1
Fair Work Act 2009
s.604—Appeal of decision
Australian Federation of Air Pilots
v
HNZ Australia Pty Ltd
(C2015/1204)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER ROE SYDNEY, 18 MAY 2015
Appeal against decision [[2014] FWC 8678] of Deputy President Hamilton at Melbourne on
23 December 2014 in matter number C2014/1571.
Introduction and background
[1] HNZ Australia Pty Ltd (HNZ) operates a helicopter charter business providing
helicopter services to clients operating across a range of industries. HNZ employs licensed
pilots to operate its aircraft within Australia. These pilots are covered by the HNZ Australia
Pty Ltd (Helicopter Pilots - Australian Operations) Enterprise Agreement 2013 (Agreement).
The Agreement commenced operation on 16 June 2014 and has a nominal expiry date of 31
August 2017.
[2] In late June 2014, HNZ foreshadowed a review of work rosters or tour cycles
consequent upon a need to find greater efficiency in existing contracts with particular clients.
HNZ proposed to consult affected employees about the changes to tour cycles that were likely
to occur and their impact on affected pilots. The proposed tour cycle change was from a 15-
day on/13-day off cycle (except in relation to Ms Ivana Gorlin who worked a 28-day on/28-
day off duty cycle) to that which is known as an equal time roster cycle comprising 21-days
on/21-days off. HNZ proposed to change the tour cycles without the consent of affected
pilots.
[3] The Australian Federation of Air Pilots (AFAP) is covered by the Agreement and
represents a number of pilots affected by the proposed alteration to the tour cycle. On 28
August 2014 the AFAP made application pursuant to s.739 of the Fair Work Act 2009 (Act)
for the Commission to deal with a dispute concerning the proposed roster change in
accordance with the dispute settlement procedure in the Agreement. The affected pilots the
subject of the application when made were Mr Greg Duncombe, Ms Ivana Gorlin, Mr Nigel
Saunders, Mr Ric Casparis and Mr Mark Quayle.
[2015] FWCFB 3124
DECISION
E AUSTRALIA FairWork Commission
[2015] FWCFB 3124
2
[4] The application was heard and determined by Deputy President Hamilton who on 23
December 2014, issued a decision1 (Decision) in which he determined that, subject to
compliance with its obligations under the Agreement to consult the affected pilots about the
proposed alteration to the tour cycle, HNZ was entitled to direct the affected pilots to work the
new tour cycle pursuant to clause 14.2.1 of the Agreement.2 The Deputy President determined
further that clause 14.2.1 met the requirements of the Act including s.93 and was not
detrimental to employees when compared to the National Employment Standards (NES)
within the meaning of s.55(4) of the Act.3 As to Mr Quayle, the Deputy President refrained
from making a determination concerning him given that an Australian Workplace Agreement
appeared to cover his employment.4
[5] On 13 January 2015 the AFAP lodged an application seeking permission to appeal and
appealing the Decision. No appeal is brought in relation to the Deputy President’s conclusion
concerning Mr Quayle.5 The AFAP’s notice of appeal sets out 10 grounds of appeal in which
it is variously said that the Deputy President was in error. By the time the appeal came on for
hearing before us, so much of the dispute as concerned Mr Casparis and Ms Gorlin had fallen
away, and ground five of the notice of appeal, which concerned the alleged failure by the
Deputy President to deal at all with the proper application of clause 8.6 of the Agreement was
no longer pressed. For reasons that will become apparent, with the exception of the second
ground of appeal, we have found it unnecessary to deal with the remaining grounds advanced
by the AFAP.
[6] This appeal may be determined on the basis that, to the extent clause 14.2.1(b) is said
to be the source of power by which HNZ may compel the affected pilots to work the new
equal time roster, we consider that the provision is a term that is detrimental to the affected
pilots when compared to the NES. Because the new roster requires the taking of annual leave
to make up the required number of touring days off, in its operation it deprives the affected
pilots of the full benefit of s.88 of the Act. Further, in our view clause 14.2.1(b) is not a term
that is permitted by either of ss.55(4) or 93(3) of the Act. Consequently clause 14.2.1(b) has
no effect by virtue of s.56. To the extent that the Deputy President reached a contrary view, he
was in error. Our reasons for reaching this conclusion are set out below.
Permission to appeal
[7] Clause 21.3 of the Agreement provides that parties have a “right of appeal” against a
decision made in the exercise of arbitration powers under the disputes settlement procedure.
This expressly indicates an intention that the requirement for permission to appeal in s.604 of
the Act not apply. Consequently we do not consider, notwithstanding that the AFAP has
applied for permission to appeal, that permission to appeal is required.6 In any event, even if
permission to appeal was required, we would grant such permission because we have formed
1 [2014] FWC 8678
2 Decision at [49] – [50]
3 Decision at [50]
4 Decision at [52]
5 AFAP outline of submissions at [9]
6 See DP World Brisbane Pty Ltd v The Maritime Union of Australia [2013] FWCFB 8557 at [46]-[50]; Shop, Distributive
and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths [2013]
FWCFB 2814 at [22]
[2015] FWCFB 3124
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the view that the appeal raises important questions about the interaction of the NES and
provisions of an agreement which deal with the taking of annual leave.
Consideration
[8] Clause 14.2.1 of the Agreement provides the following:
“14.2 Touring Pilots
14.2.1 General
A tour will be on the basis of either:
(a) thirteen 28 Day cycles per year, each cycle consisting of 15 Days (or part
thereof) on duty and 13 Days off duty with the thirteenth cycle being annual
leave or
(b) an equal time roster in which annual leave is taken during the year as part of
the touring days off. Additional days annual leave will be provided so that pilot
on an equal time roster are on par with 15/13 pilots.
If the Pilot is not fully utilised during the duty period this will not have an impact on
the Pilots (sic) future duty Days or roster cycles.”
[9] Before dealing with the substance and effect of this clause and its relationship to the
NES, it is necessary to briefly describe the types of pilots employed by HNZ for whom annual
leave entitlements and tour rostering systems are set out in the Agreement. HNZ employs
pilots that fall within one of the following designations:
Touring pilots - these pilots are employed by HNZ and are permanently on
rostered tours of duty away from their Home Base. A Home Base in relation to a
touring pilot is said to be the nearest high capacity airport to that pilot’s usual
place of residence;7 and
LOS pilots - these pilots live on-site at a base that is predominantly crewed by
touring pilots.8
[10] The annual leave entitlement under the Agreement for each designation is as follows:
Annual leave for a touring pilot is primarily set out in clause 13.1 of the
Agreement, which provides that a touring pilot is entitled to 42 days off per
annum, which includes 28 days annual leave to be taken in one 28-day block
immediately after one block of 13 touring days off;9 and
7 Clause 3 of the Agreement
8 Ibid
9 Clause 13.1.2(a) of the Agreement
[2015] FWCFB 3124
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Annual leave for a LOS pilot is determined by clause 13.1 of the Agreement,
which provides that a LOS pilot is entitled to 42 days annual leave.10
[11] The hours of work for pilots are as provided for in the NES.11 Specific provision is
made for the rostering of hours of work. For LOS pilots, the rostering of hours of work is as
set out at clause 14.1 of the Agreement. For touring pilots, the rostering or tour cycles are set
out in clause 14.2.1 of the Agreement to which reference has been made earlier. Clause 14.2.1
applies only to a touring pilot and sets out two different tour cycles, each describing how
annual leave is to be taken while working that cycle.
[12] Clause 13.1 sets out the way in which annual leave by a touring pilot is to be taken.
Clause 14.2.1(b) has the effect of altering the way in which annual leave is to be taken by a
touring pilot. The equal time roster proposed by HNZ would operate on a 21 days on and 21
days off sequence. Part of each 21 days off period would include 2.7 days of annual leave,
although this is not the sole method for the taking of annual leave proposed by HNZ.
[13] Section 88 of the Act provides as follows:
88 Taking paid annual leave
(1) Paid annual leave may be taken for a period agreed between an employee and his
or her employer.
(2) The employer must not unreasonably refuse to agree to a request by the employee
to take paid annual leave.
[14] Section 88 of the Act provides for agreement between an employer and an employee
about when annual leave is to be taken by the employee and the duration of that leave.
Further, an employer must not unreasonably refuse to agree to a request by an employee to
take paid annual leave. Self evidently clause 14.2.1(b) of the Agreement has the effect of
denying a touring pilot the opportunity of reaching agreement with HNZ about when annual
leave may be taken and the duration of leave. At the very least, the clause limits the days on
which annual leave may be taken by agreement. There is no scope under clause 14.2.1(b) to
reach agreement to take annual leave during any 21 day on duty period, nor is there any
requirement that HNZ will not unreasonably refuse a request by a touring pilot to take paid
annual leave during such a period.
[15] Counsel for HNZ submitted that under the equal time roster proposal, a touring pilot
can take annual leave at any time provided it is during the “off period”.12 In effect counsel for
HNZ was submitting that a touring pilot was not required to take only 2.7 days of annual
leave during a 21 day off duty period. With respect, this is a distinction without a difference.
On that submission, a touring pilot may only take annual leave during any window which is a
21 day off duty period. This has the effect of limiting the capacity of a touring pilot and HNZ
to agree to another time when annual leave might be taken or the pilot making a request to
that effect which may not unreasonably be refused. It also has the effect of allowing only a
maximum of three weeks of annual leave to be taken as a block, with the effect of limiting the
10 Clause 13.1.1 of the Agreement
11 Clause 14 of the Agreement
12 Transcript PN 340; See also Respondent’s outline of submissions at [26]
[2015] FWCFB 3124
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capacity to agree to or request a longer period of annual leave. In either case it seems to us
that clause 14.2.1(b) provides for a system of taking of annual leave which is contrary to or
limits the full benefit of s.88 of the Act.
[16] Section 55 of the Act contains interaction rules between the NES and relevantly, an
enterprise agreement. Section 55(4) provides the following:
55 Interaction between the National Employment Standards and a modern award
or enterprise agreement
. . .
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of
terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an
employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in
any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example)
terms:
(a) under which, instead of taking paid annual leave at the rate of pay required
by section 90, an employee may take twice as much leave at half that rate of
pay; or
(b) that specify when payment under section 90 for paid annual leave must be
made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is
entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual
leave or paid/personal carer’s leave at a rate of pay that is higher than the
employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for
example) terms requiring an employee to give more notice of the taking of unpaid
parental leave than is required by section 74.
. . .
[17] We consider that clause 14.2.1(b) of the Agreement is a term that is not permitted by
s.55(4) of the Act because it is detrimental to a touring pilot in the respect that we have
already identified, namely that it denies the touring pilot the full benefit of s.88 of the Act.
[2015] FWCFB 3124
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[18] Clause 14.2.1(b) of the Agreement must therefore depend for its efficacy on it being a
term of the Agreement permitted by s.93(3) of the Act. That section provides as follows:
93 Modern awards and enterprise agreements may include terms relating to
cashing out and taking paid annual leave
. . .
Terms about requirements to take paid annual leave
(3) A modern award or enterprise agreement may include terms requiring an
employee, or allowing for an employee to be required, to take paid annual leave in
particular circumstances, but only if the requirement is reasonable.
. . .
[19] The Deputy President dealt briefly with this question as follows:
[39] Having regard to the needs of both the employee and the employer’s business,
and the other factors raised by the applicant, in my view clause 14.2.1 meets the
requirements of the Act (including s.93), as does any employer direction under it.
There is no detriment to employees within s.55(4), and no undue influence or pressure
under s.344. The arrangement is consistent with the Act and other legislation,
agreement and contract of employment, and is not otherwise harsh.13
[20] HNZ submitted that in reaching his conclusion that clause 14.2.1(b) met the
requirements of s.93(3) of the Act, the Deputy President had regard to the needs of the
employees and the employer’s business, and the factors raised by the employee witnesses
during the hearing and there was no error in this approach. It submitted further that to the
extent that clause 14.2.1 of the Agreement required a touring pilot to take annual leave during
the year as part of that touring pilot’s days off in the touring cycle, this requirement appears
on the face of clause 14.2.1 itself and is therefore contained within the terms of the
Agreement, which was approved by the AFAP. It submitted that the AFAP cannot now argue
that the very requirement contained in an Agreement the approval of which it supported is an
unreasonable requirement.14
[21] HNZ also submitted that, in truth, the requirement to take annual leave under the 15-
day on/13-day off duty cycle pursuant to clause 14.2.1(a) of the Agreement is as, if not more,
prescriptive than the equal time duty cycle. Under clauses 13.1.2(a) and 14.2.1(a), annual
leave must be taken in one block cycle immediately after a block of 13 days off. It submitted
that there was no provision for a touring pilot to take more than one block of annual leave in
these circumstances. Conversely, so it was submitted, under the equal time duty cycle of 21-
day on/21-day off pursuant to clause 14.2.1(b), touring pilots could take one 21 day block of
annual leave plus a block of 7 days (to make up 28 days annual leave) or alternatively
multiple blocks of annual leave, for example, three one week blocks of annual leave during
their off cycles.15
13 Decision at [39]
14 Respondent’s outline of submissions at [27]-[28]
15 Ibid at [29]
[2015] FWCFB 3124
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[22] We are not persuaded by these submissions. That the AFAP agreed to or approved the
provision, or that another provision of the Agreement has the same or a greater deleterious
effect is beside the point and says nothing about whether clause 14.2.1(b) is itself a term
permitted by s.93(3) of the Act (or for that matter, s.55(4)).
[23] The essence of s.93(3) is that it permits terms to be included in an enterprise
agreement which require an employee to take paid annual leave in particular circumstances if
the requirement is reasonable, or which allow for an employee to be required to take annual
leave in particular circumstances if the requirement is reasonable.
[24] Clause 14.2.1(b) is a clause that on its face requires a touring pilot to take annual leave
during the year as part of the touring days off. Its effect is to limit the circumstances in which
a touring pilot may take annual leave. We doubt that a clause in an agreement which limits the
circumstances in which any employee may take annual leave can be said to be a clause which
requires an employee to take paid annual leave in particular circumstances. However it is
unnecessary for us to form a concluded view on this issue as in our view the requirement to
take annual leave as part of a touring pilot’s touring days off is not reasonable.
[25] In assessing the reasonableness of the requirement, counsel for HNZ accepted that all
relevant considerations needed to be taken into account including those which are set out in
paragraph [382] of the Explanatory Memorandum to the Fair Work Bill 2008.16 Paragraph
[382] provides the following:
382. In assessing the reasonableness of a requirement or direction under this
subclause it is envisaged that the following are all relevant considerations:
the needs of both the employee and the employer’s business;
any agreed arrangement with the employee;
the custom and practice in the business;
the timing of the requirement or direction to take leave; and
the reasonableness of the period of notice given to the employee to take
leave.
[26] It is apparent that the nature of these considerations, so far as they concern an
employee, is personal to the employee the subject of the direction. It follows that generalised
assessments about the impact of a requirement on employees will be insufficient. Moreover,
the reasonableness of a requirement is to be assessed at the time that the requirement is to be
fulfilled because self evidently the factual circumstances which underpin any consideration
will change, as for example, the needs of both the employer and the employee are subject to
change.
[27] It seems to us that clause 14.2.1(b) of the Agreement fixes, for the duration of the
equal time roster’s operation, the requirement that a touring pilot take annual leave in blocks
no greater than 21 days and only during that touring pilot’s touring days off without any
regard to the personal needs of the particular touring pilot or many of the other relevant
considerations discussed above. Moreover the requirement compels a touring pilot to take
annual leave only on days on which the touring pilot would not otherwise be working. Indeed
the notion that a touring pilot should only take a period of annual leave on days on which the
pilot is already not required to work seems to us to be plainly unreasonable. That the touring
16 Transcript PN 622 – PN 625
[2015] FWCFB 3124
8
pilots are entitled to rostered days off, and hence receive a break from duty, does not render
the requirement that annual leave be taken only during days off reasonable. To the extent that
the Deputy President reached a contrary view, he was, with respect, in error.
[28] Section 93(3) permits an enterprise agreement to include terms requiring an employee
(or allowing an employee to be required) to take annual leave in particular circumstances
provided the requirement is reasonable. In considering whether a requirement is reasonable
the term imposing the requirement must relate to particular circumstances in which annual
leave will be required to be taken and must on its face be reasonable or enable the
consideration of relevant considerations earlier identified before the requirement is imposed in
relation to a particular employee. Our conclusion that clause 14.2.1(b) of the Agreement is not
a term permitted by s.93(3) is based on the circumstances of this case and the text of clause
14.2.1(b). Issues such as the capacity for personal circumstances to be taken into account
when imposing a requirement, the ability to take an annual leave entitlement as a block and
the need to travel long distances to take a period of annual leave, amongst others, will be
relevant in considering the reasonableness of a requirement to take annual leave in particular
circumstances that may be contained in particular agreements.
[29] Section 55(1) of the Act prohibits an enterprise agreement excluding the NES or any
provision of the NES. A provision of an enterprise agreement need not expressly exclude the
NES in order to fall foul of s.55(1).17 A provision of an enterprise agreement which in its
operation results in an employee not receiving the full benefit of the NES also contravenes the
prohibition.18 Clause 14.2.1(b) has the effect of depriving a touring pilot working an equal
time roster of the full benefit of s.88 of the Act.
[30] As clause 14.2.1(b) of the Agreement is not a term permitted by either ss.55(4) or
93(3) of the Act, it follows that it has no effect.19
[31] For the reasons already given, the Deputy President was in error in his conclusions
about the interaction between clause 14.2.1(b) of the Agreement and the NES, and that clause
14.2.1(b) was a term permitted by either or both of ss.55(4) and 93(3) of the Act.
[32] Given our conclusions it is unnecessary for us to consider the other matters raised by
the AFAP in its notice of appeal, and it seems to us that the dispute the subject of the original
application by the AFAP is resolved accordingly.
Disposition of the appeal
[33] We uphold the appeal and we quash the Decision. Whilst we consider our decision in
effect resolves the dispute underpinning the AFAP’s original application, if that is not correct,
leave is given to either party to apply to resolve any outstanding matter.
17See Canavan Building Pty Ltd [2014] FWCFB 3202 at [36]
18 Ibid
19 See s.56 of the Act
[2015] FWCFB 3124
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VICE PRESIDENT
Appearances:
R. Reitano of counsel with B. Annson, for the Australian Federation of Air Pilots
M. Felman of counsel with R. Wade, for HNZ Australia Pty Ltd
Hearing details:
Melbourne.
2015.
11 March.
Printed by authority of the Commonwealth Government Printer
Price code C, PR567088
THE FAIR WORK OF TH MISSION THE
