[2020] FWC 6392

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 739 - Application to deal with a dispute

Flight Attendants' Association of Australia
v
Qantas Airways Limited; Qantas Domestic Pty Ltd
(C2020/5975)

Airline operations
DEPUTY PRESIDENT SAMS	SYDNEY, 4 DECEMBER 2020

Alleged dispute about matters arising under three enterprise agreements – National Employment Standards (‘NES’) – application to have the Commission deal with dispute by arbitration – aviation industry – impact on Qantas due to COVID-19 pandemic – meaning of service for calculating a flight attendant’s redundancy payments – voluntary redundancy offers – expressions of interest – whether prior periods of service with associated entities to be taken into account – whether periods of casual service to be taken into account – principles of agreement and statutory interpretation – uncontested evidence of flight attendants – definitions of service and continuous service for a number of entitlements and benefits – whether reasonable belief that past service counted for all purposes – no references to redundancy pay being calculated by reference to past service – distinction between statutory and agreement interpretation – words in Agreements not ambiguous – consideration of surrounding circumstances not permitted – Agreements do not require the respondents to include an employee’s prior service with an associated entity or casual service when calculating redundancy pay – application dismissed.

BACKGROUND

[1] On 31 July 2020, the Flight Attendants’ Association of Australia (the ‘Association’ or ‘FAAA’) filed an application, pursuant of s 739 of the Fair Work Act 2009 (the ‘Act’) in which it seeks to have the Fair Work Commission (the ‘Commission’) deal with a dispute under the dispute settlement procedure (‘DSP’) in three agreements. The dispute is with Qantas Airways Limited and Qantas Domestic Pty Ltd (‘Qantas’, the ‘Company’ or the ‘respondents’) and shortly stated, involves the interpretation of the redundancy provisions in three Agreements; namely:

(1) the Flight Attendants’ Association of Australia – Short Haul Division (Qantas Airways Limited) Enterprise Agreement 9 (‘QAL SH EA 9’);

(2) the Qantas Domestic Pty Limited Cabin Crew Workplace Agreement 2015 (‘QDEA EA 2015’); and

(3) the Flight Attendants’ Association of Australia – International Division, Qantas Airways Limited and QF Cabin Crew Australia Pty Limited Enterprise Agreement 2017 (EBA 10) (‘QF LH EA 10’).

[2] The Association set out what it considered the dispute is about at 2.1 of its F10 application as follows:

‘1. Dispute regarding what service is used to calculate redundancy entitlements under the various enterprise agreements.

2. Qantas Airways Limited and Qantas Domestic Pty Ltd has commenced a Voluntary Redundancy Expression of interest process for cabin crew positions. Employees have been sent their estimate of what their redundancy entitlement would be if their expression of interest is successful. These estimates have not included the correct periods of service.

3. The Qantas Group provided a table setting out how the company recognises service with a previous entity on 30 June 2020 and has also confirmed its position in two separate meetings with the Association and also verbally and in written correspondence to Cabin Crew directly.

4. Qantas Airways Limited and Qantas Domestic Pty Ltd when calculating redundancy entitlements have excluded periods of service by a cabin crew member where:

a. They had periods of service with an associated entity; and

b. They had periods of service as a casual

5. This is contrary to the definition of Service, which is provided for under section 12 for the purposes of the Act and specifically defined in section 22 of the Fair Work Act 2009 (Cth).

6. Where no definition of service is specified in the enterprise agreement, the Act's definition is what should apply.’

[3] In accordance with my usual practice, I listed the dispute for conciliation on 7 August 2020. Although the dispute remained unresolved, the parties continued their negotiations in order to narrow the issues to be determined by the Commission. Agreement was reached as to the question to be answered; namely, as a result of Company-wide expressions of interest (‘EOIs’) sought from Qantas’ flight attendant cohort in respect to redundancy (voluntary and possibly involuntary redundancy), whether the periods of service of flight attendants, for the purposes of calculating redundancy pay, shall take into account an employee’s:

(a) periods of service with ‘associated entities’ of Qantas; and/or;

(b) periods of service as a casual employee.

[4] Unsurprisingly, the Association maintains that either, or both periods of service above should be used to calculate an employee’s redundancy pay entitlement. Qantas opposes this contention and submits that only service with the respondents should count towards the calculation of redundancy pay. Qantas suggested that rather than examining the circumstances of each relevantly affected employee, the Commission, for reasons of efficiency, should determine in the first instance whether, as a question of agreement construction, the Association’s contentions are correct.

[5] At this point, I agree with this characterisation of the dispute. It is self-evident that if Qantas’ submissions are accepted, that this is the end of the matter and valuable time and resources would be wasted if the circumstances of each of the said affected employees (numbering over 100) was the subject of evidence. Of course, if the Association is correct, then further proceedings may also be unnecessary as the evidence will likely be uncontested. Although I accept that at least in respect to the standing of Maurice Alexander Management Pty Ltd (‘MAM’), a labour supplier to Qantas, further proceedings may be necessary, if the Association’s contentions are accepted.

[6] Ultimately, after the issuance of directions in preparation for the hearing, the matter was listed for an in-person hearing, notwithstanding the limitations on this practice due to the COVID-19 pandemic Accordingly, arrangements were made in accordance with NSW Health guidelines for Courts, to ensure the health and safety of the parties’ representatives, witnesses and Commission staff. I thank the parties for their cooperation in this respect.

[7] At the hearing, Mr M Nguyen, Mr J Scully-Leaf and Ms A McManus appeared for the Association. Mr JK Kirk of Senior Counsel, Mr T Prince of Counsel, Ms K Srdanovic, Mr S Woodbury and Ms R Kruger, Solicitors, Ashurst Australia, appeared for Qantas. I note that permission was not required for Qantas to be legally represented as the Agreements’ DSP provide that:

‘The parties are entitled to be represented including by legal representatives, in proceedings pursuant to this dispute resolution procedure.’

THE EVIDENCE

For the Association

[8] Statement evidence was received from the following persons:

• Ms Jane Elizabeth Hayes – Short Haul Flight Attendant;

• Mr Stephen John Lau – Lawyer from the Association;

• Mr Gareth Uren – Flight Attendant/Assistant Secretary of the Association;

• Mr Allan Peter O’Hearn – Customer Service Manager – Crew Delegate, FAAA;

• Mr Michael Gerber – Cabin Services Manager – Vice President FAAA; and

• Mr James Scully-Leaf – Legal Industrial Officer for the Association.

None of the Association’s witnesses were required from cross examination.

For Qantas

• Ms Ellen Burt – Manager, HR Policy.

The Agreements and relevant legislative provisions

[9] The dispute concerns the interpretation of the redundancy provisions in the three identified agreements at [1] above. The relevant provisions are in similar terms as follows:

‘21 REDUNDANCY

In addition to the provisions of Part C of this Agreement, where Qantas initiates redundancies it will be in accordance following process:

21.1 Expressions of interest will be called for from all flight attendant categories. Selection for redundancy from those that expressed an interest will be in accordance with seniority.

21.2 Where there are insufficient expressions of interest, any compulsory redundancies of employees will occur in reverse order of seniority (that is from junior to senior).

21.3 For this purpose cabin crew employed by Qantas or by any new third party labour provider will be treated as one group for the determination of seniority.

21.4 Any unbroken period of service in the long haul division or as an ongoing employee with any third party labour provider to Qantas of short haul/domestic cabin crew, that is continuous with service under this Agreement will be included when calculating an employee's seniority for the purposes of selection for redundancy.

21.5 Qantas acknowledges that before any consideration of compulsory redundancies, the continued use of casual flight attendants must be examined and justified.’

‘3 REDUNDANCY PAYMENTS

3.1 For redundancy under the terms of this Agreement, the following package will apply:

3.1.1 Three (3) weeks' pay for each year of service up to and including five (5) years service, with a minimum of four (4) weeks' pay;

3.1.2 Four (4) weeks' pay for each completed year of service in excess of five (5) years; and

3.1.3 Pro-rata payment for each completed month of service.

3.1.4 The above mentioned payments do not include payments in lieu of notice.

3.2 Any redundancy payments for full time employees who convert to part time will continue to be calculated on full time equivalent hours salary with the period of service being adjusted to reflect hours actually worked.

[10] An employer’s redundancy obligations may also arise under the National Employment Standards (‘NES’) at ss 55 and 56 of the Act which read:

55. Interaction between the National Employment Standards and a modern award or enterprise agreement

National Employment Standards must not be excluded

(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.

Terms expressly permitted by Part 2-2 or regulations may be included

(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:

(a) by a provision of Part 2-2 (which deals with the National Employment Standards); or

(b) by regulations made for the purposes of section 127.

Note: In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.

(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).

Note: See also the note to section 63 (which deals with the effect of averaging arrangements).

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.

Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards

(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).

Effect of terms that give an employee the same entitlement as under the National Employment Standards

(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement ) that is the same as an entitlement (the NES entitlement ) of the employee under the National Employment Standards:

(a) those terms operate in parallel with the employee's NES entitlement, but not so as to give the employee a double benefit; and

(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.

Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.

Terms permitted by subsection (4) or (5) do not contravene subsection (1)

(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).

Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).

56. Terms of a modern award or enterprise agreement contravening section 55 have no effect

A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.

[11] Sections 117-121 deal with the NES and redundancy pay and provide as follows:

117. Requirement for notice of termination or payment in lieu

Notice specifying day of termination

(1) An employer must not terminate an employee's employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).

Note 1: Section 123 describes situations in which this section does not apply.

Note 2: Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a notice may be given. In particular, the notice may be given to an employee by:

(a) delivering it personally; or

(b) leaving it at the employee's last known address; or

Amount of notice or payment in lieu of notice

(2) The employer must not terminate the employee's employment unless:

(a) the time between giving the notice and the day of the termination is at least the period (the minimum period of notice ) worked out under subsection (3); or

(b) the employer has paid to the employee (or to another person on the employee's behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee's behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.

(3) Work out the minimum period of notice as follows:

(a) first, work out the period using the following table:


Period
	Employee’s period of continuous service with the employer at the end of the day the notice is given	Period
1	Not more than 1 year	1 week
2	More than 1 year but not more than 3 years	2 weeks
3	More than 3 years but not more than 5 years	3 weeks
4	More than 5 years	4 weeks

118. Modern awards and enterprise agreements may provide for notice of termination by employees

A modern award or enterprise agreement may include terms specifying the period of notice an employee must give in order to terminate his or her employment.

119. Redundancy pay

Entitlement to redundancy pay

(1) An employee is entitled to be paid redundancy pay by the employer if the employee's employment is terminated:

(a) at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.

Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

Amount of redundancy pay

(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee's base rate of pay for his or her ordinary hours of work:


Redundancy pay period
	Employee’s period of continuous service with the employer on termination	Redundancy pay period
1	At least 1 year but less than 2 years	4 weeks
2	At least 2 years but less than 3 years	6 weeks
3	At least 3 years but less than 4 years	7 weeks
4	At least 4 years but less than 5 years	8 weeks
5	At least 5 years but less than 6 years	10 weeks
6	At least 6 years but less than 7 years	11 weeks
7	At least 7 years but less than 8 years	13 weeks
8	At least 8 years but less than 9 years	14 weeks
9	At least 9 years but less than 10 years	16 weeks
10	At least 10 years	12 weeks

120. Variation of redundancy pay for other employment or incapacity to pay

(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(b) the employer:

(i) obtains other acceptable employment for the employee; or

(ii) cannot pay the amount.

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.

121. Exclusions from obligation to pay redundancy pay

(1) Section 119 does not apply to the termination of an employee's employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1) (whichever happened first):

(a) the employee's period of continuous service with the employer is less than 12 months; or

(b) the employer is a small business employer.

(2) A modern award may include a term specifying other situations in which section 119 does not apply to the termination of an employee's employment.

(3) If a modern award that is in operation includes such a term (the award term ), an enterprise agreement may:

(a) incorporate the award term by reference (and as in force from time to time) into the enterprise agreement; and

(b) provide that the incorporated term covers some or all of the employees who are also covered by the award term.

122. Transfer of employment situations that affect the obligation to pay redundancy pay

Transfer of employment situation in which employer may decide not to recognise employee's service with first employer

(1) Subsection 22(5) does not apply (for the purpose of this Subdivision) to a transfer of employment between non-associated entities in relation to an employee if the second employer decides not to recognise the employee's service with the first employer (for the purpose of this Subdivision).

Employee is not entitled to redundancy pay if service with first employer counts as service with second employer

(2) If subsection 22(5) applies (for the purpose of this Subdivision) to a transfer of employment in relation to an employee, the employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with the first employer.

Note: Subsection 22(5) provides that, generally, if there is a transfer of employment, service with the first employer counts as service with the second employer.

Employee not entitled to redundancy pay if refuses employment in certain circumstances

(3) An employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with an employer (the first employer) if:

(a) the employee rejects an offer of employment made by another employer (the second employer) that:

(i) is on terms and conditions substantially similar to, and, considered on an overall basis, no less favourable than, the employee's terms and conditions of employment with the first employer immediately before the termination; and

(ii) recognises the employee's service with the first employer, for the purpose of this Subdivision; and

(b) had the employee accepted the offer, there would have been a transfer of employment in relation to the employee.

(4) If the FWC is satisfied that subsection (3) operates unfairly to the employee, the FWC may order the first employer to pay the employee a specified amount of redundancy pay (not exceeding the amount that would be payable but for subsection (3)) that the FWC considers appropriate. The first employer must pay the employee that amount of redundancy pay.

[12] Section 123(1) is also relevant and reads:

123. Limits on scope of this Division

Employees not covered by this Division

(1) This Division does not apply to any of the following employees:

(a) an employee employed for a specified period of time, for a specified task, or for the duration of a specified season;

(b) an employee whose employment is terminated because of serious misconduct;

(d) an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement;

(e) an employee prescribed by the regulations as an employee to whom this Division does not apply. (my emphasis)

[13] Mr Nguyen cited s 22 of the Act which reads:

22. Meanings of service and continuous service

General meaning

(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period ) that does not count as service because of subsection (2).

(2) The following periods do not count as service:

(a) any period of unauthorised absence;

(b) any period of unpaid leave or unpaid authorised absence, other than:

(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii) a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee's contract of employment; or

(iii) a period of leave or absence of a kind prescribed by the regulations;

(3) An excluded period does not break a national system employee's continuous service with his or her national system employer, but does not count towards the length of the employee's continuous service.

(3A) Regulations made for the purposes of paragraph (2)(c) may prescribe different kinds of periods for the purposes of different provisions of this Act (other than provisions to which subsection (4) applies). If they do so, subsection (3) applies accordingly.

Meaning for Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2

(4) For the purposes of Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2:

(a) a period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include:

(i) any period of unauthorised absence; or

(ii) any other period of a kind prescribed by the regulations; and

(b) a period referred to in subparagraph (a)(i) or (ii) does not break a national system employee's continuous service with his or her national system employer, but does not count towards the length of the employee's continuous service; and

Note: Divisions 4 and 5, and Subdivision A of Division 11, of Part 2-2 deal, respectively, with requests for flexible working arrangements, parental leave and related entitlements, and notice of termination or payment in lieu of notice.

(4A) Regulations made for the purposes of subparagraph (4)(a)(ii) may prescribe different kinds of periods for the purposes of different provisions to which subsection (4) applies. If they do so, paragraph (4)(b) applies accordingly.

When service with one employer counts as service with another employer

(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:

(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and

(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee's continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee's continuous service with the second employer.

Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee's service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).

(6) If the national system employee has already had the benefit of an entitlement the amount of which was calculated by reference to a period of service with the first employer, subsection (5) does not result in that period of service with the first employer being counted again when calculating the employee's entitlements of that kind as an employee of the second employer.

Note: For example:

(a) the accrued paid annual leave to which the employee is entitled as an employee of the second employer does not include any period of paid annual leave that the employee has already taken as an employee of the first employer; and

(b) if an employee receives notice of termination or payment in lieu of notice in relation to a period of service with the first employer, that period of service is not counted again in calculating the amount of notice of termination, or payment in lieu, to which the employee is entitled as an employee of the second employer.

Meaning of transfer of employment etc.

(7) There is a transfer of employment of a national system employee from one national system employer (the first employer ) to another national system employer (the second employer ) if:

(a) the following conditions are satisfied:

(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee's employment with the first employer;

(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or

(b) the following conditions are satisfied:

(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;

(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.

Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.

(8) A transfer of employment:

(a) is a transfer of employment between associated entities if paragraph (7)(a) applies; and

(b) is a transfer of employment between non-associated entities if paragraph (7)(b) applies.

[14] Schedule 4 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the ‘Transitional Act’) dealing with the NES states at Cl 11:

11 References to transfers of employment

References to a transfer of employment in:

(a) provisions of the National Employment Standards; and

(b) subsections 22(5) and (6) of the FW Act, as those provisions apply for the purposes of the National Employment Standards;

do not cover a situation where the employee became employed by the second employer (within the meaning of subsection 22(7) of the FW Act) at a time before the FW (safety net provisions) commencement day.

[15] The FAAA also relied on s 384 of the Act as to the recognition of casual service for the purposes of unfair dismissal provisions. That section reads:

384. Period of employment

(1) An employee's period of employment with an employer at a particular time is the period of continuous service the employee has completed with the employer at that time as an employee.

(2) However:

(a) a period of service as a casual employee does not count towards the employee's period of employment unless:

(i) the employment as a casual employee was on a regular and systematic basis; and

(ii) during the period of service as a casual employee, the employee had a reasonable expectation of continuing employment by the employer on a regular and systematic basis; and

(b) if:

(i) the employee is a transferring employee in relation to a transfer of business from an old employer to a new employer; and

(ii) the old employer and the new employer are not associated entities when the employee becomes employed by the new employer; and

(iii) the new employer informed the employee in writing before the new employment started that a period of service with the old employer would not be recognised;

the period of service with the old employer does not count towards the employee's period of employment with the new employer.

[16] The Association also relied on s 46 of the Acts Interpretation Act 1901 (the ‘AI Act’) which states:

46. Construction of instruments

(1) If a provision confers on a person (the authority ) the power to make an instrument other than a legislative instrument, notifiable instrument or a rule of court, then:

(a) this Act applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act; and

(b) expressions used in any instrument so made have the same meaning as in the Act or instrument, as in force from time to time, that authorises the making of the instrument in which the expressions are used; and

(c) any instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the authority.

(2) If any instrument so made would, but for this subsection, be construed as being in excess of the authority's power, it is to be taken to be a valid instrument to the extent to which it is not in excess of that power.

(3) The amendment of an instrument, other than a legislative instrument or a notifiable instrument, or a rule of court, by an Act does not prevent the instrument, as so amended, from being amended or repealed by the authority.

Note: This provision has a parallel, in relation to legislative instruments and notifiable instruments, in section 13 of the Legislation Act 2003.

[17] Reliance was also had on the definition of ‘associated entities’ under the Corporations Act 2001 (the ‘Corporations Act’), as it has the same meaning in s 12 of the Act. Section 50AAA of the Corporations Act reads:

50AAA. Associated entities

(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

(2) This subsection is satisfied if the associate and the principal are related bodies corporate.

(3) This subsection is satisfied if the principal controls the associate.

(4) This subsection is satisfied if:

(a) the associate controls the principal; and

(b) the operations, resources or affairs of the principal are material to the associate.

(5) This subsection is satisfied if:

(a) the associate has a qualifying investment (see subsection (8)) in the principal; and

(b) the associate has significant influence over the principal; and

(6) This subsection is satisfied if:

(a) the principal has a qualifying investment (see subsection (8)) in the associate; and

(b) the principal has significant influence over the associate; and

(7) This subsection is satisfied if:

(a) an entity (the third entity) controls both the principal and the associate; and

(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.

(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

(a) has an asset that is an investment in the second entity; or

(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.

[18] Section 50AA – Control – is as follows:

50AA. Control

(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.

(4) If the first entity:

(a) has the capacity to influence decisions about the second entity's financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members;

the first entity is taken not to control the second entity.

The Association’s evidence

Ms Jane Hayes

[19] Ms Hayes commenced her career with Murray Valley Airlines on 12 December 1983. Murray Valley became Sunstate Airlines (‘Sunstate’) on 8 November 1986, with the fleet and all staff being retained. Ms Hayes said she commenced employment with Sunstate the next day. Sunstate was renamed Southern Australian Airlines (‘Southern’) on 1 January 1992 and all staff transferred over to Southern. New aircraft (Dash 8) were added to the existing Short 380 aircraft.

[20] Ms Hayes said that in 2002, Southern became part of the Qantas Group and flight attendants had options for redeployment. Due to its regional base, Ms Hayes elected to be redeployed to Eastern Australia Airlines (‘Eastern’) on 23 September 2002, which became part of QantasLink. Ms Hayes was the only Southern flight attendant to transfer to Eastern where she retained her seniority and position in the career progression list. She worked on the same Dash 8 aircraft.

[21] Ms Hayes began employment with Qantas Airways Ltd on 21 February 2003, having been appointed from the career progression list. Ms Hayes said she did not cease employment at any time and her employment carried over to each new entity, without any redundancy being offered. Ms Hayes has questioned her period of service said to be 16 years, rather than 36 years in total. The calculations of redundancy pay were significantly different.

Mr Stephen Lau

[22] As part of the current dispute, Mr Lau, on behalf of the Association, emailed members in two Groups requesting their employment details and any disputed service periods. The first Group were identified as Qantas Airways Ltd Short Haul employees and five Long Haul employees and one Domestic Short Haul employee. This Group numbers 105. The second Group were said to be those Qantas Airways Ltd and Qantas Domestic Pty Ltd employees who Qantas has agreed to allow the FAAA to lead evidence about. This group totals 65.

[23] In his research exercise, Mr Lau examined numerous historic documents about the negotiations for the various agreements and where there may be reference to service and redundancy. These documents (where relevant) will be referred to in the Association’s submissions.

Mr Gareth Uren

[24] Mr Uren commenced his career on 13 November 2000 with Impulse Airlines (‘Impulse’). The Qantas Group took over Impulse and bought it on 21 November 2001. Mr Uren began work on Jetstar routes from around 25 May 2004. Mr Uren recalled that apart from branding, everything else was the same, including the ABN for Impulse and Jetstar on his payslip. He transferred from Jetstar to Qantas Airways Ltd on 13 February 2006. Mr Uren referred to his contract dated 16 January 2006, which advised that his annual and personal leave credits would be transferred. Reference to service was mentioned at the Long Service Leave clause which reads:

‘Long Service Leave

Previous service with your Regional Airline will be Acknowledged for Long Service Leave purposes only and service will be deemed to be continuous. You should be aware that service with the Regional Airline is for leave accrual only. It does not apply to Long Service Badges or the 10 year Staff Travel free trip.’

Mr Uren recalled that there was some discontent about this limitation and the Union sought to have service recognised for all purposes.

[25] Mr Uren identified a Union newsletter dated 17 December 2012, titled ‘It’s a WIN for career progression crew’. It reads as follows:

‘As members would be aware, there were changes to the Staff Travel policy back in October 2010. Employees who moved within the Qantas Group were able to retain their original start date if you moved within the group on or after 1 October 2010.

While your Association has been pursuing this general issue with the Company for a number of years, we have been pressing the matter through the various Joint Consultative Committee meetings for the past 18 months. On the basis that all crew should have their original Qantas Group start dates re-instated.

We are pleased to inform our members that on Friday, Qantas management confirmed that they are now in position to RE-INSTATE all Career Progression crews start dates. This initiative will include those who transferred from Eastern, Sunstate, Southern, Australian Airlines, Jetstar and Team Jetstar.

The Company is now working through the relevant policy changes and Qantas will start applying the changes in the New Year. Things that will change include but are not limited to Years of Service pins and LSL trips. As further details come to hand we will keep you all informed.

This is a fantastic WIN for Cabin Crew and the FAAA. The Association would like to thank Senior Qantas Cabin Crew management for this positive initiative.’

Mr Uren believed that this demonstrated that all crew service with other Qantas Group entities, would be recognised for all purposes.

[26] It was Mr Uren’s evidence that there was never any information from Qantas to crew about service in respect to redundancy, before employees voted on their agreements. As part of his Union duties, Mr Uren is aware of many crew members who have come forward to dispute their service, as they have all been sent estimates of their redundancy entitlements and many are disputing the calculations.

Mr Allan O’Hearn

[27] Mr O’Hearn commenced employment with Qantas Domestic Pty Ltd on 5 May 2010 after working for Team Jetstar Pty Ltd from 25 March 2008 to 4 May 2010. Mr O’Hearn said that when he commenced working for Qantas Domestic Pty Ltd, his contract recognised annual and personal leave was carried over, but service with Team Jetstar would not be recognised for redundancy purposes. When he received the December 2012 Newsletter, he had understood ‘for all intents and purposes’ it meant all other entitlements were recognised for service purposes. He claimed he voted for the QDEA EA 2015 Agreement on this understanding. He also understood that the signed Qantas Domestic (‘QD’) Career Progression Agreement 2013, provided for all his service with Team Jetstar to be recognised. Clause 5.3 provides:

‘5. CONDITIONS OF EMPLOYMENT FOR CAREER PROGRESSION

5.1 Where a qualified flight attendant from one of the Subsidiaries is successful in the merit based selection process for one of the Reserved Opportunities, QD will provide a letter of offer to the flight attendant.

5.2 Employment will be offered by Qantas Domestic Pty Limited on a permanent and full-time basis under the Qantas Domestic Pty Limited Cabin Crew Workplace Agreement 2008 (or any successor agreement).

5.3 In accordance with Qantas Group policy as it may apply from time. to time:

a) the flight attendants service with one (or more) of the Subsidiaries will be recognised for the purposes of long service leave;

b) The flight attendant's date of joining with the relevant employer from the Subsidiaries will be recognised for the purposes of any future redundancy entitlements in QD;

c) The flight attendant will be immediately entitled to staff travel under the relevant Qantas Group Staff Travel policy, as it applies to subsidiary entities. The flight attendant's date of joining the Qantas Group will apply; and

d) The flight attendant's accrued but unused annual leave and personal leave with the relevant employer from the Subsidiaries will carry across to their new employment with QD.

5.4 The flight attendant will be required to confirm their resignation from the relevant employer from the Subsidiaries to take up a position with QD.

5.5 Where operationally feasible, any flight attendant who has been unable to take annual leave prior to taking up employment with QD will be entitled to take a minimum period of two weeks annual leave during the first twelve months of their employment with QD, after this accrues. QD will aim to give these employees priority in the selection of annual leave slots during this twelve month period.

5.6 A flight attendant will be eligible to apply for Onboard Manager upgrade opportunities, where available, after 6 months of service with OD.’

[28] When he received his redundancy estimate in the current VR process, his former service was not recognised. He immediately took steps to dispute the matter.

[29] In a reply statement, Mr O’Hearn said he had never seen the letter referred to in Ms Burt’s evidence (EB13) of around February 2013 which states:

‘New Group DOR (date of recognition) will not be recognised for the purposes of redundancy’.

Mr Michael Gerber

[30] Mr Gerber commenced employment with Qantas Domestic Pty Ltd on 21 June 2010. He is currently Vice President of the FAAA and lead delegate. Mr Gerber deposed that when the vote was taken for the QDEA EA 2015 Agreement, it was his understanding and belief that any crew who had service with any wholly owned Qantas entity, would have that service recognised. He also referred to the December 2012 Newsletter as contributing to this belief. He only became aware of the QD Career Progression Agreement in January/February 2019. He believed Cl 5.3 of this agreement ‘provides full recognition of all years of service, served in any of the named Qantas Group subsidiaries, in relation to any and all future redundancies’.

[31] Mr Gerber claimed he had never sighted, or was aware of a 2018 Agreement – Flight Attendants Swap Courses Qantas Domestic Pty Ltd and QF Cabin Crew Australia Pty Ltd; see: EB 9 of Exhibit A. He believed that no other crew member would be aware of this agreement.

[32] Mr Gerber became aware that a crew member’s previous service with an associated entity was not recognised by Qantas during the current round of offers of VR in which, for the first time, all employees received their redundancy payment estimate.

Mr James Scully-Leaf

[33] Mr Scully-Leaf said that in preparing the FAAA’s case in this matter, he came across a ‘frequently asked questions’ (‘FAQ’) document issued by Qantas on 22 February 2013. Given the timing coincidence of the two document titles, and the same start date (1 July 2013), Mr Scully-Leaf believed that the FAQs related to Ms Burt’s letter of February 2013 (EB13). In answer to the first question, ‘What are the current service recognition roles?’, it said:

‘Historically if you moved between Qantas and one of our subsidiaries, or between different subsidiaries, as per relevant legislation Qantas would only recognise your previous service for long service leave accrual purposes. However, this period was not included in the calculation of your staff travel benefit nor included in other elements of service recognition, for example long service badges/awards and long service staff travel tips (10 years) or business class upgrades (7 years)’.

[34] In answer to the second question ‘What change is being made?’, the document records the answer as:

‘On 1 July 2013 the Qantas Group is updating is service recognition rules so that:

1. Date of joining for staff travel and badges/gifts purposes is to be automatically updated taking into account our records of employees’ prior continuous service with the Qantas Group.

2. Those employees that as a result of the update reach a long service trip milestone will be awarded the most recent long service trip.’

For Qantas

Ms Elen Burt

[35] Ms Burt commenced employment with Qantas in August 2001. During her employment, she has held various senior industrial relations roles.

[36] Ms Burt described the background to this dispute as follows. On 25 June 2020, Qantas announced a redundancy program and commenced consultation with the FAAA about the respondent’s decision to seek EOIs from all eligible international and domestic cabin crew in respect to a VR program. On 6 July 2020, employees covered by the three agreements received an email which included the EOI form. Eligible employees received an estimate of what they would receive if they confirmed their interest in the VR program. In calculating the number of weeks’ redundancy pay, employees would be provided with the greater of the two following calculations:

‘(a) The number of weeks’ redundancy pay they would receive under the National Employment Standards contained in the Fair Work Act 2009 (Cth) (the Act), specifically section 119. This calculation includes a period of service with an associated entity as defined in section 22 of the Act, provided the transfer of employment occurred after 1 July 2009; or

(b) The number of weeks’ redundancy pay they would receive under the applicable enterprise agreement, which is calculated by reference to the employee’s service with their current employing entity excluding any period of service as a casual employee.’

[37] Ms Burt said that typically, the payments under (b) exceed the calculations under the NES. Ms Burt said that this approach had been adopted by the Qantas Group following the commencement of the current Act and had applied it to all VR programs for cabin crew (and other groups) since 2010. Ms Burt believed this was the first occasion a dispute had been notified in respect to the meaning of ‘service’ for redundancy purposes. Apart from some limited exceptions (agreed to with the FAAA), the redundancy provisions have been consistently applied by the Qantas Group since the Qantas Airways Limited Enterprise Agreement III (‘EBA 3’) in 1996; namely, that periods of service as a casual are excluded from the meaning of ‘service’ for redundancy purposes. Since EBA 3, the redundancy pay scale for compulsory redundancy has remained the same in all successive agreements and has been applied by the respondents to the current VR program. The scale is:

‘(1) Three (3) weeks’ pay for each year of service up to and including five (5) years service, with a minimum of four (4) weeks' pay;

(2) Four (4) weeks’ pay for each completed year of service in excess of five (5) years; and

(3) Pro-rata payment for each completed month of service.’

[38] From her experience, Ms Burt described how from time to time, opportunities for career progression and swaps arise for crew with associated entities and there is a history of how this has been handled through unregistered agreements negotiated with the FAAA. This allows employees to access vacancies before being advertised to the market or swap where no vacancies exist. Ms Burt is familiar with these agreements, which may deal with when prior service is to be counted for the purposes of redundancy pay. Ms Burt identified five examples of these unregistered agreements:

‘(a) 9 May 2003 – Agreement titled ‘Career progression arrangements: Regional airlines to the short haul division of the Qantas Group’, entered into between Qantas, Eastern, Sunstate Airlines (QLD) Pty. Limited and the FAAA, a copy of which is attached to this statement and marked “EB-5”;

(b) 8 June 2004 – A similar document to that referred to at paragraph 13(a) above, but with Jetstar Airways Limited, a copy of which is attached to this statement and marked “EB-6”;

(c) 17 May 2007 – Memorandum of Understanding between Qantas, Australian Airlines Limited and the FAAA titled ‘Australian Airlines Cabin Crew Suitable Alternative Employment’, a copy of which is attached to this statement and marked “EB-7”;

(d) 21 October 2013 – Agreement titled ‘Flight Attendant Career Progression into Qantas Domestic Pty Limited’, a copy of which is attached to this statement and marked “EB-8”;

(e) 3 May 2018 – Agreement titled ‘Flight Attendant Swap Courses’ between QD, QCCA and the FAAA, a copy of which is attached to this statement and marked “EB-9”.’

[39] It was Ms Burt’s evidence that apart from (d) above, the other agreements reflect the approach referred to in [36] above. Ms Burt said the exception in (d) above reflected an intention to adopt a more generous approach, in limited circumstances, where an entity or a crew base which may be closing or to incentivise the uptake of employment at an expanding base. This occurred in 2012 when it was necessary to encourage recruitment to the QD Perth base. This resulted in the 21 October 2013 agreement (see: (d) above) with the FAAA. This agreement was reflected in Cl 5.3(b) which provides:

‘b) The flight attendant's date of joining with the relevant employer from the Subsidiaries will be recognised for the purposes of any future redundancy entitlements in QD’.

[40] At this juncture, interposing Ms Burt’s evidence, I set out below the relevant conditions in the other unregistered agreements. The 2003 Agreement records at C:

‘C. CONDITIONS OF APPOINTMENT TO THE SHORT HAUL DIVISION

1. A Regional Flight Attendant taking up appointment with the Qantas Short Haul Division will be appointed under the Flight Attendants' (Domestic Airlines) Award 1999.

2. Continued employment with the Qantas Short Haul Division is conditional on the Flight Attendant satisfactorily completing the Qantas Short Haul Division Training Course.

3. Length of service in the Regional Airline will be recognised for purposes of long service leave entitlements with Qantas.

4. Preference is for annual leave entitlements to be taken by mutual agreement prior to commencement with the Qantas Short Haul Division. However, outstanding annual leave credits will be recognised on appointment to the Qantas Short Haul Division.

5. Membership of Regional Airlines Superannuation (Division 10 of Qantas Superannuation Scheme) will cease on appointment to Qantas. Appointment on or after 1 April 1995 will be to Division 3 of the Qantas Airways Limited Staff Superannuation Plan. Flight Attendants joining the Division 3 will be able to rollover their superannuation benefits from Division 10. Service with the Regional Airlines will not be recognised for any superannuation purposes.

6. Conditions of appointment will be in accordance with those established for the Qantas Short Haul Division. Commencement date used will be the date of appointment to the Qantas Short Haul Division, except that the initial qualifying period for staff concessional travel will be waived.

7. Accrued sick leave credits will be recognised on appointment to the Qantas Short Haul Division.’

A similar provision is reflected in the 2004 unregistered agreement.

[41] In the 2007 unregistered agreement, following the closure of Australian Airlines (‘AO’), the following references were relevant:

‘Accrued Leave

2.14 Annual leave accrued at the date of termination from AO will be recognised on appointment to Qantas Short Haul. The anniversary date for future accruals will be the date of joining Qantas.

2.15 Personal leave accrued at the date of termination from AO will be recognised on appointment to Qantas Short Haul. The anniversary date for future accruals will be the date of joining Qantas.

2.16 The employees start date with AO will be recognised for the accrual of long service leave in accordance with relevant legislation.

Redundancy

2.17 For AO cabin crew accepting suitable alternative employment with Qantas Short Haul, their date of joining Qantas will be used for the calculation of future redundancy entitlements.

2.18 However, Qantas will guarantee that the minimum number of weeks redundancy pay the employee receives in the event of redundancy in the future will be equal to or greater than the number of weeks redundancy pay the employee is entitled to at the time of exiting AO.

Superannuation

2.19 Upon joining Qantas Short Haul, the employee will transfer from Division 7 to Division 6 of the Qantas Superannuation fund. An employees (sic) superannuation benefit will be in accordance with the product disclosure statement applicable to Division 6.’

[42] The unregistered agreement in May 2018 in relation to swap opportunities records at Cl 4.4:

‘4.4 The Flight Attendants (sic) ‘seniority’ for the purpose of selection in any future compulsory redundancy program with the NE under the terms of the relevant Enterprise Agreement will include the service with the OE. The Flight Attendants (sic) length of service for the purposes of calculation of redundancy entitlements / payments is outlined in Annexure B. This may be reviewed by the parties.

[43] Returning to Ms Burt’s evidence, she referred to the lists of employees and their service records, described in the two attachments to the FAAA’s submissions, titled ‘Representative Cases of Service Dispute’ and ‘All Disputed Periods’ respectively at (a) and (b). A process had been undertaken to compare these lists to the responses from the employees to the EOI requests. This revealed in respect to 160 examples in ‘All Disputed Periods’:

(a) 47 employees expressed an interest in voluntary redundancy;

(b) 44 employees said they do not wish to be considered for voluntary redundancy; and

The list included two employees whose previous service in Japan and the United Kingdom were with Qantas, and that service would be counted for redundancy purposes. Ms Burt responded to Ms Hayes’ statement that her estimate of redundancy was based on her service with Southern (19 years) capped at 26 weeks as agreed with the FAAA at the time, service with Eastern from 24 September 2002 – 20 February 2003 and service with Qantas from 21 February 2003 – 26 August 2003 and 5 January 2005 – 31 July 2020 (being exclusive of the period from 4 January 2005 – 27 August 2003 when Ms Hayes was on leave without pay).

[44] In a reply statement, Ms Burt referred to the Association’s 17 December 2012 Newsletter and said that there was no formal agreement with the FAAA; rather, Qantas implemented a change of rules (effective 1 July 2013) for recognition of service for the purposes only of:

(a) Staff Travel;

(b) Business class upgrades on staff travel;

(d) Badges (pins)/gift (cash awards) for future milestones.

Ms Burt said the change in respect to staff travel related to an employee’s seniority for ‘on load priority’. Ms Burt claimed that all employees were advised of these changes around February 2013. The template letter in evidence makes clear in the list of benefits the following:

‘New Group DOR (date of recognition) will NOT be recognised for the purposes of redundancy or any other service related benefitted not mentioned above’.

[45] In cross examination, Ms Burt said that although she was not in the role at the time, she had recently seen a spreadsheet list of over 800 employees and confirmation emails that the template letter (referred to above) was emailed to employees. She had no reason to believe individuals did not receive the letter. While the title of the email is ‘Recognition of Group Service’, it was only for specific particular circumstances.

[46] Ms Burt accepted she had been involved in the drafting and execution of the 21 October 2013 unregistered agreement. She noted the agreement at 5.3(b) was one of the limited exceptions she had referred to in her evidence. The parties to the agreement were only those nominated being Jetstar Airways Ltd, Team Jetstar Pty Ltd, Eastern, Sunstate and Network Aviation.

SUBMISSIONS

[47] Both parties provided outlines of submissions which were developed orally in the proceeding.

For the FAAA

[48] Mr Nguyen’s primary submission is that the definition of ‘service’ and ‘continuous service’ in s 22 of the Act, should apply to the employees employed under the three enterprise agreements. He noted from the evidence that there was a range of different and competing understandings of what ‘service’ is recognised, and for what purpose. The objective facts are that annual, personal and long service leave have been recognised and carried over to current service. In late 2013, service was extended to recognise discretionary benefits of staff travel and long service trips.

[49] Mr Nguyen submitted that from an employee’s perspective, all of the benefits and entitlements they encountered on a day to day basis, recognised past service with associated entities. Moreover, in the lead up to the vote for the three agreements, employees would have understood they were voting for an agreement which recognised all prior service, for all purposes. Despite Ms Burt’s denial that the 2013 QD Career Progression Agreement was not a policy, that is exactly how it was described at the time and the most recent advice in the collective memory of the parties.

[50] Mr Nguyen put that it was important to note the character of enterprise agreements as legislative instruments which are not made between Unions and employers, but are agreements voted on by relevant employees, and who are all bound to the agreement’s terms, only if a majority of employees vote to approve the proposed agreement; see: Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 (‘Toyota v Marmara’) at [60], [88] and [89].

[51] With the above in mind, Mr Nguyen submitted that while s 22 of the Act may not apply by force of the AI Act, it does not mean it may not apply to enterprise agreement construction as described in the Berri Principles; see: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005 (‘Berri’). Further, the relevance of s 22 to the construction of agreements is apparent when service is not expressly defined in the agreements. What is also relevant to the statutory definition of service here, is the employees’ understanding of what service would be recognised.

[52] Mr Nguyen traced the development of enterprise bargaining over the last 27 years, since 1993 and the definition of ‘service’ which is well understood by industrial parties since the introduction of the current Act over 10 years ago – a period of a third of the lifetime of enterprise agreements. He compared this to the working lives of employees over this period, during which this was the only definition they would have known.

[53] Mr Nguyen then dealt with the history and introduction of the current Corporations Act, dealing with the definition of ‘associated entities’, now in existence for 17 years and which are now part of the fabric of corporate financial reporting which is well accepted by the community generally. In Mr Nguyen’s view, these matters tell in favour of a definition of ‘service’ being inclusive of associated entities and casual service.

[54] Mr Nguyen referred to the origins of redundancy clauses in the Agreements which were first introduced in EBA 3 in 1996. Attachment B is titled:

Compulsory Redundancy Agreement

Qantas Airways Limited and Subdivisions and ACTU,

although there is no definition of service in the body of the Attachment.

[55] Mr Nguyen noted that the carryover of long service leave would lead employees to understand that their service with any Qantas Group entity, would be recognised for redundancy, as it is also in recognition of long service.

[56] In respect to the inclusion of casual service, Mr Nguyen acknowledged s 22 of the Act does not deal with casual service at all. However, s 384 of the Act gives guidance as to what circumstances casual service applies, and does apply for the purpose of the unfair dismissal provisions. Further, Mr Nguyen relied on the 2000 Metals Casual case; see: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Print T4991 which was adopted by the Full Bench Award Modernisation Case ([2008] AIRCFB 1000 ]) and which determined the 25% casual loading across all modern awards.

[57] Mr Nguyen submitted that having regard to equity, good conscience and the substantial merits of the matter, full time employees who had previous casual service should have that service recognised, particularly when the casual loading would not have taken into account, they would not receive redundancy payments. Mr Nguyen accepted there is no document which provides for casual service to include other periods of leave or staff benefits. Mr Nguyen conceded that casual service does not count if the employee, either remained a casual employee or had broken periods of casual employment. It is only where a casual employee employed directly by Qantas immediately translated to a permanent employee.

[58] Mr Nguyen referred to the 17 May 2007 unregistered agreement (see: [36] above) and submitted that it essentially provides a framework for the Company to provide alternative employment to avoid redundancy payments. It is not a general principle that obtaining suitable employment negates the prior service of the employee with an associated entity for the calculation of redundancy pay.

[59] Mr Nguyen then dealt with Qantas’ FAQ document of February 2013 which answered ‘Who is eligible?’ with current employees as of 25 February 2013 who have previously moved permanently between Qantas Group companies where the break in service was less than three months. Mr Nguyen observed that 3 months is also mentioned in s 22 of the Act. By reference to the Union’s Newsletter of 17 December 2012, and the subsequent unregistered agreement in February 2013, Mr Nguyen agreed that they both concerned ‘discretionary benefits which the employees would have understood’.

[60] In answer to questions from me about the nature of the dispute between the parties, Mr Nguyen put that the evidence goes to the state of mind of the parties ahead of the votes for the enterprise agreements. As far as the FAAA was concerned, there was no evidence that employees would not have understood all their entitlements count for the purpose of service, when annual, personal and long service leave counted and more recently in 2013, when further discretionary benefits were included. These were objective facts relevant to the construction of ‘service’.

For the respondents

[61] Mr Kirk submitted that ultimately, one of the major issues in this case is the construction of the three enterprise agreements. Mr Nguyen did not spend much time on that question and effectively submitted that s 22 of the Act applied to, and was picked up in the Agreements with a ‘knock on’ effect in regards to casuals. This was put even though there is no express reference to s 22 in the Agreements or to any other terms which generally apply under the Act, which are incorporated in the Agreement.

[62] Mr Kirk commenced by examining the legislative provisions. The first point to note is that s 22 – Definitions – begins with ‘In this Act…’. Section 22(1) defines a period of service as:

A period of service by a national system employer is a period during which the employee is employed by the employer.

Subsection (5) deals with a transfer of employment and reads:

(5) If there is a transfer of employment (see subsection (7)) in relation to a national system employee:

(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and

and sub-s (7) defines the meaning of transfer of employment.

[63] Mr Kirk said it was unsurprising that service with the first employer is different to service with the second. In other words, they are different entities and different companies. This is a principle founded upon and recognised as far back as 1897 in Salomon v A Salomon & Co Ltd [1896] UKHL 1; [1897] AC 22.

[64] Senior Counsel acknowledged that ss 55 and 56 of the Act make clear than an enterprise agreement cannot exclude the NES. However, it does permit an enterprise agreement to have a provision which supplements the NES, but only if it is more beneficial. One then goes to s 119 to find the statutory entitlements to redundancy pay which unsurprisingly and relevantly, do not apply to casual employees (s 123(c)).

[65] Mr Kirk then referred to the transitional provisions in the Transitional Act, Item 11 in Schedule 4 reads:

11 References to transfers of employment

References to a transfer of employment in:

(a) provisions of the National Employment Standards; and

(b) subsections 22(5) and (6) of the FW Act, as those provisions apply for the purposes of the National Employment Standards;

[66] Mr Kirk submitted that this obviously means any service with a different entity, prior to 1 January 2010, cannot be counted for the purposes of s 22. The Association’s approach is a classic ‘cherry picking’ exercise, which ignores the interaction of the relevant provisions between the Act and the Transitional Act.

[67] Turning to the redundancy provisions in the Agreements, Senior Counsel firstly observed that the QAL SH EA 9 Agreement has the same very generous provisions as the other Agreements. By way of example, if an employee has 9 years’ service, the entitlement under the Agreement is 31 weeks, whereas under the NES it is 16 weeks; with 15 years’ service the corresponding entitlements are 55 weeks and 12 weeks. What the Association seeks to do is to transplant out of context, one aspect of the statutory scheme to make even more generous the very generous and carefully negotiated arrangement between the parties and which has no reference to s 22 of the Act.

[68] Mr Kirk then turned to the core construction question which is the foundation of the Agreement’s redundancy entitlements at Part C by reference to Cl 21 of the QAL SH EA 9 Agreement; see: [9] above. He said it is clear that Cl 21 only provides for service with a third party provider (being Qantas Domestic Pty Ltd) as being relevant for the purposes of seniority (‘last on first off’) when EOIs are sought. Cl 21 does not deal with what the actual redundancy entitlements are. By reference to Cl 4 – Parties Bound – Mr Kirk observed a very clear delineation of coverage which does not include all subsidiaries; see: [9] above.

[69] Jumping to the preamble to Part C, Cl 3 states:

‘3 REDUNDANCY PAYMENTS

3.1 For redundancy under the terms of this Agreement, the following package will apply:

3.1.1 Three (3) weeks’ pay for each year of service up to and including five (5) years service, with a minimum of four (4) weeks’ pay;

3.1.2 Four (4) weeks' pay for each completed year of service in excess of five (5) years; and

3.1.3 Pro-rata payment for each completed month of service.

3.1.4 The above mentioned payments do not include payments in lieu of notice.

Mr Kirk submitted that Cl 3.2 carefully recognises full time and part time employees, but pointedly not casual employees. This is reinforced by reference to pay calculations being the ordinary time weekly rate, which is plainly not applicable to casuals because of the casual loading. Also relevant is ‘years of service’ by reference to the coverage clause, which must mean years of service with Qantas Airways Ltd.

[70] In summary, Mr Kirk submitted that all this analysis points to the obvious, plain ordinary meaning of the words in the Agreement. Extending s 22 of the Act, is contrary to that ordinary meaning and distorts the agreed outcomes.

[71] Senior Counsel referred to the Berri Principles which remain good law as to the interpretation of enterprise agreements. He noted in particular that under the Berri Principles, the AI Act does not apply. He added that generally speaking, one construes a legislative instrument (as described by Mr Nguyen) in terms consistent with the authorising Act, subject to any contrary intention. Section 46 of the AI Act provides at (1)

(1) If a provision confers on a person (the authority) the power to make an instrument other than a legislative instrument, notifiable instrument or a rule of court, then:

(a) this Act applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act; and

(c) any instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the authority.

[72] Mr Kirk put that the Association is having ‘a bit each way’, in that it accepts s 46 of the Act does not apply and does not challenge The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited [2014] FWCFB 7447 (‘Golden Cockerel’), but still seeks a statutory ‘blur’ of reading in s 22 of the Act. This was a problematic submission leading to Unilever Australia Trading Ltd v "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) [2018] FWCFB 4463 (‘Unilever’) and in particular [28] in which the Full Bench states:

‘[28] There was argument before us about the significance of a decision of the Full Bench in Australian Manufacturing Workers’ Union v Donau Pty Ltd, in which a majority found that a period of ‘contiguous’ casual service counted in the calculation of severance pay under the enterprise agreement in question. That decision turned on its own facts. It should not be understood as establishing any principle about the application of s.22 of the Act to casual employment, or the approach to calculating service in enterprise agreements. It will be recalled that in that case, the National Employment Standards of the Act had been incorporated into the agreement, and it was relevant to consider s.22, which defines service for certain purposes in the Act. It does not define service for the purposes of enterprise agreements. The majority in that case stated that the Act does not exclude a period of regular and systematic casual employment from the definition of service or continuous service for the purpose of severance payments. However, we would note that the concept of regular and systematic casual employment is a statutory construct used for the purpose of s.384 of the Act and in certain other limited contexts. It is not reflected in s.22 of the Act.’ (footnotes omitted)

Mr Kirk said that as a matter of approach, Unilever does not mean you always read in s 22 of the Act, particularly as here there is a big difference in entitlements under these Agreements.

[73] Mr Kirk responded to Mr Nguyen’s reply submissions as follows:

• s 384 of the Act deals specifically with casuals and unfair dismissal. It has nothing to do with construing enterprise agreements;

• comparing provisions in modern awards does not throw any light on construing enterprise agreements;

• relying on Cl 21 dealing with seniority demonstrates the careful treatment of particular specific circumstances. It cannot be used to imply an interpretation of other provisions;

• reliance on the approval process for Agreements and the Better Off Overall Test (‘BOOT’) is irrelevant as the comparison is not to the NES, but to the terms of the relevant modern award. This is so because ss 55 and 56 resolve any issues in this respect;

• prior service with other entities is recognised for some purposes, but they are very specific and subject to side agreements, described by Ms Burt in her evidence. It does not advance the Association’s case very far.

[74] Senior Counsel relied on Ms Burt’s evidence to demonstrate that Qantas’ approach in making someone redundant, since the commencement of the Act, is twofold. It looks at the Act and the applicable Agreement and the employee gets whichever is the greater; typically, the Agreement. Ms Burt identified some limited exceptions when more generous arrangements were agreed; however, since 1996, the generous redundancy scale has applied. Ms Burt observed this is the first time in 24 years that Qantas’ approach has been challenged.

[75] Mr Kirk accepted that the Association is not barred from raising a new argument, but it is surprising, nevertheless, that with numerous iterations of enterprise agreements over 24 years, with a very generous redundancy scheme, that no one has ever sought to invoke s 22 of the Act in the manner now contended for by the FAAA. Mr Kirk suggested that Mr Nguyen’s proposition that there was a collective memory of what s 22 of the Act meant for 10 years, was a ‘bit of a stretch’.

[76] Mr Kirk submitted that the limited and carefully targeted exceptions (described by Ms Burt), are critical to prove the rule as to the ordinary plain meaning of the words used in the Agreements. Where the exceptions have been agreed, they are expressly the subject of unregistered agreements with the Association or expressed in the clear language in the Agreements themselves. Mr Kirk identified these exceptions and explained their specific purpose. He emphasised that none of the carefully crafted examples deal with redundancy benefits. All these examples clearly demonstrate ‘that exceptions prove the rule’. So the evidence not only does not support the Association’s case, it is inconsistent with it.

[77] Mr Kirk referred to Mr Gerber’s evidence as to being unaware, as a lead Union delegate, of the 21 October 2013 side agreement when he voted for the QDEA EA 2015 Agreement and the 2018 unregistered agreement, yet Mr Nguyen asserts and relies on ‘collective memory’ of these unregistered agreements. In respect to the 17 December 2012 Newsletter, Mr Kirk observed that it had nothing to do with redundancy; it was all about staff benefits, in particular, to travel benefits as to seniority. This has always been and remains an obsession for employees. Mr O’Hearn also claimed he was not aware of the 2013 Career Progression Agreement and had expressly agreed that his contract when he commenced working for Qantas, stated that his service with Team Jetstar would not be recognised for redundancy. Mr Uren’s contract provided that on transfer from Impulse, his previous service would be acknowledged for long service leave purposes only. He also refers to the staff benefits in the 2012/2013 period.

[78] Senior Counsel submitted that Ms Burt’s second statement in respect to the mailout to all employees in around February 2013 makes it absolutely clear with the words:

‘New group DOR (date of recognition) will not be recognised for the purposes of redundancy or any other service-related benefit not mentioned above.’

Whether Mr O’Hearn received the email or not, is irrelevant for the purposes of construction.

[79] Mr Kirk summarised the case as follows:

‘In summary, all of the evidence is consistent with Qantas' construction. None of the evidence is consistent with the Association's construction, and what the Association's argument amounts to, is this. If you half close your eyes and blur things a bit, Qantas, in certain circumstances recognises service with other Qantas entities. Stick that in - you know, blur it all together and you reach a conclusion therefore for every purpose you recognise it.

These are enterprise agreements carefully drafted with a long history. Now yes, I recognise that they bind all sorts of people, but they're carefully drafted with a long history and you can't just take this blurry approach and pretend that it is other than a careful delineation of rights and entitlements. There is no recognition of the right that they now claim. It would be inconsistent with the whole scheme, as I've sought to articulate to recognise that, after 24 years of practice.’

[80] As to casuals, Mr Kirk reiterated that the NES does not apply to casuals. To attempt to take s 22 out of context in order to create something more generous, is not permissible. In any event, the Agreements’ provisions expressly refer to ‘years of service’, not broken periods of casual service. While Mr Nguyen does not say it should apply to casual service of more than two years, he is really saying how close is close enough? It would need to be expressly dealt with by carefully drafted provisions, not just guessed at.

[81] In respect to the Berri Principles, Senior Counsel relied on Principles 11, 12 and 15 which are consistent with the long history of how the Agreements’ redundancy conditions have operated.

In answer to a question as to transfers after 1 January 2010, Mr Kirk submitted that this date is most significant for the many long-term employees. However, employees transferred after that date, might fall into the less common cohort of employees who benefit from the NES provisions.

In reply

[82] Mr Nguyen said that the only definition of service Mr Kirk relied on, was based on an 1897 ‘imperial decision’ which no employee could have had any knowledge when voting for the Agreements.

[83] Mr Nguyen denied the Association was ‘cherry picking’ s 22 of the Act, without recognising the Transitional Provisions. It was the legislature which had ‘cherry picked’. Section 22 applies to the NES only and applies to transfers after 1 January 2010. For the remainder of the Act, s 22 applies, without limitation.

[84] Mr Nguyen noted that Cl 22.4 (3 years’ service for promotion to a CSM position) in the QAL SH EA 9 Agreement, is not in the Domestic Agreement. Mr Nguyen suggested that the Commission might come to a different conclusion in relation to the three Agreements. Further, the Association does not accept that there are different arrangements for employees under the QAL SH EA 9 Agreement and the QDEA EA 2015 Agreement.

[85] Mr Nguyen conceded that s 46 of the AI Act does not apply because of the Berri Principles. However, s 22 of the Act is not a ‘statutory blur’, but forms part of the objective background facts which can be taken into account, if there is an ambiguity. Mr Nguyen also submitted that the modern awards are also part of the objective facts and that the AI Act and s 22 do apply when comparing an enterprise agreement to its modern award comparator. He said that as the modern awards do not have a definition of service, s 46 of the AI Act ‘automatically’ applies. Mr Nguyen noted that a number of undertakings given at the time the Agreements were approved, make reference to the NES. This would indicate that the NES redundancy entitlement is potentially more generous than the Agreements.

[86] Mr Nguyen accepted that this was the first time in 24 years that the current issue had been raised. However, this was in the context of the first time Qantas Domestic has offered VR options and the first time all employees have been emailed the estimates of their entitlements ahead of the deadline for an EOI. In the past, a self-selected group would receive their estimates where particular employees expressed an interest in VR. In any event, the fact no-one may have complained in the past is not a matter the Commission should take into account. There are now approximately 100 employees who have received estimates inconsistent with their understanding.

[87] Mr Nguyen submitted that of the references made to the unregistered agreements, only 1 in 2018 explicitly deals with a post-conduct agreement in respect to redundancy. All the others are ‘quite obscure’ as to service for redundancy purposes.

[88] Mr Nguyen rejected Mr Kirk’s submission that the Association’s evidence going to the Qantas Domestic Program in 2013 and the Union’s Newsletter was inconsistent with its own submission. While not everything hinges on this evidence, it serves to demonstrate an agreed outcome in negotiations at the time, after which communications were sent out by the Company. The agreement actually provides as follows:

‘In accordance with Qantas policy, this is what will occur and one of those points is that the service with the subsidiary would be recognised for the purpose of redundancy.’

[89] Mr Nguyen submitted that putting all the evidence in chronological order suggests that prior to the approval vote for the QDEA EA 2015 Agreement, employees would have been of the view that service with Qantas Group entities, would be recognised for all purposes. Mr Nguyen said there could be no criticism as that delineation is close enough. From the FAQ document Qantas used 3 months or less for a break in service, which is the same period used in s 22 of the Act.

CONSIDERATION

[90] Unsurprisingly, the parties are ad idem as to the principles to be applied by the Commission when undertaking the exercise of interpreting the words in an enterprise agreement. These principles, now notoriously known as the Berri Principles, were established in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005. I set out the Berri Principles below:

‘1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide (sic) the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.’

[91] The Full Bench of the Commission in Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd T/A Appin Mine [2017] FWCFB 4487 (‘Endeavour Coal’), considered Golden Cockerel and Berri in the following terms:

‘[42] In Golden Cockerel, the Full Bench set out authorities which make it clear that while the task of construction begins with consideration of the ordinary meaning of the words of the agreement, regard must be paid to the context and purpose of the provision or expression being construed. Those authorities make clear that context and purpose are relevant to construction and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning.

[43] In this regard, the Full Bench in Golden Cockerel had set out at [29] the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA. Relevantly, that explanation emphasises the following matters:

• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means and there is always some context to any statement;

• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;

• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;

• The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context; and

• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction.’ (footnotes omitted)

[92] Further, the Full Bench of the Commission in United Firefighters Union of Australia v Emergency Services Telecommunications Authority T/A ESTA [2017] FWCFB 4537, stated:

‘[35] As stipulated in Berri, the starting point for interpreting an enterprise agreement is to have regard to the ordinary meaning of the words used. Further, the text must be interpreted in the context of the agreement as a whole. Principles 7 and 10 elicited in Berri emphasise that ambiguity in a provision within an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances. However, principle 8 makes it clear that, in determining whether ambiguity exists, one may have regard to evidence of the surrounding circumstances. That is, such evidence can be used to identify and resolve any ambiguity.’

[93] The principles applying to the interpretation of an enterprise agreement have also been the subject of much Federal Court exegesis. The Full Court of the Federal Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 said at para 197:

‘The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes (1989) 30 IR 362 at 378 (French J). The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503 (Street J)). To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced: see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).’ (citations omitted)

[94] It may be accepted that the general legal principles applicable to the interpretation of enterprise agreements are the same as those which have traditionally applied to Awards. In a judgement of the Federal Court of Australia, Rangiah J in Swissport Australia Pty Ltd v Australian Municipal Administrative Clerical and Services Union (No 3) [2019] FCA 37 provided a helpful summary by reference to the frequently cited authorities. At para 52, His Honour said:

‘The principles of construction of awards are well-settled and include the following:

(1) The canons of construction found in the Acts Interpretation Act 1901 (Cth) apply to awards of the Commission: City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [52]; Construction, Forestry, Mining and Energy Union (Construction and General Division) v Master Builders’ Group Training Scheme Inc (2007) 161 IR 86 at [33]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 at [29]; Sydney Night Patrol and Inquiry Company Limited trading as SNP Security v Pulleine [2014] FCA 385 at [26].

(2) The task of construction begins with the natural and ordinary meaning of the words used: City of Wanneroo at [53]; Kucks v CSR Limited (1996) 66 IR 182 at 184; Australian Workers’ Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13].

(3) An award is to be interpreted in light of its industrial context and purpose: City of Wanneroo at [53]; Zader v Truck Moves Australia Pty Ltd [2016] FCAFC 83 at [27]; Prestige Property Services Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2007) 161 FCR 95 at [56] and [109]; Soliman v University of Technology, Sydney (2008) 176 IR 183 at [82]

(4) An award is also to be interpreted in light of the commercial and legislative context in which it applies: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] and [13]; Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 at [90]; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [14]-[18]; Zader at [27].

(5) An award “must not be interpreted in a vacuum divorced from industrial realities”: City of Wanneroo at [57]; Australian Workers’ Union v Cleanevent Australia Pty Ltd at [14].

(6) The relevant “context” to be considered in interpreting an award extends to the origins of a particular clause. However, most often the immediate context, being the clause, section or part of the award in which the words to be interpreted appear, will be the clearest guide: Short v FW Hercus Pty Limited (1993) 40 FCR 511 at 517-19.

(7) The Court should not make too much of infelicitous expression in the drafting of an award. Ultimately, as awards bind the parties on pain of pecuniary penalties, they should make sense according to the basic conventions of the English language: City of Wanneroo at [57]. Narrow or pedantic approaches to the construction task are misplaced, but a court is not free to give effect to some anteriorly derived notion of what is fair or just regardless of what has been written in the award: Kucks at 184; Excelior Pty Ltd at [30].

(8) While context and purpose of an award will be relevant, ultimately the Court’s task is to give effect to the meaning of the award as expressed in its words, objectively construed: Amcor Limited at [70], [77]–[114].’ (citations omitted)

[95] In summary, it is well accepted that the construction of an enterprise agreement begins with ordinary meaning of the words used; see: Berri at [114]. Where there is a dispute about the construction of an enterprise agreement, the resolution will turn on the language of the agreement, having regard to its context and purpose; see: Golden Cockerel. Context might appear from the text of the agreement when viewed as a whole, the disputed provision’s place and arrangement in the agreement and the legislative framework under which the agreement was made; see: Berri Principle 1 at [114] and Golden Cockerel Principle 8 at [41]. However, the task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome; see: Berri Principle 2 at [114].

[96] Many of Mr Nguyen’s arguments were, novel and no doubt of some academic interest. Mr Nguyen displays a colourful flair for invention and creativity. That said, the primary focus of the Association’s case on s 22 of the Act overlooked a fundamental proposition as to the proper characterisation of this dispute. It is not, with respect, a dispute about statutory construction; rather, it is a dispute, properly characterised, as one involving the interpretation of the words in an enterprise agreement. While I accept that there are some similarities in the approach to be adopted between the different tasks the Commission must undertake, there is a long history of industrial jurisprudence, both in the Commission and the Courts, most recently in Golden Cockerel and Berri, which has distinguished the approach to be applied when interpreting the words in an industrial instrument to the construction of the words in a statute.

[97] On one view, the Association’s submissions and arguments in this case fly in the face of how the parties, most notably the FAAA itself, have understood and applied the complex and detailed working arrangements and employee entitlements in this industry for many years. To an outsider, many of these arrangements are unfathomable or at best, difficult to explain as to their significance and history. That said, no dispute has arisen of this kind since 1996 as to what the FAAA now submits should be a change in approach and application of how service is treated in respect to redundancy (with limited agreed exceptions), and how service is treated for other benefits and accrued entitlements.

[98] In order to drastically alter the settled status quo, the FAAA bears the evidentiary burden to overturn years of agreed interpretation. In other words, a clear and cogent evidentiary case must be established, rather than the selective ‘cherry picking’ of words from other sections of the Act (and even words in other Acts), and taking them out of context. This will not, in my opinion, take the Association’s case very far. In this respect, as Berri Principle 6 explicitly sets out, the AI Act does not apply.

[99] In my view, it is not open, when construing the words in an enterprise agreement, to rely on the definition of the same words or phrases found in other statutory schemes, such as the Corporations Act, where the purpose and context of other statutory schemes are very different to here. Of course, support may be found in the meaning of the same words or phrases in the same Act, as a matter of statutory construction; namely, the same words appearing in the same Act are taken to have the same meaning, unless a contrary intention is expressly set out. Even if s 22 has some striking relevance in this case, care should be taken, as was made clear in Unilever at [28], that the majority decision in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Donau Pty Ltd [2016] FWCFB 3075 ‘turned on its own facts’ (service counting for ‘continuous’ casual service). The Full Bench relevantly added:

‘… It should not be understood as establishing any principle about the application of s.22 of the Act to casual employment, or the approach to calculating service in enterprise agreements. It will be recalled that in that case, the National Employment Standards of the Act had been incorporated into the agreement, and it was relevant to consider s.22, which defines service for certain purposes in the Act. It does not define service for the purposes of enterprise agreements. The majority in that case stated that the Act does not exclude a period of regular and systematic casual employment from the definition of service or continuous service for the purpose of severance payments. However, we would note that the concept of regular and systematic casual employment is a statutory construct used for the purpose of s.384 of the Act and in certain other limited contexts. It is not reflected in s.22 of the Act.’

On one view, that definitive Full Bench conclusion dispels the gravamen of the Association’s case.

[100] Of course, I accept unreservedly the right of the Association to challenge the long-accepted practice of how prior service is recognised for redundancy purposes. It is open for the Association to submit that for many years, or at least since the Act’s commencement, Qantas has wrongly interpreted prior service in the present context and it is now seeking to correct a vice which the words in the Agreements and their predecessors Agreements cannot sustain.

[101] However, the exercise is not a simple as the Association’s novel submissions suggest, that s 22 of the Act holds the answer. The starting point is the terms of the Agreements themselves, giving the words their plain ordinary meaning, according to the context in which they appear and in the context of the Agreement when viewed overall. It must be accepted that Berri Principle 8 permits the consideration of surrounding circumstances and evidence of objective facts to establish whether ambiguity exists. However, this does not mean regard may be had to surrounding circumstances or objective facts, if no ambiguity exists.

[102] That said, in my opinion, the question as to the construction of the word ‘service’ in the phrase ‘for each year of service’ in the Agreements’ redundancy payments clauses, need go no further than the words (or more precisely, the omission of words), in the Agreements themselves. It is common ground, that there is no definition of ‘service’ in the Agreements for any purpose, least of all for the specific purpose of calculating redundancy payments. I note that in WorkPac Pty Ltd v Skene [2018] FCAFC 131, the Full Court of the Federal Court considered such a circumstance and said at [202]:

‘Where a term is undefined, unless there is contrary indication, it ought to be presumed that the draftsperson intended that the term have its ordinary meaning. Despite the broad purposive approach to be taken to the interpretation of industrial agreements, that cannon of construction remains applicable as a starting point.’

[103] Accordingly, despite the purposive approach to be adopted when interpreting enterprise agreements, the canon of construction regarding ‘ordinary meaning’, remains the applicable starting point.

[104] In my view, the Association’s submissions are predicated – indeed, they would not make sense otherwise – on the inclusion of words into the Agreements in order to achieve the result it seeks. This is impermissible. It is a principle of a construction that words cannot be imported into an agreement which give the actual words a meaning they would otherwise not bear, or give a meaning to the words which is contrary to their plain, ordinary meaning in order to achieve a fair or just (or fairer or more just) outcome. These are not the tests. Berri Principle 2 could not be clearer. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638, Katzman J said at [30]:

‘A narrow or pedantic approach is to be eschewed, but “[a] court is not free to give effect to some anteriorly derived notion of what is fair or just regardless of what has been written in the award” (Kucks at 184, approved in Ansett Australia Limited (subject to Deed of Company Arrangement) v Australian Licensed Aircraft Engineers’ Association [2003] FCAFC 209 at [8]). Cf. Wanneroo at [57] and Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) ALJR 1806; [2003] HCA 55 … per Hayne J at [115].’

[105] I have considerable sympathy for long serving Qantas employees with prior service with other entities, and who might, for the first time in their careers, be anxiously grappling with whether to accept VR. I appreciate why many of them would hold a reasonable belief that prior service is counted for all purposes, including redundancy payments. Mr Nguyen placed much emphasis on these purported subjective intentions, with little actual evidence. Even so, with respect, that is not the test. Subjective intention or belief, particularly as I will set out shortly, with no express documentary evidence, and as the authorities make patently plain, is to be eschewed.

[106] While the question of fairness or just results are not relevant to the construction exercise, I make the following obiter comments. One would be hard pressed to find a more generous redundancy scheme in an enterprise agreement, or as a company policy, particularly given; firstly, the scheme has remained largely unchanged for 24 years, and secondly, it is unusual to find a generous scheme which recognises that if an employee is better off under the NES (which is a small minority of Qantas employees), then whichever provides a more beneficial result will apply. It should also not be lost sight of that the present calls for EOIs are for voluntary redundancies across the Company. No decisions have been made as to persons or groups of employees who may be affected, let alone has any person’s EOI being accepted. Given the long service profile of Qantas employees, it may well be that the Company will receive more volunteers than is necessary to meet its ongoing operational requirements, arising from the medium-term impacts of the COVID-19 pandemic. In my experience, a generous VR scheme negotiated by Unions, can counterintuitively, result in disputes about employees who want to take the VR package, but are required to remain employed by the employer for operational needs.

[107] In this case, put crudely, those with short service and who want to remain employed, do not have to express an interest in VR and hope it will not come to forced redundancy. At this point, this is entirely speculative, because we simply do not know the outcome of the EOI process, because it is presently stalled by this dispute.

[108] Turning back then to the terms of the Agreements. In my opinion, there is nothing in the Agreements’ redundancy provisions or anywhere else in the Agreements, which can give actual, or even inferential support as to the Association’s definition of ‘service’; rather, the relevant terms demonstrate the contrary intention. The QDEA EA 2015 Agreement, provides at Cl 18.1.1. – Redundancy – as follows:

‘18.1.1. Expressions of interest will be called for from all flight attendant categories. Selection for redundancy from those that expressed an interest will be in accordance with length of service with QD.’

[109] In QF LH EA 10, Cl 17 provides for compulsory redundancies in reverse order of seniority, with prior service recognised only with Qantas and QCCA. It reads:

‘17. COMPULSORY REDUNDANCIES

The Compulsory Redundancy Arrangements are outlined in Schedule 2 to this Agreement.

Any compulsory redundancy of employees under this agreement will occur in reverse order of seniority. Seniority for the purpose of this clause means the total period of service as an employee in any classification covered by this agreement, whether employed by Qantas or QCCA. For this purpose employees of Qantas and QCCA shall be treated as one group for the determination of seniority.

Prior unbroken periods of service as a Qantas Short Haul flight attendant that are continuous with employment under this Agreement will be included when calculating an employee's seniority for this purpose.’

[110] The closest one gets to ‘service’ being recognised by a different entity and one which Mr Nguyen claimed is decisive, is QAL SH EA 9 which reads:

‘21.3 For this purpose cabin crew employed by Qantas or by any new third party labour provider will be treated as one group for the determination of seniority.’

[111] It will be immediately apparent that service must be by a third party labour provider and service is recognised for the purpose of seniority only in the selection for redundancy, and not for any other purpose. I observe that if the parties had intended that seniority would apply for other purposes, and particularly for calculating redundancy pay, then surely it would have been expressly set out, given the careful attention to detail disclosed in the parties’ industrial arrangements.

[112] What can be clearly observed is that in all the Agreements’ coverage clauses, they refer expressly to particular entities, namely in:

(a) QDEA EA 2015 – Cl 3 – Parties Bound and Incidence Clause – provides as follows:

‘3. PARTIES BOUND AND INCIDENCE CLAUSE

3.1. This Agreement binds the following:

3.1.1. Qantas Domestic Pty Limited (ACN 134 556 255) (QD or Company) ; and

3.1.2. the Flight Attendants’ Association of Australia (Association) – National Division, in respect of all flight attendants, whether members of the Association or not, primarily engaged on domestic routes in the classifications set out in this Agreement.

3.2. This Agreement is a comprehensive agreement. It replaces and operates to the full exclusion of all other awards, orders of industrial commissions or industrial and workplace agreements that would otherwise apply save that it does not exclude State laws dealing with occupational health and safety and workers' compensation.’

I note in particular the intention in Cl 3.2 that the Agreement is intended to be ‘a comprehensive agreement’.

(b) QAL SH EA 9 - Cl 4 – Parties Bound and Incidence of Agreement – reads:

‘4 PARTIES BOUND AND INCIDENCE OF AGREEMENT

4.1 This Agreement is binding on:

4.1.1 Qantas Airways Limited (Qantas or the Company);

4.1.2 The Flight Attendants Association of Australia (National Division) (FAAA or the Association), subject to the FAAA making an application under section 183 of the Fair Work Act 2009 (Cth); and

4.1.3 All flight attendants who are employed by Qantas Airways Limited and primarily engaged on domestic routes in the classifications set out in this Agreement.’

‘This Agreement is binding on Qantas Airways Limited (Qantas), QF Cabin Crew Australia Pty Limited (QCCA) and the employees employed by Qantas Airways Limited and QF Cabin Crew Australia Pty Limited to perform work covered by the classifications contained within this Agreement.’

[113] Applying the principle of interpreting the words ‘service’, having regard to the context of the Agreement overall, the only conclusion open to the Commission is that ‘service’ can only mean ‘service’ with the above named entities, being those which are covered by the Agreement, unless the contrary intention expressly states otherwise. As there are no other contrary intentions in the text of the clause expressly, or inferentially in the body of the Agreement, the Association’s contentions cannot be sustained.

[114] However, even if I am wrong about this conclusion, and assuming the absence of a definition, or the word ‘service’ is itself ambiguous, unclear or susceptible to more than one meaning, the overwhelming preponderance of the documentary evidence as to notorious facts, does not support the Association’s contention as to the meaning of ‘service’ for the purpose of calculating redundancy pay.

[115] In this respect, I rely on Ms Burt’s largely uncontested evidence concerning a number of examples of unregistered agreements which deal with ‘service’ for other specific purposes. Mr Kirk’s submission was that these examples are carefully targeted exceptions which prove the rule, that the plain ordinary meaning of the word ‘service’ in the Agreements is as Qantas asserts. In my opinion, Mr Kirk’s arguments are persuasive and compelling. None of these unregistered agreements deal with redundancy benefits, and at their highest, might leave an employee with the impression that if one or more entitlements is recognised, then they all must be. This is wishful thinking and not the test. Nor do I consider that a sophisticated Qantas workforce would have any doubt about what seniority meant in respect to the specific circumstances which the unregistered agreements addressed. I shall refer to these agreements by year date:

(a) The 2003 agreement deals with career progression for cabin crew of Sunstate and Eastern. Part E setting out conditions, expressly recognises sick leave, long service leave and annual leave. There is no mention of redundancy.

(b) The 2004 agreement similarly deals with career progression between Jetstar and Qantas Short Haul with the same conditions as in (a) above.

(c) The 2007 agreement deals with the closure of AO and refers to service with AO being recognised for annual and personal leave and long service leave. An express provision at 2.17 and 2.18 uses the date of joining Qantas as the point from which future redundancy entitlements will be calculated, with this entitlement being the greater of either service with AO or Qantas – significantly, not in addition to the service with AO.

(d) The 2013 agreement provides for career progression opportunities with named entities Jetstar, Team Jetstar, Eastern, Sunstate and Network Aviation, and recognition of prior service for long service leave, annual and personal leave, and redundancy entitlements. This was agreed at the time for the specific purpose of encouraging recruitment into the QD Perth base.

(e) The 2018 agreement was negotiated to facilitate staff swap opportunities between the Qantas Group of companies and QF Cabin Crew Australia. Recognition of service is provided for. Clause 4.4 provides for seniority from the old to the new employer to be recognised for the purpose of any future compulsory redundancy program; pointedly omitting reference to seniority for calculating redundancy payments.

[116] The Association placed great store on a change of rules by Qantas in 2013 which recognised service for discretionary benefits such as staff travel and upgrades, long service trips, badges and cash rewards. The FAAA described it in a Newsletter in December 2012 as a fantastic win for career progression crew. A few things may be said about this issue:

(1) The change of rules did not result in a formal signed agreement with the Association.

(2) Nowhere in the Association’s Newsletter is there mention of the changes affecting redundancy pay.

(3) I accept Ms Burt’s evidence that a template email was sent to all affected employees in February 2013 outlining the changes which included the following:

‘Redundancy – New Group DOR will NOT be recognised for the purposes of redundancy or any other service related benefit not mentioned above’.

[117] It makes perfect sense that Qantas would want to convey the terms of the changes it made for which it hoped to receive credit. I reject any inference that this communication was not made or employees misunderstood that it only applied to the specific identified employee benefits. While Mr O’Hearn and Mr Gerber claimed they do not recall seeing the email of February 2013, this is inconsistent with Mr Uren’s evidence that he was aware of what the changes were, albeit that he believed they recognised ‘service’ for all purposes.

[118] There was simply no evidence that these changes were for all purposes, including recognising ‘service’ for redundancy payments. The best the Association could do was to rely on a submission that it could reasonably be assumed that employees believed, when they voted for the QDEA EA 2015 Agreement, it included prior service recognised for all purposes, including for redundancy pay. This is not cogent evidence. There was is nothing to have positively informed employees as to such a belief. Such a submission ‘draws a very long bow’ indeed, and cannot be accepted.

[119] In my view, reliance on s 22 as somehow having a link to the Agreement provision is misplaced. The only work s 22 has to do is to recognise that which Mr Kirk submitted; Schedule 4 Item 11 of the Transitional Act, makes plain that service prior to the commencement of the Act on 1 January 2010, cannot apply to transfers of employment from one employer to another.

[120] Moreover, reliance on the NES can give no comfort to the Association’s claims. It is a classic ‘cherry picking’ exercise where the Agreement provides precisely what the NES comprehends; namely, the Agreements are not inconsistent with the NES, as they provide for a superior set of redundancy entitlements to the NES. One should be careful in what you wish for, in submitting that some sections of the Act should apply, but other related provisions do not.

Casual service

[121] For the same reasons I have rejected prior ‘service’ with associated entities for permanent employees, I reject the Association’s submissions as they apply to prior service as a casual. I apprehend that there was not much enthusiasm in the Association’s case about the issue of casual service in the current VR context. This may be because it affects a very small cohort of employees. However, I would rather prefer to think the Association understands the significant weaknesses with this aspect of its case. These include the following:

(a) It is generally accepted that casual employees do not receive redundancy entitlements as their employment is not usually considered as continuous employment. Thus, it is difficult to see how a formula for years of service and pro rata for incomplete years of service, can sensibly or logically apply to casual employees. Certainly, the NES provides no such entitlement.

(b) Casual employment comprehends the benefits of permanent employment, such as various components of leave and redundancy and guaranteed full or part time permanent hours of work, are compensated by a 25% loading. It seems inconceivable that the statutory intention was to provide, in substance, for double counting.

(c) Reliance on s 384(2)(a) of the Act, suffers from the same flaw as relying on s 22 of the Act for the purpose of determining the meaning of ‘service’. Section 384(2)(a) in Part 3-2 of the Act deals with unfair dismissal. The legislature has seen fit to provide access to the unfair dismissal provisions of the Act to regular and systematic casual employees, by providing an exception to the general rule as to continuous services for the purposes of covering an employee’s period of employment. This is far removed from any consideration of ‘service’ for the purposes of determining redundancy entitlements, based on years of service.

(d) The Agreements have a provision for consideration of the continued utilisation of casual employees, before any consideration of compulsory redundancies (obviously before full and part time permanent employees are considered). Such a provision offers a strong inference that the nature of casual employment is not one which would ordinarily attract redundancy entitlements.

(e) Reliance on the treatment of casuals under the 2000 Metals Casual Case and the Award Modernisation process gives no guidance and, in any event, is irrelevant to the meaning of ‘service’ in an enterprise agreement.

(f) There is no evidence, be it in an email, letter, agreement or conversations, that prior periods of casual employment have been considered for any leave or staff benefits; let alone for the purposes of calculating redundancy pay. It would be extraordinary to grant this claim in the absence of any sound and cogent evidentiary basis for doing so.

(g) It is ironic that the Association’s submission about s 22 of the Act as being critical to the determination of the meaning of ‘service’ in respect to associated entities, when s 22 does not refer to casual service at all – a further example of ‘cherry picking’ provisions where it might suit an argument, but ignoring it where it does not. Indeed, it is noteworthy that s 22 is titled ‘Meanings of service and continuous service’. Continuous service is inconsistent with casual employment. The best the FAAA’s creative submission got was that casual service should count, having regard to equity, good conscience, and the substantial merits of the case. Good try – but putting aside that there is no merit to this submission, it is not the test for interpreting the words in an enterprise agreement.

(h) Similarly, the NES is relied on by the Association, but conveniently overlooked when it comes to the NES and the Act’s recognition of redundancy pay under s 119, which expressly excludes casual employees at s 123 from Division 11.

[122] For these reasons, I reject the submission that past service as a casual employee, either with Qantas or an associated entity, should count towards the calculation of redundancy pay under the Agreements.

CONCLUSION

[123] For the aforementioned reasons, I do not accept that Qantas Airways Ltd or Qantas Domestic Pty Ltd are required to include an employee’s prior service with an associated entity, including any periods of prior casual service with an associated entity of Qantas or QD, when calculating redundancy pay under the three named enterprise agreements in this matter.

[124] The application is dismissed and the proceedings are concluded.

DEPUTY PRESIDENT

Appearances:

Mr M Nguyen, Mr J Scully-Leaf and Ms A McManus appeared for the Association.

Mr JK Kirk of Senior Counsel, Mr T Prince of Counsel, Ms K Srdanovic, Mr S Woodbury and Ms R Kruger, Solicitors, Ashurst Australia, appeared for Qantas.

Hearing details:

2020.

Sydney:

23 September.

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