Jeffrey Ian Wood v Virgin Australia Airlines Pty Ltd
[2025] FWC 285
•31 JANUARY 2025
| [2025] FWC 285 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Jeffrey Ian Wood
v
Virgin Australia Airlines Pty Ltd
(C2024/3712)
| COMMISSIONER PLATT | ADELAIDE, 31 JANUARY 2025 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – entitlement to annual leave as a part-time shiftworker – deduction of annual leave as a part-time shiftworker
On 7 June 2024, Mr Jeffrey Ian Wood (the Applicant) made an application for the Commission to deal with a dispute under s.739 of the Fair Work Act 2009 (the Act) concerning the application of Clauses 14 and Appendix 1 of the Virgin Australia Narrow Body Aircraft Pilots' Enterprise Agreement 2018[1] ( the 2018 Agreement) and Clause 14 and Appendix 2 of the Virgin Australia Narrow Body Aircraft Pilots' Enterprise Agreement 2021[2] (the 2021 Agreement) with the employer, Virgin Australia Airlines Pty Ltd (the Respondent).
BACKGROUND
The Respondent operates passenger airline services around Australia. The Respondent engages pilots on a full time and part time basis. Part time employees are engaged as a PT75 employee or a PT50 employee. Both the 2018 Agreement and the 2021 Agreement have application to this dispute.
The Applicant is employed by the Respondent as a pilot, flying narrow body aircraft on a PT75 basis.
The effect of the Agreement(s) as to annual leave is not in dispute. Full time pilots are credited with 240 hours annual leave per annum (42 days at 5.71 hours per day) PT75 pilots are credited with 154 hours annual leave (27 days at 5.71 hours per day) per annum and PT50 pilots receive 103 hours annual leave (18 days at 5.71 hours per day) per annum. When a pilot takes a day of annual leave, the Respondent deducts 5.71 hours from their leave balance.
The Applicant firstly contends that the PT75 and PT50 accruals are less than 75% and 50% of the full time pilots accruals. This appears to be a complaint about the bargain which was stuck at the time the Agreement was made. The question of inequity is a separate issue and I note the Commission’s function in interpreting an Agreement provision does not include redrafting what might be perceived as a poor bargain.
The Applicant secondly contends that the Agreement provides an outcome less beneficial than the National Employment Standards (NES). This is an issue within the Commission’s jurisdiction.
The Applicant finally contends that deduction of 5.71 hours from the leave balance per day of annual leave taken is not correct.[3]
The matter was unable to be resolved by Conciliation and the parties agreed to determining the dispute by arbitration.
The parties were directed to file submissions, witness statements and material to be relied upon.
The Applicant provided submissions, a witness statement and supporting material. The Respondent provided a submission and the Applicant also provided submissions in reply.
Based on the material provided, the dispute concerns matters of legal construction and not factual disputes, I proposed to determine the dispute on the papers. Both parties agreed by consent.
RELEVANT AGREEMENT PROVISIONS
The Virgin Australia Narrow Body Aircraft Pilots' Enterprise Agreement 2021 is the current applicable Agreement. It commenced operation on 1 November 2021 and has a nominal expiry of 30 June 2024. The 2021 Agreement excludes the relevant Award, being the Air Pilots Award 2020.
The transitional arrangements contained in Schedule 1, Table 15 of the 2021 Agreement appear to preserve certain relevant provisions of the Virgin Australia Narrow Body Aircraft Pilots' Enterprise Agreement 2018 as per the table below (extracted from the Respondent’s submission):
The transitional arrangements were intended to apply following a ‘cutover’ to the CAE Crew Management System (CMS). It is not in dispute that this has not yet occurred.
I find that the provisions contained in the 2018 Agreement dealing with annual leave and part time employment provide the Applicant’s entitlements and have been incorporated into the 2021 Agreement.
For the purposes of this dispute, I will reference the relevant provisions of the 2021 Agreement.
JURISDICTION
My jurisdiction to determine the dispute arises from Clauses 72.5 & 72.6 of the 2021 Agreement (reproduced below):
“72. ROLE OF FWC OR AGREED THIRD PARTY
72.5 FWC/the agreed third party is empowered to determine the dispute in any manner it sees fit, having regard to such rules and processes as FWC/the agreed third party thinks appropriate.
72.6 FWC/the agreed third parties’ determination will be final, and all parties will accept and abide by it (subject to it being overturned on appeal or stayed pending the determination of an appeal).”
APPLICANT’S EVIDENCE & SUBMISSIONS
The Applicant’s evidence is summarised below:
· The Applicant is employed as a Narrow Body Airline Captain (Pilot).
· The Applicant is on a part time (PT75) arrangement. The Applicant is a shiftworker as defined by the Act.
· The Respondent’s roster in relation to pilots has a duration of 28 days. Full time employees are rostered to work 16 days, PT75 employees work 12 and PT50 employees work 8 (out of the 28 days).
· There are no set days of duty and the roster is published no later than 7 days prior to the start of the roster period.
· The Respondent’s payroll software (Oracle Payroll) uses a datum of 40 hours per week salary for full time employees; 30 hours per week for PT75 and 20 for PT50.
· A PT75 pilot will accrue 2.08 days of leave per roster period (based on 27 days per annum) as per Clause 14.3, Appendix 1 of the 2018 Agreement.
· When taking annual leave, 5.71 hours is deducted from the annual leave balance, regardless of the working arrangement. 5.71 is calculated by taking 40 full-time ordinary hours divided by 7 days.[4]
· The ‘permutations’ of annual leave are not compatible with the roster periods which result in the Applicant being unable to access 5 weeks.
· Clause 42.16 of the 2021 Agreement and the allocation of DDO’s (Designated Days Off) prevent the Applicant from planning personal, recreational or cultural activities away from home base other than during an approved period of leave.
· Part time pilots leave accrual balances are unlawfully accessed to reduce the company’s salary obligation when periods of leave are included within a pay period.
The Applicant submits he is unable to access 5 weeks of annual leave (per year) as a PT75 shiftworker due to ‘certain permutations’ and that the deduction of annual leave causes ‘aberration and inequity’ which results in financial disadvantage. He submits if this is correct, then he will have been denied his entitlements under the National Employment Standards.
RESPONDENT’S SUBMISSIONS
The provisions of the 2018 Agreement dealing with annual leave and part-time work are incorporated in the 2021 Agreement and continue to govern the Applicant’s entitlements.
A ‘day’ with respect to the credit or deduction of annual leave is treated as a calendar day.
The Respondent contends that the Applicant’s dispute is split into three limbs:
(1)PT75 and PT50 employees accrue less than 75% and 50%, respectively of the annual leave accrued by full time pilots (Pro- Rata Accrual Issue);
(2)The leave arrangements for part time employees lead to less beneficial outcomes than under the National Employment Standards (NES Compliance Issue); and
(3)Thirdly, the deduction of 5.71 hours of annual leave per day which is the same for full time and part time employees is unfair and causes financial disadvantage (Deduction Issue).
With respect to the first limb and as a result of Clause 40.1 and Appendix 1 of the 2018 Agreement, the Respondent submits PT75 pilots receive a pro-rata entitlement which is incorporated into Clause 14.3 of the 2021 Agreement. PT75 pilots accrue 27 days of annual leave per annum. Any accrual in excess of 27 days is inconsistent with the 2021 Agreement and therefore in conflict with s.739(5) of the Act.
With respect to the second limb, the Respondent submits the NES does not operate such that the Applicant is entitled to 5 full calendar weeks free of duty in a given year. The Respondent relies on the authority contained in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (Mondelez).[5]
The effect of the Mondelez is that a ‘day’ (of leave) is a ‘notional day’ which is equivalent to the employees ordinary hours of work in the relevant period. Accordingly, the Respondent submits that the 5 weeks referred to the in the NES is 5 notional weeks and that an employee’s entitlement would be equivalent to their ordinary hours of work in a four or five week period (for a day worker or shiftworker respectively).
The Respondent submits the Applicant is entitled to four or five weeks equivalent to the employees ordinary hours which is calculated at 5/52 of annual ordinary hours. As a result, there is a natural pro-rating of part-time employees’ annual leave entitlements and their accruals are proportionally smaller.
In relation to the third limb being the deduction of annual leave (5.71 hours per day), the Respondent submits the Applicant’s characterisation of annual leave accrued in the payroll system being worth a dollar value is incorrect.
The Respondent submits that the Applicant is entitled to 8 designated days off, 8 offline days and 12 days available for duty in each 28 day roster period. The taking of leave reduces the number of designated days and days available for duty. Offline days remain at 8. In effect, the days available for duty decreases as more leave is taken during a roster period.
As for payment, the Respondent submits that pilots are paid an hourly rate per ‘credit’ or ‘credit hour’, whereby pilots are paid an hourly rate for their credits earned in each roster cycle (which is currently $280.00 per hour for Captains). There is a minimum credit guarantee which is 43.15 credits for PT75 pilots and that subject to any adjustments for unpaid leave or exchange of duties through the ‘Trip Swap System’ that result in less credit hours, pilots are paid no less than the MCG for any given roster period. Relevantly, approved leave attracts a credit of 2.46 hours per day.
The Respondent contends that as a result of the operation described above, by taking annual leave, a PT75 pilot receives time off at a time of choosing and does not have their pay reduced and continues to accrue credits.
LEGISLATION
Section 87 of the Act deals with the entitlement to annual leave:
“87Entitlement to annual leave
Amount of leave
(1)For each year of service with an employer (other than periods of employment as a casual employee of the employer), an employee is entitled to:
(a)4 weeks of paid annual leave; or
(b)5 weeks of paid annual leave, if:
(i)a modern award applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or
(ii)an enterprise agreement applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or
(iii)the employee qualifies for the shiftworker annual leave entitlement under subsection (3) (this relates to award/agreement free employees).
Note:Section 196 affects whether the FWC may approve an enterprise agreement covering an employee, if the employee is covered by a modern award that is in operation and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Accrual of leave
(2)An employee’s entitlement to paid annual leave accrues progressively during a year of service (other than periods of employment as a casual employee of the employer) according to the employee’s ordinary hours of work, and accumulates from year to year.
Note:If an employee’s employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.
Award/agreement free employees who qualify for the shiftworker entitlement
(3)An award/agreement free employee qualifies for the shiftworker annual leave entitlement if:
(a)the employee:
(i)is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and
(ii)is regularly rostered to work those shifts; and
(iii)regularly works on Sundays and public holidays; or
(b)the employee is in a class of employees prescribed by the regulations as shiftworkers for the purposes of the National Employment Standards.
(4)However, an employee referred to in subsection (3) does not qualify for the shiftworker annual leave entitlement if the employee is in a class of employees prescribed by the regulations as not being qualified for that entitlement.
(5)Without limiting the way in which a class may be described for the purposes of paragraph (3)(b) or subsection (4), the class may be described by reference to one or more of the following:
(a)a particular industry or part of an industry;
(b)a particular kind of work;
(c)a particular type of employment.
Section 88 of the Act deals with the taking of paid annual leave:
“88 Taking paid annual leave
(1)Paid annual leave may be taken for a period agreed between an employee and his or her employer.
(2)The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
Section 90 of the Act deals with payment for annual leave:
“90Payment for annual leave
(1)If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.
(2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.”
CONSIDERATION
The nature of the dispute pertains to the Applicant’s accrual and deduction of annual leave as a PT75 shiftworker. Accordingly, the questions for determination appear to be as follows:
1. What is the Applicant’s entitlement to annual leave?
2. Does the 2021 Agreement operate in a manner that is inconsistent with the National Employment Standards such that the Applicant does not receive his statutory entitlement to annual leave?
3. Is the accrual/deduction of the Applicant’s annual leave [at 5.71 hours per day] inconsistent with the NES?
The first question to be answered is ‘What is the Applicant’s entitlement to annual leave’. The Applicant’s leave entitlement as a part time pilot is provided by the 2021 Agreement which states he is to be credited with 154 hours (27 days) leave per year. As stated earlier the relativity between full time and other part time employees is a matter for bargaining.
The second question is whether ‘the Agreement operate[s] in a manner that is inconsistent with the National Employment Standards such that the Applicant does not receive his statutory entitlement to annual leave.’ I am not persuaded that the Agreement operates in a manner inconsistent with the NES. I agree with the Respondent’s submission that the most relevant authority is Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.[6] In that matter, the High Court considered the meaning of “10 days” of paid personal/carer’s leave. The reasoning applied in Mondelez is applicable to the annual leave provisions of the NES. In Mondelez, the majority held that a “day”, for the purposes of the “10 days” of paid personal/carer’s leave in the NES, is a “notional day” equivalent to the employee’s ordinary hours of work in a two-week period; and as a result, the total “10 day” accrual over an employee’s year of service is equivalent to their fortnightly ordinary hours, or if there are no regular fortnightly hours, 1/26⁄th of the employee’s ordinary hours of work in a year. I agree that the same result ought to apply in relation to the NES annual leave entitlement, with the “four weeks” or “5 weeks” referred to in the NES meaning four or five notional weeks.
As a PT75 employee it follows that Mr Wood is entitled to a minimum of 75% of the leave entitlements of a full time employee (subject to this amount meeting the requirements of the NES.
I have considered the decision in RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union (RACV), and accept that this decision takes an alternative approach.[7] Mondelez followed RACV and was the product of a superior Court. In my view Mondelez is a more appropriate decision to follow in this matter.
Mr Woods as a 0.75 FTE (PT75) is entitled to take 27 days annual leave. The NES entitlement to annual leave for a full time shift worker is 35 days. Mr Woods pro-rata NES entitlement of 27 days is 77.14% of the full time NES entitlement. This exceeds his pro rata NES entitlement.
The final question was ‘Is the deduction of the Applicant’s Annual Leave [at 5.71 hours per day] inconsistent with the NES. I am not persuaded that this deduction of 5.71 hours per day of annual leave is unfair or incorrect. It appears to follow the approach endorsed in Mondelez. Mr Woods contention that the Respondent’s deduction of annual leave is inequitable, appears to be based on an analysis of the payroll system and associating a dollar value to the deduction. I am cognisant that the Agreement was assessed at the time of approval to have met the better off overall test – this involves a global assessment, that an employee is better off under the Agreement compared to the relevant Award.
Having reviewed the cases and considered the evidence before me, I find that the Respondent has applied the relevant provisions of the 2021 Agreement correctly and in a manner that is not inconsistent with the NES.
COMMISSIONER
[1] [2018] FWCA 2671.
[2] [2021] FWCA 5487.
[3] Paragraphs 21-27 of Applicant’s witness statement.
[4] Paragraph 13 of Applicant’s witness statement.
[5] (2020) 271 CLR 495; [2020] HCA 29.
[6] Ibid.
[7] 249 IR 150, [2015] FWCFB 2881.
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