Federal Court of Australia

Transport Workers’ Union of Australia v Qantas Airways Limited (No 2) [2021] FCA 1012

ORDERS

THE COURT DECLARES THAT:

1.    The respondent (Qantas) by its Chief Executive Officer, Qantas Domestic and International, in making the decision announced on 30 November 2020 to outsource its ground handling and fleet presentation operations at ten Australian airports (relevant airports) to third party providers, engaged in conduct which contravened s 340(1)(b) of the Fair Work Act 2009 (Cth) (Act), by taking adverse action against:

(a)    employees of Qantas who performed ground handling and fleet presentation work at the relevant airports and whose employment was covered by the Qantas Airways Limited and QCatering Limited – Transport Workers Agreement 2018 (Qantas employees) for the purposes of Item 1(c) of s 342(1) of the Act by prejudicially altering Qantas employees’ positions; and

(b)    employees of Qantas Ground Services Pty Limited (QGS) who performed ground handling and fleet presentation work at the relevant airports and whose employment was covered by the Qantas Ground Services Pty Limited Ground Handling Agreement 2015 (QGS employees) for the purposes of Item 3(c) of s 342(1) of the Act by altering QGS’ position to its prejudice in relation to its contract for services with Qantas,

for reasons, which included to prevent the exercise by the Qantas employees and QGS employees in 2021 of their workplace right, following the nominal expiry of the relevant enterprise agreements, to: (i) organise and engage in protected industrial action or a protected action ballot for the purpose of supporting or advancing claims in relation to a proposed enterprise agreement; and (ii) participate in enterprise bargaining, under the Act.

THE COURT ORDERS THAT:

2.    Pursuant to rule 39.05 of the Federal Court Rules 2011 (Cth), order 1 made on 30 July 2021 be corrected so as to read: “The claims for relief in terms of prayers 1.5, 1.6, 1.7, and 1.9 of the amended originating application filed 31 December 2020 be dismissed.”

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LEE J:

A    INTRODUCTON

1    In Transport Workers’ Union of Australia v Qantas Airways Limited [2021] FCA 873 (principal judgment or PJ) I deferred finalisation of declaratory relief. These reasons are to be read together with the principal judgment and they, together with the principal judgment, constitute my reasons for granting the relief following the separate hearing on liability questions ordered on 22 December 2020. I will use the abbreviations adopted in the principal judgment.

2    The formulation of relief in this matter has a degree of complexity by reason of the wide ranging and disparate claims made by the Union, the way in which the prayers for declaratory relief were drafted, and the fact that my dispositive findings do not correspond identically to the relief as articulated in the amended originating application (AOA).

3    At PJ [315], I directed the parties to bring in short minutes of order which, among other things, proposed a form a declaration specifying the contravening conduct found. After hearing further argument about the form of relief, I have concluded it is appropriate I formulate the terms of the declaration in a form different to that proposed initially by either of the parties. Primarily, this is because only one declaration ought to be made in this case and, more generally, any declaration should not speak in generalities, without giving adequate content and indicating the gist of the findings made: Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53 (at 91 [89]–[90] per Gummow, Hayne and Heydon JJ). Further, the declaration should contain sufficient indication about how and why the relevant conduct contravened the applicable statutory norm: BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167; (2004) 207 ALR 452 (at 465 [35] per Gray, Goldberg and Weinberg JJ), quoting Rural Press (at 91 [90]); see also Ethicon Sàrl v Gill [2021] FCAFC 29 (at [816] per Jagot, Murphy and Lee JJ).

B    The relevant proscribed reasons

4    The case pleaded by the Union was hydra-headed. Even after a refinement I entreated be made at the FCMH, no less than six proscribed reasons were run, namely, adverse action:

(1)    because of Union membership (s 346(a)) (see the AOA prayer 1.5; ASOC at [40.1], [41]);

(2)    because of the benefits of the QAL Agreement and QGS Agreement (s 340(1)(a)) (see AOA prayer 1.6; ASOC at [40.2], [42]);

(3)    because of an ability to participate in enterprise bargaining (s 340(1)(a)) (see AOA prayer 1.7; ASOC at [40.3], [43]);

(4)    because of an ability to participate in a protected action ballot and protected industrial action (s 340(1)(a)) (see AOA prayer 1.9; ASOC at [40.3A], [43A]);

(5)    to prevent employees participating in enterprise bargaining (s 340(1)(b)) (see AOA prayer 1.8; ASOC at [40.4], [44]); and

(6)    to prevent employees exercising the workplace right, following the nominal expiry date of enterprise agreements which covered and applied to them, to participate in a protected action ballot and organise and/or engage in protected industrial action for the purpose of supporting or advancing claims in relation to a proposed enterprise agreement (s 340(1)(b)) (see AOA prayer 1.10; ASOC at [40.5], [44A]).

5    As was made plain at PJ [260], the primary case of the Union by the end of the submissions was that aside from the pandemic disrupting operations, 2020 presented a unique opportunity to outsource because the “affected employees” had no ability to initiate nor participate in the process of: (a) a protected action ballot (s 341(2)(d)) and; (b) organising and engaging in protected industrial action (s 341(2)(c)). I should note in this regard that the defined term “affected employees” I adopted at PJ [203] and used in PJ [260] (as being employees who were members of the Union) was used in contradistinction to the broader definition of “Affected Employees” pleaded in the ASOC (see [26] below), because this more restricted definition reflected the primary emphasis of the case of the Union put in closing submissions as I understood it.

6    At PJ [282], I turned to the question of whether Mr David decided to outsource the ground operations for one of the prohibited reasons alleged (see [4(6)] above), being preventing the exercise by the affected employees of their workplace right to: (a) organise and engage in protected industrial action (or participate in a protected action ballot) and; (b) participate in bargaining in 2021. I defined this as the Relevant Prohibited Reason. This definition was within the pleading at ASOC [40.5] and [44A]: see [4(6)] above. Although this definition reflected the way the case was pleaded and was convenient, it perforce elided what in the circumstances of this case are two closely related, but distinct workplace rights.

7    The ability to participate in organising and engaging in protected industrial action is an ability to “participate in, a process or proceeding under a workplace law or workplace instrument” for the purposes of s 341(1)(b). Part 3-3 Div 2 sets out when industrial action for a proposed enterprise agreement is protected industrial action. The other workplace right identified, the ability to participate in bargaining, is also an ability to “participate in, a process or proceeding under a workplace law or workplace instrument” for the purposes of 341(1)(b), but is regulated by Part 2-4, which deals with enterprise agreements.

8    After defining the Relevant Prohibited Reason, at PJ [283]–[302], I explained why I formed the view that the facts proved on the balance of probabilities fell short of proving that Mr David “did not decide to outsource the ground operations partly to prevent the exercise by the affected employees of their workplace right to organise and engage in protected industrial action and participate in bargaining in 2021” (emphasis added). These words were used advisedly.

9    Part of the number of independent reasons why I have come to this conclusion was the closeness of the relationship and lack of evidence of any differences in reasoning between Mr Jones endorsing, and Mr David deciding upon, the outsourcing. This gives me some pause in accepting that Mr David was differently motivated than Mr Jones: see, for example, PJ [195], [200], [299]. I have also come to the view (see, for example, PJ [200], [305]) that it was more likely than not that Mr Hughes’ recommendation was similarly motivated as Mr Jones’ endorsement, given the nature of their working relationship (although, to the extent relevant, I have less confidence in making any definitive finding as to the motivations of Mr Hughes as compared to Mr Jones).

10    Returning to the evidence of Mr Jones, some of the findings I make in relation to his evidence were that: (a) he was concerned about the Union being able to exert industrial power by organising protected industrial action following the QAL Agreement reaching its nominal expiry date and he feared the Union and its members having both the QGS Agreement and QAL Agreement (together, the Enterprise Agreements) “open” concurrently (see PJ [198]); (b) relatedly, Mr Jones believed that operational risk would increase in 2021 in circumstances of open Enterprise Agreements and power being concentrated back in the Union (see PJ [276]); (c) similarly, Mr Jones perceived a need for the outsourcing decision to be made prior to Qantas being presented with the prospect that the inevitable industrial backlash caused could have, as part of its response, protected industrial action (see PJ [201]); and (d) Mr Jones (and Mr Hughes) thought the Union would be less amenable in any bargaining than the more compliant ASU, that any bargaining with the Union would not achieve costs targets, and in any bargaining process the Union was unlikely to work with Qantas to allow it to achieve its desired ends (see PJ [196]–[198]).

11    In particular, I made the following findings (at PJ [197]–[198]):

197    In Mr Jones’ notes in a ‘Q&A’ section, which he said were intended to assist him in dealing with questions he contemplated he might get from Board members (Ex 1, p 2043) he noted, obviously contrasting the more compliant ASU that “right sizing” was preferable because, among other reasons, “ASU/Linda willing to work with us on transformation” (Linda being the ASU’s then National Secretary, Ms Linda White (T583.23–4)).

198    It is plain that Mr Jones (and, for that matter, Mr Hughes) believed that the ASU members were persons with whom one could do business, but the more militant Union and its members fell into a different category. Put more specifically, notwithstanding that the ASU EPA was “open” and protected industrial action was a possibility, what Mr Jones was concerned about was the Union being able to exert industrial power by organising protected industrial action following the QAL Agreement reaching its nominal expiry date of 1 January 2021. Not only did Qantas perceive that it could not work with the Union and its members in ground handling without some difficulty, it feared the Union and its members having both the QGS Agreement and QAL Agreement “open” concurrently.

12    It followed from the reasons explained at greater length in the principal judgment that I expressly rejected the evidence given by Mr Jones that no part of his reasons for the recommendation to make the outsourcing decision was to prevent employees disrupting services in 2021 by taking protected industrial action when, it was hoped, services might be getting back to usual: see PJ [195].

13    But my finding is that Mr Jones knew that the whole purpose of any anticipated protected industrial action in 2021 was that that action would be taken by the Union to support or advance claims in relation to a proposed enterprise agreement under the FWA in 2021. The taking of protected industrial action cannot be divorced from its raison d’être, the Union and employees covered by the Enterprise Agreements seeking to support or advance claims in relation to a new enterprise agreement and engage in enterprise bargaining.

14    Importantly, in making a finding as to the state of mind of Mr Jones as to the Relevant Prohibited Reason (which formed an independent part, but not the only part, of my reasoning as to why I was not persuaded to the requisite standard of Mr David’s evidence as to his state of mind), I had in mind, and have had regard to, the precise terms of s 340(1)(b). The natural meaning of the verb “prevent” used in the present context, is to preclude the occurrence of an anticipated event or to render the event impractical or impossible by anticipatory action: see Oxford English Dictionary Online (Oxford University Press, August 2021). This focusses attention on the event (or, in this case, the two related events), being the exercise of the workplace rights: to organise and engage in protected industrial action and participate in bargaining in 2021. This is consistent with what the Full Court (Jessup, Tracey and Perram JJ) explained in Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84; (2014) 222 FCR 152 (at 189–90 [126]):

… the expression “to prevent the exercise” must be read in the sense “in order to prevent the exercise” or “with a view to preventing the exercise”. It was not sufficient if action taken by the person referred to in the subsection had the incidental effect of preventing the exercise. 

15    From the perspective of the Union, it would not have been enough if the sole concern of Mr Jones was the perceived logical ramification of protected industrial action or the consequence of protected industrial action, being a disruption as to operational continuity. Of course, anticipated disruption in 2021 was of critical concern, but I do not consider that Mr Jones was solely concerned with the event of operational continuity in 2021. I am comfortably satisfied after hearing his evidence, that part of what distinctly mattered to Mr Jones was the prospect of the event of Qantas having to deal, in 2021, with the actual exercise by the Union and employees covered by the Enterprise Agreements of the workplace rights identified, and part of his reasoning in endorsing outsourcing in November 2020 was to prevent an anticipated event, being the exercise of these rights (not just the consequence of them); and this formed part of his reasoning process. This was all part of his overall desire to avoid the Union being able to exert industrial power by organising protected industrial action following the Enterprise Agreements reaching their nominal expiry date and protected action being taken for the purpose of supporting or advancing claims in relation to a proposed enterprise agreement.

16    Following what emerged in cross-examination and recognising the inevitability of the concerns expressed in the contemporaneous documents as to potential operational disruption in 2021, Qantas, perhaps understandably, sought in final submissions to develop an argument that this operational disruption was the only event that was being sought to be prevented. But as I have sought to explain, that is a distortion and oversimplification as to what was going on in the mind of Mr Jones (and an oversimplification of what was not proved in relation to the reasoning of Mr David). Mr Jones partly wanted to prevent the exercise of the workplace rights, in and of themselves, cognisant of the “open” Enterprise Agreements being the necessary prerequisite to the exercise of those rights.

17    Although I do not make such a positive or express finding in relation to Mr David, for reasons I have explained, my assessment of the evidence of Mr Jones (and Mr Hughes as explained in the principal judgment) is an independent part of my reasoning as to why I do not consider that Qantas discharged its onus in this respect. In giving some focus to my findings as to the evidence of Mr Jones in these reasons, I stress that I do not wish to modify, in any way, the different factors explained in the principal judgment as to why, by reference to the whole of the evidence, I failed to reach the level of satisfaction or reasonable persuasion on the balance of probabilities that Qantas failed to prove that part of the reasons for Mr David’s outsourcing decision did not include prevention of an anticipated event, being the exercise of the workplace rights I will identify in the declaration (and not solely the operational disruption that would be a consequence of them).

18    For reasons I have explained at length, given my assessment of Mr David’s evidence contextually, this was the only aspect of the Union’s case that had substance. This was a case in substantially the same form as pleaded at ASOC [44A] (not at [40.3A] as was mistakenly published in the primary judgment (at [310]), but has been corrected by an erratum published contemporaneously with these reasons). Although ASOC [40.5] and [44A], in effect, rolled up two distinct workplace rights, this is unsurprising when one appreciates that the feared protected industrial action would be taken in support of the perceived “militant” Union’s claims in relation to a proposed enterprise agreement – the exercise of the rights sought to be prevented, was in this way, linked.

19    Qantas is correct in submitting that all four of the so-called because of allegations (identified at [4(1)]–[4(4)] above) should be rejected. This leaves the question as to whether both aspects of the so-called to prevent case (identified at [4(5)] and [4(6)] above) should be reflected in the declaratory relief, or only [4(6)] above should be reflected in the declaratory relief.

20    As noted above, the recommendation and endorsement of the outsourcing decision to prevent employees participating in protected industrial action or a protected action ballot was not made in a vacuum. Although it might be said, consistently with [4(5)] above, that it was not proved by Qantas that a reason for the outsourcing decision being made by Mr David was not to prevent employees participating in enterprise bargaining (see AOA prayer 1.8; ASOC at [40.4], [44]), the form of the declaration proposed by prayer 1.8 is defective; it is insufficiently particular, lacks specificity, and should not be made (although I will not formally dismiss this aspect of the application to ensure there is no confusion that the more particular declaration that I will make encompasses my finding as to the prevention of this workplace right).

21    What has not been proved by Qantas is that the reasoning of Mr David for the outsourcing decision included preventing the workplace rights identified being exercised in a particular context, and the gist of the findings made as to that context should be reflected in the declaration. Therefore, consistently with requirements of precision, only one declaration should be made, and this declaration should reflect the case identified at [4(6)] above.

C    The affected employees

22    Another issue dividing the parties in respect of the declaratory relief is the question of which employees have been found to be affected by Qantas’ adverse action. This was not a matter explored in oral submissions before the hearing as to relief. Qantas contends that any declaratory relief should only encompass those employees who are members of the Union (as reflecting the primary emphasis of the case put by the Union in final submissions – see [5] above). Qantas, by its submissions filed on 16 August 2021 (QS), seeks to separate the taking of adverse action against all employees the subject of the outsourcing decision from whether that adverse action constitutes a contravention of the FWA. Qantas contends that only those affected employees who were members of the Union had the relevant workplace rights. So the submission runs, it may be that all employees have the ability to participate in a protected action ballot or protected industrial action, but for Qantas, it was only the spectre of the Union taking any such action, as a powerful “large collective” that actuated Qantas, and that it perceived would cause operational disruption in 2021: QS [18]–[19]. It would not have been concerned, it was said, about any risk to operational continuity “if a lone employee (or perhaps a handful of employees) took protected industrial action in some form at some time in 2021”: QS [19].

23    Qantas also submits that no case was run that it had wished to prevent enterprise bargaining in 2021 with employees not represented by the Union, and that no evidence was led at any point to the effect that affected employees not represented by the Union were at any risk of participating in the enterprise bargaining process “such that Qantas would wish to prevent them from doing so”: QS [17]. That submission was briefly developed orally, as Senior Counsel for Qantas suggested that it is “at the very least … unknown for certain employees whether they would, in [the] future, have appointed or not appointed the [Union] as their relevant representative”: T19.46–7. It is appropriate to say a number of things to address the points raised by Qantas.

24    First, stepping out the analysis for the cause of action under s 340 of the FWA (as I did at PJ [208]) emphasises the obvious point that for an employee to be the subject of the adverse action contravention, they must have the relevant workplace right. Much depends on the identity and circumstances (as it relates to the workplace right) of each individual employee affected by the adverse action, and so much is recognised by the necessity to identify the particular workplace right that is said to be a reason for the taking of adverse action. The individuals affected must actually possess that right in the manner that is found to have actuated the impugned decision or action. The assessment of whether the workplace right actuated the adverse action, obviously enough, is not an assessment of whether an employee has the relevant workplace right in vacuo.

25    Secondly, the principal judgment canvassed the acrimonious relationship between the Union and Qantas. But it is important to note that I specifically rejected (at PJ [258]) the allegation that the outsourcing decision was made because the employees were members of the Union: see [4(1)] above. The finding of a contravention for taking adverse action because of Union membership is, quite obviously, contingent on affected employees being members of the Union: QS [15(a)]. But that does not mean that all workplace rights are contingent on Union membership, as Qantas seems to (perhaps implicitly) suggest: QS [14]–[16]. Much depends on the particular findings as to the state of mind of the decision-maker, and on the particular workplace right that has been found to have in part actuated the impugned decision.

26    Thirdly, as noted above, the Union’s pleadings defined the “Affected Employees” as Qantas “employees [who] perform baggage handling, ramp and related services at the [relevant] airports” and QGS “employees classified as airline services operators and co-ordinators [who] perform work servicing [QGS’] contract with Qantas at the [relevant] airports” (ASOC [2.8], [3.9]), and although the focus of the case, as was developed at the hearing, was on members of the Union (as I have explained at [5] above), the broader case was never abandoned, nor was it expressly limited to those employees who were members of the Union.

27    Fourthly, properly analysed, Qantas’ contention as to there being no evidence of any risk of industrial action by non-Union employees is not really to the point. It may be accepted that the Union members were very likely to participate in protected industrial action or a protected action ballot, given the nature of the Union’s past behaviour and its relationship with Qantas. But I made no such finding – it was not necessary, and to do so directs attention away from what I was required to decide. The role of the Court in determining whether an employer has taken adverse action for a proscribed reason is to interrogate the state of mind of the decision-maker at the time of the impugned decision: see, for example, PJ [224]. It is not to speculate on how the Union or its members would behave, or how non-Union employees might behave, once the Enterprise Agreements reached nominal expiry. What would have happened in a counterfactual is not relevant, except to the limited extent that an expectation or prognostication at the time of the decision as to whether, in the future, a workplace right would be exercised, might be relevant in assessing whether it was likely an impugned decision was taken in order to prevent the future exercise of the workplace right.

28    What is important is how the assessment of the risk of protected industrial action or a protected action ballot as part of bargaining for new enterprise agreements weighed in the mind of Mr David (and to the extent relevant, Mr Jones and others) at the time of making the decision in late 2020. The focus is, ex ante, on the mind of the decision maker, and in this case, what was proved about how Mr David assessed the situation would evolve in 2021 when the airline hoped to be back in full operation. Qantas was concerned with the potential for operational disruption and to prevent the exercise of the workplace rights captured in the declaration. Whether those concerns would be realised, and which of the relevant employees would exercise the rights, is not to the point.

29    As is accepted by Qantas, all employees covered by the Enterprise Agreements had the ability to participate in protected industrial action or a protected action ballot, provided they met the procedural requirements under the FWA: QS [18]. That is, “all Affected Employees were theoretically capable of participating in either of these processes in 2021, [but] would need a bargaining representative to do so (section 437(1) of the FW Act (to make an application for a protected action ballot) and section 409(2) (for the industrial action to be protected)). Those who would not have the [Union] as their bargaining representative, would have to appoint someone else (section 176(1)(c)).” It was the risk of protected industrial action or a protected action ballot arising because of the open Enterprise Agreements that loomed large. It seems to me that although the evident focus of everyone within Qantas as to industrial risk arising from any outsourcing decision was on the Union and the anticipated industrial response of its members, the declaration should encompass all employees covered by the Enterprise Agreements.

30    I accept there is uncertainty as to whether, in truth, any concern about protected industrial action on the expiry of the Enterprise Agreements being taken by any relevant employees other than members of the Union actuated Mr David (and hence Qantas) in the outsourcing decision. But I am not making an affirmative finding as to the reasons of Mr David; rather I am finding that Qantas has not proved that a reason for Mr David making the outsourcing decision was not for one of the prohibited reasons pleaded (as reflected in the declaration). If I am wrong in this regard, and the effect of the way the Union ran its case was to limit the Union to the case I understood had principal emphasis in final submissions (see [5] above), then I would have made a declaration in identical terms, but limited to members of the Union.

D    Other issues

31    The parties are also in dispute as to whether QGS should be joined as a party. It is unnecessary to deal with that issue now. No application for joinder has been made by the Union, and the Union has indicated that it will first seek to obtain an undertaking from QGS that it would reinstate the employees who were terminated if its contract is reinstated with Qantas. The remedial response pursued by the Union has a number of complications that I have raised, but are unnecessary to detail here. Obviously enough, however, QGS is a necessary party should an order be sought requiring it to do or not do anything, and I have found that the outsourcing decision amounted to adverse action as against QGS employees in contravention of the FWA. This issue will be addressed if and when any application is made by the Union.

32    It should also be noted that after the case management hearing, the parties were asked to clarify jointly by email their position in relation to a draft of declaration 1(b), and specifically whether it should refer to Qantas “altering the position of the QGS employees to their prejudice” or rather “altering QGS’ position to its prejudice.” The parties were in agreement that the latter wording was to be preferred to “accurately reflect the operation of Item 3(c) of s 342(1) of the [FWA]”.

33    Finally, for completeness, it is appropriate to note that a slip occurred in relation to order 1 made on 30 July 2021, which meant that the order contained a clerical mistake and, further, did not reflect the intention of the Court at the time it was made (within the meaning of FCR 39.05(e) and (g)). An order will be made under the slip rule reflecting those parts of the amended originating application that should be dismissed.

Associate:    

Dated:    25 August 2021