The Australian Licenced Aircraft Engineers Association
[2015] FWCFB 1696
•26 MARCH 2015
| [2015] FWCFB 1696 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.
(EM2013/120)
AIRLINE OPERATIONS - LICENSED AIRCRAFT ENGINEERS - QANTAS AIRWAYS LIMITED - AWARD 2005
AIRLINE OPERATIONS - TECHNICAL SALARIED STAFF - QANTAS AIRWAYS LIMITED - AWARD 2005 [TRANSITIONAL]
AIRLINE OPERATIONS (QANTAS AIRWAYS LIMITED) SHORTER HOURS AWARD 2005
AIRLINE OPERATIONS (QANTAS AIRWAYS LIMITED) LONG SERVICE LEAVE AWARD 1999
Airline operations | |
VICE PRESIDENT WATSON | MELBOURNE, 26 MARCH 2015 |
Application by The Australian Licenced Aircraft Engineers Association for a modern enterprise award for Airline Operations - Licensed Aircraft Engineers - Qantas Airways Limited - Award 2005, Airline Operations - Technical Salaried Staff - Qantas Airways Limited - Award 2005 [Transitional], Airline Operations (Qantas Airways Limited) Shorter Hours Award 2005, Airline Operations (Qantas Airways Limited) Long Service Leave Award 1999 - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - case for modern enterprise award not established - application dismissed - Schedule 6 Item 4, Schedule 6 Item 6, Schedule 6 Item 9 - Fair Work Act 2009, s.134.
Introduction
[1] The Australian Licenced Aircraft Engineers Association has made an application under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the following awards:
- Airline Operations - Licensed Aircraft Engineers - Qantas Airways Limited - Award 2005 (LAME Award);
- Airline Operations - Technical Salaried Staff - Qantas Airways Limited - Award 2005 [Transitional] (TSS Award);
- Airline Operations (Qantas Airways Limited) Shorter Hours Award 2005 (Shorter Hours Award); and
- Airline Operations (Qantas Airways Limited) Long Service Leave Award 2009 (LSL Award).
[2] At the hearing of this matter Mr G Norris appeared for The Australian Licenced Aircraft Engineers Association (ALAEA) and Ms T Firth of counsel and Ms J Oldmeadow appeared for Qantas Airways Limited (Qantas). At the hearing of the matter on 8 December 2014 the ALAEA withdrew its application to replace the third and fourth of the above awards. It pressed its application to make a modern enterprise award to replace the first two of the above awards.
The Legislative Task
[3] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Transitional Act which provides:
“(5) In deciding whether or not to make a modern enterprise award, and in determining the content of that award, the FWC must take into account the following:
(a) the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
(b) whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process;
(c) the content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
(d) the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;
(e) the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
(f) the likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g) the views of the persons covered by the enterprise instrument;
(h) any other matter prescribed by the regulations.”
[4] It is also necessary to consider the modern enterprise awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise, in the context of the modern awards objective and the minimum wage objective, that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. The modern awards objective, set out in s.134 of the Fair Work Act 2009 (the Act), is as follows:
“134 The modern awards objective
What is the modern awards objective?
(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.”
[5] We turn to consider these factors in relation to the circumstances of this case. It will be necessary to consider the factors in relation to the LAME Award and the TSS Award as part of this analysis.
The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5)(a)
[6] The origins of the LAME Award can be traced to 1975. Over ensuing years the award applied to licensed aircraft engineers who were employed by Qantas and who were members of the ALAEA. At the time, Qantas only operated internationally. Aircraft engineers employed by domestic airlines were covered by an industry award since 1982. Consequent upon the merger of Qantas and Australian Airlines in 1993 licensed engineers employed on domestic aircraft came under the coverage of the Qantas award and the aircraft types in the Qantas award were expanded accordingly. The award was consolidated in 1994.
[7] The TSS Award was first made in 1976. The award was varied over the years on a number of occasions to expand the classifications and to deal with the Qantas, Australian Airlines merger.
[8] Since the early 1990s the parties have dealt with terms and conditions of employment by way of a series of enterprise agreements. The latest agreements EBA9 utilised the LAME Award and the TSS Award for the purposes of applying the Better Off Overall Test.
[9] The size and importance of Qantas and the unique nature of licensed aircraft engineering work were probably the contributing factors in the making of the enterprise awards rather than industry awards.
Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4(5)(b)
[10] The Airline Operations (Ground Staff) Award is the modern award that would apply to the work in question if a modern enterprise award is not made. The ALAEA states that it would not cover all classifications covered by the TSS Award. Qantas submits that the Manufacturing and Associated Industries and Occupations Award would apply to technical staff covered by the TSS Award.
The content of the modern awards referred to in paragraph (b): Item 4(5)(c)
[11] The parties made conflicting submissions as to which of the awards contain inferior conditions. In our assessment the modern awards contain superior conditions in some respects and the enterprise awards contain superior conditions in other respects. Overall, the enterprise awards appear to contain more favourable conditions and terms more directly aligned to the operations of Qantas.
The terms and conditions of employment applying in the industry: Item 4(5)(d)
[12] The airline industry is complex and is characterised by a large number of employers and an increasing number of specialist contractors providing services to the airline operators. There has been an increase in competition and a drive for considerable cost savings associated with the introduction of low cost airlines.
[13] Since December 2013 applications to modernise nine enterprise awards applying to Qantas have either been dismissed or withdrawn. The only outstanding applications are the current matters relating to the ALAEA.
The extent to which the Awards provide enterprise-specific terms and conditions of employment: Item 4(5)(e)
[14] Given their origin, the two enterprise awards covered by this application were clearly formulated with the operations of Qantas in mind. However the significant changes in operations and the focus on enterprise agreements has rendered the content of the awards less and less relevant. In our view there are few terms of the awards that can be described as enterprise specific.
The likely impact on the persons covered by the Awards, and the persons covered by the modern awards referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award: Item 4(5)(f)
[15] Given the application of regularly negotiated enterprise agreements we are of the view that the termination of the enterprise award would not have any immediate impact on employees or the employer. There may well be an impact at the time the agreements are renegotiated. However, as the terms of the respective awards are not significantly different overall, we conclude that any impact will be minor.
The views of the persons covered by the enterprise instrument: Item 4(5)(g)
[16] Qantas is opposed to the making of a new modern enterprise award for these groups of employees. The ALAEA and implicitly its members support the making of a new enterprise award.
Any other matter prescribed by the regulations: Item 4(5)(h)
[17] No other matters are prescribed.
Should a modern enterprise award be made?
[18] We have had regard to the above factors and the other criteria we are required to apply. It is clear that the enterprise awards applying to the various parts of the Qantas workforce arose from its history as an international airline and a significant Australian employer. Its industrial regulation was complex and dispersed to cover the very many different groups of employees. However the airline industry has since changed dramatically. Qantas is no longer a purely international airline. It is no longer government owned. It has a significant domestic arm and a low cost subsidiary to compete in an increasingly low cost market - both domestically and internationally. This means that the original justification for making an enterprise award is no longer present. Any ongoing coverage by an enterprise award would need to be justified in the current circumstances.
[19] We have found in relation to other groups of Qantas employees that the modern awards objective is better served by having the relevant Qantas employees covered by the same award covering similar employees of other employers. For the two groups of employees who remain covered by an enterprise award the same result is compelling.
[20] We note the opposition of Qantas to the making of an enterprise award for the two remaining groups. We also note the role that enterprise agreements have had in regulating actual terms and conditions for these groups and other Qantas employees since the early 1990s. The application of industry awards, with classifications that can be expanded if a case is established for doing so, is the overwhelming industry practice and the practice for other groups of Qantas employees.
[21] We are not satisfied that a case has been made out to make a modern enterprise award covering the two groups of employees. Coverage by industry awards will not make material changes and will not be unfair. In our view that is the best application of the modern awards objective and modern enterprise awards objective.
Conclusions
[22] For the above reasons, the application by the ALAEA is dismissed. Pursuant to Item 9(3) of Schedule 6 to the Transitional Act the two awards sought to be modernised terminate as at the date of this decision.
VICE PRESIDENT WATSON
Appearances:
Mr G Norris for The Australian Licenced Aircraft Engineers Association.
Ms T Firth of counsel and Ms J Oldmeadow for Qantas Airways Limited.
Hearing details:
2014.
Melbourne.
8 December.
Final written submissions:
ALAEA further submissions on 12 December 2014.
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) additional submissions on 5 December 2014.
Qantas further submissions on 24 November 2014.
Printed by authority of the Commonwealth Government Printer
<Price code C, AP839983, AT839984, AW838870, AW765549, PR561900 >
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