Flight Attendants' Association of Australia; Transport Workers Union & Anor v Qantas Airways Limited & Anor

[2021] HCATrans 116

[2021] HCATrans 116

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S3 of 2021

B e t w e e n -

FLIGHT ATTENDANTS’ ASSOCIATION OF AUSTRALIA

Applicant

and

QANTAS AIRWAYS LIMITED (ACN 009 661 901)

First Respondent

QF CABIN CREW AUSTRALIA PTY LIMITED (ACN 128 382 105)

Second Respondent

Office of the Registry
  Sydney  No S4 of 2021

B e t w e e n -

TRANSPORT WORKERS UNION

First Applicant

AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION (ASU)

Second Applicant

and

QANTAS AIRWAYS LIMITED (ACN 009 661 901)

First Respondent

QANTAS GROUND SERVICES PTY LTD

Second Respondent

Applications for special leave to appeal

KEANE J
EDELMAN J
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 25 JUNE 2021, AT 11.15 AM

Copyright in the High Court of Australia

____________________

MR M. GIBIAN, SC:   May it please the Court, I appear with MR P.A. BONCARDO for the applicants in both matters.  (instructed by Michael Doherty Legal)

MR J.K. KIRK, SC:   May it please the Court, I appear with my learned friend, MR T.O. PRINCE, for the respondents in both matters.  (instructed by Ashurst Australia)

KEANE J:   Yes, Mr Gibian.

MR GIBIAN:   Thank you, your Honours.  As your Honours will have seen, this matter concerns a significant component of the JobKeeper scheme enacted by the Commonwealth in response to the circumstances of the coronavirus pandemic.  The relevant provision at issue – section 789GB(a) - provides an important protection for employees in circumstances where those employees were stood down or directed to perform different or reduced duties as a consequence of the pandemic.  It did so by providing a minimum payment guarantee in respect of periods their employer was entitled to JobKeeper payments.  The interpretation adopted by the majority in the Full Court, in our submission, was inconsistent with the text and the substance to give that important protection no useful operation. 

KEANE J:   Mr Gibian, speaking of utility and usefulness, these provisions no longer exist.  Is that right?

MR GIBIAN:   The JobKeeper scheme ceased as of March of this year, your Honour, yes. 

KEANE J:   So, there is a question about the utility of the issue you seek to raise, and apart from the usefulness of the application in terms of providing guidance for the future, there does not seem to be a clear indication of prejudice in the sense that it does not seem to be clear that anyone is worse of as a result of the interpretation that you are now attacking.

MR GIBIAN:   Can I address those in two parts.  Firstly, as to the continued operation of the Job Keeper scheme, in our submission the matter does raise an important question.  If our submissions are correct, then the approach adopted by Qantas to the payment of its employees during the 12‑month period between March of 2020 and March of 2021, during a period in which those employees were experiencing – and tens of thousands of those employees were experiencing financial stress as a consequence of being stood down or working reduced periods was wrong, and there is a remedy for that. 

Of course, the scheme operated generally throughout the economy and applicable to thousands of employers and millions of employees.  Whether the provision was correctly applied generally is a matter of importance appropriate for a grant of special leave.

As to the second question, the proceedings were initially commenced by Qantas seeking an interpretation of the statutory provisions and the matter was argued in a sense in the abstract, albeit that there was evidence in relation to a small number of employees and the effect on them of the payment approach that was adopted.  The calculations in relation to those employees were such that they were underpaid on our interpretation of the provisions.

GLEESON J:   Underpaid by reference to what?  Do you mean underpaid by reference to the JobKeeper amount?

MR GIBIAN:   The minimum payment guarantee that Qantas was required to satisfy was not satisfied because Qantas counted, to satisfy its minimum payment obligation, moneys that had been earned by those employees in earlier periods of time, not by reference to the particular JobKeeper fortnights, including moneys that were earned before the JobKeeper scheme was in existence, and that meant that they were not paid the amount that was required.

The consequence of the difference of approach can perhaps be seen in the hypothetical scenarios that were dealt with in both the primary judge and the Full Court’s judgment.

EDELMAN J:   The difference between the approach that you take, that you support, which is, as I understand Justice Bromberg’s approach, and the approach of Justices Jagot and Wheelahan, at most could only ever be an amount relative to two weeks and a small component of that amount.  Is that right?

MR GIBIAN:   Perhaps if I could go to the first hypothetical example in the majority’s judgment at page 73 of the application book, referred to as scenario 1.  Their Honours set out three different permutations by reference to the three interpretations adopted.  In that scenario, the employee performed work entitling the employee to $3,000 in the first fortnight and no work at all in the second fortnight because they were stood down.  The $3,000 earned in the first fortnight, on this scenario, only $1,500 of which was payable in the first fortnight, the other $1,500 was overtime and, as a matter of fact, paid during the second fortnight. 

On our interpretation, because the provision operates in respect of a particular fortnight, the employee was entitled in total to receive $3,000 in respect of the first fortnight because that was the value of the work that the employee actually performed, and with respect to the second fortnight there was no money that the employee actually earned by the performance of work and the employee was entitled to receive the then $1,500 payment passed on by way of the government subsidy.

On Qantas’ approach, which is the middle box on that page, it says it is entitled to count moneys earned in the first fortnight to satisfy its minimum payment obligation in the second fortnight and the total amount paid over that period is only the amount of $3,000 instead of $4,500.  That is the circumstance in which there is a difference in outcomes.

EDELMAN J:   So, it requires overtime to have been worked, the overtime not to have been paid in the same fortnight as the payment for the standard work, and the overtime, then, not to have been counted for the minimum payment obligation?

MR GIBIAN:   It is not limited to a circumstance in which overtime is the reason for the delayed payment.  That was raised as the hypothetical scenario because that is, in fact, what happened in Qantas’ business.  Whenever a payment is made in a later period by reference to work performed in an earlier JobKeeper period, the issue would arise. 

As I say, in these instances, Qantas did count not only moneys earned in earlier fortnightly periods, but moneys earned by employees prior to the JobKeeper scheme even existing to satisfy its minimum payment obligations under the scheme and that is, in our submission, inconsistent with the purpose and structure of the scheme itself.

Your Honours, can I just note the structure of the payments under the JobKeeper scheme, and I do not need to go to them in detail, but in short, they were dealt with in the rules, extracts from which commence at page 159 of the application book.  It provided entitlements to a payment by employers on a fortnight‑by‑fortnight basis, upon the satisfaction of the various requirements set out specifically in rule 6.  The fortnights were arbitrary fortnights commencing on 30 March 2020. 

One of those conditions was a wage condition, which is rule 10 at page 170, which required the employer to pay the employee for each fortnight an amount which exceeded the JobKeeper payment, initially the $1,500 figure.  In that context, the provisions which were inserted into the Fair Work Act, which commence on page 142 of the application book, provided protections to employees in that context.  The guide to the part, which is 789GA, indicates that:

The purpose of this Part is to assist employers who qualify (or previously qualified) for the jobkeeper scheme to deal with the economic impact of the Coronavirus –

pandemic.  Can I make two observations about that.  One is that the manner in which it assisted employers is that it provided a power to make what we will call JobKeeper stand‑down directions, that is, standing down or reducing or changing the hours and days of work of employees.  What is contemplated is the employer may have had insufficient work for the employees to perform as a consequence of the pandemic.

The flipside of that, which is acknowledged in the guide to the part, is that it also provided certain protections to employees in that context.  Part of those protections were the employment – employer payment obligations in Division 2 commencing on page 149 of the application book.  There were three of those, as your Honours will have seen:  the wage condition, the minimum payment guarantee, and the hourly rate of pay guarantee.

Can I note the wage condition, which is at 789GD, which required an employer qualified for the scheme to ensure that the wage condition had been satisfied in respect of the employee by the end of the fortnight?  Unlike GDA, the provision we are dealing with here, it expressly deals with the timing of payments, requires in short the wage condition the 1500 figure be paid by, that is, within the time period of each of the JobKeeper fortnights.

The critical provision, GDA, then sets out a distinct and separate obligation referred to as the “minimum payment guarantee”.  In subsection (2) it operates:

If a jobkeeper payment is payable to an employer . . . for a fortnight –

that is, it is operating by reference to an entitlement which is on a fortnightly‑by‑fortnightly basis of the employer and, in that circumstance:

the employer must ensure that the total amount payable to the employee in respect of the fortnight is not less than the –

two amounts, either the “jobkeeper payment” or, in (b):

the amounts payable to the employee in relation to the performance of work during the fortnight.

The construction adopted by, or proposed by Qantas and accepted by the majority, was that the effect of that provision, or the minimum payment guarantee, was either the amount of the JobKeeper payment, the $1500, or the amount that the employee - was payable in any event to the employee in that fortnight, that is, during that period of time.

There are two critical features of the test of the section which are, in our submission, inconsistent with that construction.  Firstly, the chapeau to subsection (2) imposes a requirement on the employer to:

ensure that the total amount payable to the employee in respect of the fortnight is not less than the greater of the –

two amounts.  The reference – the obligation is not expressed by reference to a payment that must be made in or during the fortnight but in respect of the fortnight.  As the majority acknowledged, both at paragraphs 70 and 82 of their judgment, Qantas’ construction in effect requires reading the words “in respect of” as if they say, “in the fortnight”.  That is not compatible with the text and that is particularly so when contrast is drawn with 789GD, the immediately preceding provision, which expressly deals with the timing of payment “by the end of the fortnight” rather than, as in GDA, “in respect of the fortnight”.

The second element of the text is that in (2)(b) the second alternative of amounts:

the amounts payable to the employee in relation to the performance of work during the fortnight.

In our submission, the ordinary and natural meaning of that phrase is that the words “during the fortnight” refer to the performance of work rather than the time at which the payments – the amounts are payable.  Qantas’ construction and that adopted by the majority requires the words “during the fortnight” to be read as qualifying only the words “amounts payable” and as having no relationship to when the work was performed at all. 

As I say, in our submission, that interpretation leaves the provision with no effective work to do.  On the construction of the majority, the minimum guarantee is that the employee must either be paid the amount of the JobKeeper payment, the $1500, or the amount that was in any event payable to the employee in that period. 

The JobKeeper payment is already required to be paid to the employee under the preceding provision, 789GD, during that period and if there is a higher amount payable to the employee during the fortnight the employee has that entitlement already under the relevantly applicable statutory provision, industrial agreement or contract that entitles the employee to the payment.

The majority endeavoured to answer that submission at paragraph 77 of its judgment at pages 106 and 107 in a manner which, with respect, reinforces rather than answers the concern.  They say two things.  On page 106 at around line 50 their Honours say that the three provisions – GD, GDA and GDB:

are a cascading set of provisions, with the later provisions building on (and overlapping with) the earlier provisions.

It is, with respect, unclear what is meant by that other than that it is contended that the provisions do not have imposed separate obligations.  That, with respect, is, we would say, inconsistent with the three separate provisions imposing civil penalty provisions as part of this important scheme.  Then over the page, commencing at the top of page 107, their Honours say that:

On Qantas’s construction s 789GDA(2) is ensuring that, whatever else may be the case, if the employee is otherwise entitled to be paid greater than the jobkeeper payment, the employer must pay that greater amount.

As I say, that rather reinforces that the interpretation gives the section nothing to do.  All it does, on this view, is require the employer to pay the employee what the employee was otherwise entitled to be paid in any event.  The only possible effect it was suggested the section could have on this interpretation is that if the only provision dealing with payment timing for the employee was a contractual one, it may have conferred a contractual entitlement to one to which a civil penalty may attach.  That was not the relevant circumstance of the Qantas employees whose payment provisions were dealt with in enterprise agreements.

EDELMAN J:   Mr Gibian, do you accept that on either construction that is being raised in this Court, some scenarios will involve the employee being worse off and some scenarios will involve the employee being better off?

MR GIBIAN:   We do not know of a circumstance in which our construction will lead to an employee being worse off.

EDELMAN J:   That is what Justice Bromberg says at paragraph 108. 

MR GIBIAN:   I mean worse off as compared to the construction that Qantas proposes.  As I say, the effect of Qantas’ construction is that the only effect of the section is that it requires the employee to be paid what they are in any event entitled to be paid, in which case there could not be a less advantageous outcome, that is, it merely replicates other entitlements that the employee in any event has.  So, we do not see that there is a way that our construction would be less advantageous to an employee in any circumstance. 

It is more advantageous in particular circumstances because it – aligning with the JobKeeper scheme makes sure that in respect of each JobKeeper fortnight the employee is required to be paid if there is insufficient work, the amount of the JobKeeper payment, the $1500.  If there is greater than that value of work available to the employee and

required to be performed, the employee must receive the full value of the work that they perform during that fortnightly period. 

What Qantas’ and the majority’s construction permits is for an employer to offset liability it is has incurred to its employees by directing them or requiring them to perform work in earlier periods, its minimum payment obligation during the periods.  It is entitled to a JobKeeper payment.  That is not the purpose of the scheme, and it is inconsistent with the structure and effect, in our submission. 

The contrary arguments, with respect, do not - are unpersuasive.  The majority relied upon the urgency of the drafting of the legislation to perhaps more easily disregard disconformities between the text and the interpretation advanced by Qantas.  Perhaps that in itself raises a question in relation to the approach to statutory interpretation.  In the absence of an alleged drafting error, which was not identified, it is difficult to see how that assists the task of construction. 

Secondly, the majority found persuasive, particularly at paragraphs 8, 9, 69 and 82, the concern that administrative burden may be imposed upon employers on our construction.  That is not a concern that arises from the text of the statute or finds any support in any of the extrinsic material.  The only burden would be that the employer is required to calculate the amount earned by an employee in a fortnightly period.  There is no evidence that that was a sufficient burden to fall upon the task of statutory interpretation. 

Finally, the interaction with section 323 and the use of the phrase in that provision, “amounts payable . . . in relation to the performance of work”, does not assist Qantas’ or the majority’s construction.  That provision, as Justice Bromberg pointed out at paragraphs 97 and 98, itself imposes an obligation by reference to the period that work is performed, namely, that it must be paid – the employer must be paid at least monthly – that is within a month of the work being performed, consistently with the manner in which we would interpret that phrase. 

KEANE J:   Thanks, Mr Gibian.  We need not trouble you, Mr Kirk.

These applications do not raise any issue of principle of sufficient general importance to warrant the grant of special leave to appeal.  Each application should be dismissed with costs.

AT 11.37 AM THE MATTERS WERE CONCLUDED