Peat, J. v Oxley Airlines Ltd

[1991] FCA 850

Re: JOHN PEAT
And: OXLEY AIRLINES LIMITED
No. N I77 of 1991
FED No. 850
Industrial Law
(1991) 40 IR 96

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Foster J.(1)

CATCHWORDS

Industrial Law - federal award - breach by employer - penalty under s 178 Industrial Relation Act 1988 - multiple breaches in course of conduct regarded as single breach only - employer's lack of knowledge of the award - calculation of penalties.

Industrial Relations Act 1988 - s 178, s 356

HEARING

SYDNEY

#DATE 23:10:1991

Counsel for the applicant: P. Roberts

Instructed by Australian Government Solicitor

Counsel for the respondent: P.M. Kite

Instructed by Lane and Lane

ORDER

The respondent pay penalties totalling the amount of $1,750.

The penalties be paid to the applicant.

28 days be allowed for the payment of penalties.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The applicant in these proceedings is an inspector employed by the federal Department of Industrial Relations and was charged with the investigation and prosecution of breaches of awards. He brings these proceedings against the respondent, Oxley Airlines Limited, which company carried on the business of airlines transportation. The respondent also conducts a flying school. The proceedings relate to the employment by the respondent of a pilot, Tony Lester Bowen, who met his death in an aviation accident on 7 April 1988 whilst flying in the employ of the respondent.

1. The proceedings are brought by amended application asserting a number of breaches of the relevant federal industrial award being the Pilots General Aviation Award 1984 (the "Award"). The proceedings are brought under s 178 and s 356 of the Industrial Relations Act 1988 (the "Act").

2. By s 178(2)(b), regard may be had to whether the breaches charged arise out of a "course of conduct" by the organisation alleged to be in breach. Where that is found to be so, the breaches can be taken to constitute a single breach. It is not disputed, and in my view rightly so, that so far as the matters raised in this application are concerned, where there are multiple breaches of particular clauses of the award alleged, those multiple breaches can properly be regarded as a course of conduct resulting in the Court regarding them, for the purpose of imposition of penalty, as a single breach only.

3. Material has been placed before the court by way of affidavit of the applicant and affidavits filed on behalf of the respondent. There are no contested issues of fact in the matter and consequently it is not necessary to refer in detail to matters of fact raised in those affidavits. The convenient way to approach the matter is to follow the course which was followed by counsel in presenting the case and by way of defence raised by the respondent. There are six categories of breach of different clauses of the Award alleged. The categories, in so far as they contain a number of individual breaches, are to be regarded, as I have already said, as single breaches for the purpose of imposition of penalty.

4. Before I deal with the individual categories, I should make some general observations. It is put on behalf of the respondent on the basis of the evidence in the case, which I accept, that the respondent was aware of the existence of the Award but, through its relevant officers, was not in fact aware of its detailed provisions. In particular it was not aware of the detailed provisions, the breach of which founds the application before the Court. The Court is therefore not dealing with a case of flagrant disregard of the known provisions of an award. In some circumstances, as is instanced in decided cases to which I have been referred, a lack of knowledge of the provision which has been breached has been regarded as sufficient to preclude in the circumstances of the particular case the imposition of any penalty at all.

5. This is clearly not such a case. The provisions of the award that were breached in varying degrees were provisions that should have been well known to the respondent company employing pilots. Even if not fully known to the managing director, they should have been well known to persons charged in the respondent's organisation with the implementation of the Award provisions. The facts placed before me are not sufficient in my view to indicate gross negligence in failure to advert to these provisions, but they certainly demonstrate an unacceptable lack of care on the part of the organisation of the respondent and on the part of those members of the respondent whose business it undoubtedly was to be aware of these provisions and to implement them.

6. The categories of breach to which I shall now refer vary in my view in terms of importance. I shall make reference to these matters as I proceed. The more significant breaches must of course be visited with a more appropriate penalty. It has been pointed out that the maximum penalty that can be imposed in respect of any breach or any series of breaches treated as a single breach through the application of the course of conduct provisions is only $1,000. It was put to me that apparently $1,000 has been the maximum penalty since 1974. It has survived, however, as a maximum penalty despite recent amendments to the Act and must therefore be regarded as the true maximum regarded by the regulation making authority as representing the penalty reserved for the worst possible types of breach of the relevant provision. I bear that in mind in considering the seriousness of the breaches that have been alleged here and which are admitted.

7. I take into account as a general matter also that there is no history in the respondent of prior breaches. Other matters going to mitigation are best considered in relation to the individual charges in the six categories.

8. The first category is described as a failure to sign duty and flight time records from May through to December, 1987. In discussion with counsel it has become apparent to me that the object of the clause which imposes this requirement in the Award, namely cl. 9(b) of Part A, is not so much to ensure safety in relation to flying, by employed pilots, but to ensure that as an administrative matter flight time records, which are important records in relation to the operations of the company, are accurately kept and their accuracy is verified by the authenticating signature of the employer. So regarded, the records must be seen as being important company records. The failure to comply with this clause, however, indicates a sloppiness in administrative procedures rather than anything more serious. Treating the various breaches as one breach only, I think the appropriate penalty is $150.

9. The next category relates to breaches of cl. 33(a) of Part A of the Award. That clause, to which I had been taken in detail, provides for the provision by the employer to each of the pilots within his employ accident insurance for a death benefit of not less than $60,000 over and above any entitlement available under workers compensation legislation. There is no need to refer to the detail of the clause. Quite clearly this is a very significant aspect of the Award. It provides a most important benefit for employed pilots, and more particularly their dependants. It is a very serious matter that this aspect of the Award was not adverted to. I accept, as I have said, that there was ignorance on the part of the relevant personnel of the respondent in relation to this aspect of the Award rather than a blatant disregard of it. It is a state of ignorance, however, which should not have occurred. I feel that the Court must mark its disapproval of the failure of the respondent to advert to this very significant aspect of the Award and to implement it. I think the appropriate penalty is $750.

10. The third category of breach alleged and admitted consists of breaches of cl. 36(i)(iii) of Part A stated compendiously as utilising Mr Bowen while engaged on casual hire to fly in excess of 300 flying hours per annum. Indeed he flew in excess of 300 flying hours between the periods 1 May 1987 to 23 September 1987 with the result that there was a very clear breach of this part of the Award. It is apparent that this aspect of the Award has industrial rather than safety significance. It is intended to limit the amount of employment of casual pilots as against permanent pilots. I accept that there was a failure to advert to this provision. Clearly the managing director was totally unaware of it. Indeed, I accept his evidence that had he been aware of this limitation on the use to which he could put Mr Bowen, he would not have employed him. For reasons to which I will refer in more detail, I am satisfied that the respondent through its managing director was in the first instance for financial reasons somewhat loathe to employ Mr Bowen at all as a casual pilot. I do not regard this particular breach as being of a very serious nature. I think a penalty of $100 is appropriate.

11. The next category of breaches relate to the breach of cl. 36(i)(v) of Part A of the Award. The breaches are stated compendiously as a failure to pay Mr Bowen the casual rate of pay prescribed by the Award for the period 1 May 1987 to 23 September 1987. It appears from the evidence that Mr Bowen was paid $25 per flying hour for this period of time when the proper amount payable under the Award was $41.12. I should add that there was, after August 1987, an adjustment upwards of the amount paid to Mr Bowen as a casual pilot to $30 per hour. Accordingly, Mr Bowen was paid fairly well below the appropriate award rate over this period of time.

12. I am satisfied that there was a failure on the part of those who had the relevant responsibility to advert to the appropriate casual rate of pay prescribed by the Award. It appears that all that happened was that a rate of $25 per hour was negotiated with Mr Bowen and accepted by him. It is further stated that some inquiries were made on behalf of the respondent by which it was ascertained that this was in effect the going rate for hourly pay of a casual pilot.

13. I accept this evidence on behalf of the respondent. I also accept that the respondent's managing director had in the first instance been reluctant to employ Mr Bowen at all. This reluctance stemmed from the fact that the company was acting under a scheme of arrangement with its creditors, which imposed upon it considerable financial stringency. Indeed it appears that the managing director was prevailed upon by the chief pilot of the respondent to employ Mr Bowen for Mr Bowen's sake.

14. It seems that Mr Bowen was in a position of wishing to build up his flying hours on twin engine aircraft and that there was an opportunity afforded to him by employment with the respondent to so do. There was therefore a degree of friendly activity on the part of the respondent in extending employment in these circumstances. Indeed it seems that shortly before Mr Bowen met his death he, having built up the required number of hours and achieved an increased level of experience, was about to take employment on a permanent basis with a larger airline in which he could put those flying hours and that experience to good use.

15. The simple fact remains, however, that there was the Award and it did provide for a considerably higher rate of pay and there was a breach of it through a degree of inadvertence that should not have occurred. There was a substantial number of breaches which of course are treated as one because they are regarded as a course of conduct. I feel, however, that the breaches are sufficiently serious to warrant the imposition of a penalty of $500.

16. The next category involves alleged and admitted breaches of cl. 36(i)(vi) of Part A of the Award. These breaches amounted to a failure to pay Mr Bowen a minimum of four hours pay for tours of duty on certain dates as set out in the application at the rate prescribed for casual pilots.

17. This clause is obviously intended to secure a certain minimum amount of pay in respect of the employment of casual pilot on casual rates. Again the excuse for a failure to make these payments has been put forward as being ignorance of the particular clause. I do not regard this particular breach as being of any great significance, especially having regard to the fact that disapproval of the breaches to pay the appropriate casual rate of pay have already been marked in the penalty imposed for those breaches. I think a fairly nominal penalty of $50 is appropriate for this breach.

18. The final breach alleged and admitted is one of cl. 1 of Part B of the Award, stated as a failure to pay Mr Bowen the total annual salary required under the award for a permanent pilot. The difference between what he should have been paid from a proper application of and calculation under the Award, and the amount that he was actually paid, is not very substantial. The best that I can understand from the material put before me is that there was some miscalculation in reaching the amount that he was paid. I do not feel that there has been shown to have been any higher degree of negligence involved in this, although it is the type of thing that should not happen in the interest of proper administration. I think a penalty of $100 is appropriate for this breach.

19. In the result the total of penalties imposed are in the amount of $1750.

20. I further order that the total of these penalties be paid by the respondent to the applicant, John Peat, pursuant to s 356 of the Act.

21. I allow 28 days for the payment of the amount of the penalties.