FEDERAL COURT OF AUSTRALIA

Ansett Australia Limited (subject to Deed of Company Arrangement) v Australian Licenced Aircraft Engineers’ Association [2003] FCAFC 209

ANSETT AUSTRALIA LIMITED (ACN 004 209 410) (subject to Deed of Company Arrangement) v AUSTRALIAN LICENCED AIRCRAFT ENGINEERS’ ASSOCIATION & ANOR

N 477 of 2003

WILCOX, CONTI & JACOBSON JJ

25 AUGUST 2003

SYDNEY

THE COURT ORDERS THAT:

The appeal is dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     This is an appeal from a judgment of Gyles J given on 26 March 2003.

2                     The only question which arises on the appeal is whether his Honour correctly construed the redundancy clause, which was clause 21 of the Ansett Australia Union Collective Bargaining Agreement 1999 (“the EBA”).  His Honour set out the clause at [18] of his judgment and it is unnecessary to repeat it.

3                     His Honour also set out the terms of the other relevant instruments, namely, the Licenced Aircraft Engineers’ (Ansett Australia Limited) Award 1995 (the “Award”) and the Ansett Airlines of Australia and Subsidiary Airlines – Non-Voluntary Redundancy Plan (the “May 1991 Policy”) at [19] and [20] respectively.

4                     As his Honour said at [21], the principal question is whether the cap of 104 weeks referred to in clause 21(c)(ii) of the EBA applies where the “no disadvantage” provision of clause 21(b) operates so as to trigger the effect of the redundancy provisions of the earlier instruments, ie, the Award or the May 1991 Policy.

5                     Ansett contended before his Honour that the EBA was the operative agreement and should apply according to its terms.  Ansett also submitted that the cap was not just part of the calculation for determining entitlement under the EBA but had a wider operation.

6                     The critical passage of his Honour’s judgment is to be found at [22] as follows:-

“In my opinion, counsel for the applicant is correct in submitting that this interpretation is untenable.  The “no disadvantage” rider is based upon the premise that there are three separate regimes for administering compulsory redundancy.  The first is the new Business Recovery Redundancy Program (“BRP”) provided for by the 1999 EBA itself.  The second is the CR May 1991 Policy.  The third is the Award.  As counsel for the applicant points out, each regime had its own structure, including limits.  In my opinion, there is no escape from the conclusion that the 104 week cap is one (and only one) aspect of the BRP and that the benefits to be obtained under that program (including the cap) must be compared (in the case of a particular employee) with the operation of the previous CR May 1991 Policy regime as a whole, with its limits, and with the Award entitlements as a whole with their limits.  The other capping provision in the 1999 EBA of $175,000 per employee illustrates the point – it is expressly for redundancy processed under the BRP and is indistinguishable in this respect from the 104 week cap.  This effectively deals with the first two questions of interpretation.”

7                     The EBA was a certified agreement in accordance with s170LT of the Workplace Relations Act 1996 (Cth) (“the WRA”).

8                     The proper approach to construction of certified agreements was stated by Madgwick J in Kucks v CSR Limited (1996) 66 IR 182 at 184 and Northrop J in Australasian Meat Industry Employees’ Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 at 212.

9                     Ansett submits that by reason of clauses 5(c) and 21 of the EBA, and sections 170LY and 170LZ of the WRA, on 3 May 1999 (the day on which the EBA was certified by the AIRC) clause 21 of the EBA became the sole source of redundancy entitlements for employees then and thereafter bound by the EBA.

10                  Ansett also repeats the effect of the submission it put to the learned primary judge as to the scope of the capping provision in clause 21(c)(ii) of the EBA.

11                  Whether or not it is correct to say, as the primary judge said at [22], that there are three separate regimes for administering redundancy, it is plain that the two regimes which preceded the EBA were preserved.

12                  Thus, although the EBA purported to replace the earlier regimes when the EBA came into effect in 1999, it did not exclude their operation.

13                  What was required when an employee was made redundant was a comparison of the overall benefits provided under each instrument.

14                  The 104 week cap was part of the package of entitlements provided by the Business Recovery Redundancy Program (“BRP”) which was referred to in clause 21(c) of the EBA.  The $175,000 maximum payment referred to in clause 21(c)(vi) has the same character.

15                  To construe the 104 week capping provision as operating independently from the package of benefits so as to thereby limit the operation of the amounts payable under the Award or the 1991 Policy would be to vitiate the effect of the “no disadvantage” clause.  It would be contrary to the purpose of the EBA which was to avoid the employee being put in a less disadvantageous position under the new regime than he or she was under the old.

16                  In this regard it is to be noted that each of the earlier regimes had its own separate capping mechanism; see clause 4(j) of the Award and clause 5(b) of the 1991 Policy.

17                  Thus, when comparing the package of benefits under the old regime with that which is afforded under the new one, the cap provided in each case must be taken into account.

18                  It follows that the 104 week cap in the new regime cannot override the capping provisions provided for in the old ones in comparing the benefits payable.

19                  Ansett submitted that on the proper construction of clause 21(b) of the EBA consideration was required to be given to the circumstances of each employee to determine whether, but for the operation of the EBA, he or she would had more favourable entitlements under the award or the 1991 Policy.

20                  However this argument would require a grant of leave to amend the notice of appeal which we have refused: see Coulton v Holcombe (1986) 162 CLR 1 and Metwally v University of Wollongong (1985) 60 ALR 68. 

21                  For these reasons the order we make is that the appeal is dismissed.

Associate:

Dated:              28 August 2003