Transport Workers' Union of Australia v Australian Air Express Pty Ltd

[2019] FWC 1013

[2019] FWC 1013

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Transport Workers' Union of Australia
v
Australian Air Express Pty Ltd
(C2018/1996)

COMMISSIONER SPENCER BRISBANE, 15 FEBRUARY 2019

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

INTRODUCTION

[1] An application pursuant to s.739 of the Fair Work Act 2009 (the Act) was made by the Transport Workers’ Union of Australia (the Applicant) in relation to a dispute arising under the On Airport Business Development Agreement (AaE/TWU) 2014 (the Agreement), with Australian Air Express Pty Ltd (the Respondent).

[2] In summary terms, the Applicant alleged that the terms of the Agreement required (in the circumstances as set out) the Respondent’s utilisation of staff employed by Qantas Ground Services Pty Ltd (QGS) at its Brisbane Airport facility required the Respondent to pay QGS employees the same rates of pay as if they had been employed directly by the Respondent (commonly referred to as “site rates”).

[3] The Respondent submitted that QGS was not a “labour hire agency” for the purposes of the Agreement, and that the requirement to pay QGS employees as if they had been direct employees of the Respondent was not enlivened.

[4] The matter was listed for conference however was unable to be resolved. The parties agreed on the following question for arbitration:

Whether, under clause 35 of the On Airport Business Development Agreement (AaE/TWU) 2014, employees of Qantas Ground Services Pty Ltd (QGS) (Employees) are required to be paid the rates of pay that apply to employees of Australian Air Express Pty Ltd (AaE) (Site Rates) and, if so, whether AaE is required to ensure that Site Rates are paid to the Employees when the Employees are performing the same work as AaE employees:

(a)  at the Domestic Freight Shed at Brisbane Airport; and/or

(b)  at any other location at Brisbane Airport at which AaE employees may be required to work.

The parties acknowledge that a determination of the above question may require the Commission to determine whether, for the purposes of the application of clause 35, the Brisbane Domestic Freight Shed is an 'AaE facility' and QGS is a 'Labour Hire Agency'. 1

[5] Directions were set for the filing of material and the matter was heard in Brisbane. The Applicant was represented by Mr M Gibian of Counsel, and Mr L Norris, Legal Officer of the Applicant, and the Respondent was represented by Ms H McKenzie and Ms F Whaley, of Ashurst Australia. Permission to appear was granted pursuant to s.596.

RELEVANT PROVISIONS OF THE ACT

[6] Pursuant to s.739 of the Act:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

RELEVANT PROVISIONS OF THE AGREEMENT

[7] The dispute resolution procedure is set out in cl.11 of the Agreement:

“11. DISPUTE RESOLUTION PROCEDURE

11.1 Resolving Issues

The parties agree to resolving issues in accordance with the procedure in clause 11.2 and to continue providing service to our customers without interruption or delay.

11.2 Dispute Procedure

Any dispute or claim about the application of the Agreement or application of the National Employment Standards shall be dealt with as follows:

11.2(a) The matter shall first be discussed by the aggrieved employees with their supervisor.

11.2(b) If not settled, the matter shall be discussed by the employee, and where requested by the employee a representative which may be an accredited Union representative, and the appropriate manager.

11.2(c) If not settled, the matter shall be further discussed by the employee, and where requested by the employee a representative that may be the Branch Secretary or other appropriate official of the Union, and the appropriate representative of AaE.

11.2(d) If agreement has not been reached, the matter shall then be discussed between the employee and a more senior representative of AaE and where requested by the employee a representative that may be the federal body of the Union.

11.2(e) If the matter is still not settled, it may be submitted to a member of the Fair Work Commission, for conciliation and if necessary, arbitration.”

[8] The dispute related to cl.35 of the Agreement, as set out:

“35. LABOUR HIRE AGENCIES

Employees of Labour Hire Agencies will be paid the same rates of pay for time worked within AaE facilities as if they had been a direct employee of AaE.”

SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE

[9] The Applicant submitted that the question for determination is whether QGS is a “labour hire agency” for the purposes of cl.35 above, and whether employees of QGS are entitled to be paid at the rates prescribed in the Agreement.

[10] The Applicant referred to the recent decision of Deputy President Anderson in Trakas v BPL Adelaide Pty Limited; and Ready Workforce (A Division of Chandler MacLeod) Pty Ltd T/A Chandler MacLeod (Trakas), 2 in which the Deputy President considered a labour hire arrangement as follows:

“[103] Based on the facts I have found, Mr Trakas came to be working at the Baiada factory on 2 April 2017 in consequence of a labour hire arrangement between Baiada and Chandler MacLeod. It was a triangular relationship in which Mr Trakas agreed to supply his labour to Chandler MacLeod (under the terms of the ‘Employment Application: Industrial’ between Mr Trakas and Chandler MacLeod) and in turn Chandler MacLeod agreed to place Mr Trakas into work at the Baiada factory and Baiada agreed to that placement (under the terms of the Labour Supply Agreement between Baiada and Chandler MacLeod).

[104] On the face of it, this was a typical labour hire arrangement in which the worker had no contract with the host firm (Baiada) but was an employee of and had a contract of employment with the labour hire firm (Chandler MacLeod).” 3

[Emphasis added]

[11] The Applicant submitted that the “essential characteristic” of a labour hire arrangement is the “triangular relationship” between the parties.

[12] It was submitted that this interpretation was consistent with the approach taken by the legislature in Queensland. The Labour Hire Licensing Act 2017 (Qld) (LHLA) defines“labour hire services” as follows:

“7 Meaning of provider and labour hire services

(1) A person (a provider) provides labour hire services if, in the course of carrying on a business, the person supplies, to another person, a worker to do work.

Examples of providers—

• a contractor who supplies workers to a farmer or fruit grower to pick produce for the farmer or grower

• a group training organisation or principal employer organisation under the Further Education and Training Act 2014 that supplies an apprentice or trainee to an employer

• an employment agency who on-hires temporary administration staff to a business

(2) Without limiting subsection (1), a provider provides labour hire services regardless of—

(a) whether or not the worker is an employee of the provider; and

(b) whether or not a contract is entered into between the worker and the provider, or between the provider and the person to whom the worker is supplied; and

(c) whether the worker is supplied by the provider to another person directly or indirectly through 1 or more agents or intermediaries; and

(d) whether the work done by the worker is under the control of the provider, the person to whom the worker is supplied or another person.

(3) However, a person does not provide labour hire services merely because—

(a) the person is a private employment agent under the Private Employment Agents Act 2005 ; or

(b) the person is a contractor who enters into a contract to carry out construction work within the meaning of the Building and Construction Industry Payments Act 2004 , section 10 , and engages subcontractors to carry out the work; or

(c) the person is, or is of a class of person, prescribed by regulation.

(4) A regulation may prescribe a person, or a class of person, under subsection (3)(c) only if the supply of a worker by the person or class of person is not a dominant purpose of the business ordinarily carried on by the person or class of persons.”

[13] The Applicant submitted that QGS had applied for, and been granted, a license under the LHLA.

[14] The Applicant also referred to the decision of the Full Bench in Transport Workers’ Union of Australia v Qantas Airways Limited; Q Catering Limited, 4 which examined the inception of QGS:

“[16] In 2009, Qantas established a new company known as Qantas Ground Services Pty Limited (QGS). The establishment of this company arose from the dispute between Qantas and the TWU over the intention of Qantas to outsource the bag room functions in Perth. As a result of discussions over this dispute, QGS was established to supply workers to perform bag room functions at Adelaide and Perth; ramp functions at Sydney Domestic Terminal for Qantas Link and supply labour hire employees for Qantas. The TWU made an enterprise agreement with QGS in 2009 (the QGS Agreement) which contains wages and allowances less than those contained in EBA7. The QGS Agreement was made on 24 June 2009 under s.333(d) of the Workplace Relations Act and has a nominal expiry date of 30 November 2012.

[17] Qantas presently utilises QGS to supply supplementary labour working alongside Qantas employees at Sydney Domestic Terminal, Melbourne, Brisbane, Adelaide, Perth, Canberra, Darwin, Townsville, Sydney International Terminal, Hobart and Cairns. The employees of QGS include employees formally engaged by other labour hire companies such as Blue Collar, Workforce International and Chandler McLeod (Ready Workforce). In the past Qantas has adopted a practice of paying labour hire providers, other than QGS, an amount based on the rate of pay for Qantas employees. The rates paid by Qantas to QGS with respect to QGS employees are based on the QGS Agreement. Qantas utilises QGS to operate and manage all ramp and bag room functions at the Sydney Domestic Terminal, and the bag room at Perth. Qantas engages other third parties to operate all ground handling functions at Port Hedland, Broome, Karratha, Newman and Kalgoorlie.” 5

[15] Further, the Applicant made reference to content on QGS’s website, in which QGS self-describes as being “established to provide a labour hire alternative to the Qantas Group under a certified TWU Agreement.”

[16] In relation to the construction of cl.35, the Applicant referred to the ordinary principles of interpretation of industrial instruments. 6 It was submitted that whilst the Applicant did not concede that cl.35 was ambiguous, if there was some uncertainty in its interpretation, the bargaining history between the parties supported the Applicant’s position.

[17] The Applicant outlined the history of cl.35 as follows:

“25. Clause 35 is but one in a long list of like clauses in prior agreements between the parties. Its presence is not atypical; many employee organisations seek to protect the rates of pay negotiated with what is commonly referred to as a “site rates” clause.

26. In 2004 a similar clause in the Business Development Agreement (AaE/TWU) 2004 was initially refused certification. The then clause 10.5 was in the following terms:

Labour Hire Agencies

Employees of Labour Hire Agencies will be paid the same rates of pay for time worked within AaE facilities as if they had been a direct employee of AaE.

27. Lloyd SDP (PR954467, Melbourne 20.12.04) initially held at the first instance that the clause did not relate to matters pertaining to the employment relationship between AaE and its employees. The decision was quashed on appeal (PR959284, Sydney 24.06.05). In quashing this aspect of the decision, the majority of the Full Bench noted the concerns held by TWU members and the intention of the clause in the following passage [37]:

...the TWU members and delegates were aware that flexibility afforded in that way, without appropriate safeguards, had the capacity to adversely impact on employees’ job security and their level of take home pay. They were aware that without safeguards in the agreement the company could have the work of employees performed by more lowly paid employees of labour hire companies which employees may not be adequately trained or experienced thus potentially impacting on occupational health and safety standards.

28. These concerns of employees and the TWU were not without an evidential basis. The affidavit of Mr. John Allan tendered at the first instance supports all the above points and was unchallenged.

29. Moreover, the unchallenged evidence of Mr. Allan was that the “site rates” clause in that agreement had resulted from enterprise bargaining; certain flexibilities had been granted to AaE in exchange for the site rates clause. To diminish the operation of the site rates clause would be to grant a windfall to AaE and, correspondingly, to deprive the TWU of a benefit that was fairly bargained for.

30. The same concerns have driven AaE members to include similar clauses in each agreement since and most recently, clause 35 in the current agreement.” 7

[18] The Applicant submitted that the purpose of cl.35 was clear: to promote job security by discouraging the outsourcing of the Respondent’s workforce. It was submitted that whilst QGS may not necessarily identify itself as a labour hire agency, the substance of activities it engages in are identical to that of a labour hire agency.

[19] Finally, in respect of the reference to “AaE facilities” in cl.35, the Applicant referred to the coverage clause in the Agreement, which states as follows:

“3. SCOPE AND FORMAL MATTERS

3.1 This Agreement shall be binding upon:

3.1(a) Australian air Express Pty Ltd (ACN 054 307 336);

3.1(b) Only employees who are employed in classifications at Attachment C of this Agreement and employed at locations specified at Attachment D; and

3.1(c) The TWU (after the TWU gives the Fair Work Commission notice in accordance with s.183 of the Act).

…”

[20] The Applicant noted that there is in fact no Attachment D to the Agreement. It was submitted that Attachment D to previous emanations of the Agreement provided as follows:

“”On” Airport locations are defined for the purposes of this BDA as those Airport facilities that have or could have direct airside access.

As such all existing and new staff working with AaE at these locations will be covered by this “On” airport BDA.”

[21] It was submitted that whilst the Applicant did not intend to expand the coverage of the Agreement by virtue of this dispute, the Commission could exercise its power pursuant to s.602 of the Act to correct the omission, or alternatively determine what is meant by the term “AaE facilities.”

[22] For these reasons, the Applicant submitted that the questions for arbitration should be answered as follows:

“44. It follows from the above that the Applicant's position on the questions for arbitration is as follows:

Under clause 35 of the On Airport Business Development Agreement (AaE/TWU) 2014, are Qantas Ground Services Pty Limited employees entitled to be paid the same rates as Australian air Express Pty Ltd (AAE) employees when performing the same work as AAE employees:

(a) at the facility where AAE employees are currently engaged to work at the Brisbane Airport;

45. Answer: Yes.

and

(b) at any other location on Brisbane Airport at which AAE employees may be required to work.

46. Answer: Yes, provided the location is within Attachment D of the On Airport Business Development Agreement (AAE/TWU) 2010.” 8

[23] The Applicant relied on the evidence of four witnesses. Mr Adam Carter, Branch Assistant Secretary of the Queensland Branch of the Applicant, provided an affidavit in these proceedings. Mr Carter’s affidavit exhibited a copy of the affidavit of Mr John Allan, formerly the Federal Secretary of the Applicant, that was filed in the proceedings before Senior Deputy President Lloyd referred to above.

[24] Whilst Mr Carter was not able to give evidence as to the truth of the contents of Mr Allan’s affidavit, nor was Mr Allan available to give evidence in these proceedings, the history of cl.35 was not in serious dispute between the parties and was evident from the prior proceedings and preceding enterprise agreements.

[25] Mr Denny Whitfield, Leading Hand of the Respondent, in his affidavit set out that in or about 2016, he recalled several labour hire staff previously employed by the labour hire company, Adecco being offered employment with QGC. He stated that once those employees accepted employment with QGC, despite them still performing the same work for the Respondent, they ceased receiving site rates.

[26] Mr Whitfield recalled that during negotiations for the Agreement, the Respondent had raised the prospect of removing cl.35 from the Agreement, however this was met with universal opposition.

[27] Mr Scott Connolly, Assistant General Secretary of the Australian Council of Trade Unions, gave evidence of the extensive history leading to the creation of QGS. Mr Connolly’s evidence was that QGS was created as a result of a dispute between the Applicant and Qantas Airways Limited (Qantas). The dispute first arose in 2007, and centred on Qantas’ utilisation of external labour hire agencies to replace its permanent workforce. Mr Connolly stated that whilst at this time Qantas did not reduce matters to writing, it was indicated that Qantas would pay labour hire staff at site rates. Mr Connolly stated that in 2009, Qantas moved away from paying site rates at its Perth Baggage Room.

[28] The dispute culminated in the initiation of further proceedings, and was the subject of a judgment of the Federal Court. 9 In 2009, with a view of resolving the dispute, the Applicant attended meetings with Qantas. Mr Connolly stated that as a result of these meetings, the Applicant agreed to the creation of a new entity (QGS), as a solution to Qantas’ “genuine labour hire needs,” on the understanding that Qantas would continue to predominately employ staff under its existing enterprise agreement, and that Qantas would enter into further discussions with the Applicant prior to implementing QGS elsewhere.

[29] Finally, Mr Richard Schmidt, Level 2 Ground Crew of QGS, provided an affidavit in these proceedings. Mr Schmidt was one of the employees Mr Whitfield referred to in his affidavit: formerly employed by Adecco however subsequently accepting a role with QGS at a reduced income. Mr Whitfield, in his statement reply, noted that supervision of QGS and Adecco employees is mainly performed by Leading Hands of the Respondent. He stated that any performance issues are first raised with Leading Hands prior to escalating the matter to a Qantas Freight Operations Manager. 10

[30] Mr Schmidt stated that he felt compelled to accept the position with QGS as it had been indicated to him that QGS would provide greater long term career prospects. Mr Schmidt maintained that Mr English indicated QGS represented greater long terms career prospects, however accepted that Mr English conditioned this by stating “this decision is for me to decide on my own and what suits my needs.” 11

SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE

[31] The Respondent submitted that pursuant to cl.11.2 of the Agreement, the Commission was only able resolve disputes or claims “about the application of the Agreement…,” and is prohibited from making any determination that would be inconsistent with the Act or the Agreement. 12 Accordingly, it was submitted that in interpreting cl.35 of the Agreement, the Commission must not “make a determination that confers a right, or imposes an obligation on a party to the dispute, that would either go beyond or be inconsistent with clause 35.”13

[32] In this regard, the Respondent submitted that cl.35 does not apply in the present circumstances. Pursuant to s.51(1) of the Act, an enterprise agreement “does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person.” Further, s.52(1)(b) of the Act states that an enterprise agreement will only apply an employer if the agreement covers the employer. An enterprise agreement covers an employer if “the agreement is expressed to cover (however described) … the employer.” 14

[33] The Respondent submitted that the Agreement is expressed to be “binding” on the Respondent (that is, Australian Air Express Pty Ltd) and does not apply to any other employing entity other than the Respondent. It was submitted that for cl.35 of the Agreement to apply, there are three conditions that must be satisfied, namely:

“(i) AaE has engaged QGS to provide workers to AaE;

(ii) the QGS employees perform work in AaE facilities; and

(iii) QGS is a ‘Labour Hire Agency’ within the meaning of the clause.” 15

[34] The Respondent outlined its history within the Qantas group of companies. Established in 1992 as a joint venture between Qantas and Australia Post, the Respondent was wholly acquired by Qantas Freight Enterprises Pty Ltd (Qantas Freight) in November 2012. Qantas Freight and QGS are wholly owned subsidiaries of Qantas.

[35] The Respondent does not carry out any business in its own right, does not own or lease any assets, and is not a party to any commercial contracts. Rather, the Respondent submitted, its role was confined to that of an “employer of a legacy workforce within the Qantas Freight business.” 16

[36] Conversely, the Respondent submitted that QGS was responsible for providing ground handling services to the Qantas group including baggage handling, ramp services, cabin presentation, ground transport and warehouse freight handling. Employees of QGS are covered by the Qantas Ground Services Pty Limited Ground Handling Agreement 2015.

[37] It was submitted that the decision to engage QGS employees at the Brisbane Domestic Freight Shed to work alongside employees of the Respondent, was made by Qantas Freight for its own benefit, rather than for the benefit of the Respondent.

[38] The Respondent submitted that the relationship between the Respondent and QGS was not commercial in nature, and the Respondent was not involved in decision about the provision of freight handling services for Qantas Freight. Accordingly, it was submitted that QGS was not engaged by the Respondent.

[39] Secondly, the Respondent submitted that cl.35 of the Agreement only applies to labour hire workers who perform work within “AaE facilities.” In considering the meaning of the term “AaE facilities,” the Respondent referred to the decision of the Full Bench in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd. 17

[40] The Respondent suggested that the following context is relevant for the purposes of interpreting the term:

“(a) The term appears in a provision that imposes an obligation on AaE (the employer to whom the Agreement applies) to pay AaE rates of pay to workers who are not covered by the Agreement and to whom the Agreement cannot apply (by virtue of section 52 of the FW Act);

(b) The purpose of the provision is to protect the job security of AaE employees by removing any financial benefit to AaE from engaging third party labour hire employees instead of its own employees. If the provision had any other purpose, it would not be a permitted matter for the purposes of section 172(1) of the FW Act;

(c) AaE can only comply with the obligation in respect of workers whose engagement is within the control of AaE; and

(d) AaE employees who are covered by the Agreement are engaged in freight handling operations and perform their work in freight handling sheds and around the airport terminals.” 18

[41] The Respondent submitted that the term “AaE facilities” should be interpreted to mean “freight handling premises that are owned, operated, leased, branded or otherwise controlled by AaE and at which AaE employees work at the direction of AaE.” 19

[42] It was submitted that since the Respondent’s acquisition by Qantas Freight in 2012, the Domestic Freight Shed at Brisbane Airport has been managed and controlled by Qantas Freight, and its lease is currently held by another subsidiary of Qantas, Express Freighters Australia Pty Limited.

[43] The Respondent submitted that the mere presence of employees of the Respondent at the Domestic Freight Shed does not render it an “AaE facility,” and that employees of Qantas, Adecco and QGS also perform work at the shed.

[44] Accordingly, it was submitted that the Domestic Freight Shed at Brisbane Airport was not an “AaE facility” for the purposes of cl.35.

[45] Finally, the Respondent submitted that QGS was not a labour hire agency for the purposes of the Agreement. It was submitted that the “core business” of QGS is to provide ground handling services to the Qantas group. To achieve this, QGS recruits and trains employees and allows them to progress through the classification structure into managerial and supervisory roles. In contrast, the Respondent submitted that labour hire agencies are commonly understood to be established to provide outsourced skilled and unskilled workers to other, unrelated businesses.

[46] The Respondent submitted that the fact that QGS has applied for and been granted a licence under the Labour Hire Licensing Act 2017 (Qld) was not determinate of its status as a labour hire agency within the meaning of cl.35. It was submitted that the legislation provides a broad definition for labour hire, and that many companies in Queensland (including Qantas itself) have applied for and been granted a license.

[47] The Respondent relied on the evidence of two witnesses. Mr Tony English, Regional Business Manager QLD/NT of Qantas Freight, provided a statement in these proceedings.

[48] Mr English stated that in 2016, he was responsible for all operational requirements of the freight business, including resourcing of the Qantas International and Domestic Freight Sheds at Brisbane Airport. He stated that during this time, work at the Domestic Freight Shed was performed by employees of the Respondent, and casual labour hire workers employed by Adecco. He stated that he believed the workers employed by Adecco were covered by the Airline Operations – Ground Staff Award 2010 and were paid site rates whilst working at the shed.

[49] He stated that in or about March 2016, there was a need for additional porter roles at the Domestic Freight Shed, which created an opportunity to recruit and train Adecco workers to fill the vacant roles. He circulated among Adecco workers an Expression of Interest document. He set out that a number of Adecco employees expressed an interest in the training opportunity. Mr English stated that five candidates were provided with training and were allocated to the vacant roster lines at the Domestic Freight Shed.

[50] Mr English indicated that the initial proposal for these Adecco employees was for them to be offered short term employment with the Respondent on a secondment basis, however he stated that this proposal was not accepted by the business and the workers remained employed by Adecco.

[51] In 2017, Mr English stated that he approached QGS to discuss the possibility of recruiting porters to fill the vacant roster lines at the Domestic Freight Shed. In April 2017, QGS advertised internally and externally for five porter roles, and invited the current employees of Adecco to apply.

[52] He stated that this proposal would provide “stability and permanency to the new porters, whilst also allowing some flexibility if the proposed freight shed integration impacted resourcing requirements in the short to medium term.” 20 He stated that there are currently six QGS employees employed working at the Domestic Freight Shed at Brisbane Airport.

[53] In response to the evidence of Mr Schmidt, who stated that he felt compelled to accept a position with QGS at a reduced income, Mr English stated that he explained to Mr Schmidt that QGS “offered stability of employment, sick and annual leave and the opportunity to join the Qantas Group (and obtain staff travel benefits), but that it was up to the individual whether they apply for a role with QGS.” 21 He denied that he indicated the Respondent would be moving away from using Adecco.

[54] Ms Cherie Lea Horan, Regional Terminal Manager QLD/NT for Qantas Freight, also provided a statement in these proceedings. Ms Horan gave evidence regarding the inception of the Respondent that was consistent with the evidence of Mr English.

[55] Importantly, Ms Horan stated that the Respondent employed a “legacy workforce,” and that there was no intention for the Respondent to recruit new employees and that natural attrition would reduce the workforce over time. She stated that Qantas Freight’s future staffing requirements would be provided by Qantas and QGS, with supplementary third party labour hire workers as required.

[56] Ms Horan stated that the Domestic Freight Shed was leased from Brisbane Airport Corporation Pty Limited to Express Freighters Australia Pty Limited, a subsidiary of Qantas Freight. She stated that equipment at the shed is owned or leased by either Qantas Freight Qantas.

[57] Ms Horan set out that currently, Adecco labour hire workers engaged to work at the Domestic Freight Shed are paid site rates. She stated that when the site rates clause at cl.35 of the Agreement was first introduced in the Business Development Agreement (AaE/TWU) 2004, the Respondent directly engaged labour hire employees to work in facilities it operated. She stated that today, the Domestic Freight Shed is operated by Qantas Freight, and it is Qantas Freight that engages the Adecco labour hire workers.

[58] Ms Horan stated that although the rate paid to employees of Adecco at the Domestic Freight Shed was higher than that paid to QGS employees, there were other important factors that made employment with QGS more beneficial. Ms Horan set out as follows:

“(a) As QGS is part of the Qantas Group, QGS employees are eligible for generous Qantas Group entitlements such as staff travel and access to company superannuation funds.

(b) QGS employees benefit from stability of employment on a permanent part-time basis (minimum 20 hours per week), as opposed to casual employment with Adecco. Permanent employment entitles QGS employees to such benefits as personal/carer's leave, annual leave and public holidays and long service leave.

(c) Employment under the terms of the QGS Enterprise Agreement is more beneficial than employment under the terms of the Award in the following respects:

(i) additional paid personal/carer’s leave (clause 23.1);

(ii) paid parental leave (clause 25);

(iii) paid domestic and family violence leave (clause 25A.1);

(iv) enhanced notice of termination of employment and severance pay (clause 29);

(v) employees in accumulation division or external funds receive an employer superannuation contribution rate of 10% (clause 31(e)).

(d) QGS provides its employees with extensive opportunities for career progression and development. QGS deploys its employees to all areas of the business, including baggage handling, ramp services, cabin presentation, ground transport and warehouse freight handling. Additionally, QGS employees have the opportunity to apply for internally advertised roles with other entities in the Qantas Group.

(e) Employees’ continuous service within the Qantas Group is recognised for all purposes, including leave entitlements and career progression.

(f) QGS employees are embedded within the culture of the Qantas Group, adhering to the Qantas Group values and bound by the Qantas Group Standards of Conduct Policy (and related policies).” 22

[59] Finally, Ms Horan stated QGS had evolved from an entity supplying workers as an alternative to labour hire, to one with over 2000 employees and the primary provider of ground handling services for Qantas, including baggage, ramp, fleet presentation, freight operations and transport.

CONSIDERATIONS

[60] The Applicant’s dispute relates to whether the Respondent is required to ensure that employees of QGS who perform work at the Domestic Freight Shed at Brisbane Airport, are paid site rates pursuant to cl.35 of the Agreement.

[61] The Applicant submitted that QGS is a labour hire agency for the purposes of the clause, and that work was being performed at an “AaE facility.” Therefore, it was posited that the Respondent was required to ensure site rates are paid at the Domestic Freight Shed. The Respondent contended that QGS was not a labour hire agency and further, that it was not engaged by the Respondent therefore cl.35 did not apply. Further, the Respondent submitted that the Domestic Freight Shed was not an “AaE facility.”

[62] In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri), 23 the Full Bench summarised the approach to be adopted with respect to the interpretation of enterprise agreements, as set out:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

 
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties. 

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

 
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning. 

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists. 

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement. 

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement. 

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations. 

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. 

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 24

[63] Determination of the questions for arbitration requires the Commission to undertake a construction exercise with respect to clause 35. On the words alone, of clause 35 it is not possible to construe the ordinary meaning of the clause or the obligations it may give rise to. The clause is ambiguous.

[64] Considering the clause in conjunction with the text of the agreement does not assist because crucial elements of the clause are not defined by the Agreement and given no content; “Labour Hire Agencies” and “Aae facilities” are not defined and do not appear anywhere else in the Agreement that may shed light on their meaning. Similarly, the place and arrangement of clause 35 in the Agreement does not assist in identifying an ordinary meaning of the provision.

[65] That the Agreement is an agreement made in accordance with the Act, and that the Agreement deals with persons or entities “covered by” such agreements does assist to some extent. To the extent that the Respondent submits that the clause cannot impose an obligation on, or a right in, a person or entity that is not “covered by” the Agreement is indisputable, and the submission is accepted. Thereofre, the question becomes, what obligation does clause 35 impose upon the Respondent, being an entity covered by the Agreement and to whom the Agreement applies.

[66] It is convenient to determine the meaning of ‘AaE facilities’ at the outset. The Applicant submits that the phrase should be construed as meaning, essentially, any location that would fall within Attachment D of the 2010 Agreement. The Respondent submits that the term should be construed as meaning any “freight handling premises that are owned, operated, leased, branded or otherwise controlled by AaE and at which AaE employees work at the direction of AaE”. I do not consider either of these interpretations is correct.

[67] As to the Applicant’s preferred construction, the exact status of ‘Attachment D’ has not satisfactorily been dealt with in the evidence. It does not appear to be in dispute that it has possibly been omitted from the Agreement in error, 25 although I note that Attachment D does not appear in the table of contents to the Agreement. Ultimately, this issue does not need to be determined.

[68] Attachment D is relevant to the scope of the Agreement. Clause 3.1(b) of the Agreement provides that the Agreement is “binding” upon:

“Only employees who are employed in classifications at Attachment C of this Agreement and employed at locations specified at Attachment D”

[69] Attachment D does not define or attempt to list facilities that may meet the definition of “AaE facilities”. If the Applicant’s construction is to be accepted that would mean clause 35 would impose an obligation on the Respondent in respect of a facility that meets the definition of “’On’ Airport locations” within Attachment D, but with which the Respondent has absolutely no involvement, control or power in relation to. Plainly, this cannot be correct.

[70] For this reason, I accept the Respondent’s submission. That is, the term “AaE facilities” must mean a facility with which AaE has a relevant relationship.

[71] The Applicant’s submissions and evidence regarding the context, history and purpose of the provision are acknowledged. It is clear that a substantial purpose of the provision was to bolster job security. The imposition of the obligation in clause 35, whatever that might be, was a disincentive for the Respondent to engage cheaper labour at AaE facilities, in place of AaE employees.

[72] It is not any facility that falls within the conception of AaE facilities. Nor is it any facility with which AaE has a passing or remote connection. The purpose of the provision is to oblige AaE to ensure employees on the site receive ‘site rates’. To interpret the provision as obliging AaE to do so where it has no control over such matters would be illogical. It must be a facility with which AaE has the ability to exert control, in some meaningful way, over the employees performing work at that site. The provision envisages that that is done through labour hire arrangements that may be in place. This may be undertaken through some proprietary rights, which most commonly would be in the form of ownership or a lease. Ownership of a facility or the existence of a lease may be very strong evidence that a facility falls within the meaning of “AaE facilities” but would not in every case be determinative. For example, AaE may own a facility but have encumbered its proprietary rights by way of a lease to another and otherwise have no control or relationship with the facility. In that instance, arguably, that is not an AaE facility to which the obligations of the provision would attract.

[73] The evidence of Ms Horan is that the Domestic Freight Shed is leased to Express Freighters Australia Pty Limited, a subsidiary of Qantas Freight, by Brisbane Airport Corporation Pty Limited. On the basis of this evidence, the Domestic Freight Shed is not an AaE facility for the purposes of clause 35.

CONCLUSION

[74] Given these assessments, the questions for arbitration (as set out below for convenience) are determined as follows:

“Whether, under clause 35 of the On Airport Business Development Agreement (AaE/TWU) 2014, employees of Qantas Ground Services Pty Ltd (QGS) (Employees) are required to be paid the rates of pay that apply to employees of Australian Air Express Pty Ltd (AaE) (Site Rates) and, if so, whether AaE is required to ensure that Site Rates are paid to the Employees when the Employees are performing the same work as AaE employees:

(a)  at the Domestic Freight Shed at Brisbane Airport; and/or

(b)  at any other location at Brisbane Airport at which AaE employees may be required to work.

The parties acknowledge that a determination of the above question may require the Commission to determine whether, for the purposes of the application of clause 35, the Brisbane Domestic Freight Shed is an 'AaE facility' and QGS is a 'Labour Hire Agency'”

[75] In relation to the first question, the answer is ‘no’, because the Domestic Freight Shed is not an AaE facility within the meaning of clause 35.

[76] In relation to the second question, it is improper to answer this question. The manner in which the question is worded by the parties is too broad. It is not possible, in the absence of evidence about any particular location to determine if “any other location” falls within the ambit of clause 35. To the extent the question can be answered, and on the basis that this second question for arbitration is limited to the consideration of site, clause 35 only operates in relation to AaE facilities, being a facility over which AaE has some meaningful control, being the ability to control employees working on the site.

[77] One final matter should be mentioned. That the Union and its members are concerned about the changing circumstances and the diminished obligations under clause 35, by such. This is understandable. However, an interpretation of industrial instruments is not predominately guided by fairness or reaching a just outcome. The change in circumstances since the Agreement was negotiated may (in the circumstances of the operations as presented) mean that the clause no longer has much work to do. Given the considerable history of the provision, the important aim of the provision in relation to job security and the most recent bargaining history in relation to the provision, accordingly consultation or discussion about the impact of the changing circumstances may well have been warranted. This view, however, is counterbalanced by the Respondent’s submissions and evidence, that it has maintained the job security of this group of employees, in circumstances where there have been changes to the business.

[78] The matter has been determined in response to the questions as provided by the parties. I Order accordingly.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

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 1   The Questions for arbitration were revised by consent of the Parties.

 2   [2018] FWC 1530.

 3   Ibid at [103] – [104].

 4   [2012] FWAFB 6612.

 5   Ibid at [16] – [17].

 6   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd [2017] FWCFB 3005.

 7   Outline of the Applicant’s Submissions dated 11 July 2018 at paras 25 – 30.

 8   Ibid at paras 44 – 46.

 9   Qantas Airways Limited v Transport Workers’ Union of Australia [2011] FCA 470.

 10   Statement in Reply of Denny Whitfield dated 15 August 2018 at at para 9.

 11   Further affidavit of Richard Graham Charles Schmidt affirmed 15 August 2018 at para 7.

 12   Fair Work Act 2009 s.739(5).

 13   Respondent’s Outline of Submissions dated 8 August 2018 at para 4.

 14   Fair Work Act 2009 s.53(1).

 15   Respondent’s Outline of Submissions dated 8 August 2018 at para 5.

 16   Ibid at para 11.

 17   [2017] FWCFB 3005.

 18   Respondent’s Outline of Submissions dated 8 August 2018 at para 20.

 19   Ibid at para 21.

 20   Witness Statement of Tony George English dated 8 August 2018 at para 15.

 21   Ibid at para 36.

 22   Witness Statement of Cherie Lea Horan dated 8 August 2018 at para 46.

 23   [2017] FWCFB 3005.

 24 Ibid at [114].

 25   PN1810.