| [2015] FWCFB 3124 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
VICE PRESIDENT HATCHER |
|
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.
[4] The application was heard and determined by Deputy President Hamilton who on 23 December 2014, issued a decision 1 (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 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:
[10] The annual leave entitlement under the Agreement for each designation is as follows:
[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:
(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 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.
[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
[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:
[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 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.
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.
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]
7 Clause 3 of the Agreement
8 Ibid
9 Clause 13.1.2(a) of the Agreement
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]
13 Decision at [39]
14 Respondent’s outline of submissions at [27]-[28]
15 Ibid at [29]
16 Transcript PN 622 – PN 625
17 See Canavan Building Pty Ltd [2014] FWCFB 3202 at [36]
18 Ibid
19 See s.56 of the Act
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