Qantas Airways Limited v Da Ros

Qantas Airways Limited (Qantas) appealed to the High Court of Australia against a decision of the Full Federal Court which had affirmed a judgment in favour of Mr Da Ros. The dispute concerned the interpretation of clause 17.3 of the Qantas Airways Limited Enterprise Agreement 2004 (the EA), which provided for the payment of a redundancy allowance to employees whose positions were made redundant. Mr Da Ros had been employed by Qantas for 20 years and was made redundant in 2006. He was paid a redundancy allowance calculated by reference to his years of service, but he contended that the allowance should have been calculated by reference to his base salary plus a component of his annual leave loading.

The central legal issue before the High Court was whether the phrase "base salary" in clause 17.3 of the EA included annual leave loading for the purpose of calculating the redundancy allowance. Qantas argued that "base salary" referred only to the fixed rate of pay for the position, excluding any additional entitlements such as leave loading. Mr Da Ros contended that "base salary" was intended to encompass all components of his regular remuneration, including the annual leave loading, which was a predictable and recurring component of his earnings.

The High Court, comprising Hayne and Crennan JJ, allowed the appeal. Their Honours reasoned that the ordinary meaning of "base salary" in the context of an enterprise agreement, absent any express exclusion, should be interpreted to include all components of remuneration that are regularly and predictably paid to an employee. They found that the annual leave loading, being a fixed percentage of ordinary pay paid annually, was such a component. Therefore, the Court concluded that the Federal Court had erred in its interpretation of clause 17.3, and that Mr Da Ros's redundancy allowance should not have included the annual leave loading in its calculation.

The High Court ordered that the appeal be allowed and the judgment of the Full Federal Court be set aside. The matter was remitted to the Federal Court for further orders consistent with the High Court's judgment.