Qantas Airways Limited T/A Qantas Airways Ltd
[2024] FWCA 4143
•26 NOVEMBER 2024
| [2024] FWCA 4143 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.210—Enterprise agreement
Qantas Airways Limited T/A Qantas Airways Ltd
(AG2024/4080)
FLIGHT ATTENDANTS’ ASSOCIATION OF AUSTRALIA, QANTAS AIRWAYS LIMITED AND QF CABIN CREW AUSTRALIA PTY LIMITED ENTERPRISE AGREEMENT 2022 (EBA11)
| Airline operations | |
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 26 NOVEMBER 2024 |
Application for variation of the Flight Attendants’ Association of Australia, Qantas Airways Limited and QF Cabin Crew Australia Pty Limited Enterprise Agreement 2022
Introduction and background
On 29 March 2022, Commissioner Matheson approved the Flight Attendants’ Association of Australia, Qantas Airways Limited and QF Cabin Crew Australia Pty Limited Enterprise Agreement 2022 (Agreement).
The Agreement has a nominal expiry date of 29 March 2026.
The Agreement covers Qantas Airways Ltd (Qantas), QF Cabin Crew Australia Pty Limited (QCCA) and the employees of Qantas and QCCA employed to perform work covered by the classifications contained within the Agreement, including Flight Attendants, Customer Service Supervisors and Customer Service Managers. The Flight Attendants’ Association of Australia (FAAA) and the Transport Workers’ Union (TWU) are also covered by the Agreement.
On 16 October 2024, Qantas filed an application under section 210 of the Fair Work Act 2009 (Cth) (Act) to vary the Agreement.
At the time of the vote on the proposed variation to the Agreement, 3,286 employees were covered by the Agreement. 2,725 employees cast a valid vote. 2,537 employees voted to approve the variation.
The FAAA supports the application to vary the Agreement. The TWU did not want to advise the Fair Work Commission (Commission) whether it supports or opposes approval of the variation.
Variation sought
The scope of employees covered by the Agreement has not changed as a result of the variation of the Agreement. The variation provides a pay increase for QCCA employees and Qantas employees employed on or after 17 December 2007; no pay increase is provided for Qantas employees employed before 17 December 2007. The variation does not provide for a QCCA flight attendant to be paid the same amount as a Qantas flight attendant employed prior to 17 December 2007. QCCA flight attendants will receive the same annual salary as Qantas flight attendants employed on or after 17 December 2007.
The variation provides for the hourly rate applicable to Additional Hourly Pay and overtime to be increased in accordance with the formula set out at in the Agreement. This applies (in different amounts) to QCCA employees and Qantas employees employed on or after 17 December 2007, as well as Qantas employees employed before 17 December 2007.
This variation allows employees covered by the Agreement to fly on the A350 aircraft, providing the opportunity to Australia based long haul cabin crew to fly on the A350 aircraft, which will be used on a variety of flying including Ultra Long Range flying (ULR Flying), also known as ‘Project Sunrise’ flights. ULR Flying is defined as a single sector planned for greater than 20 hours, and is proposed to include non-stop direct flights from Sydney to London and Sydney to New York.
The variation provides for a range of consequential amendments to the Agreement arising from ULR Flying, including:
an additional overtime rate where flight duty hours are in excess of 20 hours;
the inclusion of a range of new upline, home base and in-flight rest provisions for ULR Flying on the A350 aircraft;
increases in flight duty limitations; and
variations to provisions regarding AV spans and when an employee can be called to do ULR Flying when on standby.
Other amendments proposed by the variation include:
reintroduction of elapsed time credits for employees covered by the Agreement;
extension of the transport entitlements to crew who commute from other international bases in Australia and who have otherwise not had the ability to utilise home transport provisions where they are domiciled; and
where the reassignable hours arising as a result of an operational disruption or change are less than 5 hours on a per instance basis, Qantas/QCCA will not seek to reassign these hours and Fixed Pay Protection will apply.
Legislative framework
The Commission must approve a variation of an enterprise agreement made under s 210 of the Act if:
(a)the Commission is satisfied that had an application been made under s 182(4) or s 185 for the approval of the agreement as proposed to be varied, the Commission would have been required to approve the agreement under s 186; and
(b)the Commission is satisfied that the agreement as proposed to be varied would not specify a date as the nominal expiry date which is more than 4 years after the day on which the Commission approved the agreement;
unless the Commission is satisfied that there are serious public interest grounds for not approving the variation.[1]
The requirements for approval of an enterprise agreement under s 186 of the Act relevantly include satisfaction by the Commission that:
(a)the agreement has been genuinely agreed to by the employees covered by the agreement;
(b)the terms of the agreement do not contravene s 55 of the Act (which deals with the interaction between the National Employment Standards and enterprise agreements); and
(c)the agreement passes the better off overall test (BOOT).
BOOT
General principles
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Act, that commenced operation on 6 June 2023.
Under transitional arrangements, amendments made by Part 16 of Schedule 1 to the Amending Act in relation to the BOOT requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. The better off overall test provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the agreement was made before 6 June 2023. The variation to the Agreement was made on 9 October 2024.
Section 193(1) of the Act provides that an enterprise agreement passes the BOOT if the Commission is satisfied, as at the test time, that each award covered employee, and each reasonably foreseeable employee, for the enterprise agreement would be better off overall if the enterprise agreement applied to the employee than if the relevant modern award applied to the employee. The “test time” is when the application for approval of the enterprise agreement is made.[2]
In Armacell Australia Pty and Others the application of the BOOT was explained by the Full Bench in the following manner:[3]
“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement.”
This principle is now enshrined in s 193A(2) of the Act.
The BOOT is not applied as a line-by-line analysis. It is a global test requiring consideration of advantages and disadvantages to relevant employees.[4] An enterprise agreement may pass the test even if some award benefits have been reduced, as long as overall, those reductions are more than offset by the benefits of the enterprise agreement.[5]
Ultimately the application of the BOOT is a matter that involves the exercise of discretion, and it involves a degree of subjectivity or value judgement.[6]
It is clear from the references to “each … employee” in section 193(1) of the Act that every employee to whom the enterprise agreement will apply, if approved, must be better off overall than if the relevant modern award applied to the employee. It is not enough that a majority or most of the employees to whom the enterprise agreement will apply, if approved, will be better off overall than if the relevant modern award applied.[7]
The Commission must give consideration to any views relating to whether an enterprise agreement passes the BOOT that have been expressed by any of the following:
(a)the employer or employers covered by the agreement;
(b)the award covered employees for the agreement; and
(c)a bargaining representative for the agreement.[8]
Further, the Commission must give primary consideration to a common view (if any) relating to whether the agreement passes the BOOT expressed by all of the following:
(a)the bargaining representative(s) of the employer; and
(b)the bargaining representative(s) of award covered employees for the agreement (other than a bargaining representative that is not an employee organisation).[9]
In considering whether or not an agreement passes the BOOT, the Commission may only have regard to patterns or kinds of work, or types of employment, if they are reasonably foreseeable at the test time. In considering what is reasonably foreseeable, the Commission must have regard to the nature of the enterprise to which the agreement relates.[10]
The Commission must determine whether a particular pattern or kind of work, or type of employment, is reasonably foreseeable for the purposes of s 193A(6) if a view is expressed by any of the following that it is, or is not, reasonably foreseeable:
(a)the employer covered by the agreement;
(b)the award covered employees for the agreement;
(c)a bargaining representative for the agreement.[11]
Genuine Agreement
Relevant principles
Section 186(2)(a) of the Act requires that the Commission be satisfied that the variation to the Agreement was genuinely agreed. Section 188 goes on to set out certain matters that the Commission must take into account or be satisfied of in determining whether an agreement has been genuinely agreed. Relevantly for present purposes, s 188(1) of the Act requires the Commission to take into account the Statement of Principles made under section 188B in determining whether it is satisfied that the agreement was genuinely agreed.
On 12 May 2023, the Commission issued the Statement of Principles pursuant to s 188B of the Act. I have taken those principles into account in deciding the application to vary the Agreement.
Further, s 188(4A) of the Act states the Commission cannot be satisfied that an agreement was genuinely agreed unless it is satisfied that the employer complied with s 180(5) of the Act. Section 180(5) requires an employer to take all reasonable steps to explain the terms of an enterprise agreement and the effect of those terms and ensure that the explanation is provided in an appropriate manner taking into the particular circumstances of the employees who will be covered by the agreement.
The purpose of the requirement in s 180(5) is to “enable the relevant employees to cast an informed vote: to know what it is they are being asked to agree to and to enable them to understand how wages and working conditions might be affected by voting in favour of the agreement”.[12]
Employee concerns
Numerous employees covered by the Agreement have raised concerns with the Commission about the application to approve the variation to the Agreement. The employees who have raised those concerns do not wish to be identified. The Commission has respected those wishes and has communicated the concerns to Qantas and the employee bargaining representatives for their response without identifying the name(s) of employees who raised the concerns.
I have taken into account all the concerns raised by employees in relation to the application to approve the variation to the Agreement, together with responses provided by Qantas, the FAAA and the TWU to those concerns. The concerns raised by employees include the following matters:
(a)Prior to the current Agreement, Qantas cabin crew were split into two different work groups. The first part comprised crew employed prior to 2007 and the second part comprised crew employed after 2007. To add complexity to this, some crew had voluntarily opted onto part 2 from part 1 for access to the A380 flying. During the negotiations for the current Agreement, Qantas claimed that all crew must move onto part 2 conditions as the system could not manage the two different base rates of pay. Therefore, crew employed prior to 2007 (part 1) were forced onto the part 2 base rate of pay and given a supplementary payment to bring their rate of pay up to the part 1 pay rate (even though it falls short of this). This was a huge loss for Qantas (part 1) employees as any overtime and additional hours pay are calculated at the new base rate which is essentially half that of the previous rate.
(b)One of the main concerns with the variation Qantas is proposing is that they are only offering the pay increase to QCCA (former part 2) employees. And this is now a much higher hourly rate for Qantas Cabin Crew Australia Crew as apposed to its legacy crew.
(c)Despite a proposed 30% pay increase, QCCA employees will continue to earn approximately $25,000 less annually than their Qantas counterparts performing identical roles. This disparity undermines the principle of “equal pay for equal work”.
(d)Currently, QCCA crew numbers are approximately 2400 and Qantas crew only number 800.
(e)The vote for this variation was strongly aligned with securing access to ULRF for the future. And during joint roadshows by Qantas and the FAAA, crew were warned that if the vote did not result in a yes, it would mean job losses and result in Qantas hiring more off shore cabin crew. This created duress and affected the voting which resulted in a strong yes vote.
(f)It is contended that Qantas has leveraged the fact that QCCA forms a larger part of the cabin crew workforce and by offering them a substantial pay increase, engineered a yes vote to the proposal. Some employees strongly believe the same pay increase should be extended to the Qantas workgroup also. Since the pay rise to QCCA is not defined in terms of reason and the voting and the variation are aligned with future productivity by all crew, some employees strongly believe that all crew under the Agreement should have been entitled to a pay increase, not just the majority who were all hired by Qantas through its third party labour hire company, QCCA. All employees are covered under the same Agreement, and had to be on the same base rate for the current Agreement, so some employees cannot understand how the employers can morally, ethically and legally move away from this. Some employees find it discriminatory towards the legacy crew to not receive a pay increase. It is contended that Qantas cannot have it both ways: they can’t force employees onto the same base rate of pay and then elect to give only one group within that a pay increase.
(g)Overtime is achieved on the longer trips and really only accessible to those who are not burdened by childcare and other family carer responsibilities at home. So essentially these crew members will not achieve any real financial gain whatsoever under the varied Agreement.
(h)The proposal to vary the Agreement is a blatant attempt to stop any same job same pay (SJSP) challenge in the future due to QCCA crew moving onto being Qantas crew (the legacy crew) which removed the SJSP obstacle of a third party labour hire perception.
The FAAA’s close relationship with Qantas management raises concerns about conflicts of interest.
(j)The FAAA has used its Facebook page to discuss objections raised by employees to the application for approval of the variation to the Agreement.
(k)When the Agreement was being negotiated in 2021 and 2022, crew voted overwhelmingly no to vote down the Agreement. However, within a little over two weeks, and with little or no amendments, it was voted up with a very high majority well over 90%. This was because crew were coerced and bullied into voting yes. They were told that if they did not vote yes, the company would make an application to the Commission to terminate the enterprise agreement meaning employees would be back on the modern award. The modern award would have seen someone at a Flight Attendant pay scale lose $40.00 per hour. Other union officials were saying employees could all be sacked. This was after the world had literally been shut down following Covid lockdowns and people were desperate to return their roles.
(l)As a direct result of voting in favour of the Agreement in 2022, employees have lost some great conditions they fought hard to achieve over many years.
(m)Qantas employees have not received a pay rise for at least six years and are essentially earning what they earned 15 years ago after losing conditions in the Agreement. The cost of living crisis is having a huge impact on the ability of employees to save for a home loan, holidays or family outings.
(n)The Agreement outlines a pay structure with incremental increases that may not keep pace with inflation or industry standards, potentially eroding real wages over time.
(o)Regardless of the concerns raised by crew during the delivery of the roadshows, no amendments were made to even reflect employee concerns. Essentially, it was a deal struck by both parties in secrecy and it was take it or leave it, but if you leave it, this is what you will lose.
(p)Qantas employees covered by the Agreement were given the chance to vote on the variation even though they were not impacted by the changes to wage rates paid to QCCA employees.
(q)The proposed variation to the Agreement constitutes a breach of Qantas’ duty of care, compromising crew wellbeing and safety in favour of operational flexibility, particularly insofar as the variation permits 24 hour periods of planned duty and 26-hour unplanned duty periods.
(r)The proposed integration of the traditional 17.5% annual leave loading into the base salary diminishes transparency and reduces the distinct financial benefits employees traditionally receive during leave periods.
(s)Qantas has not adequately informed employees about the Commission’s rejection of the variation to the Agreement. Instead, employees have only learned about these objections through posts on the Union Facebook Group Page.
Consideration
The FAAA and TWU are bargaining representatives in relation to the proposal to vary the Agreement. Neither the FAAA nor the TWU chose to express a view about whether the Agreement, as varied, passes the BOOT. Accordingly, there is no common view on that matter.
Having regard to all the benefits and detriments in the Agreement compared to the relevant awards, I am comfortably satisfied that, as at the ‘test time’, each award covered employee, and reasonably foreseeable employee, for the Agreement would be better off overall if the Agreement, as varied, applied to the employee than if the relevant award applied to the employee. The Agreement passed the BOOT when it was approved in 2022. The variations made to the Agreement make it more beneficial relative to the relevant awards, notwithstanding that Qantas employees who were employed prior to 17 December 2007 do not receive a pay increase under the varied Agreement.
I have considered each of the matters raised by employees with the Commission in relation to the application for approval of the variation to the Agreement. A number of those concerns are not relevant to the matters I am required to take into account under the Act when determining whether or not to approve the proposed variation to the Agreement. For example, many of the alleged events which took place prior to the making and approval of the Agreement in 2022 are not relevant, other than for context, to the application for approval of the variation.
I make the following observations in relation to a number of the concerns raised by employees:
(a)The variation provides for pay increases to both QCCA employees and Qantas employees employed on or after 17 December 2007, but not for Qantas employees employed prior to 17 December 2007. It also provides for increases to the "additional hourly pay" and overtime rates for QCCA employees and Qantas employees employed on or after 17 December 2007, as well as for Qantas employees employed prior to 17 December 2007.
(b)The Agreement, both as originally made and as proposed to be varied, provides for different amounts to be paid to different groups of employees doing the same job. However, the requirements for approval of an enterprise agreement do not include that all employees covered by the agreement be provided with the same benefits, even where employees are doing the same work and contributing in the same way to productivity in the workplace. It is quite common for different groups of employees (often employed at different periods of time) to be provided though ‘grandfathering’ or other arrangements with different benefits under a single enterprise agreement. The new ‘same job same pay’ provisions in Part 2-7A of the Act do not apply to different groups of employees who are employed by the same employer(s) and who are covered by the same enterprise agreement. Two of the key considerations under the Act for approval of an enterprise agreement, or a variation to such an agreement, are whether all employees covered by the agreement will be better off overall under the agreement compared to the relevant award(s) and whether the agreement was genuinely made. Differences between benefits provided to employees under an enterprise agreement do not, of themselves, have a significant bearing on satisfaction of the BOOT or the question of genuine agreement.
(c)The explanatory material provided to employees in relation to the proposed variation of the Agreement has been provided to the Commission. I have read that material. It provides a fair and accurate account of the variation and its effect on employees. I am satisfied that the explanatory material afforded employees an opportunity to make an informed vote on the proposed variation. The explanatory material does not suggest that employees were placed under duress to vote in favour of the proposed variation.
(d)All employees covered by the Agreement were given the opportunity to vote on the proposed variation. This was both appropriate and required by the Act.
(e)The fact that QCCA crew have been offered the opportunity to take up direct employment with Qantas is not required or facilitated by the variation to the Agreement. It is a separate matter.
(f)Qantas continues to have a legal obligation to ensure the health and safety of its employees at work. To the extent that the variation to the Agreement permits longer working hours on long range flights, Qantas will need to manage risks associated with employee fatigue and safety.
(g)Contrary to the belief of some employees who have communicated with the Commission, I have not rejected Qantas’ application for approval of the variation. I have raised issues with Qantas and invited responses to those issues. This decision is my first and only determination of the variation application.
I am satisfied, taking into account the Statement of Principles, that the variation to the Agreement was genuinely agreed. The material before the Commission establishes to my satisfaction that Qantas took all reasonable steps to explain the terms of the varied Agreement, and the effect of those terms, to employees and ensured that the explanation was provided in an appropriate manner taking into the particular circumstances of the employees covered by the Agreement. The balance of the pre-approval requirements in s 180 of the Act were also met.
There are no serious public interest grounds for not approving the variation.
I am satisfied that each of the requirements of ss 186, 187, 188, 210 and 211 of the Act as are relevant to this application for approval of the variation to the Agreement have been met.
I raised with Qantas and the employee bargaining representatives whether there was a requirement under s 205A of the Act for the Agreement, as varied, to include a workplace delegates’ rights term. I am satisfied that there is no such requirement, for the following reasons:
(a)Section 205A of the Act was introduced by the Fair Work Legislation Amendment (Closing Loopholes) Act 2023. Section 96 of Schedule 1 of that Act provides that section 205A does not apply in relation to an enterprise agreement if, before 1 July 2024, the employer concerned asks the employees to approve the agreement by voting for it, and by that vote employees approve the agreement, and the Commission approves the agreement.
(b)The Agreement was made on 14 March 2022 and approved by the Commission on 29 March 2022.
(c)Further, the approval requirements for a variation of an enterprise agreement are set out in section 211 of the Act. Section 211(1)(a) provides that Commission must approve the variation if it is satisfied that had an application been made under (relevantly) section 185, the Commission would have been required to approve the agreement under section 186.
(d)Section 211(2)(a) of the Act provides that for the purposes of the Commission deciding whether it is satisfied of the matter referred to in section 211(1)(a), it must take into account subsections 211(3) and (4). Neither of those subsections require the Commission to be satisfied the variation includes a workplace delegates' rights term.
Conclusion
For the reasons given, I approve Qantas’ proposed variation of the Agreement.
Pursuant to s 216 of the Act, this variation will operate from 26 November 2024.
DEPUTY PRESIDENT
[1] Fair Work Act 2009 (Cth) s 211
[2] Fair Work Act 2009 (Cth) s 193(6)
[3] [2010] FWAFB 9985 at [41]
[4] SDA v Beechworth Bakery Employee Co Pty Ltd[2017] FWCFB 1664 at [12]; s 193A(2) of the Act
[5] Re Australia Western Railroad Pty Ltd T/A ARG – A QR Company [2011] FWAA 8555 at [8]; NTEIU v University of New South Wales[2011] FWAFB 5163 at [47]
[6] TWU v Jarman Ace Pty Ltd[2014] FWCFB 7097 at [28]
[7] Loaded Rates Agreements [2018] FWCFB 3610 at [100]
[8] Fair Work Act 2009 (Cth) s 193A(3)
[9] Fair Work Act 2009 (Cth) s 193A(4)
[10] Fair Work Act 2009 (Cth) s 193A(6)
[11] Fair Work Act 2009 (Cth) s 193A(6A)
[12] CFMMEU v Ditchfield Mining Services Pty Ltd[2019] FWCFB 4022 at [69], applying One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77 at [115]
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