Transport Workers’ Union of Australia

[2019] FWCA 5449

[2019] FWCA 5449

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Transport Workers’ Union of Australia
(AG2017/4329)

AERO-CARE COLLECTIVE AGREEMENT 2012
[AE899834]

Airport operations
SENIOR DEPUTY PRESIDENT HAMBERGER	SYDNEY, 6 AUGUST 2019

Application for termination of the Aero-Care Collective Agreement 2012 – comparison with Airline Operations–Ground Staff Award 2010 – split shifts – termination not contrary to the public interest – termination is appropriate in all the circumstances – agreement terminated.

[1] On 20 September 2017, the Transport Workers’ Union of Australia (TWU) applied to the Fair Work Commission (the Commission) under s.225 of the Fair Work Act 2009 (Cth) (the FW Act) for termination of the Aero-Care Collective Agreement 2012 1 (the Agreement).

[2] On application by Aerocare Flight Support Pty Ltd (Aerocare), the employer covered by the Agreement, I adjourned 2 this application pending the Federal Court of Australia’s (the Federal Court’s) determination of matter no. NSD1814/2017. Rangiah J of the Federal Court handed down his judgment in that matter on 25 January 2019.

[3] I note that Aerocare has changed its name to Swissport Australia Pty Ltd since this application was lodged. However, for clarity, I will refer to it as Aerocare throughout this decision.

The hearing

[4] After the Federal Court judgment of 25 January 2019, I issued fresh directions for the filing of evidence and submissions, and heard the application on 8 and 9 May 2019.

[5] At the hearing, Mr A Howell, counsel, appeared with Mr M Doherty, solicitor, for the TWU. Mr F Parry QC appeared with Mr M Follett, counsel and Ms L Mummé, solicitor, for Aerocare. No other parties sought to be heard.

[6] The TWU tendered witness statements from:

•  Wendy Carr, the TWU’s former Director of Legal and Operations; 3

Shane O’Brien, the TWU’s Director of Aviation Campaigns; 4 and

Therese Walton, the TWU’s National Industrial Officer / Negotiator. 5

[7] Aerocare tendered witness statements from:

•  Gregory Shelley, Aerocare’s General Manager, Employee Relations; 6 and

Lucienne Mummé, Partner at Johnson Winter & Slattery, solicitors for Aerocare. 7

[8] All witnesses except Ms Mummé were cross-examined.

Background

Commission proceedings

[9] On 24 April 2017, Aerocare applied to the Commission for approval of a new enterprise agreement, the Aerocare Collective Agreement 2017 8 (the 2017 agreement), to replace the Agreement. On 31 August 2017, Commissioner Wilson dismissed that application.9 Aerocare unsuccessfully appealed the Commissioner’s decision to a Full Bench of the Commission.10

[10] On 15 May 2018, Aerocare applied to the Commission for approval of another enterprise agreement, 11 the Aerocare Collective Agreement 2018, to replace the Agreement. As with the application before me, that application was adjourned pending the determination of Federal Court matter no. NSD1814/2017. It is currently before Commissioner Wilson for consideration.

Federal Court proceedings

[11] On 15 May 2018, a Full Court of the Federal Court dismissed 12 Aerocare’s application to quash Commissioner Wilson’s decision in relation to the 2017 agreement and the Full Bench decisions that dismissed its appeal against the Commissioner’s decision.

[12] On 25 January 2019, Rangiah J of the Federal Court handed down his judgment 13 interpreting provisions of the Airline Operations–Ground Staff Award 201014 (the Award). In the absence of a new enterprise agreement, the Award is the industrial instrument that would apply to Aerocare employees should the Agreement be terminated.

[13] Aerocare had sought a declaration, inter alia, that the Award does not prevent employees from working split shifts, that is, ‘two paid periods of work within a single day that are split by a period when the employee is not working and not paid’ 15. His Honour held that:

•  PSEs would most appropriately be classified as part-time shiftworkers if the Award applied to them. 16

•  Clause 28.3(d) of the Award, which states that ‘[e]xcept at the regular change-over of shifts, an employee must not be required to work more than one shift in each 24 hours’, applies to part-time shiftworkers, and would therefore apply to PSEs if the Award applied to them. 17

•  The meaning of ‘one shift’ in cl 28.3(d) of the Award is

‘… one period of paid work that must be rostered for at least four consecutive hours. It remains “one shift” if it is broken by an unpaid meal break, but not if it is broken by another period where the employee is not working and unpaid.’ 18

•  Accordingly, since what Aerocare describes as a ‘split shift’ in fact comprises two periods of paid work that are broken by a period where the employee is not working and unpaid (i.e. two shifts, under the Award), Aerocare would not be able to require PSEs (or indeed, any other employee) to work split shifts if the Award were to apply. 19

The 2018 TWU survey

[14] Mr O’Brien annexed to his witness statement the results of a survey the TWU had conducted in February 2018 20 (the 2018 survey), which he said was about ‘seeking workers [sic] views on the termination of the 2012 Agreement’.21 The 2018 survey comprised questions about employees’ hours of work, working patterns including split shifts, whether employees wanted an enterprise agreement that resulted in them being ‘better off overall’ than under the Award and finally, whether they supported the termination of the Agreement.

[15] Regrettably, I find there is very little, if any, probative value in the results of the 2018 survey when it comes to ascertaining the views of the employees covered by the Agreement, because:

•  Aerocare definitively established at hearing that there were no measures in place to restrict access to the survey to employees covered by the Agreement. Indeed, the evidence is clear that at least one person who was not an Aerocare employee completed the survey. 22 Additionally, given that 73 of the survey respondents said they were full-time employees,23 but Mr Shelley’s evidence is that Aerocare only had 40 full-time employees altogether at the relevant time,24 it is plausible that considerably more than one person who was not an Aerocare employee responded to the survey.

•  There do not appear to have been any measures in place to ensure that any given person (whether covered by the Agreement or not) could only respond to the survey once, which means that it is possible that the results could have been skewed by one person responding multiple times. 25

•  208 people responded to at least part of the survey. 26 Even if the integrity of the survey were intact (that is, even if each response to the survey was completed by an Aerocare employee covered by the Agreement, and there were no duplicates), that is still only 9.96% of the 2088 employees27 covered by the Agreement at that time.

•  Of those 208 respondents, only 86 (4.12% of the employees covered by the Agreement at that time) responded to the final question asking if they supported termination of the Agreement. 28 I cannot reasonably learn anything about the views of the other (at least) 95.88% of employees covered by the Agreement from the survey results, even if those results were reliable. The most I can find is that a considerable majority (89.53%)29 of those who responded to the final question supported termination of the Agreement, but this is not significant in the circumstances.

Comparing the terms and conditions of the Agreement and the Award

[16] The Agreement nominally expired on 19 February 2017. 30

[17] The vast majority of Aerocare’s employees are engaged as Permanent Secure Employees (PSEs). 31 The Agreement relevantly provides:

‘9.5 Employees engaged as a PSE are entitled to a minimum of 3 hours pay per shift irrespective of the hours actually worked, at the rate of pay for the employee’s classification and level in which the employee is engaged for each shift.

9.6 A PSE is entitled to a minimum of 60 hours pay at the rate of pay for the Employee’s classification and level, over a Roster Period [28 days], subject to:

(a) The work being available for which a PSE can be rostered or required to work;

(b) The PSE being available for work for a minimum 60 hours over the Roster Period.’

[18] Aerocare dedicated most of its cross-examination of Ms Carr and Ms Walton to highlighting discrepancies and alleged errors in their respective comparisons of the Agreement and the Award, 32 and demonstrating that Ms Carr and Ms Walton did not have detailed knowledge of the hours Aerocare employees worked as at the hearing date, their shift patterns or how those patterns may have changed between the date they prepared their analyses and the hearing date.33 Despite this, it is not necessary for me to make specific findings about what employees working particular rosters would be paid under either instrument; after all, this is not an application that turns on the satisfaction of the better off overall test (BOOT).

Rates of pay for ordinary hours

[19] I do, however, accept that how the Agreement’s terms and conditions compare to those of the Award is a relevant consideration. Suffice to say that the following facts are not contentious:

•  The Agreement’s base rates of pay for ordinary hours are higher than the Award’s rates of pay for corresponding classifications.

•  The Award provides for the payment of shift penalty rates for shiftworkers’ ordinary hours when worked at certain times of the day on weekdays, 34 and when worked on weekends or public holidays.35

•  The Agreement provides four rates of pay for each PSE classification: Monday-Friday, Saturday, Sunday and public holiday rates. 36

[20] I find that the majority of Aerocare employees are more likely than not to work hours that would attract shift penalty rates under the Award. In making this finding, it is reasonable for me to take notice of the nature of airport operations. They are patently not ‘nine-to-five’ workplaces, and Mr Shelley acknowledged that the PSEs’ roster is based around and directed by Aerocare’s clients’ flight schedules. 37 Mr Shelley acknowledged that about two-thirds of the shifts he analysed as part of Aerocare’s application for approval of the 2017 agreement would attract a shift penalty rate if the Award were to apply.38 He would not concede except in the broadest terms that this continued to be the case at as the hearing date.39

Split shifts

[21] Aerocare relies on cl 9.1 of the Agreement to enable it to roster PSEs to work split shifts: 40

‘9.1 Employees may be engaged in Casual, PSE or FTE [Full Time Employee] categories of employment and work may be performed in one or more shifts per day.’

[22] This is supported by cl 9.8:

‘9.8 The PSE’s ordinary hours of work may be worked in a span (which may not be continuous) on any day of the week.’ [my emphasis]

[23] I find that if I were to terminate the Agreement – and therefore, cause the Award to apply to Aerocare’s employees – then one of the most significant changes in circumstances would be that Aerocare would not be able to require its employees to work split shifts. I am bound by, and agree with, the Federal Court’s declaration in this regard.

[24] This is not to say that it would be a breach of the Award for employees to work split shifts under any circumstances. Rangiah J expressly ‘carved out’ such a finding in his decision:

‘I have concluded that under the Award, an employer cannot require an employee to work split-shifts. I have not decided that a split-shift cannot be worked, although each period of work within a split-shift will be one shift, and must, therefore, consist of at least four consecutive hours. …’ 41 [emphasis in original]

[25] It is probably the case that, were the Award to apply, an Aerocare employee could legitimately work split shifts by entering into an individual flexibility arrangement to vary the application of the terms of the Award relating to ‘arrangements for when work is performed’. 42 However, there are various safeguards in cl 7 of the Award against varying those arrangements other than with the employee’s genuine agreement, and the employee is entitled unilaterally to revert to the terms of the Award as written with 13 weeks’ notice. There would be more hoops for Aerocare to jump through to enable employees to work split shifts under the Award than they do under the Agreement, and an employee would always retain the right either to refuse from the outset, or agree for a time and then give notice that he or she wished to revert to the terms of the Award.

[26] I also note Mr Shelley’s evidence that, were Aerocare to revert to the Award, it:

‘… would not roster employees to work split-shifts and would instead roster a different employee to work the second shift in the split-shift. [Aerocare] may also employ more employees to work the second shift in a split-shift. The impact of this on existing employees will be that they are likely to receive less hours of work per week and less income, or if available, may need to work more days per week in order to maintain their income.’ 43

Overtime

[27] I accept Aerocare’s proposition that since the Award does not permit an employer to require an employee to work split shifts in the first place, then it is logical that the Award would not mention what an employer should pay an employee if he or she work a split shift. More specifically, I accept that the Award does not expressly provide that the second half of a split shift should attract overtime rates. As stated above, I also accept that conducting a BOOT analysis is not an express requirement of s.226 of the FW Act. However, I think the most reasonable way to compare employees’ entitlements under the Agreement to those under the Award in this regard is to treat the second part of a split shift as overtime, as the TWU has done in its calculations.

Current pay rates

[28] I accept Mr Shelley’s evidence that it is currently paying its PSEs at rates higher than those in the Agreement. 44 However, I agree with the TWU that, for the purposes of this application, what employees would receive were the Award to apply should be weighed against what Aerocare is required to pay and provide under the Agreement at the moment – not what it is in fact paying and providing. It is always open to an employer to decide to be more generous than it is legally obliged to be, but that is discretionary, not guaranteed. For that matter, in situations where what Aerocare is currently paying its employees is more generous than the Award requirements, it could continue to pay those amounts even if the Agreement were terminated and the Award applied.

Overall comparison

[29] Having regard to my previous observations and the evidence presented during the hearing, I am satisfied that overall, the terms and conditions of employment under the Agreement are less beneficial than those provided for in the Award, for a substantial proportion of Aerocare’s employees.

The legislation

[30] Sections 225 and 226 of the FW Act provide:

‘225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.’

Consideration

Public interest: s.226(a)

[31] As previously noted, I am satisfied that taken as a whole, the terms and conditions provided for by the Agreement are less beneficial than those provided for in the Award, for a substantial proportion of Aerocare’s employees.

[32] It would generally not be in the public interest to have the employment of employees regulated by an agreement that provides less favourable terms and conditions than the relevant award, especially more than two years after the nominal expiry date of the agreement in question.

[33] Accordingly, I am satisfied that termination of the Agreement would not be contrary to the public interest.

Views of parties covered by Agreement: s.226(b)(i)

[34] The TWU supports termination of the Agreement. Aerocare opposes it. As canvassed above, there is minimal evidence before me about the views of employees covered by the Agreement.

Circumstances of parties covered by Agreement, including likely effect of termination on them: s.226(b)(ii)

[35] If the Agreement were to be terminated, the employees would be entitled to the generally more beneficial provisions of the Award. It is possible that, as Mr Shelley said, Aerocare would be less likely to engage employees for a second shift if these shifts had to be paid for at overtime rates. This might mean that, in practice, many employees would suffer a reduction in their weekly hours. Nevertheless, termination of the Agreement would generally be beneficial for the bulk of the workforce.

[36] I do not consider that termination of the Agreement would have any significant effect on the TWU.

[37] I accept Aerocare’s evidence that termination of the Agreement would have a significant detrimental effect on its business.

[38] Weighing up all these factors, I am satisfied that it would be appropriate to terminate the Agreement in all the circumstances. Accordingly, I am required to terminate the Agreement.

Date of effect

[39] I am conscious that reverting the employees to the Award immediately would involve substantial disruption to Aerocare’s business. 45 Moreover, as previously noted, Aerocare has applied to the Commission to approve a new enterprise agreement.

[40] I consider that in these circumstances, Aerocare should be given a reasonable period in which to put into place, if possible, a new BOOT-compliant agreement. Accordingly, I have decided that the termination of the Agreement should take effect six months from the date of this decision.

Conclusion

[41] Since I am satisfied that it is not contrary to the public interest to terminate the Agreement, and it is appropriate to do so in all the circumstances, I order that the Agreement be terminated with effect from 6 February 2020.

SENIOR DEPUTY PRESIDENT

Appearances:

A Howell, counsel, with M Doherty, solicitor, for the Transport Workers’ Union of Australia.

F Parry QC with M Follett, counsel, and L Mummé, solicitor, for Swissport Australia Pty Ltd.

Hearing details:

Sydney.

2019.

May 8, 9.

Printed by authority of the Commonwealth Government Printer

<AE899834 PR711046>

 1   AE899834.

 2   [2018] FWC 2056.

 3   Exhibit 1.

 4   Exhibit 3.

 5   Exhibit 7.

 6   Exhibit 9.

 7   Exhibit 15 – the exhibit comprises only [20]-[28] of the document.

 8   Commission matter no. AG2017/1424.

 9   Aerocare Flight Support Pty Ltd T/A Aerocare Flight Support[2017] FWC 4311.

 10   Aerocare Flight Support Pty Ltd T/A Aerocare Flight Support v Transport Workers’ Union of Australia; Australian Municipal, Administrative, Clerical and Services Union[2017] FWCFB 5826; Aerocare Flight Support Pty Ltd T/A Aerocare Flight Support v Australian Municipal, Administrative, Clerical and Services Union; Transport Workers’ Union of Australia [2018] FWCFB 59.

 11   Commission matter no. AG2018/2008.

 12   Aerocare Flight Support Pty Ltd v Transport Workers’ Union of Australia & Anor [2018] FCAFC 74.

 13   Swissport Australia Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union & Anor (No 3) [2019] FCA 37 (‘Swissport v ASU (No 3)’).

 14   MA000048.

 15   Swissport v ASU (No 3) [2019] FCA 37 [2].

 16 Ibid [79].

 17 Ibid [94].

 18 Ibid [133].

 19 Ibid [134].

 20   Exhibit 3 annexure SOB5.

 21 Ibid [63].

 22   PN595-8; exhibit 17.

 23   Exhibit 3 annexure SOB5, question 1.

 24   PN858.

 25   PN503-5.

 26   Exhibit 3 annexure SOB5.

 27   PN858.

 28   Exhibit 3 annexure SOB5, question 10.

 29   Ibid.

 30   [2013] FWCA 965 [28].

 31 Exhibit 9 [19].

 32   PN196-259, PN722-6, PN733-88,

 33   PN76-92, PN112-20, PN678-97, PN717-9, PN727-9.

 34   MA000048 cls 30.3, 30.4.

 35   Ibid cl 30.7.

 36   AE899834 sch A.2.2.

 37   PN869-87, PN940, PN1137.

 38   PN1120-6.

 39   PN1129-39, PN1176-81.

 40   PN908-12.

 41   Swissport v ASU (No 3) [2019] FCA 37 [136].

 42   MA000048 cl 7.1(a).

 43 Exhibit 9 [58].

 44   Ibid [51](d); PN989.

 45   See e.g. exhibit 9 [44]-[51].