FEDERAL COURT OF AUSTRALIA

Australian Licenced Aircraft Engineers’ Association v Qantas Airways Limited [2020] FCAFC 3

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

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

REASONS FOR JUDGMENT

THE COURT:

The issue

1    This appeal concerns the construction of cl 35.2 of the Licensed Aircraft Engineers (Qantas Airways Limited) Enterprise Agreement 10 (Agreement 10). Agreement 10 concerns licensed aircraft maintenance engineers or LAMEs. The appellant, referred to as the Association, contends that the respondent, referred to as Qantas, contravened cl 35.2 of Agreement 10 (and thus s 50 of the Fair Work Act 2009 (Cth)) by “recognising” external training undertaken by a LAME outside of the LAME’s trade stream. This contention depends on cl 35.2 being construed as a code which prohibits Qantas from recognising external training other than as provided for in the clause. Qantas contends that this involves a misconstruction of cl 35.2 on the basis that the clause does no more than identify the circumstances in which Qantas must recognise external training but does not prohibit Qantas from recognising external training other than in accordance with the clause. Qantas also contends that for the purposes of cl 35, to “recognise” training means to recognise training by the LAME accruing points for pay purposes in accordance with cl 16.4 of Agreement 10.

The primary judge’s approach

2    The primary judge preferred Qantas’s construction of cl 35.2 with the consequence that there was no contravention of that clause and s 50 of the Fair Work Act: Australian Licensed Aircraft Engineers’ Association v Qantas Airways Limited [2019] FCA 989. For the reasons that follow we agree with the primary judge’s conclusion.

3    Clause 35 is in these terms:

35.    LAME PAY STRUCTURE – TRAINING

35.1    The employees and the [Association] accept and are committed to the fact that all training provided by Qantas to LAMEs shall be dictated by the operational requirements and needs of the enterprise. Qantas shall set the training levels for Qantas operated aircraft types which shall be the only recognised training for the purposes of accruing points.

  35.2    Future external training shall only be recognised on the following terms:

35.2.1    Prior approval (for pay recognition purposes) of the training by the relevant manager on the basis of future operational use in that area.

35.2.2    Training is within the LAMEs trade stream.

35.2.3    Training is undertaken at the LAME’s own expense and time.

4    The primary judge identified the background to and context in which cl 35.2 was negotiated between the Association and Qantas.

5    Agreement 10 is the tenth in a series of enterprise agreements between the Association and Qantas regulating the industrial relationship between Qantas and LAMEs: primary judgment, [2].

6    Historically, there were two kinds of LAMEs licensed by the Civil Aviation Safety Authority, (CASA): mechanical and avionic. Mechanical LAMEs were licensed to work in the trade stream of an airframe or engine engineer. Avionic LAMEs were qualified to work as electrical instrument or radio engineers: primary judgment, [4].

7    On 27 June 2011, CASA promulgated Pt 66 of its Manual of Standards. Part 66 continued the two trade streams but substituted new categories of licence, a B1 licence, which allowed a mechanical LAME to perform some electrical work and a B2 licence for avionic work: primary judgment, [5]. Part 66 included transitional provisions enabling CASA to issue a B1 licence subject to conditions that the LAME not be authorised to perform the kinds of electrical work that could now be included in such a licence if the LAME had not yet qualified to perform such work: primary judgment, [6].

8    Before the introduction of the predecessor provision to cl 35, Qantas was bound to pay a LAME higher wages in recognition of external training (that is, training not offered by Qantas) the LAME had completed whether or not Qantas had approved the training or required the LAME to perform work using the training. As the primary judge put it at [8]:

The context in which the parties agreed the terms of what is now cl 35 was that Qantas wished to guard itself against being under an obligation to pay higher wages to LAMEs who, independently of any approval of their employer, obtained better or additional qualifications.

9    The Association sought the inclusion of a transitional measure from Qantas to the effect that Qantas would recognise licences gained by LAMEs who had already committed to or commenced external training. Qantas agreed to this transitional measure in the predecessor agreement to Agreement 10. Qantas also proposed a provision with respect to future external training in terms which accord with what is now cl 35.2: primary judgment, [9]. In the primary judge’s words at [11]:

Thus, cl 35.1 recorded that both the Association and Qantas accepted that Qantas would have the sole right to determine who should be paid at what level for holding particular qualifications to work on particular aircraft. But, the parties also recognised that LAMEs who undertook external training with Qantas’ approval should be protected in the way cl 35.2 seeks to do.

10    The primary judge referred to the principle that the meaning of the text of an industrial agreement is to be determined by what a reasonable person would have understood the words to mean considered in the context set by the text, the surrounding circumstances as known to the parties, and the purpose and object of the transaction: primary judgment, [30] citing Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2018] FCAFC 146; (2018) 264 FCR 342 at 356-357 [56]-[58].

11    The primary judge concluded that, in its context, cl 35.2 should be understood as a mechanism by which Qantas could maintain control, for pay purposes, over the training of LAMEs. If, but only if, all of the three criteria in cl 35.2 were satisfied, Qantas would be bound to accept the training for the purpose of the LAME accruing the points relevant to the pay the LAME would receive under cl 16.4 of Agreement 10: primary judgment, [31]. It was common ground that cl 16.4 and Appendix J to Agreement 10 set out the method by which a LAME accrues points for pay purposes as a result of their experience and training.

12    His Honour continued at [32]:

Importantly, cl 35.1 did not preclude Qantas, for example, forming the view that, for its operational requirements and the needs of its enterprise, it would provide internal training to one or more LAMEs to enable him or her to qualify in a different trade stream than the one in which the LAMEs already held a licence. Moreover, cl 44 expressly contemplated that LAMEs could hold, and study or train to hold, both a B1 and a B2 licence.

13    His Honour’s analysis of cl 44 confirmed his view that cl 35 imposed a duty on Qantas if the criteria were satisfied but did not preclude Qantas from otherwise recognising external training of LAMEs outside of their trade stream for pay purposes.

The Association’s submissions

14    The Association submitted that the construction preferred by the primary judge is inconsistent with the plain and ordinary meaning of cl 35.2, which identifies that future external training “shall only be recognised” on the terms set out in the provision. It said that the primary judge’s approach would permit Qantas to recognise external training outside of the LAME’s trade stream contrary to the plain language of the clause.

15    According to the Association, the primary judge’s construction failed to have regard to the purpose of cl 35.2 as a whole. It may be accepted that one purpose of cl 35.2 is to give Qantas control over recognition, for pay purposes, of qualifications attained by its employees. However, this is not the only purpose of the provision. The purpose of giving Qantas control over recognition of external training is wholly satisfied by cl 35.2.1, so if that were the only purpose of the provision the clause would stop there. The additional provisions are designed to ensure that the delineation between the B1 (mechanical) and B2 (avionics) trade streams is not disrupted. As the Association put it:

Disruption of the distinct trade streams would diminish recognition of the distinct skills involved in the trade streams and interfere with career progression for LAMEs within the B1 and B2 trade stream workforces in accordance with clause 16. The recognition of external training outside of trade stream also has the potential to diminish training opportunities for B1 LAMEs to remove “exclusions” from their licences.

16    Further, the Association said that the primary judge’s interpretation would have the effect of divorcing “recognition” for pay purposes from “recognition” in the sense of Qantas requiring a LAME to exercise the authorities and privileges associated with possessing a particular licence. In the Association’s words:

That is, Qantas is required to recognise external training and accord points to the employee for pay purposes only if the criteria in clause 35.2 are satisfied, but it could require an employee to undertake work requiring the qualification whenever it wished and the employee would receive no benefit, in pay terms, for possessing the qualification.

17    The Association described this as an “industrially nonsensical outcome”.

18    The Association submitted that the primary judge’s approach to cl 44 of Agreement 10 was incorrect. For one thing cl 44 was only introduced into Agreement 10 after the introduction of cl 35 and it is not orthodox to construe an earlier provision by reference to a subsequent provision. For another, cl 44 is directed at B1 LAMEs obtaining qualifications to remove exclusions from their B1 licence so as to obtain a full B1 licence and B2 LAMEs being able to obtain a full B2 licence. In the Association’s words (references omitted):

The aspect of clause 44 focused on by the primary judge is that clause 44.3.5 provides for a LAME to undertake conversion training “of his/her own volition” and receive a conversion allowance if Qantas requires him or her to exercise the privileges and authorities under a full B1 licence. Clause 44.3.5 does not conflict with the constraint on the recognition of external training outside of trade stream imposed by clause 35.2.2. Clause 44.3.5 again only operates where the LAME undertakes training to convert their “current licence”, that is, a limited B1 licence into a full B1 licence. No cross trade training occurs. The primary judge erred in concluding an inconsistency arises between clause 44.3.5 and the interpretation advanced by the appellant.

19    The Association submitted that its construction is consistent with the common understanding of the parties having regard to the long history of the provision. The clause has been present since 1997 and Qantas has consistently applied it so that a LAME cannot have externally obtained training recognised outside of their trade stream.

Discussion

20    While we accept the Association’s submissions about the operation of cl 44 of Agreement 10, we consider that the primary judge’s conclusion about the meaning of cl 35.2 is correct.

21    Clause 35 is in two parts. Clause 35.1 concerns Qantas internal training. Clause 35.1 provides that Qantas shall set the training levels for Qantas operated aircraft types which shall be the only recognised training for the purpose of accruing points. As noted by cl 16.4, it is apparent that the accrual of points is the means by which LAMEs move through a graded wage structure determined by their training and/or experience as a LAME.

22    Clause 35.2 is an exception to cl 35.1. It concerns Qantas recognising external training. In the context set by cl 35.1, for Qantas to “recognise” external training means to recognise such training for the purpose of accruing points for pay purposes. To the extent that the Association contended that Qantas may recognise external training other than for the purpose of accruing points for pay purposes, this approach cannot be reconciled with the text and context of cl 35.2.

23    Contrary to the Association’s submission, the natural and ordinary meaning of cl 35.2 and, in particular the words “shall only be recognised”, suggest a duty to which Qantas is subject rather than a prohibition. This is because the focus of the clause is that which Qantas shall recognise. The qualifier “only”, in this context, indicates that the clause identifies the only circumstances in which Qantas “shall recognise”, in the sense of being bound to recognise, external training for the purpose of accruing points. The clause is not framed by reference to what Qantas shall not do; that is, the clause does not say that Qantas shall not recognise external training other than in the circumstances identified in the clause. Accordingly, we do not consider the primary judge’s construction to be contrary to the plain meaning of the clause. Rather, the primary judge’s construction accords with the more natural reading of the clause as imposing a duty on Qantas, rather than a prohibition, albeit accepting that the clause is not free from potential ambiguity.

24    The fact that, from Qantas’s perspective, the clause may contain redundancies (that is, Qantas’s control over external training is achieved by cl 35.2.1 so that if Qantas’s control is the only purpose of the clause then cl 35.2.2 and cl 35.2.3 are redundant) is not a safe foundation from which to infer that the clause must have another purpose of protecting the distinction between the B1 and B2 trade streams. In any event, cl 35.2.2 and cl 35.2.3 are not redundant as they provide the advantage of making it clear that Qantas will only be bound to recognise external training for the purpose of accruing points if those conditions in cl 35.2.2 and cl 35.2.3 are also satisfied. In that sense, while the same outcomes could be achieved by the approval mechanism in cl 35.2.1, the provisions of cl 35.2.2 and cl 35.2.3 provide certainty as to when Qantas will be bound to recognise approved external training. Further, potential redundancy in legal drafting is so commonplace that it rarely provides a safe foundation for any inference about meaning.

25    The Association’s “industrially nonsensical outcome” is premised on cl 35.2 addressing Qantas’s capacity to require an employee to undertake work requiring the utilisation of a qualification obtained through external training without Qantas being required to pay for the utilisation of that qualification. However, the clause does not deal with that subject. It is not addressing recognition in the sense of Qantas requiring a LAME to exercise the authorities and privileges associated with a particular qualification or licence.

26    What is clear is that, in context, “recognised” in cl 35.2 must mean “recognised for the purpose of accruing points” as this is the phrase used in cl 35.1 from which cl 35.2 is an exception. This is also confirmed by the words in brackets in cl 35.2.1 “for pay recognition purposes”. In other words cl 35 is concerned with one kind of recognition only – recognition for the purpose of accruing points for pay increases. The clause says nothing about Qantas otherwise “recognising” the skills of its LAMEs through the assignment of appropriate work to them. It neither authorises Qantas to assign such work nor seeks to impose a limitation on some other capacity, if it exists (a matter upon which we were not addressed), given to Qantas by Agreement 10 to require a LAME to exercise skills which have not been recognised for pay purposes.

27    Further, the Association’s construction of cl 35.2 involves its own industrially nonsensical outcome. For example, assume that for certain external training of a LAME cl 35.2.1 and cl 35.2.2 are both satisfied but Qantas pays for the training so that cl 35.2.3 is not satisfied. The Association’s construction would prohibit Qantas from recognising that training for the purpose of the LAME accruing points. This nonsensical outcome can be avoided by construing cl 35.2 as imposing a duty on Qantas rather than establishing a prohibition.

28    The Association’s view that the purpose of cl 35.2.2 is to maintain the distinction between the trade streams, rather than merely to specify when Qantas will be bound to recognise the external training for the purpose of accruing points, is confounded by the fact that there is no such distinction drawn in cl 35.1. Qantas is free to set such training as it thinks fit in cl 35.1 including training across the trade streams.

29    For these reasons we consider that the primary judge’s preferred construction of cl 35.2 is correct. The appeal should be dismissed.

Associate:

Dated:    4 February 2020