[2017] FWCFB 487
The attached document replaces the document previously issued with the above code on 6
March 2017.
The place of signing has been amended to Melbourne.
Associate to Vice President Catanzariti
6 March 2017
1
Fair Work Act 2009
s.604 - Appeal of decisions
Bristow Helicopters Australia Pty Ltd
v
Australian Federation of Air Pilots
(C2016/7376)
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT GOOLEY
COMMISSIONER WILSON
MELBOURNE, 6 MARCH 2017
Appeal against decision [2016] FWC 8515 of Commissioner Cambridge at Sydney on 2
December 2016 in matter number C2016/5875.
[1] On 2 December 2016, Commissioner Cambridge issued a Decision1 which held that
the stand downs of the affected employees implemented by Bristow Helicopters Australia Pty
Ltd (“the Appellant”) were in contravention of section 524 of the Fair Work Act 2009 (Cth)
(“the Act”). Subsequent to his Decision, the Commissioner issued an Order2 on 2 December
2016, pursuant to section 526 of the Act, ordering that:
1. The stand downs of the affected employees be withdrawn and each employee be
permitted to return to work (Order 1);
2. The Appellant treat the stand downs of the affected employees as null and void, and to
pay each of the affected employees the wages they would have earned had they been
permitted to work during the period in which they were stood down (Order 2); and
3. The Appellant comply with Order 1 within 72 hours and the Appellant comply with
Order 2 within 14 days.
[2] On 15 December 2016, the Appellant lodged a Notice of Appeal, appealing the
Decision and subsequent Order made by the Commissioner. At the heart of the appeal was
whether the Commissioner correctly applied and construed section 524 of the Act in making
his Decision.
[3] On 16 December 2016, Vice President Watson issued an Order,3 which had the effect
of staying Order 2 made by the Commissioner until this appeal was heard and determined.
1 [2016] FWC 8515.
2 PR587968.
3 PR588687.
[2017] FWCFB 487
DECISION
E AUSTRALIA FairWork Commission
[2017] FWCFB 487
2
[4] We heard the appeal on 23 January 2017 and reserved our Decision. At the hearing,
Mr M. Follett, of Counsel, sought permission to appear for the Appellant and Mr C. Dowling,
of Counsel, sought permission to appear for the Respondent. Given the complexity of the
matter, and having regard to section 596 of the Act, permission was granted to both parties to
be represented.
The Decision
[5] Pursuant to section 524 of the Act, the Commissioner found that the stand downs of
the affected employees were not caused by any breakdown of machinery or equipment and/or
a stoppage of work for which the Appellant could not reasonably be held responsible. The
Commissioner held that the stand downs were caused by the operation of the terms contained
in the Bristow Helicopters Australia Pilots Enterprise Agreement 2016 (“the Agreement”).
The Commissioner found these terms restricted the capacity of the Appellant to dismiss
employees on the basis of involuntary redundancy and, instead, the Appellant stood down
those employees that it would have otherwise dismissed. In this regard, the Commissioner
held that the terms contained in the Agreement were something which the Appellant could
reasonably be held responsible for. The Commissioner found that the circumstances which
caused the stand downs of the affected employees were not circumstances comprehended by
section 524(1) of the Act.
[6] Therefore, the Commissioner held that the stand downs of the affected employees had
been implemented in contravention of the requirements of section 524 of the Act and
subsequently issued the above Orders.
The Appeal
[7] At the heart of the appeal was whether the Commissioner correctly applied and
construed section 524 of the Act in making his Decision.
Appellant’s Submissions
[8] The Appellant submitted five main appeal grounds, which we summarise as follows.
[9] Firstly, the Appellant contended that the Commissioner erred regarding the question of
causation. The Appellant asserted that the Commissioner applied a “direct causal connection”
test to the question of causation, which equated to an immediate and sole (or at least
dominant) cause test for causation. The Appellant asserted that the Commissioner did not
expand in any detail as to the nature of the test and, further, that the test applied by the
Commissioner was erroneous. Instead, the Appellant contended that the causation element in
section 524 should have been approached in the modern, common sense way adopted by
common law,4 which is consistent with the statutory purpose of section 524 of the Act.5
Further, the Appellant submitted that an enquiry as to causation should be undertaken by
reference to the purpose of the enquiry.6 Having regard to subsections (a)-(c) of section 524,
the Appellant noted that the apparent purpose of the provision is to ensure that an employer
who is not at fault, is not wholly at loss by having to pay its employees in full as usual in
4 Tabet v Gett (2010) 240 CLR 537, [111]-[113].
5 Thiess v Collector of Customs (2014) 250 CLR 664, 22-23; Acts Interpretation Act 1901 (Cth) s 15AA.
6 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, 56; Henville v Walker (2001) 206 CLR
459, 98.
[2017] FWCFB 487
3
circumstances where it cannot obtain useful work from them. Moreover, the Appellant
contended that the Commission can only arbitrate a dispute if the employer has already passed
through the “causal gate” of section 524. This is because only an employee or their
representatives can initiate a dispute about the operation of the Part, whilst employers cannot.7
Accordingly, the Appellant asserted that the employer must be lawfully capable of
withholding payment in the first instance, such as to give rise to a relevant “dispute”. The
Appellant submitted that this can only occur where a flexible and common sense approach to
causation is taken. In this regard, the Appellant noted that a similar balance is struck in the
assessment of causation in other texts, in particular, at common law,8 equity9 and in the trade
practices context.10
[10] The Appellant contended that if the “substantial and operative” test were applied,
causation would be plainly established here. Further, the Appellant asserted that whilst there
was evidence that the Appellant had commenced a review of its labour requirements in early
2016 and had implemented an earlier round of redundancies across its workforce,11 the earlier
round did not impact the pilots the subject of these proceedings. On any view, the Appellant
submitted that they were stood down for reasons including the grounding of EC225
helicopters.12 In this regard, the Appellant contended that the above reason did not need to be
the sole or dominant reason. Further, the Appellant asserted that the temporal “gap” between
the Norway crash and the stand downs does not impact that assessment in circumstances
where the length of the substantive grounding was unknown and where alternatives to stand
downs and retrenchment were being explored. The Appellant contended that the same
conclusion is reached on an application of the various other prevailing tests of causation. In
particular, the Appellant asserted that a common law approach yields the following
conclusion: “but for” the prohibition on the use of EC225 helicopters resulting from the
Norway incident, the lack of useful employment would not have arisen. Similarly, the
Norway incident and the grounding of the EC225 fleet “materially contributed” to the stand
down. In this regard, the Appellant asserted that the Commissioner’s findings were not
inconsistent with any of these propositions. Rather, it was only through a rigid application of
an immediate and sole/dominant reason test, a test which otherwise finds no favour in
approaches to causation in other areas, that the Commissioner fell into error.
[11] The Appellant contended that, in applying that test, the Commissioner concluded that
the “true reason” for the stand down was the fact that the Appellant was prohibited from
retrenching the first four pilots by the operation of the status quo provisions (clause 6.1.3) in
the applicable enterprise agreement. The Appellant submitted that such a conclusion was
erroneous, as the four pilots in question were only to have been retrenched due to there being
a lack of useful work for them to do on account of the EC225 grounding, whereby that same
lack of work formed the reason for the stand down. The Appellant asserted that the grounding
was a “necessary condition” of that lack of work and, thus, a necessary condition of the stand
down.13 In this regard, the Appellant submitted that, by attempting to divorce them, the
Commissioner erred.
7 Fair Work Act 2009 (Cth) s 526(3).
8 See generally March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506; Adeels Palace Pty Ltd v Moubarak (2009) 239
CLR 420, [55].
9 Maguire & Tansey v Makaronis (1997) 188 CLR 449, 467-70. See the distinction drawn in Youyang Pty Ltd v Minter
Ellison Morris Fletcher (2003) 212 CLR 484, 38. See also Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165, 85.
10 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109, 54-58; Henville v Walker (2001) 206
CLR 459, 14 and 69.
11 [2016] FWC 8515, [50].
12 See, for example, Annexures “KW6” and “KW7” of Exhibit 16 (AB 836-838).
13 Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145, [99].
[2017] FWCFB 487
4
[12] Secondly, the Appellant contended that the Commissioner erred in construing section
524(1)(c) of the Act in four ways:
1. The Commissioner required the identification of a fixed period of time before a
“stoppage of work” can fall within the scope of section 524(1)(c);
2. The Commissioner found that “a reduction in the available work for the EC225
helicopters, for whatever reasons, does not represent stoppage of work”;14
3. The Commissioner’s finding that there was “a reduction in the available work for
EC225 helicopters”15 does not accurately reflect the evidence. There was more than a
mere reduction in available work; and
4. The Commissioner erroneously concluded at paragraph [63] of his Decision that “[a]n
employer who consciously allows another entity to exercise control over its operations
would become vicariously liable for the actions of that entity.”
[13] Thirdly, the Appellant asserted that the Commission’s finding at paragraph [61] of his
Decision that “there was no breakdown of the EC225 at any time; at most, its use was
restricted” was erroneous. The Appellant contended that the Norway crash would meet the
definition of a “breakdown of machinery”. In this regard, the Appellant asserted that an
examination of the Explanatory Memorandum demonstrates that a broad construction of
section 524(1)(b) was intended. This is because section 524(1)(b) is not intended to be
confined to the employer’s machinery, but rather, it also includes a breakdown of a third
party’s machinery.16 Further, the Explanatory Memorandum makes it clear that the section
aims to avail employers of a stand down mechanism where essential plant or equipment is
rendered unusable through no fault of the employer. In this regard, the Appellant contended
that the EC225 helicopters were unusable at the time of the stand downs. Further, the
Appellant asserted that the Commissioner utilised an unduly narrow construction of
“breakdown of machinery” by placing weight on the fact that none of the EC225 helicopters
displayed the same fault (overtly) as that which caused the Norway crash.17 In this regard, the
Appellant contended that the narrow construction of section 524(1)(b) adopted by the
Commissioner leaves an employer in such circumstances with an invidious choice: either
adopt the “safe” course, but be compelled to pay its employees to perform no useful work; or,
place its employees in potential danger by directing them to operate equipment with a
potential latent defect.
[14] Fourthly, the Appellant posited that, assuming the Commissioner was right to
conclude that the stand down was not authorised by section 524 of the Act, the Commission
had no power to issue Order 2. In this regard, the Appellant submitted that there are limits on
the types of relief the Commission can order. The Appellant noted the decision of Hatchett v
Bowater Tutt Industries Pty Ltd,18 in particular:
“A claim for payment of wages, or for wrongful dismissal, or for breach of an award in
whatever form the claim of legal right may have been cast is beyond the jurisdiction of
14 [2016] FWC 8515, [62].
15 Ibid.
16 Explanatory Memorandum, Fair Work Bill 2008 (Cth) at [2079].
17 [2016] FWC 8515, [61].
18 (1990) 26 FCR 561, 567.
[2017] FWCFB 487
5
the Commission. This is clearly established by a series of decisions of the High Court
…”
[15] The Appellant asserted that the dispute before the Commission was indistinguishable,
as it was a dispute about the respective rights of the Appellant and non-parties (the affected
employees) under section 524 of the Act and an attempt by the Respondent to secure payment
for the stood down employees. Whilst the Appellant noted that the Commission was entitled
to make Order 1, the Appellant contended that in making Order 2, the Commission exceeded
its jurisdiction. As such, the Appellant posited that Order 2 should be quashed.
[16] Fifthly, the Appellant asserted that the Commissioner has not disposed of or otherwise
determined the section 739 application. The Appellant contended that the Commissioner had a
statutory duty to do so, either by arbitrating the dispute or choosing not to do so and
dismissing it.19 Given the way in which the matter progressed and the Respondent’s position,
the Appellant submitted that the determination of the stand down application effectively
resolved or determined the section 739 application. Absent any further orders in relation to
that dispute, the Appellant contended that the Commissioner ought to have dismissed that
application and that, on any rehearing, the Full Bench can do so.
[17] For these reasons, the Appellant asserted that the Full Bench should grant permission
to appeal, allow the appeal, quash the Decision and the Respondent’s section 739 application
should otherwise be dismissed.
Respondent’s Submissions
[18] The Respondent addressed each of the Appellant’s five main grounds of appeal as
outlined above.
[19] In relation to the first ground of appeal, the Respondent contended that there was
nothing erroneous in the Commissioner’s approach to section 524 in requiring a “causal
connection” or “direct causal connection”. Pursuant to section 524(1) of the Act, the
Respondent asserted that the phrase “because of one of the following circumstances” requires
a direct causal connection and, as such, the Commissioner’s approach was orthodox. Further,
contrary to the Appellant’s submission, the Respondent contended that nothing in the
Decision demonstrated the application by the Commissioner of a “sole”, “dominant” or
“immediate” interpretation of “because” in section 524(1) of the Act. The Respondent posited
that no assistance is provided by the Appellant’s submission by analogy on the application of
a “but for” test in the context of Part 3-1 of the Act. In any event, the Respondent asserted that
causation, at common law or otherwise, is a question of fact which “must be determined by
applying common sense to the facts of each particular case.”20 The Respondent contended that
the evidence established that the crash of the EC225 aircraft may have led to the following:
(a) An obligation to train some or all of its affected workforce; and/or
(b) A need to make some of its workforce redundant.
19 Fair Work Act 2009 (Cth) s 739(4).
20 March v Stramare (E&MH) Pty Ltd (1991) 171 CLR 506, 515 (Mason CJ).
[2017] FWCFB 487
6
[20] Consistent with the above, the Respondent contended that the Appellant commenced
the implementation of retraining for some of its affected workforce in accordance with the
Agreement. However, the Respondent submitted that this did not, at any time, give rise to the
need for a stand down. Further, the Respondent asserted that the Appellant’s choice to make
some of its workforce redundant also did not give rise to the need for a stand down. The
Respondent submitted that the only cause of the stand down, on the application of the facts in
this case, was the section 739 application which challenged the involuntary redundancies. As
such, the Respondent posited that it is clear that each of the pilots chosen for redundancy were
not redundant on the proper application of the Agreement. The Respondent contended that the
Commissioner was correct in identifying that the impetus of the stand downs was the
operation of the terms of the Agreement, which restricted the termination of the employment
of particular individuals who had been stood down rather than made redundant.21 The
Respondent contended that the Commissioner correctly identified that, whilst the redundancy
of those individuals may have been connected to the grounding of the EC225 helicopter, the
standing down of those employees was not connected to the grounding of the EC225
helicopter. As such, the Respondent submitted that the Commissioner was correct to
distinguish the reason for redundancy from the reason for the stand downs.22
[21] In relation to the second ground of appeal, the Respondent addressed each of the sub-
points made by the Appellant as follows:
1. The Respondent contended the Commissioner did not require the identification of a
fixed period of time before a “stoppage of work” can fall within the scope of section
524(1)(c) of the Act. The Respondent asserted that the Commissioner merely noted
that such a stoppage is “ordinarily for some identified period of time”;
2. The Respondent contended that the evidence establishes that the EC225 grounding led
to a decision to retrain and then an erroneous selection for redundancy. As such, these
circumstances did not represent a stoppage of work;
3. The Respondent asserted that the Appellant’s criticism of the Commissioner’s finding
that there was “a reduction in the available work from EC225 helicopters”23 is not
supported by the evidence; and
4. The Respondent posited that the Commissioner’s comments “in passing” did not form
a basis for the decision or orders as challenged and, on the facts in this case, those
comments do not demonstrate error.
[22] In relation to the third ground of appeal, the Respondent contended that the
Commissioner’s finding that “there was no breakdown of the EC225 at any time; at most, its
use was restricted” is wholly consistent with the evidence.
[23] In relation to the fourth ground of appeal, the Respondent contended that there is and
was no contest between the parties that there was a proper jurisdictional basis for the disputes
under section 526 and section 739 of the Act. The Respondent noted that section 595(3)
relevantly provides that “[t]he FWC may deal with a dispute by arbitration (including by
making any orders it considers appropriate) only if the FWC is expressly authorised to do so
21 [2016] FWC 8515, [59]-[60].
22 Ibid.
23 Appellant’s submissions, [26].
[2017] FWCFB 487
7
under or in accordance with another provision of this Act.” In this regard, the Respondent
noted that there is no dispute that the FWC was expressly authorised to do so under section
526 and/or section 739 of the Act. In relation to Order 2, the Respondent asserted that this
Order properly gave effect to the resolution of the dispute within the power of the Act. As
such, the Respondent posited that it cannot be said that the Order represents a pecuniary
payment or is otherwise restricted by the Act.
[24] In relation to the fifth ground of appeal, the Respondent accepted the finding of the
Commission at paragraph [64] of the Decision, namely, that:
“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.”
[25] In the circumstances, the Respondent noted it was content that the section 739
application otherwise be dismissed, reserving its rights to continue to challenge the selection
for redundancy by the Appellant of pilots other than from the whole pilot group.
[26] For the above reasons, the Respondent contended that permission to appeal should be
refused, the appeal should be dismissed and the application under section 739 otherwise be
dismissed.
Consideration – Permission to Appeal
[27] The FWC will grant permission to appeal only if it is in the public interest to do so.24
The test of assessing whether a matter is in the public interest is discretionary and involves a
broad value judgement.25 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,26 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.”
24 Fair Work Act 2009 (Cth) s 604(2).
25 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210, [6].
26 [2010] FWAFB 5343, [27].
[2017] FWCFB 487
8
[28] 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.27
[29] 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.
[30] We find that permission to appeal should be granted in this matter. We are of the view
that the appeal raises important questions concerning the application of section 524 of the Act
in circumstances where the Commissioner’s discretion to determine whether the Appellant
may stand down its employees is an issue in the dispute. We consider this to be an important
matter regarding the Commissioner’s approach in making such a determination and, therefore,
the dispute arising in this case is a matter of public interest. It is on this basis that permission
to appeal is granted.
Consideration – The Appeal
[31] We note that a decision under appeal is of a discretionary nature and such a decision
can only be successfully challenged on appeal if it is shown that the discretion was not
exercised correctly. We note that it is not open for us to substitute our view on the matters that
fell for determination before the Commissioner in the absence of error of an appellable nature
in the Commissioner’s original Decision. As the High Court said in House v The King28:
“The manner in which an appeal against an exercise of discretion should be determined
is governed by established principles. It is not enough that the judges composing the
appellate court consider that, if they had been in the position of the primary judge, they
would have taken a different course. It must appear that some error has been made in
exercising the discretion. If the judge acts upon a wrong principle, if he allows
extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he
does not take into account some material consideration, then his determination should
be reviewed and the appellate court may exercise its own discretion in substitution for
his if it has the materials for doing so. It may not appear how the primary judge has
reached the result embodied in his order, but, if upon the facts it is unreasonable or
plainly unjust, the appellate court may infer that in some way there has been a failure
properly to exercise the discretion which the law reposes in the court of first instance.
In such a case, although the nature of the error may not be discoverable, the exercise of
the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[32] We now turn to consider Orders 1 and 2 made by Commissioner Cambridge at first
instance.
Order 1
[33] 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:
27 Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210, [7].
28 [1936] 55 CLR 499.
[2017] FWCFB 487
9
In early 2015, the Appellant announced that it was commencing a program to address
excessive staffing levels particularly in respect to pilots;
A voluntary redundancy program was implemented, however, ongoing economic
downturn meant that by March 2016, the Appellant identified that it needed to make
approximately 14 pilots involuntarily redundant;
On 29 April 2016, the fatal crash of an EC225 helicopter in Norway led to the
substantive grounding of all EC225 type helicopters, which were a significant part of
the Appellant’s 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 EC225 pilots led to the seven least
senior EC225 pilots being requested to take either voluntary redundancy or some form
of leave, including leave without pay;
On 4 July 2016, decision of Cloghan C in Lloyd Helicopters Pty Ltd T/A CHC
Helicopters Australia v Australian Federation of Air Pilots29 (hereafter “Lloyd
Helicopters”) was issued, and the selection of involuntary redundancies based upon
aircraft type as opposed to pilot group was promulgated;
On 12 July 2016, the Appellant commenced to implement involuntary redundancies of
the two least senior EC225 pilots (Mr Duncombe and Mr Luscombe);
On 13 July 2016, the Respondent lodged the section 739 dispute application and
invoked the status quo provisions (clause 6.1.3) in respect to the involuntary
redundancies of Mr Duncombe and Mr Luscombe;
On 15 July 2016, Mr Duncombe and Mr Luscombe were advised that they had been
stood down;
On 23 August 2016, the Appellant advised further stand downs of EC225 pilots, Mr
Butler and Mr Jerry;
On 20 October 2016, further stand downs were advised to an additional seven EC225
pilots;
On 21 October 2016, the Australian Civil Aviation Safety Authority (“CASA”)
removed any restriction on use of the EC225; and
On 26 October 2016, a Full Bench quashed the Lloyd Helicopters decision.
[34] In relation to the above events, the Appellant contended that it did not contravene
section 524 of the Act by standing down the affected employees.
29 [2016] FWC 4232.
[2017] FWCFB 487
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[35] Section 524 of the Act states as follows:
“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.”
[36] In dealing with Order 1, we refer to grounds 1 – 3 of the Appellant’s submissions.
[37] In relation to the first appeal ground, the Appellant contended that the Commissioner
erred in applying a “direct causal connection” test to the question of causation pursuant to
section 524(1) of the Act. We note the word “because” in section 524(1) of the Act denotes an
explicit requirement for a direct causal connection between the period in which an employee
is stood down because he or she cannot usefully be employed and any one of the
circumstances elicited at subsections 524(1)(a)-(c) of the Act. This is corroborated in
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied
[2017] FWCFB 487
11
Services Union of Australia & Anor v FMP Group (Australia) Pty Ltd,30 whereby Gostencnik
DP stated:
“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.”31
[38] In construing section 524(1) of the Act, the Commissioner at paragraph [53] of his
Decision stipulated that:
“There must be a direct causal connection between the breakdown of the 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.”
[39] Accordingly, the Commissioner found that an examination of the evidence between
the events that occurred in the period between the substantive grounding of EC225 helicopters
on 29 April 2016 and the first stand downs on 15 July 2016 revealed that the reason for the
stand downs was not the substantive grounding of the EC225. Rather, the Commissioner
found that the stand downs were caused by the Appellant being prevented from dismissing Mr
Duncombe and Mr Luscombe on the basis of involuntary redundancy due to the dispute
application lodged by the Respondent on 13 July 2016.
[40] We note the following salient facts that lead us to conclude that the Commissioner did
not err in making his decision:
(a) After the EC225 crash in Norway, each of the relevant pilots was notified that he
would be retrained. That retraining was in accordance with the Agreement;
(b) After the notification of retraining, but prior to the implementation of that training,
the Lloyd Helicopters decision provided the Appellant with the apparent ability to
avoid its “last on, first off” selection for redundancy obligation under the
Agreement and instead choose pilots that flew EC225 aircraft for redundancy;
(c) After the decision in Lloyd Helicopters, the Appellant chose not to proceed with
the training for each of the relevant pilots and instead chose a number of them for
involuntary redundancy (including Mr Luscombe and Mr Duncombe);
(d) The Respondent immediately challenged those involuntary redundancies and
sought the implementation of the status quo (by its section 739 application); and
(e) Upon receiving the dispute notification to maintain the status quo, the Appellant
wrote to Mr Luscombe and Mr Duncombe advising them of their stand down.
Those notices of stand down made no mention of the EC225 crash in Norway.
30 [2013] FWC 2544
31 Ibid [31].
[2017] FWCFB 487
12
[41] The evidence establishes that the crash of the EC225 aircraft may have led to the
following:
(a) An obligation to train some or all of its affected workforce; and/or
(b) A need to make some of its workforce redundant.
[42] Consistent with the above, the Appellant commenced the implementation of retraining
for some of its affected workforce in accordance with the Agreement. Moreover, the
Appellant chose to make some of its workforce redundant. However, neither of these events
gave rise to the need for employees to be stood down pursuant to section 524 of the Act. The
only cause of the stand downs on the application of the facts in this case, is the section 739
application made by the Respondent which challenged the Appellant’s choice to make the
affected employees redundant.
[43] As a result, we are satisfied the Commissioner did not err in concluding that the
grounding of the EC225 helicopters and reduction in work did not justify the standing down
of the affected employees. Accordingly, we are not satisfied that the Commissioner erred in
his construction or application of section 524 in this regard.
[44] In relation to the second appeal ground, the Appellant contended that the
Commissioner erred in construing section 524(1)(c) of the Act in four ways.
[45] Firstly, the Appellant submitted that the Commissioner found that section 524(1)(c)
required the identification of a fixed period of time before a “stoppage of work” can fall
within the scope of that section. We disagree with this submission. The Commissioner noted
that a stoppage of work occurs “ordinarily for some identified period of time.”32 We are not
satisfied that the Commissioner’s reference to an “identified period of time” imposed a
requirement that the stoppage of work must be for a fixed period of time. Rather, the
Commissioner merely made reference to the fact that stoppages of work ordinarily occur for
some period of time. As such, we are not satisfied that the Commissioner erred in this regard.
[46] Secondly, the Appellant asserted that the Commissioner’s finding at paragraph [62] of
his Decision that “a reduction in the available work for the EC225 helicopters, for whatever
reasons, does not represent a stoppage of work …” misconceived the application of section
524 of the Act. We do not agree with this submission. It cannot be said on the evidence that
there was a stoppage of work in circumstances where:
(a) There remained search and rescue work to be carried out with EC225 aircraft;
(b) There remained work with the EC225 notified by the Appellant after 19 May 2016
until 2 June 2016;
(c) CASA cleared the EC225 for search and rescue and ground runs from 16 June
2016; and
(d) There remained the decision and ability of the Appellant to retrain, and engage on
training, its workforce.
32 [2016] FWC 8515, [62].
[2017] FWCFB 487
13
[47] As such, we are not satisfied that the Commissioner erred in construing section
524(1)(c) of the Act.
[48] Thirdly, the Appellant contended that the Commissioner’s finding at paragraph [62] of
his Decision that “[a] reduction in the available work for EC225 helicopters …” did not
accurately reflect the evidence. In particular, that there was more than a mere “reduction” in
available work for EC225 helicopters. We do not agree with this submission. The context of
subparagraphs (a)-(d) of paragraph [46] of this Decision clearly demonstrates that there was a
reduction in the work available to EC225 helicopters. As such, we are satisfied that
Commissioner did not err in finding that there was a reduction in the available work for
EC225 helicopters.
[49] Fourthly, the Appellant contended that the Commissioner erroneously concluded at
paragraph [63] of his Decision that “[a]n employer who consciously allows another entity to
exercise control over its operations would become vicariously liable for the actions of that
entity.” We are not satisfied that the above statement formed the basis upon which the
Commissioner made his Decision. Rather, the Commissioner found at paragraph [68] of his
Decision that:
“The circumstances which caused the stand downs of the affected Pilots are not
circumstances which are comprehended by subsection 524 (1) of the Act.”
[50] Accordingly, the Commissioner found that the stand downs of the affected pilots were
implemented in contravention of section 524 of the Act. As such, we are not satisfied that the
comments made in passing at paragraph [63] of the Decision formed the basis upon which the
Commissioner relied in reaching his conclusion that the Appellant could reasonably be held
responsible for the stand downs. Further, we are not satisfied that these passing comments are
the subject of appellable error. Therefore, we are not satisfied the Commissioner erred in this
regard.
[51] In relation to the third ground of appeal, the Appellant contended that the
Commissioner erred in finding at paragraph [61] of his Decision that “there was no
breakdown of the EC225 at any time; at most, its use was restricted.” We are not satisfied that
the Commissioner’s finding was inconsistent with the evidence. We note that the EC225
helicopter crash in Norway occurred on 29 April 2016. However, for example, between 20
April 2016 and 2 June 2016, the Appellant (as well as the United Kingdom and Norwegian
authorities) permitted the continued use of the EC225 helicopters for search and rescue.
Moreover, after 29 April 2016, the EASA and CASA permitted the continued use of the
EC225 for search and rescue. As such, we are not satisfied that the Commissioner erred in
making the above finding.
[52] Thus, as we have found no appellable errors in relation to grounds 1 – 3 asserted by
the Appellant, we are satisfied that there is no appellable error in relation to Order 1.
[53] Accordingly, the appeal in relation to Order 1 is dismissed.
[2017] FWCFB 487
14
Order 2
[54] In dealing with Order 2, we refer to grounds 4 and 5 of the Appellant’s submissions.
[55] In relation to the fourth ground of appeal, the Appellant contended that the
Commission did not have jurisdiction to issue Order 2. However, the Respondent submitted
that the Commission was authorised to deal with the dispute as it considered appropriate
pursuant to section 595 of the Act.
[56] We note the following extract from paragraph [567] of the decision in Hatchett v
Bowater Tutt Industries Pty Ltd (hereafter “Hatchett”):33
“A claim for payment of wages, or for wrongful dismissal, or for breach of an award in
whatever form the claim of legal right may have been cast is beyond the jurisdiction of
the Commission. This is clearly established by a series of decisions of the High Court
…”34
[57] Further, in R v Gough; Ex parte Key Meats Pty Ltd (hereafter “Gough”),35 Gibbs CJ
stated:
“However, the Commission had no jurisdiction to determine the legal rights of the
employees who had been stood down or to enforce the rights given by the award.”36
[58] We are of the view that the circumstances in Gough are not dissimilar from those in
the present case. Namely, there has been “an attempt to secure payment by the prosecutor to
the employees who had been stood down.”37 As the dispute involves a claim for payment of
wages as outlined in Hatchett and revolves around the legal rights of the affected parties as
referred to in Gough, we are of the view that making an Order in such circumstances is
beyond the jurisdiction of this Commission. As such, Order 2 made by the Commissioner
pursuant to the section 526 application is beyond the jurisdiction vested in the Commission.
[59] However, we note there were two applications before the Commissioner at first
instance. Firstly, the section 739 application lodged on 12 July 2016 and, secondly, the
section 526 application lodged on 29 September 2016. It is not disputed that the
Commissioner dealt with the section 526 application. However, the Commissioner did not
make any determination as to the section 739 application in his Decision. This is
demonstrated at paragraph [64] of the Commissioner’s Decision, which states as follows:
“The circumstances which gave rise to the [s.526] 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 [s.739] dispute application.”
[60] In relation to the fifth ground of appeal, the Appellant contended that the
Commissioner was required to deal with the section 739 application and ought to have
dismissed that application. We are of the view that the Commissioner erred in making his
33 (1990) 26 FCR 561.
34 Ibid 567.
35 (1982) 148 CLR 582.
36 Ibid 587.
37 Ibid.
[2017] FWCFB 487
15
assessment at paragraph [64] of the Decision. The Commissioner was required to make a
determination as to the section 739 application. Accordingly, we are satisfied that the
Commissioner made a House v The King error in exercising his discretion. We are not
required to identify an appellable error in every ground of appeal for there to be a quashing of
an order – quashing an order is warranted upon an appeal bench identifying an error in
accordance with House v The King. Having identified that the Commissioner, in our view,
erred in exercising his discretion in accordance with House v The King by failing to deal with
the section 739 application, we are satisfied that the appeal must be upheld in relation to
Order 2 and Order 2 must be quashed in relation to the section 526 application.
[61] Thus, the appeal in relation to Order 2 is upheld.
[62] Order 2 in relation to the section 526 application is quashed.
Conclusion
[63] Permission to appeal is granted.
[64] The appeal in relation to Order 1 is dismissed.
[65] The appeal in relation to Order 2 is upheld and, accordingly, Order 2 is quashed.
[66] The section 739 application is referred to Commissioner Cambridge to deal with the
matter.
VICE PRESIDENT
Appearances:
M. Follett, of Counsel, for the Appellant.
C. Dowling, of Counsel, for the Respondent.
Hearing details:
2017
Sydney:
23 January.
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Price code C, PR589639
OMMISSION CO THE SEAA THE FAIR WORK
