Virgin Australia Regional Airlines Pty Ltd T/A Virgin Australia Regional Airlines v Australian Licenced Aircraft Engineers Association, The - [2023] FWC 1510

[2023] FWC 1510

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.425—Industrial action

Virgin Australia Regional Airlines Pty Ltd T/A Virgin Australia Regional Airlines
v

Australian Licenced Aircraft Engineers Association, The

(B2023/542)

COMMISSIONER SCHNEIDER

PERTH, 22 JUNE 2023

s.425 - Application for an order to suspend protected industrial action - cooling off - order not issued.

On 8 June 2023, Virgin Australia Regional Airlines Pty Ltd (the Applicant), applied to the Fair Work Commission (the Commission) for an order pursuant to section 425 of the Fair Work Act 2009 (Cth) (the Act). An order is sought in relation to protected industrial action (the PIA) being engaged in by employees of the Applicant who also are members of the Australian Licensed Aircraft Engineers Association (the Respondent).

The Applicant has also made an application, under section 234 of the Act, for an intractable bargaining declaration (the IBD Application).

The Applicant is seeking an order under section 425 of the Act for the suspension of the PIA, until such time as the IBD Application could be determined by the Commission. The Applicant submits that, should the IBD Application be successful, the PIA would cease and therefore this current application has been made pending the hearing of the IBD Application.

I delayed in making any form of interim order, having formed the view that I would not be granting any order in relation to the PIA. I have concluded that it would be contrary to the public interest to grant an interim order suspending the PIA if I would ultimately not be granting the suspension order sought.

A Hearing of the matter occurred on 13 June 2023. At the Hearing, the following witnesses were called to give evidence:

· Mr Stephen Purvinas (Mr Purvinas): Federal Secretary of the Australian Licensed Aircraft Engineers Association.
· Mr Nathan Miller (Mr Miller): Executive General Manager of Virgin Australia Regional Airlines.

Background & Bargaining History

The Applicant is an operator of a regional airline, based in Perth, which services approximately 21 intra-state destinations in Western Australia and 3 inter-state destinations across the country.

The Applicant’s operations are best described as falling into one of the below two categories:

· regular public transport (the RPT); and

· charter services.

The Applicant’s employees who are the subject of this application, and members of the Respondent, are covered by the Virgin Australia Regional Airlines Aircraft Engineers (Western Australia) Enterprise Agreement 2017 (the Current Agreement). The nominal expiry date for the Current Agreement passed on 7 February 2021.

Bargaining for the Proposed Agreement commenced in or around August 2020.

Bargaining between the parties to date has included:

· More than 21 bargaining meetings being held.

· The filing of an application under section 240 of the Act. That application was also dealt with by my Chambers, during which seven conferences were held by the Commission.

· PIA first occurring in October 2022, increasing in frequency and severity from March 2023.

· Two versions of the Proposed Agreement having been put to a ballot of employees and both having been voted down.

Legislation

Section 425 of the Act is set out below.

“425 FWC must suspend protected industrial action--cooling off

(1)   The FWC must make an order suspending protected industrial action for a proposed enterprise agreement that is being engaged in if the FWC is satisfied that the suspension is appropriate taking into account the following matters:
(a)   whether the suspension would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue;
(b)   the duration of the protected industrial action;
(c)   whether the suspension would be contrary to the public interest or inconsistent with the objects of this Act;
(d)   any other matters that the FWC considers relevant.

(2) The FWC may make the order only on application by:
(a) a bargaining representative for the agreement; or

(b) a person prescribed by the regulations.”

Applicant Submissions & Evidence

The Applicant submits that section 425 of the Act enables the Commission to suspended protected industrial action that is being engaged in by parties involved in enterprise bargaining.

The Applicant highlights that, unlike sections 423, 424, and the harm focused 426 of the Act, section 425 of the Act provides that the Commission must suspend, and only suspend (not terminate), protect industrial action to allow for a cooling off period.

The Applicant submits several factors, listed below, in support of granting an order to suspend PIA:

“(a) as noted, VARA has made an IBD Application (the effect of which, if a
declaration were made, would be to prevent the further taking of protected
industrial action – but only once the declaration is made);
(b) given that the IBD provisions are completely new and the volume of evidential
material likely involved in support of the IBD Declaration, the Commission is
unlikely to be in a position to hear and determine that application before, or
early within, the period of more damaging protected industrial action
commencing on Monday, 12 June 2023 (notice 8 in the attachment). Indeed,
there is some potential that the IBD Application will be heard by a Full Bench;
(c) for the reasons set out in VARA’s IBD Application, the prospects of the parties
resolving outstanding issues without the Commission arbitrating are non existent,
and the IBD Application is directed towards having the Commission
resolve the remaining matters at issue without further protected industrial
action taking place (which imposes losses on LAMEs and VARA alike);
(d) the industrial action being organised by the ALAEA and engaged in by the
Engineers in relation to the Proposed Agreement first commenced in
September 2022 (almost nine (9) months ago). The industrial action has
occurred regularly since that time and the most recent notification involves a
not insignificant escalation of that action;
(e) whilst the Act sets out a regime for bargaining in which parties may take
protected industrial action in support of their claims, this “right” is qualified by
a number of the provisions of the Act, including the power under section 425
for the Commission to suspend it. Further, this regime must be weighed
against the public interest in avoiding industrial unrest at, and concluding a
Proposed Agreement that will give stability to, VARA’s operations, which are
(for the reasons set out above) vitally important for transportation services to
remote parts of Australia;
(f) the suspension of the industrial action for a limited period of time – that is, only
while the IBD Application is heard and determined by the Commission – would
not be contrary to the public interest or inconsistent with the objects of the Act;
(g) the industrial action has caused VARA significant costs and will continue to do
so;
(h) the industrial action has disrupted services to customers and will continue to
do so; and
(i) VARA is a large player in an industry that provides an important function to the
Australian economy.”

Section 425 of the Act

Section 425(1)(a) – Matters at issue

The Applicant submits that a suspension of the PIA will assist in resolving the matters at issue, as a suspension of PIA will assist it in prosecuting the IBD application.

The Applicant submits that the “matters at issue”, included in section 425(1)(a) of the Act, does not mean that the suspension of PIA can only be granted if it specifically assists the bargaining process.

The Applicant submits that, in the context of the intractable differences between the parties (or at the least an arguable case as to that contention), a suspension of the PIA until the IBD application can be determined would be appropriate.

Section 425(1)(b) – Duration

The Applicant notes that the first instance of PIA occurred in October 2022. The Applicant submits that the PIA is continuing and escalating. The Applicant contends that this is a significant and extended period of PIA which therefore supports a suspension.

Section 425(1)(c) – Public interest and objects of the Act

The Applicant submits that a suspension of the PIA in these circumstances would not be inconsistent with the objects of the Act.

The Applicant submits that the only potentially relevant object is that in section 3(f) of the Act:
“achieving productivity and fairness through an emphasis on enterprise‑level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”

The Applicant submits that nothing in a suspension order, especially the limited scope of such a suspension order sought by the Applicant, would interfere with or be inconsistent with the objects of the Act.

The Applicant further submits that the nature of the PIA being taken and the impact that the PIA is having on the general population supports the granting of a suspension order.

Section 425(1)(d) – Other relevant matters

The Applicant submits that the nature of the suspension order is a relevant consideration for the Commission to consider.

The Applicant submits that it is not seeking a general suspension of PIA, rather the Applicant is seeking a suspension of PIA until the IBD application can be determined by the Commission.

The Applicant submits that, once the IBD application is determined by the Commission, the impact of this current application and any order would, in effect, be negated.

It is the Applicant’s contention that if the IBD application is successful the PIA would, at that time, cease. However, if the IBD application is not successful, then the suspension would end, and the Union and the members would be free to continue the PIA.

The Applicant submits that, due to the extended duration of bargaining, it has formed the view that there is no reasonable prospect of an agreement being reached and that the continued PIA is unlikely to persuade or change the position of the Applicant. The Applicant submits that this further supports an order suspending the PIA.

Respondent Submissions & Evidence

The Respondent notes the Applicant’s submission, that it is only pursuing this application as a form of an interim injunction to suspend the PIA until such time as the IBD application is heard by the Commission and opposes this as the basis for an order being granted.

The Respondent submits that had the intent of the legislation been to temporarily suspend any ongoing PIA during the hearing of an IBD application, section 234 of the Act itself would provide for such an interim order.

The Respondent submits that, as no such mechanism exists under section 234 of the Act, the Applicant has therefore filed this application without any merit or substance.

The Respondent submits that an application under section 425 of the Act, such as this current one, is generally used when the PIA is proving to be a hinderance to a bargaining outcome being reached and a cooling off period would be beneficial in assisting the parties reaching an agreement. However, the Respondent submits, in this matter the Applicant is seeking a suspension simply to pursue another application before the Commission, rather than to continue or facilitate negotiations towards reaching an agreement.

The Respondent submits that the Commission must consider if making such an order as requested by the Applicant is appropriate in the context and asserts that the reasons provided by the Applicant for seeking such an order to suspend the PIA is not an appropriate use of the powers contained within section 426 of the Act.

Section 425 of the Act

Section 425(1)(a) – Matters at issue

The Respondent submits that the granting of such an order would not be beneficial to the parties engaged in the bargaining process. The granting of such an order would not assist the parties in reaching an agreement, rather it would only provide the Applicant with immediate relief from the PIA.

The Respondent confirmed that it also intends on opposing the IBD application. If the Respondent is successful in its opposition, then the PIA would continue as normal. Therefore, if the PIA was suspended in the interim, it would prevent the Respondent’s members from advancing their bargaining claims and positions. Alternatively, in the event the IBD application is determined in the Applicant’s favour, a suspension order issued in this matter would rob the members from their final opportunity to advance their positions.

The Respondent submits that the Applicant primarily wishes to have a suspension of the PIA in order to assist the Applicant to mount and prosecute the IBD application and that this is not an appropriate use of the Commission’s powers in such an application.

Section 425(1)(b) – Duration

The Respondent submits that the first action occurred in October 2022 and notes that the action was merely a stoppage of work for 1 minute. The Respondent highlighted that between 5 October 2022 and 8 February 2023 there was no PIA engaged in by members of the Respondent.

The Respondent submits that the PIA that is the subject of this application, which was due to commence on 12 June 2022, could be managed and mitigated through the use of overtime payments to members who were not rostered to work these shifts. The Respondent also offered an undertaking which, albeit will have a cost impact on the Applicant, further assists in mitigating the potential impact of the PIA.

The Respondent submits that the nature of the PIA and the Respondent’s undertaking to assist in mitigating the operational impacts of the PIA weighs against an order being made.

Section 425(1)(c) – Public interest and objects of the Act

The Respondent submits that the PIA currently being engaged in is not impacting the wider public interest and is not inconsistent with the objects of the Act.

Rather, the Respondent submits, the PIA being engaged in is consistent with the objects of the Act and that an undertaking has been provided by the Respondent to assist the Applicant in mitigating the operational impacts of the PIA.

Section 425(1)(d) – Other relevant matters

The Respondent submits that the other considerations raised by the Applicant are either not relevant or should not weigh in favour of granting an order to suspend the PIA.

The Respondent highlighted that the PIA increased in March 2023 after an extended period of minimal industrial action by the Respondent.

The Respondent also highlighted that, whilst bargaining has been on-going for a significant period of time, there had been delays in relation to bargaining due to COVID-19 and other issues that arose during the pandemic.

The Respondent also highlighted that, whilst the Applicant is a large player in the airline industry and provides an important service to the public and charter clients, this operational significance should not be a relevant consideration in this matter.

Consideration

Having considered the submissions of both the Applicant and the Respondent, I have decided to not grant an order under section 425 of the Act.

The parties disagree over the scope of the considerations under section 425 of the Act.

The Applicant contends that the considerations and assessment of appropriateness should not be limited to an assessment of whether the suspension would assist the parties in enterprise bargaining, rather that it simply assists the parties to resolve the matters at issue.

The Respondent critiques the Applicant’s position, stating that the Applicant’s interpretation does not consider the context of the section overall. The Respondent submits that the Applicant’s interpretation renders subsections (a) and (b) worthless as considerations in guiding the Commission’s conclusion.

I am inclined to agree with the Respondent, that the section enables the Commission to enforce a cooling off period to assist in resolving the matters at issue. I find the Respondent’s position regarding the matters at issue, being the bargaining process and status of bargaining, is more logical and consistent with the context this Part of the Act and the objects of the Act than the Applicant’s interpretation.

Before moving on to the considerations, I note that, as a required perquisite of section 425 of the Act, there is indeed PIA being engaged in, this matter is not disputed by either party.

Section 425(1)(a) – Matters at issue

I have considered the position put forward by the Applicant, that a suspension of PIA would assist the Applicant in preparing for and prosecuting the IBD application, therefore assisting the parties in resolving the matters in issue.

It is understandable that Applicant is of the position that a cooling off period and the suspension of the PIA may provide clear air and allow the parties to focus resources on the IBD application, rather than managing the impacts of PIA. However, I do not accept that this a persuasive argument as it relates to section 425(1)(a) of the Act.

There is no suggestion that a granting of this application would assist the parties in reaching an agreement on the issues at hand. Rather, the Applicant’s argument is only that it would provide the Applicant with more time to prepare for the IBD application.

I am inclined to agree with the Respondent’s submissions, that the issues at hand should relate to those issues in bargaining which gave rise to the application.

The existence of a causal link, between the suspension and some effect it may have on assisting the parties come closer, is also difficult to establish in this matter. On the evidence before me, I am not convinced that the cooling off and suspension would assist the parties in any such way. I also note that the effect of the PIA does not appear to be actively, or on any notable level, hindering the parties’ ability to hold bargaining meetings or otherwise resolve the issues at hand. On this point, and to entertain the Applicant’s position, I also do not see how the suspension would assist in the mounting of the IBD application as, like the bargaining, it does not appear to have any notable negative impact on the parties’ ability to prepare.

Although not integral to my consideration here, I note that the Applicant is a large employer with significant legal and industrial support both within the business and through its ability to engage external assistance. The Applicant is in a favourable position to mount its case in the IBD application regardless of the existence of PIA. The Applicant submits and confirms that it is ready to proceed with the IBD application as soon as practicable.

Even if I am incorrect, and this consideration should be interpreted more broadly (as is the Applicant’s position), I do not accept the argument that a cooling off period, to allow for the hearing of the IBD application, would be beneficial to the bargaining representatives in resolving the issues at hand. I will discuss this conclusion further at the end of my consideration.

I have considered the submissions of the Respondent and, largely, agree with the positions advanced against the Applicant’s contentions.

The Respondent drew reference to the Commission’s decision in Application by Orora Packaging Australia Pty Ltd,[1] in which Deputy President Colman noted that section 425(1)(a) of the Act requires consideration of whether there is benefit to the bargaining representatives,[2] not merely one party. I accept the Respondent’s submission here, that the argument advanced in relation to this consideration would not benefit all bargaining representatives.

Additionally, on the evidence before the Commission, I cannot identify any circumstances that would give rise to a cooling off period being of benefit to both bargaining representatives in resolving the issues at hand.

Granting an order would primarily serve as a commercially beneficial outcome for the Applicant, where the PIA ceases, at least, for an interim period until the IBD application is determined by the Commission.

Section 425(1)(b) – Duration

In relation to the PIA that is occurring, on assessment of the evidence provided by the Applicant, the PIA which occurred in October 2022 was, as the Respondent highlighted, only a single 1-minute stoppage of work on 5 October 2022. No further PIA occurred until 8 February 2023.

On the evidence provided by the Applicant, it is clear that the PIA increased from March 2023 and further escalated from 12 June 2023. It is contested between the Applicant and the Respondent the actual impact of the PIA which has been taken to date and will continue to take place.

I note the parties’ contentions over the duration of the PIA and, although I accept the first instance of PIA occurred quite some time ago, it would be misleading to suggest that the PIA from its outset has been severe or noteworthy.

The Respondent notes that the section 425(1)(b) of the Act requires an assessment of the PIA that is the subject of the application, being the PIA that is occurring, not any past or potential PIA. I agree with the Respondent’s articulation of this consideration and also with the contention that the action being taken is moderate in severity and, at the time of this matter, had only recently commenced.

I do not believe the duration of the PIA weighs strongly in favour of granting a suspension order.

Section 425(1)(c) – Public interest and objects of the Act

The Applicant submits that, due to the limited scope of the order being sought, the effect of any order would not be inconsistent with the objects of the Act.

The Applicant also submits that the public interest would be best served by a suspension in PIA to allow the Applicant’s business to operate uninterrupted by PIA at least until the IBD application is determined.

I have considered this submission and the Respondent’s submissions in reply.

The Respondent and the employees who are members of the Respondent are engaged in PIA to advance their bargaining claims. They are taking this action after following the relevant requirements of the Act and after an extended period of bargaining, I am not satisfied that it is consistent with the objects of the Act to suspend the PIA in this circumstance.

I agree that it would not be an appropriate use of the Commission’s powers under section 425 of the Act, to grant an order suspending the PIA, to allow the Applicant greater convenience and time to mount and prosecute the IBD application.

I do not consider that it is appropriate for PIA to be suspended in circumstances where if the Applicant’s IBD application is successful all PIA could cease. A suspension would merely bring the benefit of PIA stoppage to the Applicant forward and enable them to better their position in relation to the IBD application which could result in permanent stoppage of the PIA. Meanwhile, further disadvantaging the Respondent’s member’s ability to advance their positions and stripping them of their right to take PIA.

Section 425(1)(d) – Other relevant matters

The Applicant has filed an application under section 234 for an intractable bargaining declaration (IBD application) to be made by the Commission.

Having heard the evidence of Mr Miller and Mr Purvinas, it appears the Applicant has an arguable case in respect of the IBD application and this will require careful consideration by the Commission.

From the evidence provided by the parties, it would appear that there is limited prospects of the parties finding an outcome in bargaining without the intervention of the Commission.

The Applicant submits that, until the IBD application can be heard and determined by the Commission, it would be appropriate for this current application to be granted as, in the event that the IBD application is determined in favour of the Applicant, the PIA would cease.

The Applicant notes that, in the alternative, if it is unsuccessful in the IBD application the employees will then be able to recommence PIA.

It is a fair and reasonable conclusion to draw from the evidence of Mr Miller that the PIA is having not only a commercial impact on the Applicant (through increased overtime costs to cover periods of PIA) but it is also impacting the Applicant’s charter business servicing clients in the West Australian resources sector.

The Respondent has provided an undertaking, which assists in reducing the operational impact of the PIA, albeit at a cost to the Applicant. These undertakings will not fully mitigate the impact of the PIA, however they have been made by the Respondent to assist the Applicant in managing operational issues which may arise from the PIA.

The Applicant contends that the undertaking does not remove all risk and that the business will still be impacted by the PIA. Whilst I accept the Applicant’s position, that the undertaking does not remove all risk or potential impact from the PIA, it is not a compelling argument that I find weighs in favour of an order being granted. The Respondent has provided an undertaking which will assist in managing the impact of the PIA, the Respondent has provided this undertaking to assist the Applicant in managing the impact of the PIA. However, it is only natural that in circumstances where PIA is taking place that there will be some impact to the Applicant’s operations.

I also note that if the IBD application is successful, then this period will be the final opportunity for the Respondent and their members to take PIA to advance their claims in the bargaining process.

I have considered this argument by the Applicant and I do not believe that this is a sufficient reason for the Commission to consider a suspension of PIA.

Conclusion

The provisions of section 234 are recent amendments to the Act and only came into effect of 6 June 2023. I agree with the Respondent that, if it had been the intention of the Act that when a section 234 application is filed with the Commission that PIA be suspended until such time as the application is determined, then this section of the Act would have allowed for such a provision for interim relief against PIA.

Although, I do note that the existence of adjacent applications could very likely be a relevant consideration depending on the circumstances of each individual matter. However, in this matter, it is not the circumstance that the existence of the IBD application weighs in favour of granting an order.

Section 425 of the Act requires that the Commission must suspend the PIA if taking into account the above considerations, it deems it appropriate. I am not satisfied that the argument put forth, nor the circumstances of the matter, gives rise to it being appropriate to suspend the action with the use of section 425 of the Act. What is clear, on the evidence and submissions put forth, is that the parties’ chances of resolving the matters at issue are nearing hopeless. Notably, a cooling off period, in my assessment, would not be beneficial in resolving the matters at issue. On the contrary, it appears that due to the problematic state of bargaining, the PIA is, as it is intended to be, one of the remaining few effective methods for the Respondent’s members to attempt to advance their positions in the hopes of resolving the outstanding disagreements.

The very existence of the IBD application hints to the position the parties find themselves in. The IBD application serves as a last resort and does not allow the parties the same freedoms as normal bargaining would.

In these circumstances, I would like to assist the parties, however feasible, in coming to a resolution using the appropriate methods and powers. In this matter, the suspension of the PIA is not one such method I deem appropriate and the power to enforce the cooling off period is equally unhelpful.

Using section 425 of the Act in such circumstances, to allow the parties space to prepare their IBD arguments, is not consistent with the purpose of the Commission’s power in such an application and it is inconsistent with the public interest, noting that the suspension of protected industrial action strips employees of a useful bargaining tool. The power serves as a useful tool to assist the bargaining representatives to resolve issues, not to give space to mount an application which, by its very nature, could restrict the parties’ ability to resolve issues themselves.

Based on the evidence before the Commission and the submissions of the parties, in considering the matters within section 425 of the Act, I am not satisfied that an order suspending protected industrial action should be granted.

The Application is therefore dismissed, an Order to that effect has been issued.[3]

COMMISSIONER

Appearances:

Mr M Follett of Counsel for the Applicant.
Mr L Saunders of Counsel for the Respondent.

Hearing details:

2023.
Perth:
June 13.

[1] [2020] FWC 49.

[2] [2020] FWC 49, [27].

[3] [PR763531].

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Citations

Virgin Australia Regional Airlines Pty Ltd T/A Virgin Australia Regional Airlines v Australian Licenced Aircraft Engineers Association, The [2023] FWC 1510

Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Orora Packaging Australia Pty Ltd t/a Orora Bag Solutions v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union [2020] FWC 49