DECISION

Fair Work Act 2009
s. 739 - Application for the Fair Work Commission to deal with a dispute in accordance with a Dispute Settlement Procedure

s. 526 - Application for the Fair Work Commission to deal with a dispute involving stand down

Australian Federation of Air Pilots
v
Bristow Helicopters Australia Pty Ltd
(C2016/4461 and C2016/5875)

s. 739 dispute settlement procedure - s. 526 dispute involving stand down - stand down of certain employees in contravention of s. 524 - stand downs caused by operation of terms of enterprise agreement providing for status quo - cause of stand downs not a breakdown of machinery or equipment nor a stoppage of work - cause of stand downs a matter for which the employer can be reasonably held responsible - fairness between parties - Orders made.

[1] This Decision arises from two applications which were made by the Australian Federation of Air Pilots (the AFAP), and taken against Bristow Helicopters Australia Pty Ltd (the employer or Bristow). The first application (the dispute application) was lodged at Melbourne on 13 July 2016, and it was taken under section 739 of the Fair Work Act 2009 (the Act). The dispute application sought that the Fair Work Commission (the Commission) deal with a dispute in accordance with a Dispute Settlement Procedure (DSP) which is found at clause 6 of the Bristow Helicopters Australia Pilots Enterprise Agreement 2016 (the Agreement).

[2] The second application (the stand down application) was lodged at Sydney on 29 September 2016, and it was taken under section 526 of the Act. In the second application, the AFAP have sought that the Commission determine that the stand downs of certain employees by Bristow are invalid because the circumstances of the stand downs do not satisfy section 524 of the Act. Further, the AFAP have sought consequent Orders which would require Bristow to retract the stand downs, return the employees to paid engagement, and make payment for all remuneration lost by employees who had been invalidly stood down.

[3] The dispute application was initially allocated to Hamilton DP, and it was the subject of a conciliation conference held on 21 July 2016. On 8 August 2016, the AFAP requested an urgent re-listing of the matter as there were impending notices of involuntary redundancy to be issued to a group of Bristow’s Pilots. At this time, as Hamilton DP was on leave, the matter was reallocated, and I held a further conciliation conference on 10 August 2016.

[4] Although there was some progress made towards reducing the number of Pilots who were the subject of the dispute, the primary matter of concern regarding involuntary redundancies of certain Pilots, was clearly unresolved. The AFAP sought to have the dispute application proceed to Arbitration, and subsequently Directions were issued in preparation for a Hearing scheduled for 9 and 10 November 2016, in Sydney.

[5] Following the lodgement of the stand down application, the Directions and Hearing arrangements for the dispute application were utilised for the purposes of providing Arbitration proceedings involving both applications. The subject matter that underpinned the dispute application is entwined with the stand down application. However, the stand down application is a matter that has an identified significant, direct potential outcome, that is, it would either succeed or fail. Therefore, the Hearing which has involved both applications has focussed upon a determination of the stand down application.

[6] The Hearing has ultimately involved proceedings which were conducted in Sydney on 9 and 10 November, and Perth on 24 November 2016.

[7] At the Hearing, the AFAP was represented by its Senior Industrial Officer, Mr D Stephens. Mr Stephens called a total of five witnesses who gave evidence in support of the stand down application. Mr Stephens also introduced one further witness statement from an individual who was not required for cross examination.

[8] Bristow was represented by Mr P Robertson, Principal Consultant from the Australian Mines and Metals Association (AMMA). Mr Robertson introduced evidence from four witnesses, all of whom were cross examined by Mr Stephens.

[9] Mr Stephens and Mr Robertson both made oral submissions in elaboration of documentary material that each had filed on behalf of the respective Parties.

Background

[10] Bristow is part of the worldwide Bristow Group of Companies (Bristow Group). The Bristow Group has headquarters in Houston, Texas, and it provides industrial aviation services specialising in helicopter transportation, search and rescue, and aircraft support services to government and civil organisations throughout the world. The Bristow Group conducts operations in respect of major offshore oil and gas producing locations which are broadly organised into four regions; Africa, Americas, Europe Caspian, and Asia Pacific. Bristow leases aircraft from the Bristow Group to provide helicopter and fixed wing passenger air transportation and search and rescue services (SAR) within the Asia Pacific region.

[11] Bristow has about 26 helicopters in Australia, of which about 15 are ordinarily engaged in commercial operations. Bristow uses a range of helicopter types to provide services to its customers. Prior to 29 April 2016, Bristow utilised a significant number of Airbus EC 225 helicopters as part of its commercial fleet. Bristow has approximately 400 employees of which approximately 97 are Pilots, and 51 of those Pilots were endorsed only to fly the EC 225 helicopter.

[12] On 29 April 2016, an EC 225 helicopter, which was not operated by the Bristow Group, crashed in Norway and 13 people were killed.

[13] The crash of the EC 225 helicopter in Norway appeared to involve some mechanical fault with the gearbox of the aircraft, and various air safety authorities implemented cautionary restrictions on the use of the EC 225 helicopter. The Bristow Group issued its own notification to suspend all operations of the EC 225 helicopter other than in respect of critical SAR operations. This meant that, to a large extent, the EC 225 helicopter was grounded, and it could not be used for ordinary commercial operations.

[14] Although there was some limited SAR work that the EC 225 helicopters could perform, they were effectively grounded in respect of all other commercial operations. The severe restrictions placed upon the use of the EC 225 helicopters had a significant impact on Bristow’s operations. Some of Bristow’s customers demanded that the EC 225 helicopters that had been used were to be immediately replaced with different helicopters. In many instances, Bristow was able to utilise other helicopters that it had at its disposal in order to overcome the substantive grounding of the EC 225.

[15] On 16 June 2016, the Australian Civil Aviation Safety Authority (CASA) issued a Direction to Bristow under sub-regulation 11.245(1) of the Civil Aviation Safety Regulations 1998 which restricted the use of the EC 225 helicopter to limited SAR operations and ground running of the helicopter.

[16] The substantive grounding of the EC 225 helicopters occurred at a time when Bristow had been suffering significant financial losses, broadly caused by a contraction in work associated with a downturn in the Australian resources industries. In February 2015, Bristow had identified that it had a significant excess of staff, particularly Pilots. Bristow implemented an enhanced voluntary separation program which was partially successful in reducing Pilot numbers. Bristow also managed to redeploy some Pilots. However, Bristow identified an on-going excess of Pilots, and in the period between May and June 2016, it implemented the involuntary redundancies of 12 Pilots.

[17] Consequently, at the time of the EC 225 crash in Norway, Bristow was anticipating the need for further reductions in its overall Pilot numbers. The involuntary redundancies which were subsequently implemented in May to June 2016 were conducted in accordance with particular terms contained in subclause 35.1.1 of the Agreement. This subclause specified that Pilots who were to be selected for involuntary redundancy were to be determined by their seniority within the permanent Pilot group, so that the least senior were the first to be selected on a “last on first off basis.”

[18] The strict adherence to a last on first off selection for involuntary redundancy is a common feature in industrial instruments that apply to commercial aviation Pilots in Australia. The Agreement had only recently been made, (31 May 2016), and the strict seniority for last on first off selection was applied for those Pilots that were made involuntarily redundant in May and June. The substantive grounding of the EC 225 helicopter impacted upon the application of the strict seniority for last on first off selection for redundancy. Pilots who were only endorsed (aka rated) to fly the EC 225 helicopter, and who were not at the bottom of the seniority list, would have to be retrained so as to enable them to fly other types of helicopters, whilst those at the bottom of the seniority list who were flying helicopters other than the EC 225, would have to be made redundant.

[19] Bristow did not stand down EC 225 Pilots immediately following the substantive grounding of the EC 225 helicopters, despite the significant reduction in the amount of useful work that could be performed by Pilots who were endorsed only to fly the EC 225. Instead, Bristow management commenced to make arrangements for the EC 225 Pilots to be retrained in other types of helicopters. In order to facilitate these arrangements the EC 225 Pilots who did not have endorsement to fly other types of helicopters, were asked to take various forms of leave and/or consider an enhanced voluntary redundancy package.

[20] During June, Bristow realised that it was unlikely that it would require all of the EC 225 Pilots to be retrained for endorsement to fly other helicopters, and it identified the seven least senior EC 225 Pilots as surplus. These seven surplus EC 225 Pilots were required to elect to either take an enhanced voluntary redundancy package, or proceed to take some form of leave, including leave without pay. At this time, circa June and July, the AFAP and the Bristow Pilots committee had been negotiating with Bristow about the terms that would apply to any voluntary arrangements for redundancy or leave that would apply to the seven surplus EC 225 Pilots, so that these voluntary arrangements may mitigate the need for any involuntary redundancies.

[21] At the same time that these voluntary arrangements were being pursued as a means to address the overall reduction in Pilot numbers, coupled with the impact of the substantive grounding of the EC 225, a Decision was made by the Commission (the Cloghan C Decision) which interpreted the terms of an industrial instrument which were similar to those terms found in subclause 35.1.1 of the Agreement. The Cloghan C Decision 1 was issued on 4 July, and it rejected the requirement for the strict adherence to seniority for the last on first off selection of redundancy. Instead, the Cloghan C Decision introduced the prospect that the particular aircraft type for which a Pilot had endorsement could displace the Pilot’s seniority as the determinant for selection for involuntary redundancy.

[22] On 12 July 2016, Bristow wrote to the AFAP and advised, inter alia, that it was proceeding to implement involuntary redundancies in respect of the identified surplus EC 225 Pilots. This meant that Bristow was departing from the previously applied strict application of the last on first off redundancy selection from across the entire Pilot group. There were two Pilots from the seven EC 225 identified as surplus who had not elected to take enhanced voluntary redundancy or some other form of leave, and these individuals were to be made involuntarily redundant immediately. Further, Bristow advised that at the expiration of the leave taken by the other surplus EC 225 Pilots, unless some alternative arose, those EC 225 Pilots would then be made involuntarily redundant.

[23] On 13 July 2016, the AFAP lodged the dispute application and it sought to invoke a status quo provision contained in the DSP as a means to prevent Bristow from implementing the involuntary redundancies of the “first” two of the EC 225 Pilots.

[24] On 15 July 2016, Bristow wrote to the two EC 225 Pilots who had not elected to take any leave (Messrs Luscombe and Duncombe) and it advised them that it could not issue them with a letter of redundancy due to the dispute that had been lodged by the AFAP. Further, Luscombe and Duncombe were advised that whilst the dispute was open and unresolved status quo in regards to employment would be maintained. Messrs Luscombe and Duncombe were advised that they had been stood down without pay.

[25] As previously mentioned, on 21 July, Hamilton DP conducted an initial conciliation proceeding in respect of the dispute application. The Commission held a further conciliation proceeding on 10 August 2016. Also on 10 August, one of the EC 225 Pilots who had been stood down, Mr Duncombe, made application to access his personal leave entitlement as he had broken his wrist. On 11 August, Bristow informed Mr Duncombe that his application for personal leave was refused.

[26] On 23 August 2016, Bristow advised another EC 225 Pilot, Simon Butler, that he was to be stood down without pay when his leave entitlements were exhausted as at 26 August 2016. On 1 September 2016, Bristow advised another EC 225 Pilot, Phil Jerry, that he was to be stood down without pay when his leave entitlements were exhausted as at 15 September 2016.

[27] As previously mentioned, on 29 September 2016, the AFAP lodged the stand down application.

[28] On 20 October 2016, Bristow issued stand down notices to a further seven EC 225 Pilots. There were various different dates upon which each of these stand downs were stated to commence, ranging from the earliest on 22 October 2016, in the case of EC 225 Pilot Alex Bailey, to the latest on 17 April 2017, in the case of EC 225 Pilot Norm Shattock.

[29] On 21 October 2016, CASA revoked the Direction that it had issued on 16 June 2016 in respect of the EC 225 helicopter, thereby effectively releasing the EC 225 helicopter from any restriction regarding its general operation.

[30] On 26 October 2016, a Full Bench of the Commission issued a Decision 2 which quashed the Cloghan C Decision.

The AFAP Case

[31] Mr Stephens who appeared for the AFAP, made submissions which referred to various documentary outlines of submissions which focused upon a determination of the stand down application. In abbreviated summary, the AFAP submitted that the stand downs which had been implemented by Bristow in respect to various EC 225 helicopter Pilots, were invalid because the circumstances described in section 524 of the Act did not exist so as to permit the stand downs.

[32] Mr Stephens made submissions which criticised various aspects of the stand downs that occurred for the first two EC 225 Pilots, Messrs Luscombe and Duncombe. In particular, Mr Stephens said that the stand down notices provided to Messrs Luscombe and Duncombe did not state any reasons for the stand downs as could be comprehended by any of the circumstances set out in subsection 524 (1) of the Act. Further, the AFAP criticised the purported notices because they provided no indication of any period of stand down but were instead open ended.

[33] It was further submitted by Mr Stephens that the stand down notices that were provided to the other EC 225 Pilots were also deficient as they did not properly identify the particular circumstances that Bristow relied upon in conformity with subsection 524 (1) of the Act. Specifically, Mr Stephens submitted that there had been no breakdown of machinery or equipment and therefore subsection 524 (1) (b) was not applicable, and there had been no stoppage of work which rendered subsection 524 (1) (c) not applicable. Consequently, according to the submissions made by Mr Stephens, the circumstances mentioned in subsection 524 (1) of the Act had not been established, and therefore the question of whether an employee could or could not be usefully employed did not arise.

[34] The submissions made by Mr Stephens also addressed the question of whether the affected employees, in this case the EC 225 Pilots who had been stood down, could have been usefully employed. In this regard, it was submitted that it was the decision of the respondent to not operate otherwise operable aircraft at the relevant time that the work of each of the affected Pilots could have involved something that was of some benefit or value to the respondent. In this regard, it was noted that a number of the affected Pilots had been initially arranged to undertake training to convert to be endorsed on a different aircraft type and this training could, and should have been undertaken so that the affected Pilots could have performed work that was of some benefit or value to the respondent.

[35] The further submissions made by the AFAP criticised that the respondent had denied alternative employment opportunities which arose during the period that the affected employees were stood down. The AFAP submitted that there were various vacancies that the respondent advertised internally but it rejected expressions of interest from both Messrs Luscombe and Duncombe, who were refused interviews for any of the alternative employment opportunities.

[36] Mr Stephens made further submissions which were critical of the conduct of the respondent whereby it commenced to attempt to reduce the alleged surplus of Pilots contrary to the terms of subclause 35.1.1 of the Agreement, and without properly exhausting the voluntary redundancy requirements of clause 35.6 of the Agreement. The submissions made by the AFAP asserted that the respondent had various options such as voluntary redundancy and retraining which it could have implemented, rather than the stand downs of the affected employees.

[37] In summary, Mr Stephens submitted that the stand downs of the affected employees were not genuine because none of the circumstances mentioned in subsection 524 (1) existed. Specifically, Mr Stephens said that there was no industrial action in terms of 524 (1) (a), there had not been a breakdown of machinery in terms of 524 (1) (b), and there had been no stoppage of work in terms of 524 (1) (c). In any event, according to the submissions made by the AFAP, the respondent was reasonably responsible for the events that gave rise to the decision to stand down because it was within its control and capacity to retrain, and/or further pursue voluntary redundancy. Further, Mr Stephens stressed that it was the decision of the respondent to ground the EC 225 helicopter when the CASA had provided for capacity for some limited operation of the aircraft. It was also submitted that fairness should dictate that the respondent be required to take efforts to avoid the stand downs, and adopt measures which were reasonably available to it.

[38] In conclusion, the AFAP urged that the Commission determine that the stand downs of the affected employees were invalid. Further, the AFAP sought that Orders be made in terms of, (i) quashing the decision of the respondent to stand down relevant employees; and (ii) providing recompense to affected employees for lost remuneration the employees would have otherwise received, but for the notices of stand down.

The Employer’s Case

[39] Mr Robertson from AMMA appeared for the respondent employer, Bristow. Mr Robertson made submissions which rejected the case that was advanced by the AFAP. Mr Robertson referred to the written submissions which had been filed on behalf of Bristow.

[40] The submissions made on behalf of Bristow asserted that it was entitled to stand down the affected Pilots because the circumstances of section 524 (1) (b) and/or (c) of the Act had been established. Bristow submitted that the reason for the stand downs involved either a breakdown in machinery or stoppage of work outside of its control, that being, the grounding of the EC 225 aircraft as a result of the fatal accident on 29 April 2016, and the consequent loss of client work utilising the EC 225 aircraft.

[41] The submissions made on behalf of Bristow recounted the various chronological events that occurred following the fatal crash of the EC 225 helicopter in Norway on 29 April 2016. In particular, it was submitted that on the day following the fatal crash, 30 April 2016, the Bristow Group leadership team announced that there would be a precautionary suspension of all EC 225 operations, with the exception of critical SAR. Subsequently, on 16 June 2016 the CASA issued a directive to Bristow which had the effect of significantly limiting the operational use of the EC 225 helicopters.

[42] The submissions made by Bristow stated that the grounding of the EC 225 helicopters meant that Bristow had no useful work for nine helicopters and 40 EC 225 Pilots. It was submitted that Bristow could not be reasonably held responsible for the grounding of the EC 225 helicopters, and consequently the requirements of subsection 524 (1) of the Act had been established. In support of these submissions, Bristow stated that at the relevant dates that each of the Pilots were stood down there was no work in which they could be usefully employed. Further, Bristow submitted that there was no real value in providing training to each of the affected Pilots as they were likely to be made redundant in the short-term. In addition, Bristow rejected any of the prospects that had been suggested as providing basis for alternative employment for any of the affected Pilots.

[43] In further submissions, Bristow referred to evidence that it had implemented voluntary redundancy options and that it had facilitated the taking of various forms of leave as a means to mitigate the impact of the grounding of the EC 225 helicopter. Further, Bristow noted the evidence of the cost to retrain EC 225 Pilots in order to fly other aircraft types, and it indicated that it had implemented this costly training in respect to the more senior of the EC 225 Pilots. Therefore, according to the submissions made by Bristow, it had acted on proper principles and in good faith when it took the decision to stand down those Pilots who had not elected to take either voluntary redundancy or other leave options.

[44] The submissions made on behalf of Bristow also asserted that the breakdown of machinery involved the EC 225 crash in Norway on 29 April 2016 and it clearly could not be held responsible for that breakdown of machinery or equipment. Bristow stated that this breakdown of machinery or equipment was a major contributing factor that led to the stand down of the relevant Pilots because they could not be usefully employed flying EC 225 aircraft at the time they were stood down.

[45] It was further submitted by Bristow that there had been a stoppage of work for which it could not be held to be reasonably responsible. Bristow submitted that the stoppage of work occurred at the directive of the CASA, and the instructions from Bristow Group, and the instructions from its clients who no longer wished to use the EC 225 helicopters. Bristow submitted that the stand down of the relevant Pilots was not indefinite and it was conditional upon the EC 225 being returned to service and/or there being work available in which the Pilots can be usefully employed.

[46] Bristow also made submissions in respect to subsection 526 (4) of the Act involving the Commission taking into account fairness between the Parties. In respect to fairness between the Parties, it was submitted by Bristow that it had used its best endeavours to minimise the impact of the EC 225 crash on its Pilot group as a whole, and it had acted in good faith. Further, Bristow submitted that, but for the AFAP position on the maintenance of the status quo as a result of the dispute application, Bristow would have made each of the affected Pilots involuntarily redundant.

[47] In conclusion, it was submitted by Bristow that fairness dictated that the relevant Pilots have been stood down in conformance with section 524 (1) (b) and (c) of the Act. Further, the submissions made by Bristow reiterated its opposition to the case that had been advanced by the AFAP. Bristow submitted that the dispute application and stand down application should be dismissed.

Consideration

[48] The determination that has been required in this instance has focused upon the stand down application made by the AFAP under section 526 of the Act. Essentially, the stand down application taken by the AFAP has asserted that Bristow has stood down Pilots and it intends to stand down further Pilots, in contravention of subsection 524 (1) of the Act.

[49] Section 524 of the Act is in the following terms:

“524 Employer may stand down employees in certain circumstances

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

(2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:

(a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

(b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.

Note 1: If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment.

Note 2: An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).

(3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.”

[50] The significant factual matters involving the major events which ultimately led to the stand downs of the affected Pilots were not the subject of important contest. The relevant, broadly uncontested events can be summarised as follows:

● In early 2015, Bristow announced that it was commencing a program to address excessive staffing levels particularly in respect to Pilots.

● A voluntary redundancy program was implemented but on-going economic downturn meant that by March 2016 Bristow identified that it needed to make approximately 14 Pilots involuntarily redundant.

● On 29 April 2016, the fatal crash of an EC 225 helicopter led to the substantive grounding of all EC 225 type helicopters, which were a significant part of the Bristow fleet.

● On 31 May 2016, the Agreement was made, and during May and June, 12 Pilots were made involuntarily redundant. Selection of these involuntary redundancies was in accordance with the terms of the Agreement stipulating last on first off from across the permanent Pilot group.

● During June 2016, the lack of useful work for EC 225 Pilots led to the seven least senior EC 225 Pilots being requested to take either voluntary redundancy or some form of leave, including leave without pay.

● On 4 July 2016, the Cloghan C Decision was issued, and the selection of involuntary redundancies based upon aircraft type as opposed to Pilot group was promulgated.

● On 12 July 2016, Bristow commenced to implement involuntary redundancies of the two least senior EC 225 Pilots (Duncombe and Luscombe).

● On 13 July 2016, the AFAP lodged the dispute application and invoked status quo provisions in respect to the involuntary redundancies of Duncombe and Luscombe.

● On 15 July 2016, Duncombe and Luscombe were advised that they had been stood down.

● On 23 August 2016, Bristow advised further stand downs of EC 225 Pilots, Butler and Jerry.

● On 20 October 2016, further stand downs were advised to an additional seven EC 225 Pilots.

● On 21 October 2016, the CASA removed any restriction on use of the EC 225.

● On 26 October 2016, a Full Bench Decision quashed the Cloghan C Decision.

[51] The Commission has undertaken an analysis of these circumstances which formed the primary factual matters that underpinned the stand downs which, in the first instance applied to Messrs Duncombe and Luscombe on 15 July, and which were subsequently expanded to include a further nine EC 225 Pilots. Specifically, the Commission has analysed the circumstances so as to determine whether these circumstances are circumstances which satisfy the terms of subsections 524 (1) (b) and (c) of the Act. That is, do these circumstances establish a period in which the affected Pilots cannot be usefully employed because of a breakdown of machinery or equipment and/or a stoppage of work for which Bristow cannot reasonably be held responsible.

The Causal Connection

[52] Bristow has primarily relied upon the substantive grounding of the EC 225 helicopters arising from the fatal crash in Norway, as representing the circumstances which satisfy the terms of subsections 524 (1) (b) and/or (c) of the Act. There was no dispute that Bristow could not be held responsible for the crash in Norway, and the subsequent substantive grounding of the EC 225 helicopters were undeniably connected to the crash in Norway.

[53] However, the mere existence of a breakdown of machinery or equipment and/or a stoppage of work for which the employer cannot reasonably be held responsible, is not sufficient to establish the circumstances which satisfy subsection 524 (1) of the Act. There must be a direct causal connection between the breakdown of machinery or equipment and/or the stoppage of work, and the absence of useful work for the employee who is stood down. Thus, the absence of useful work created by a breakdown of machinery or equipment and/or a stoppage of work must be the cause of any stand down.

[54] This direct causal connection between any of the circumstances mentioned in subsection 524 (1) of the Act, and the stand down of any employee was succinctly summarised in the following extract of a Decision of Gostencnik DP, which I respectfully embrace and adopt:

“Indeed the structure and language of s.524(1) shows that there needs to be a temporal connection between one of the circumstances arising and the standing down of an employee because the employee cannot usefully be employed. The words “because of” in s.524(1) are used to indicate a causal link between the occurrence of a circumstance and the absence of useful employment.” 3

[55] In this instance, the substantive grounding of EC 225 helicopters occurred shortly after the fatal crash in Norway on 29 April. However, the first stand downs of EC 225 Pilots, Messrs Duncombe and Luscombe, occurred about 2 ½ months later on 15 July. An examination of the evidence of the events that occurred in the period between the substantive grounding of EC 225 helicopters and the first stand downs on 15 July, reveals that the reason for the stand downs was not the substantive grounding of the EC 225 (and other loss of work), but instead, the stand downs were caused by Bristow being prevented from dismissing Duncombe and Luscombe on the basis of involuntary redundancy.

[56] It was clear from the evidence 4 that if there was no status quo requirement contained in the DSP in the Agreement, then Bristow would have implemented the dismissals of Messrs Duncombe and Luscombe on the basis of involuntary redundancy. It was, and remains, a matter of contest as to whether these and other EC 225 specific redundancies, which would be “aircraft specific”, would be in breach of the terms of clause 35.1.1 of the Agreement. However, it must be recognised that at the time that Bristow attempted to implement the involuntary redundancies of Messrs Duncombe and Luscombe, the prevailing authority was that found in the Cloghan C Decision, and, of course, that Decision has been subsequently quashed.

[57] The evidence 5 has also established that the further stand downs issued to EC 225 Pilots, Messrs Butler and Jerry, have been implemented as the leave entitlements of those individuals have been exhausted, and where otherwise they would have been likely to have been made redundant. The use of stand downs as an alternative to dismissal on the basis of involuntary redundancy whether by choice or because of the status quo requirements of the Agreement, does not provide for a circumstance contemplated by subsection 524 (1) of the Act.

[58] The first stand downs of Messrs Duncombe and Luscombe were caused by the status quo provisions of the DSP preventing Bristow from dismissing those individuals on the basis of involuntary redundancy. Similarly, the subsequent stand downs of Messrs Butler and Jerry have also been caused by the status quo restriction, and/or these stand downs have been implemented as an alternative to the dismissal of those individuals on the basis of involuntary redundancies. This has meant that Bristow has, intentionally or otherwise, used stand downs as a mechanism to apply what amounts to “aircraft specific” loss of pay, pending any release from the status quo restriction which would then enable redundancies that may need to be implemented from across the permanent Pilot group.

[59] Consequently, the impetus for the stand downs has been the operation of various terms of the Agreement, which have restricted the termination of the employment of the particular individuals who have then been stood down rather than made redundant. The basis for the redundancy of those individuals may be connected with the substantive grounding of the EC 225 helicopter, and the crash that led to that substantive grounding was something that the employer could not reasonably be held responsible. However, it is not sufficient that one of a number of factors which contributed to the need for redundancies may be characterised as a circumstance specified in subsection 524 (1) of the Act. The stand downs must be caused by one of the circumstances specified in subsection 524 (1) of the Act.

[60] The multifactorial chain of causation including the substantive grounding of the EC 225 helicopters, and the loss of other work, potentially establishes a justifiable basis for redundancies per se, but these factors are not the circumstances which caused the stand downs. The stand downs have been caused by the operation of the terms of the Agreement, and those terms are something that the employer can reasonably be held responsible.

No Breakdown of Machinery or Stoppage of Work

[61] In any event, the substantive grounding of the EC 225 helicopters occurred as a result of a combination of regulatory, self-imposed, and customer imposed restrictions on the use of machinery or equipment. There was no breakdown of the EC 225 at any time; at most, its use was restricted. Consequently, the circumstances of subsection 524 (1) (b) of the Act involving a breakdown of machinery or equipment are not satisfied by the substantive grounding of the EC 225.

[62] Further, there was no evidence of any stoppage of work surrounding any of the stand downs of EC 225 Pilots. The circumstances contemplated by subsection 524 (1) (c) of the Act would require identification of some event which involved work being consciously halted for some reason and ordinarily for some identified period of time. A reduction in the available work for the EC 225 helicopters, for whatever reasons, does not represent a stoppage of work in satisfaction of the terms of subsection 524 (1) (c) of the Act.

[63] In passing it should be noted that Bristow cannot avoid responsibility for the decision to substantively ground the EC 225 helicopters. I must reject the proposition that because the decision to ground the EC 225 was made by Bristow’s parent corporation, Bristow Group, Bristow therefore escaped responsibility for that decision. An employer who consciously allows another entity to exercise control over its operations would become vicariously liable for the actions of that entity. Consequently, Bristow can reasonably be held responsible for the consequences of the actions of another entity, whether that be Bristow Group or a customer, in circumstances where Bristow permitted such control to be exercised via contract or corporate structure.

Conclusion

[64] This matter has involved two separate applications taken under different sections of the Act. The first application (the dispute application) was made under section 739 of the Act and as the circumstances of the dispute which underpinned that application developed, the second application (the stand down application) was made under section 526 of the Act. The circumstances which gave rise to the stand down application, and the nature of the relief that was sought in that matter, has meant that the determination of the stand down application has essentially surpassed the dispute application.

[65] Consequently, the Commission has been required to determine the stand down application. The determination of the stand down application has involved a direct contest as to whether the stand down by Bristow of several of its Pilots was action that complied with the requirements of subsection 524 (1) of the Act.

[66] In dealing with this dispute, I have taken into account fairness between the Parties as required by subsection 526 (4) of the Act. As part of the process for taking into account fairness between the Parties, I have assessed numerous issues which have required some balancing of the respective interests of; the affected Pilots; the AFAP; and the commercial interests of Bristow. A summary of this assessment has been encapsulated by Bristow’s refusal 6 to allow Mr Duncombe access to his sick leave when he fractured his wrist whilst on stand down.

[67] Following a careful analysis of the broadly uncontested facts which led to the stand downs of the affected Pilots, the Commission has examined those factual circumstances in order to determine whether they represent circumstances which are properly comprehended by subsection 524 (1) of the Act. In particular, the circumstances were said to satisfy the terms of subsection 524 (1) (b) and/or (c) which involve a breakdown of machinery or equipment and/or a stoppage of work for any cause for which Bristow cannot reasonably be held responsible.

[68] In summary, the stand downs of the affected Pilots were not caused by any breakdown of machinery or equipment and/or a stoppage of work for any cause for which Bristow cannot reasonably be held responsible. The stand downs were actually caused by the operation of terms contained in the Agreement, these terms restricted the capacity for Bristow to dismiss employees on the basis of involuntary redundancy, and instead it stood down those employees that it would have otherwise dismissed. The terms contained in the Agreement are something which Bristow can reasonably be held responsible. The circumstances which caused the stand downs of the affected Pilots are not circumstances which are comprehended by subsection 524 (1) of the Act.

[69] Therefore, the stand downs of the affected Pilots have been implemented in contravention of the requirements of section 524 of the Act. The stand downs of the affected Pilots are invalid, and appropriate Orders reflecting this invalidity shall be issued.

[70] Consequently, the stand down application made by the AFAP has been granted. The stand down dispute is determined accordingly.

COMMISSIONER

Appearances:

Mr D Stephens appeared for the Australian Federation of Air Pilots.

Mr P Robertson from the Australian Mines and Minerals Association (AMMA) appeared for the employer.

Hearing details:

2016.

Sydney:

November 9, 10.

Perth:

November 24.

 1   [2016] FWC 4232.

 2   [2016] FWCFB 7720.

 3   [2013] FWC 2554 @ paragraph [31].

 4   See in particular, Exhibit 5 @ Attachment “LD3” and Exhibit 9 @ Attachment “ML12”.

 5   See in particular, Exhibit 16 @ paragraphs 47 and 48.

 6   See in particular, Exhibit 5 @ Attachment “LD27”.

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