546(3) of the FW Act, be paid to the Consolidated Revenue Fund of the Commonwealth within 28 days of these orders.

6. The proceedings otherwise be dismissed.

7. No order as to costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

These proceedings, commenced on 2 April 2012, concern allegations of breach of a Federal award – the Air Pilots Award 2010 (Cth), made by the Fair Work Commission on 4 September 2009 (“the Award”). The applicant initially alleged that each of the respondents had breached identified provisions of the Fair Work Act 2009 (Cth) (“the FW Act”). The proceedings were listed for hearing in December 2013. Two days before the hearing was to commence, the parties announced that they had reached agreement about a number of matters raised by the application and statement of claim, that the second and third respondents would admit liability for identified matters, and that the parties had agreed that I should take submissions about penalties to be imposed on one of the days listed for hearing. BACKGROUND The first respondent (“Jetstar New Zealand”) is incorporated in accordance with the laws of New Zealand. It is a wholly owned subsidiary of the third respondent. The second respondent (“Jetstar Group”) is incorporated in Australia. It is also a wholly owned subsidiary of the third respondent. The third respondent (“Jetstar Airways”) is incorporated in Australia. It is a wholly owned subsidiary of Qantas Airways Limited (“Qantas”). At the relevant time, the senior management team of Jetstar Airways included: the Chief Executive Officer, Mr Bruce Buchanan; the Executive Manager Operations, Mr Mark Dal Pra; the Chief Pilot, Captain Mark Rindfleish; the Manager Flying Operations and Resources, Mr Matthew Bell; the Head of Human Resources, Mr Rohan Garnett; and the Manager of Employee Relations, Mr Tim Nuttall. A recruitment specialist engaged by Jetstar Airways, Ms Leah Golias, provided advice and services in connection with the events described below. An industrial relations consultant, Mr John Farrow, also provided advice to Jetstar Airways in relation to those matters. The Jetstar companies provide airline services in Australia, New Zealand and the Asia/Pacific region. For that purpose, the various companies employ pilots. Those pilots who are employed by a “national system employer” within the meaning of s 14 of the FW Act are entitled to the provisions of the Award. Jetstar Group and Jetstar Airways are each a national system employer. The agreement reached by the parties, that the second and third respondents (but not the first respondent) were liable to penalties in the present proceedings, was supported by a statement of agreed facts, which was accompanied by a series of annexed documents. The parties agreed that Jetstar Group contravened s 45 of the FW Act and s 323(1) of the FW Act and that Jetstar Airways was “involved” in Jetstar Group’s contraventions pursuant to s 550(2)(c) of the FW Act and thereby liable for both contraventions. The provisions of the FW Act to which I have referred (and s 324) are as follows: 45 Contravening a modern award A person must not contravene a term of a modern award. Note 1:This section is a civil remedy provision (see Part 4-1). Note 2:A person does not contravene a term of a modern award unless the award applies to the person: see subsection 46(1). … 323 Method and frequency of payment (1)An employer must pay an employee amounts payable to the employee in relation to the performance of work: (a) in full (except as provided by section 324); and (b)in money by one, or a combination, of the methods referred to in subsection (2); and (c)at least monthly. Note 1:This subsection is a civil remedy provision (see Part 4-1). Note 2:Amounts referred to in this subsection include the following if they become payable during a relevant period: (a)incentive-based payments and bonuses; (b)loadings; (c)monetary allowances; (d)overtime or penalty rates; (e)leave payments. … 324 Permitted deductions (1)An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if: (a)the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or (b)the deduction is authorised by the employee in accordance with an enterprise agreement; or (c)the deduction is authorised by or under a modern award or an FWC order; or (d)the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court. Note 1:A deduction in accordance with a salary sacrifice or other arrangement, under which an employee chooses to: (a)forgo an amount payable to the employee in relation to the performance of work; but (b)receive some other form of benefit or remuneration; will be permitted if it is made in accordance with this section and the other provisions of this Division. Note 2:Certain terms of modern awards, enterprise agreements and contracts of employment relating to deductions have no effect (see section 326). A deduction made in accordance with such a term will not be authorised for the purposes of this section. (2)An authorisation for the purposes of paragraph (1)(a): (a)must specify the amount of the deduction; and (b)may be withdrawn in writing by the employee at any time. (3)Any variation in the amount of the deduction must be authorised in writing by the employee. … 550 Involvement in contravention treated in same way as actual contravention …(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person: …(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or … (emphasis in original)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.