1
Fair Work Act 2009
s.604 - Appeal of decisions
Australian Federation of Air Pilots
v
Lloyd Helicopters Pty Ltd T/A CHC Helicopters (Australia)
(C2016/4586)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT HAMILTON
COMMISSIONER PLATT
SYDNEY, 26 OCTOBER 2016
Appeal against decision [[2016] FWC 4232] of Commissioner Cloghan at Perth on 4 July
2016 in matter number C2016/1167.
Introduction
[1] On 4 July 2016, Commissioner Cloghan issued a decision (Decision)1 pursuant to
s.739 of the Fair Work Act 2009 (the Act) and the dispute settlement provision in the CHC
Helicopters (Australia) Pilots Enterprise Agreement 2013-2016 (the Agreement). He found
that in the event the Respondent determined to terminate the employment of pilots covered by
the Agreement by way of redundancy, clause 20.1 of the Agreement had the effect of
requiring that the pilots to be selected for redundancy would be determined from a subset of
the whole pilot group, that is, the pilots whose jobs were made redundant.
[2] On 22 July 2016, the Australia Federation of Air Pilots (AFAP) lodged an appeal in
respect of the decision claiming that Commissioner Cloghan erred in his interpretation of
clause 20.1 of the Agreement.
Background
[3] The relevant background to the dispute is detailed in paragraph [8] to [26] of the
Decision. In summary a client of the Respondent terminated their contract for helicopter
services. This coupled with the withdrawal of a particular type of helicopter after a safety
issue which resulted in a surplus of pilots.
[4] The Respondent had sought to deal with the issue by allowing the pilots to take leave.
At the time the dispute was lodged, however, there was the potential for terminations by way
of redundancy to occur.
[5] A dispute arose as to the interpretation of the relevant Agreement provisions. This
dispute was put to the Commission by way of seeking an answer to three questions.
[2016] FWCFB 7720
DECISION
E AUSTRALIA FairWork Commission
[2016] FWCFB 7720
2
[6] Only one of the questions put to Commissioner Cloghan is the subject of this appeal.
That question was:
“Is the effect of subclause 20.1 of the CHC Pilots Agreement that a pilot selected for
redundancy must be taken from across the pilot group, but only in relation to the
specific group of pilots whose job is redundant?”
[7] Commissioner Cloghan answered the question in the affirmative.
[8] Clause 20.1 of the Agreement provides that:
“Redundancy of employees shall be taken from the whole Pilot group of the Company
and will be affected in the order determined by the merit system at Appendix 2.”
[9] The Commissioner determined that it was necessary to establish the meaning of the
phrase “the whole pilot group” in order to interpret the clause believing that the clause was
“capable of more than one meaning and contain (sic) uncertainty.”
[10] The Commissioner reached his conclusion on the following basis:
“[78] Applying the principle in Ockham’s razor, was it the intention of CHC and
employees, when reaching agreement on the redundancy provision in subclause 20.1,
to have a situation whereby:
when selected positions are abolished;
the persons who occupy those positions are not automatically considered to be
redundant employees; however,
a pilot whose position is not being made redundant and who is in a different
operational stream and who is flying a different aircraft, is considered for
redundancy; and further,
in the event of applying the above process, a pilot in an unrelated position to
the abolished position, is made redundant. Further, CHC is required to retrain
the pilots whose position has been abolished. Finally, the pilot may, or may
not, complete the training qualification.
[79] I consider it can be reasonably inferred that Clause 14 Consultation, in particular
subclause 14.5(a)(iii) and Clause 20 Redundancy, in particular subclause 20.8 are
intended to mitigate the adverse consequences upon employees when positions have
been abolished. Further, this is the same intention and purpose of s.398 of the FW Act.
However, the AFAP’s submission does not attempt to limit the adverse impact on a
discrete group of employees but to have widespread, intrusive, protracted and serious
consequences for all pilots. Are these consequences a proportionate and sound
response to the circumstances which have led to the abolition of discrete positions
described above. I am satisfied that such a disproportionate response is inconsistent
with the confined, and minimal, intent of “group” in subclause 20.1 of the CHC Pilots
Agreement.
[80] Faced with the conflicting meaning and application of subclause 20.1, should I
adopt the simplest explanation rather than rely on the AFAP submission of subclause
20.1 which has more assumptions and appears contrary to the context of the scheme of
[2016] FWCFB 7720
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the Agreement, the FW Act and the operational practicalities? It is difficult to come to
any conclusion other than the simplest, that is, pilots should be selected from a group
as defined by aircraft type/contract or operational stream.”
The Appeal
[11] In giving consideration to the appeal, we are guided by the most recent High Court
authority on the interpretation of agreements, Amcor Ltd v. CFMEU
2
, and the summary of
those principles in the recent Full Bench decision in The Australian Meat Industry Employees
Union v Golden Cockrel.3
Appellant’s Submissions
[12] In terms of the merits, the Appellant submitted that the Commissioner erred in:
determining that clause 20.1 was ambiguous;
not interpreting the phrase “whole pilot group” in a manner consistent with its
ordinary meaning; and
rewriting the agreement to achieve what might be regarded as a fair outcome.
[13] In terms of permission to appeal, the Appellant contended that the public interest was
enlivened as the error was serious in nature, and would result in significant injustice to the
employees if the Commissioner’s decision was to stand.
Respondent’s submissions
[14] In terms of the merits, the Respondent contended that:
the Commissioner’s approach was consistent with the principles in Golden
Cockerel;4
the words contained in clause 20.1 are not plain and have more than one meaning;
and
the Commissioner ascertained the parties purpose in effecting redundancies and
adopted an interpretation which was available and avoided injustice and
inconvenience.
[15] In terms of leave to appeal the Respondent submitted that leave to appeal should not
be granted as:
there were currently no plans to make any employees redundant and this position
was likely to continue;
the Agreement had expired and the Respondent would not renegotiate a new
Agreement containing such term;
in the event that an acceptable Agreement could not be negotiated, the Respondent
would apply to terminate the Agreement; and
the effect of the appeal would be to provide an advisory opinion and no substantial
injustice will occur to anyone if the appeal is not determined.
[2016] FWCFB 7720
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Consideration - permission to appeal
[16] The Commission will grant permission to appeal only if it is in the public interest to do
so.5 The test of assessing whether a matter is in the public interest is discretionary and
involves a broad value judgement.6 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,7 the
Full Bench summarised the test for determining the public interest as follows:
“[26] Appeals have lain on the ground that it is in the public interest that leave should
be granted in the predecessors to the Act for decades. It has not been considered useful
or appropriate to define the concept in other than the most general terms and we do not
intend to do so. The expression ‘in the public interest’, when used in a statute,
classically imports a discretionary value judgment to be made by reference to
undefined factual matters, confined only by the objects of the legislation in question.
[Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing
O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of
importance and general application, or where there is a diversity of decisions at first
instance so that guidance from an appellate court is required, or where the decision at
first instance manifests an injustice, or the result is counter intuitive, or that the legal
principles applied appear disharmonious when compared with other recent decisions
dealing with similar matters, it seems to us that none of those elements is present in
this case.”
[17] Alternately, the second ground for granting permission to appeal is that the decision is
attended with sufficient doubt to warrant its reconsideration or that substantial injustice may
result if leave is refused.8
[18] In determining whether permission to appeal should be granted we have reviewed and
considered all material filed by the parties including all submissions, correspondence and
relevant authorities.
[19] At the hearing, counsel for the Respondent advised that it had lost and continued to
lose substantial contracts for services to its competitors as a result of the cost basis imposed
by the Agreement. Counsel for the Respondent asserted that the Union, in reaching what was
considered to be a more favourable enterprise Agreement with a competitor, had made:
“continued operation under the existing agreement commercially untenable. It means
that there will either be a new agreement, our client will terminate the existing
agreement and revert to the modern award, or our client will go out of business.”9
[20] The potential for the Respondent to go ‘out of business’, and potentially terminate the
employment of its workforce by way of redundancy, establishes the utility of the appeal. We
therefore grant permission to appeal.
[2016] FWCFB 7720
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Consideration – the appeal
[21] This appeal concerns the correct interpretation of clause 20.1 of the Agreement, and it
is therefore not a discretionary decision. The question before us is: was the Commissioner
correct in his decision that clause 20.1 was ambiguous?
[22] As previously noted, clause 20.1 provides:
“Redundancy of employees shall be taken from the whole Pilot group of the Company
and will be affected in the order determined by the merit system at Appendix 2.”
[23] A Pilot is defined in clause 3 of the Agreement as an employee of the Company
covered by the scope of the Agreement. The literal meaning of clause 20.1 is that ‘all’ the
pilots are the group from whom redundant employees are chosen. In our respectful view there
is no reason to depart from the ordinary and literal meaning of the clause. The term ‘whole
pilot group’ is not ambiguous and should be given its plain and ordinary meaning.
[24] We recognise that in some cases the application of this interpretation in conjunction
with the selection criteria in the Agreement may result in inconvenient outcomes for the
Respondent. However, it is not the Commission’s role to re-write the Agreement in order to
achieve what might be considered a more appropriate outcome10. The outcome is not absurd
and does not defeat the intended operation of the clause.
[25] We are of the view that clause 20.1 provides that a pilot selected for redundancy must
be taken from across all of the pilots employed by the Respondent who are covered by the
Agreement. As such, in our respectful view, the Commissioner fell into error in his
interpretation of the clause. We are therefore satisfied that the appeal should be upheld and
that the original Decision must be quashed.
Conclusion
[26] Permission to appeal is granted.
[27] The appeal is upheld.
[28] The Commissioner’s Decision is quashed.
THE FAIR WORK CO COMMISSION AF NOISS THE SEAA
[2016] FWCFB 7720
6
VICE PRESIDENT
Appearances:
Mr C Dowling of Counsel for the Appellant
Mr G Hatcher of Senior Counsel for the Respondent
Hearing details:
10am
13 September 2016
Melbourne
Printed by authority of the Commonwealth Government Printer
Price code {C}, PR586851
1 [2016] FWC 4232.
2 (2005) 222 CLR 241.
3 [2014 FWCFB 7447.
4 The Australian Meat Industry Employees Union v Golden Cockrel [2014 FWCFB 7447.
5 Fair Work Act 2009 (Cth) s 604(2).
6 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [6].
7 [2010] FWAFB 5343 at [27].
8 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [7].
9 Transcript - PN133.
10 The Australian Meat Industry Employees Union v Golden Cockrel [2014 FWCFB 7447.
