Surveillance Australia Pty Ltd T/A Leidos Airborne Solutions v Australian Federation of Air Pilots
[2023] FWC 3078
•27 NOVEMBER 2023
| [2023] FWC 3078 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Surveillance Australia Pty Ltd T/A Leidos - Airborne Solutions
v
Australian Federation of Air Pilots
(C2023/6948)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 27 NOVEMBER 2023 |
Appeal against decision [2023] FWC 2427 of Commissioner Connolly at Melbourne on 24 October 2023 in matter number C2023/4181 – stay application – stay granted.
This decision concerns an application by Surveillance Australia Pty Ltd T/A Leidos - Airborne Solutions for a stay order pursuant to s 606 of the Fair Work Act 2009 (Cth) (Act). The application is made in the context of an appeal against a decision[1] issued by Commissioner Connolly on 24 October 2023. The decision concerns a dispute arising in accordance with clause 1.12 of the Surveillance Australia Pilot and Observer Enterprise Agreement 2016 (Agreement), which the Commissioner arbitrated under s 739(4) of the Act.
The Agreement applies to the appellant and its employees engaged as aircrew, being persons holding duties essential to the operation of an aircraft in flight, including pilots and observers. The respondent, Australian Federation of Air Pilots (AFAP) is one of two registered organisations covered by the Agreement.
The appellant’s operations primarily involve supporting Australian Border Force surveillance activities, 365 days of the year. The appellant has implemented fly in fly out (FIFO) arrangements with certain pilots for the performance of such work.
The dispute as initially raised by the AFAP concerned the question of whether an individual flexibility arrangement (IFA) pursuant to clause 1.14 of the Agreement could be used to vary an employee’s entitlement to annual leave. The question to be determined by the Commission was framed in the following way: “Whether the Individual Flexibility Arrangements (“IFA”) provided in clause 1.14 of the [Agreement] can be applied to employees’ annual leave entitlements.”
In summary, the Commissioner concluded that it is not permissible for an IFA, or any other instrument purporting to have the same effect, to vary or limit an employee’s annual leave entitlement.[2] The Commissioner was satisfied that the appellant’s practice of planning annual leave to be taken during FIFO off swing periods varies or seeks to vary an employee’s annual leave entitlements and is not permissible.[3]
The appellant contends that the effect of the decision is that it cannot agree in advance with its pilots to take annual leave as part of their off swing period.[4] It submits that the conclusion that such agreed arrangements are inconsistent with s 88(1) of the Act is erroneous. Further, it is said that the Commissioner’s conclusion that all off swing periods are rostered days off is a syllogistic fallacy.
By its Form F7 Notice of Appeal,[5] the appellant seeks a stay of the entirety of the decision pending the hearing and determination of its appeal. The stay is opposed by the AFAP.
Relevant principles
Section 606 of the Act gives the Commission the discretionary power to stay the operation of the whole or part of a decision the subject of an appeal. Section 606(1) of the Act provides as follows:
“If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order.”
In deciding whether to exercise its discretion to grant a stay order, the Commission must be satisfied that the appellant has an arguable case, with some reasonable prospects of success, both in respect of permission to appeal and the substantive merits of the appeal.[6] Further, the balance of convenience must weigh in favour of the order subject to appeal being stayed.[7] Accordingly, both “elements” are necessary conditions to the grant of a stay.
In determining a stay application, the Commission must assess the strength of the appellant’s case without the benefit of hearing the appellant’s full argument and usually without the opportunity to undertake a full analysis of the case materials. Accordingly, the consideration of whether the appellant raises an arguable case with some reasonable prospects of success is to be undertaken against that context and is necessarily a preliminary assessment only.
Appeal grounds
The appellant raises nine grounds of appeal. It is contended that the Commissioner erred in the following ways:
The Commissioner erred in the proper construction of s 88(1) of the Act and clause 6.1 of the Agreement, finding that agreements between an employer and employee planning multiple future periods of annual leave over an extended period were inconsistent with the National Employment Standards (NES) and the Agreement.
The Commissioner erred by erroneously equating off swing days as part of a FIFO roster with “rostered days off” under the Agreement.
The Commissioner erred in finding that the agreements made between the appellant and individual employees required those employees to take annual leave on their rostered days off.
The Commissioner erred in the proper construction of the NES and the Agreement, finding that off swing days as part of a FIFO roster cannot include a period of annual leave “whether that is by agreement or not.”
The Commissioner (a) erred in the construction of clause 1.14 of the Agreement and/or s 202 of the Act, and/or (b) mistook the facts in finding that the common law agreements under which the employees agreed to take annual leave during their off swing days as part of a FIFO roster were either an IFA or an “instrument purporting to have the same effect of an IFA.”
The Commissioner acted on a wrong principle and/or did not take into account a material consideration when stating that “it has not been necessary to determine whether the annual leave terms proposed have been genuinely or not genuinely agreed between the employer and the affected pilots.”
The Commissioner erred by not finding that the annual leave proposal was genuinely agreed by those employees that had agreed to it.
The Commissioner mistook the facts in finding that an effect of the agreements made between the appellant and individual employees was to prevent an employee from taking an extended period of annual leave by agreement.
By reason of the above, the Commissioner erred in finding that the annual leave proposal by the appellant varied or sought to vary an employee’s annual leave entitlements as provided for by the Agreement and the NES.
Arguable case with some reasonable prospects of success
Appeal grounds (1), (2) and (4) concern the proper construction of the Agreement. The conclusions reached by the Commissioner in relation to those matters are subject to the correctness standard.[8] For the reasons that follow, I am satisfied that the appellant has made out an arguable case, with some reasonable prospects of success, both in relation to the grant of permission to appeal and the merits of the appeal, in connection with appeal grounds (1), (2) and (4), and thereby (9).
The AFAP contends that appeal grounds (1) and (2) mischaracterise the conclusions reached in the decision. It submits that the Commissioner did not find that agreements for taking leave for multiple future periods of time were not consistent with the NES or the Agreement. Nor, it is submitted, did the Commissioner equate off swing days with “rostered days off” under the Agreement.
For the purposes of determining the stay application, I am not persuaded that grounds (1) and (2) mischaracterise the Commissioner’s findings. Such a conclusion does not appear to be borne out upon a review of the decision. The decision records the following finding at [110]:
“However, as the AFAP have identified, there are a number of points of contention that arise with the submissions made by the Respondent. Principally, that the precise wording of the NES at s.88(1) supports a position that “Paid annual leave may be taken for a period agreed between an employee and his or her employer” not for an agreement in perpetuity or for the period of an IFA or common law contract as proposed by Surveillance Australia.”
It appears to follow that the Commissioner found that s 88(1) of the Act precludes the parties from reaching agreed arrangements as to when annual leave would be taken “in perpetuity or for the period of an IFA or common law contract.” This finding is challenged by appeal ground (1).
Further, the Commissioner concluded at [98] of the decision that he was “not convinced that the 12 off swing days proposed by the employer as rostered days off in these circumstances can include a period of annual leave, whether that is by agreement or not.” It appears to follow that the Commissioner concluded that annual leave cannot be taken in the off swing period because they are rostered days off. This finding is challenged by appeal ground (2).
As to appeal ground (4), the appellant contends that the Commissioner erred by concluding that off swing days as part of a FIFO roster cannot include a period of annual leave, whether by agreement or not. Ground (4) arises from the conclusion at [98] of the decision summarised at [16] above. The AFAP submits that this ground is not arguable because the Commissioner’s conclusion is correct. The AFAP says that the Agreement does not contemplate including a period of annual leave in an employee’s off swing days and accordingly, the arrangement adopted by the appellant is not permitted by s 93(3) or s 55(4) of the Act, whether or not it is agreed. The AFAP relies on Australian Federation of Air Pilots v HNZ Australia Pty Ltd (HNZ)[9] in support of its position.
The practice of planning annual leave to be taken during FIFO off swing periods was the subject of consideration by the Western Australian Industrial Magistrates Court in Jones v Odyssey Marine No 1.[10] The decision concluded that arrangements for annual leave could lawfully be made wherein FIFO workers use their annual leave in their paid off-duty periods immediately after the on-duty periods in which the annual leave accrued. The Court relied, in part, upon the approach taken by the Commission in Australian Maritime Officers' Union and Ors v Curtis Island Services Pty Ltd,[11] which concerned dispute proceedings involving the performance of work on an even time roster involving “on-duty’ and “off-duty” periods. The first instance conclusion that the relevant annual leave provisions were satisfied pursuant to arrangements involving all leave being taken in non-duty or off-roster periods was undisturbed by a Full Bench of the Commission on appeal.[12]
The appellant contends that the Commissioner’s findings are inconsistent with these decisions, and with arrangements in other industries where FIFO work is performed. Further, the appellant submits that the Commission has endorsed the approach of taking annual leave during the off swing period of a FIFO roster in (a) various enterprise agreement approval decisions, and (b) the approach to arranging annual leave in the Mining Industry Award 2020.[13] The appellant says that if the decision is left undisturbed, arrangements for taking annual leave during the off swing period will be inconsistent with the NES, even where agreed.
The AFAP submits that these decisions and materials are distinguishable. It says that the decisions referred to at [18] were made in the context of enterprise agreements that expressly provide for annual leave to be taken during the off swing period, contrary to the Agreement here, which does not contain a provision to that effect. In the absence of such a term in the Agreement, the AFAP disputes that it is open to the appellant to rely upon a variety of other instruments to have that effect, having regard to s 93(3) of the Act. Further, the AFAP says that decisions considering annual leave arrangements that have been authorised through a statutory means do not mean that the appellant’s approach, which is taken outside that statutory framework, is permissible.
Further, the AFAP rejects that the various enterprise agreement approval decisions relied upon by the appellant have any probative value. The AFAP submits that the appellant’s rights will not be determined through Commission decisions approving unrelated enterprise agreements containing provisions dealing with taking annual leave as part of a FIFO roster.
The authorities referred to at [18] arguably recognise that there is capacity for FIFO employees to agree with their employer to take annual leave in off swing periods without contravening the NES. The decision under appeal concluded that such agreed arrangements could not be made, in summary because they are inconsistent with s 88(1) of the Act and because an employee cannot take annual leave during an off swing period because such days represent their rostered days off. I consider that the appellant has raised an arguable case that the Commissioner’s construction of the NES and the Agreement in the manner described in grounds (1), (2) and (4) is erroneous. I am satisfied that the appellant’s argument has some reasonable prospects of success, both as to permission to appeal and the merits of the appeal. This includes the extent to which the decision in HNZ is distinguishable having regard to the nature of the appellant’s arrangements, which involve agreement with individual pilots as to the taking of annual leave (not imposed upon an employee by the terms of the enterprise agreement). That the appellant has an arguable case with some reasonable prospects of success as to grounds (1), (2), (4) and thereby (9), both as to permission to appeal and the merits of the appeal, weighs in favour of the grant of a stay.
It is therefore not necessary to consider the other grounds relied upon by the appellant. For the purposes of the stay application, it is sufficient that there is an arguable case, with some reasonable prospects of success, in relation to one of the appeal grounds.
Balance of convenience
It is for the appellant to satisfy the Commission that the balance of convenience favours a stay. In support of its position, the appellant relies on the witness statement of its Head of Operations, Mr Thomas Smallwood.[14] Mr Smallwood was cross-examined at the stay hearing and the relevant aspects of that examination is considered in the analysis that follows.
Mr Smallwood’s evidence is that the appellant has entered into agreements for the acquittal of annual leave during the FIFO off swing period with five of nine affected pilots. The evidence sufficiently establishes that two pilots currently rostered pursuant to FIFO arrangements have not objected, upon consultation, to ongoing observation of their agreed annual leave arrangements pending the appeal.[15] Two further pilots are currently in training and are expected to be checked to line[16] in late December 2023 or early January 2024. These employees have also not objected, upon consultation, to the acquittal of their annual leave during their off swing period in accordance with arrangements initially made in July 2023.[17]
The circumstances of (a) a pilot with agreed annual leave arrangements, but who is on unpaid leave until late March or early April 2024, and (b) a pilot in training who is not expected to be checked to line until late March or early April 2024 do not, in my view, bear materially upon the following analysis.[18]
If a stay is granted, the appellant’s agreed annual leave arrangements with the pilots discussed at [25] above will be honoured pending determination of the appeal. I consider this provides certainty to the pilots’ future rosters including, where relevant, over the Christmas and New Year holiday period. Conversely, if a stay is not granted, a consequence may be the cancellation of their agreed annual leave rosters to give effect to the decision. Any resultant disruption to a pilot’s otherwise agreed annual leave plans for the period pending the Full Bench decision will be irreversible. I consider that this prejudices the affected pilots as well as potentially other pilots impacted by consequential changes necessary to rosters over the relevant period, to ensure 365-day coverage to the Australian Border Force on a 24-hour, 7-day basis.
With respect to the counterfactual, if a stay is granted and the appeal is unsuccessful, the appellant will restore any annual leave taken during the off swing period to the pilots’ annual leave balances. Through the evidence of Mr Smallwood, the appellant has proffered the following undertaking:[19]
“In the event that its appeal is unsuccessful, Surveillance Australia undertakes to re-credit to employees covered by the [Agreement] the annual leave taken during off swing periods as agreed under arrangements of the kind considered in the Decision.”
The AFAP submits that if the stay is granted and the appeal is unsuccessful, the appellant cannot return the opportunity the pilots have lost to take annual leave over the Christmas and New Year period in the “usual” way, and this is not cured by the undertaking. I have taken this position into account when considering the four pilots identified at [25] above. However, the AFAP’s contention that these employees are prejudiced is undermined by Mr Smallwood’s evidence that they have not objected to their agreed annual leave arrangements continuing, pending the appeal. Mr Smallwood’s evidence in this respect is not the subject of serious challenge, notwithstanding the AFAP’s general observation that the genuineness of a pilot’s agreement to such arrangements is not known. It follows that I do not consider that prejudice will accrue to the four relevant pilots identified at [25] in the event a stay is granted.
The remaining three pilots do not currently have agreements with the appellant addressing when they will take annual leave.[20] I do not consider that any prejudice will accrue to these employees by the issuance of a stay, as the status quo with respect to the way their annual leave is acquitted will be unchanged. To the extent the grant of stay would permit a negotiation between the appellant and each of these pilots about taking annual leave during the off swing period, such arrangements could be implemented only by agreement (and following any agreement, with the protection of the appellant’s undertaking). This ameliorates, in my view, any potential prejudice to the three pilots arising from a stay. I otherwise accept Mr Smallwood’s evidence that in the event agreement is not reached with these employees about taking annual leave during the pilot’s off swing period for consistency with other pilots, their ongoing employment with the appellant will be unaffected.
I am satisfied that the balance of convenience weighs in favour of the issuance of a stay. The preceding analysis demonstrates the absence of any significant prejudice to the relevant pilots should the stay be granted, and the existence of prejudice to the pilots should the stay be refused.
Conclusion
Having regard to the above matters and the conclusions reached, I am satisfied that I should exercise my discretion to order that the decision be stayed pending determination of the appeal. There are no issues of a discretionary kind which weigh against the exercise of my discretion to do so.
The stay order is issued with this decision.[21]
DEPUTY PRESIDENT
Appearances:
Mr B Avallone, of Counsel, with K. Sweatman, on behalf of the appellant
Mr J Marks and Mr D Stephens, on behalf of the respondent
Hearing details:
2023.
Melbourne:
November 24.
[1] [2023] FWC 2427
[2] Ibid at [20], [119]-[120]
[3] Ibid at [119]-[120]
[4] Ibid at [98]
[5] Dated 13 November 2023
[6] Edghill v Kellow-Falkiner Motors Pty Ltd[2000] AIRC 785 at [5] approved on appeal in Kellow-Falkiner Motors Pty Ltd v Edghill[2000] AIRC 786
[7] Ibid; See also Coal and Allied Operations Pty Limited v Crawford and Others (2001) 109 IR 409 at [13]
[8] UGM Mining Services Pty Ltd v CFMMEU[2021] FWCFB 1639 at [13]; NTEU v La Trobe University [2015] FCAFC 142; (2015) 255 IR 238 at [104]; CPSU v State of Victoria (Department of Justice)[2014] FWCFB 6153 at [8]; Pawel v AIRC (1999) 94 FCR 231, 238-239
[9] [2015] FWCFB 3124 at [22]; cf Appeal Book 71 at [285]-[286]
[10] [2020] WAIRC 00118
[11] [2015] FWC 1836, see in particular [43] and [50]
[12] Australian Institute of Marine and Power Engineers, The v Curtis Island Services Pty Ltd[2015] FWCFB 6093
[13] Clause 22.5(b)
[14] Exhibit 1
[15] Ibid at [17(a)]
[16] Ibid at [8]
[17] Ibid at [17(b)]
[18] Ibid at [17(c)] and [18]
[19] Ibid at [23]
[20] Ibid at [20]
[21] PR768679
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