Federal Court of Australia
Australian Licensed Aircraft Engineers Association v Qantas Airways Limited [2022] FCAFC 50
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The cross-appeal be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
BESANKO J:
Introduction
1 This is an appeal by the Australian Licensed Aircraft Engineers Association against three declarations made by a judge of this Court in proceedings before the Court. The respondents to the appeal are Qantas Airways Limited and Jetstar Airways Pty Ltd. Jetstar Airways Pty Ltd is a member of the Qantas Group. The declarations concern the proper construction and application of certain clauses in two enterprise agreements: Licensed Aircraft Engineers (Qantas Airways Limited) Enterprise Agreement 10 (the Qantas Agreement) and Jetstar Airways Engineering & Maintenance Enterprise Agreement 2018 (the Jetstar Agreement).
2 There is also a cross-appeal by the respondents against a further order made by the judge to the effect that their Amended Originating application be otherwise dismissed. Each respondent contends that the judge erred in making that order and that he should have made an order restraining the Fair Work Commission (the FWC) from hearing proceedings brought by the appellant concerning the proper construction and application of clauses in the enterprise agreements.
3 The appellant represents Licensed Aircraft Maintenance Engineers or LAMEs as they were referred to in the primary judge’s reasons. I will refer to Licensed Aircraft Maintenance Engineers as Aircraft Engineers. Aircraft Engineers are responsible for the maintenance of aircraft and, in particular, for the certification of aircraft servicing and maintenance work.
4 At or about the time of the commencement of the COVID-19 pandemic, Qantas employed approximately 1,100 Aircraft Engineers and Jetstar employed approximately 175 Aircraft Engineers. Following the disruption caused to the airline industry by the COVID-19 pandemic, Qantas, by letters sent on 25 March 2020, stood down 356 Aircraft Engineers with effect from 1 April 2020, and Jetstar, by letters sent on 24 March 2020, stood down 113 Aircraft Engineers with effect from 1 April 2020.
5 The appellant and the members it represents did not accept that Qantas and Jetstar could rely on the stand down provisions in the respective enterprise agreements. A number of meetings took place between representatives of Qantas and Jetstar on the one hand, and the appellant and the Aircraft Engineers on the other. Those meetings did not result in a resolution of the dispute and, on 26 March 2020, the appellant commenced two proceedings — one against Qantas and the other against Jetstar — in the FWC. On 13 May 2020, Qantas and Jetstar commenced proceedings in this Court. The details of those proceedings are set out below (at [11]–[17]).
The Qantas Agreement
6 The Qantas Agreement contains a clause which enables the employer to stand down an employee without pay in circumstances where the employee cannot be usefully employed because of a strike or stoppage of work through any cause for which the employer cannot reasonably be held responsible. This right is subject to a number of conditions. Clause 14.6 of the Qantas Agreement is in the following terms:
14.6 Stand down
Qantas shall have the right to deduct payment for any day an employee cannot be usefully employed because of a strike or stoppage of work through any cause for which Qantas cannot reasonably be held responsible. The right given in this clause is subject to the following conditions:
14.6.1 When Qantas proposes to exercise the right given in this clause it shall notify the employee. During the period such notification remains in force the employee shall be deemed to be stood down for the purposes of this clause.
14.6.2 An employee who is stood down shall be treated for all purposes (other than payment of wages) as having continuity of service and employment notwithstanding such standing down.
14.6.3 An employee who is stood down may at any time during the period the employee is stood down terminate his/her employment without notice and the employee shall be entitled to receive from Qantas as soon as practicable any moneys due to the employee at the time of termination. The day on which the employee exercises the right of termination without notice shall be the day on which the employment is terminated.
14.6.4 An employee whose employment is terminated under clause 14.6.3 shall for all purposes (other than payment in lieu of notice) be treated as if employment had been terminated by Qantas without default of the employee.
14.6.5 An employee who is stood down as aforesaid shall be at liberty to take other employment.
14.6.6 An employee stood down for a period of more than 5 working days who has exercised the right to take other employment shall be entitled to work out in such other employment notice of up to one week provided the employee notifies Qantas of the employee so doing.
14.6.7 An employee whom Qantas proposes to stand down may elect to take, for the period of the stand down only and for such further time as is reasonably required for the employee to return to his normal place of abode, any annual leave to which the employee is entitled or which is accruing and upon such election being exercised the employee’s annual leave shall be reduced accordingly.
14.6.8 Notwithstanding anything contained in clause 14.6 Qantas will not deduct payment for any day prescribed by the Agreement as a public holiday which occurs during the period of stand down of an employee except to the extent that such employee has become entitled to payment for the holiday in other employment. An employee claiming for a holiday shall, if required by Qantas, furnish a statutory declaration setting out details of any other employment during this period and the remuneration received therein.
7 The Qantas Agreement also contains a clause which sets down a procedure for the resolution of disputes between employer and employee. The procedure requires attempts to be made to resolve the dispute by discussion, but if that is not successful, then either party may refer the subject-matter of the dispute to the FWC for resolution. Clause 6.1 of the Qantas Agreement is in the following terms:
6.1 In the event of a dispute arising in the workplace about matters arising under this Agreement or in relation to the National Employment Standards, the procedure to resolve the matter will be as follows:
6.1.1 The employee and the employee’s supervisor meeting and conferring on the matter.
6.1.2 If the matter is not resolved at this meeting, the parties to the dispute must arrange for further discussions between the employee and more senior levels of management.
6.1.3 If the matter cannot be resolved it may be referred by either party to FWC for resolution. This does not affect the right of either party to a dispute to take other action to resolve the dispute.
The FWC’s jurisdiction to “deal with” a dispute which is the subject of a dispute resolution procedure in an enterprise agreement is the subject of ss 738 and 739 of the Fair Work Act 2009 (Cth) (the FW Act).
The Jetstar Agreement
8 The Jetstar Agreement also contains a stand down clause. It is similar, but not identical, to the stand down clause in the Qantas Agreement. Clause 30.5 of the Jetstar Agreement relevantly provides as follows:
30.5 Stand down without pay
30.5.1 The Company may deduct payment from an Employee for any day or part of a day in which they cannot be usefully employed because of a stoppage of work by any cause, which Jetstar cannot reasonably prevent. In these situations consideration will first be given to the following alternatives before deduction of pay occurs:
(i) redeployment into other productive duties; or
(ii) where the above cannot be achieved, deployment onto any paid leave owing. …
9 The Jetstar Agreement also contains a clause which sets down a procedure for the resolution of disputes between the employer and the employee. That procedure also contains a provision whereby disputes may be referred to the FWC. Unlike the Qantas Agreement in which there is no such clause, the Jetstar Agreement contains a clause providing for the continuation of work in certain circumstances while the dispute resolution procedure is being followed. Clause 20 of the Jetstar Agreement is in the following terms:
20. RESOLVING WORKPLACE CONCERNS OR DISPUTES
If there is a dispute relating to any matter arising under this Agreement or in relation to the NES, the following dispute resolution procedure will be followed:
20.1 A dispute will first be discussed between the Employee and their local Line Maintenance Manager or Duty Operations Manager (in ports where there is no LMM/DOM, the dispute will be discussed with their local Supervisor in the first instance). The local manager will make a decision on the potential resolution and advise the Employee verbally or in writing if requested within 72 hours of notification.
20.2 If the dispute is not resolved, the Employee may refer the matter to more senior levels of management for further consideration. A response will be provided where possible within five (5) working days, but no later than ten (10) working days.
20.3 If the dispute remains unresolved either party may notify the existence of a dispute to the FWC for conciliation and if conciliation is unsuccessful, arbitration.
20.4 Where the above procedures are being followed work will continue as per the status quo prior to the dispute arising provided the matter in dispute does not relate to an imminent risk to health or safety and the Employee cannot be reallocated to other appropriate duties.
20.5 No party will be prejudiced as to the final settlement by the continuation of work in accordance with this clause.
20.6 The Employee has the right to be represented by a representative of their choice (including a representative from a Union) during any step in this process.
Subclause 20.4 provides for the continuation of work while the procedures are being followed.
10 The presence of the stand down provisions in both enterprise agreements means that the stand down provision in the FW Act, s 524, is not relevant in this case.
The Two Proceedings in the FWC and the Respondents’ Application to this Court
11 In each proceeding before the FWC, the appellant applied to the FWC for it to “deal with” the dispute (see s 739(6) of the FW Act).
12 The appellant’s application to the FWC in the case of Qantas contained a contention that there had not been a “stoppage” of work in respect of the aircraft maintenance functions performed by Aircraft Engineers and, in any event, the Aircraft Engineers who had been stood down can be “usefully employed” during the proposed stand down. Examples given by the appellant in its application to the FWC of potential “useful employment” included “heavy maintenance, addressing time-deferred defects, corrosion repairs, and routine and non-routine aircraft maintenance”. The appellant’s application to the FWC in the case of Jetstar is, in substance, the same as it is in the case of Qantas.
13 The two respondents before this Court brought an Originating application seeking to invoke the Court’s jurisdiction under s 39B(1) and (1A)(c) of the Judiciary Act 1903 (Cth) and/or s 562 of the FW Act. In the application, each respondent sought an injunction or a writ of prohibition restraining the FWC from hearing or determining the dispute the subject of the appellant’s applications to the FWC. In each case, the relevant respondent made an alternative claim to restrain the FWC from hearing or determining so much of the dispute dealing with whether, in the case of Qantas, there was a “stoppage of work through any cause for which Qantas cannot reasonably be held responsible” and, in the case of Jetstar, there was a “stoppage of work by any cause, which Jetstar cannot reasonably prevent”.
14 The respondents’ Originating application also included an application for declarations that, in the case of Qantas, there was a “stoppage of work through any cause for which Qantas cannot reasonably be held responsible” and, in the case of Jetstar, there was a “stoppage of work by any cause, which Jetstar cannot reasonably prevent” and further, in the case of Jetstar (to summarise), a declaration that the status quo provision in cl 20.4 of the Jetstar Agreement was not engaged.
The Orders which are the Subject of the Appeal and Cross-Appeal
15 The primary judge dealt with the relief claimed in the Originating application in two stages. At the first stage, the primary judge dealt with the issue of whether the dispute resolution procedure in each enterprise agreement had been engaged such that the FWC had jurisdiction. The primary judge found that the procedure had been engaged, but only as to whether there was useful work which could be undertaken by the Aircraft Engineers (Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) [2020] FCA 951 (Qantas (No 2)). The orders following this decision are the subject of the respondents’ cross-appeal and each respondent seeks an order permanently restraining the FWC from hearing or determining the relevant proceeding before it.
16 At the second stage, the primary judge dealt with each respondent’s claim for declaratory relief with respect to the proper construction and application of cl 14.6 of the Qantas Agreement in the case of Qantas and cl 30.5.1 and cl 20.4 of the Jetstar Agreement in the case of Jetstar. As to those issues, the primary judge found in favour of each respondent and subsequently made the following declarations:
1. On the proper construction of clause 14.6 of the Licensed Aircraft Engineers (Qantas Airways Limited) Enterprise Agreement 10, for the whole of the period from 12.01am on 29 March 2020 until 22 April 2020, there existed a “stoppage of work through any cause for which Qantas cannot reasonably be held responsible”, being the stoppage of Qantas’s domestic and international passenger flying other than:
(a) in the order of 2,200 flights for “fly in fly out” workers (two of which were international flights, with the balance being domestic flights);
(b) until around mid-April 2020, in the order of 1,700 domestic flights; and
(c) from around mid-April 2020, in the order of 250 domestic and international flights conducted pursuant to arrangements entered into between Qantas and the Commonwealth Government.
2. On the proper construction of clause 30.5.1 of the Jetstar Airways Engineering & Maintenance Enterprise Agreement 2018, for the whole of the period from midnight on 1 April 2020 until 2 May 2020, there existed a “stoppage of work by any cause, which Jetstar cannot reasonably prevent”, being the stoppage of Jetstar’s international passenger flying, and the stoppage of Jetstar’s domestic passenger flying other than:
(a) until around mid-April 2020, in the order of 195 domestic flights; and
(b) from around mid-April 2020, in the order of 134 domestic flights conducted pursuant to arrangements entered into between Jetstar and the Commonwealth Government.
3. On the proper construction of clause 20.4 of the Jetstar Airways Engineering & Maintenance Enterprise Agreement 2018, Jetstar was not required by reason of that clause at any time on or after 18 March 2020, to lift, withdraw or otherwise not impose a stand down upon the Licensed Aircraft Maintenance Engineers employed by Jetstar who were (or were to be) stood down from shifts, work or duties commencing on or after midnight on 1 April 2020 until 2 May 2020.
(See Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 3) [2020] FCA 1428; (2020) 299 IR 100 (Qantas (No 3).)
17 The result of both decisions is reflected in the declarations and the primary judge’s refusal to restrain the proceedings in the FWC. In Qantas (No 3), the primary judge described the outstanding questions to be resolved by the FWC as follows: (1) whether the Aircraft Engineers could have been usefully employed during the period when they were stood down; and (2) whether, if they could not have been usefully employed, the lack of useful employment was “because of” the stoppage of work. The primary judge said that in identifying these questions, he was not intending to be exhaustive (at [46]).
The Appeal
The Evidence before the Primary Judge
18 The principal evidence advanced at the hearing of the issues which were determined by the primary judge in Qantas (No 3) consisted of a Statement of Agreed Facts and Admissions (the Agreed Statement) and a Supplementary Statement of Agreed Facts and Admissions (the Agreed Supplementary Statement). In general terms, those documents addressed the effects and consequences of the COVID-19 pandemic.
19 It seems to me (as it did to the primary judge) that it is convenient to set out the relevant agreed facts rather than try to summarise them.
20 The first group of agreed facts are taken from the Agreed Statement and deal with the steps taken by the Commonwealth government and the governments of the various States and Territories in response to the COVID-19 pandemic and the steps taken in respect of the COVID-19 pandemic by foreign governments as well as international airlines:
6. During the period January 2020 to 2 May 2020, international governments also implemented various measures in response to the COVID-19 pandemic of the kind described in paragraph 5 above, including the governments of those countries comprising Qantas’ and Jetstar’s respective international passenger networks. The precise measures adopted varied from jurisdiction to jurisdiction, but in some cases included restrictions on or the outright prohibition of entry into particular countries by foreign nationals or attempts to transit through particular airports.
7 By reason of the matters described in paragraphs 5 and 6 above, and also by reason of the impact of the COVID-19 pandemic more generally, by 25 March 2020:
(a) as regards international air travel:
(i) Australian citizens and residents could not leave Australian territory as a passenger on an outgoing aircraft unless one of the following exemptions applied: the person was ordinarily resident in a country other than Australia; the person was member of the crew of an aircraft or vessel or was a worker associated with the safety or maintenance of an aircraft or vessel; the person was engaged in the day-to-day conduct of inbound and outbound freight; the person’s travel was associated with essential work at an offshore facility; or, the person was travelling on official government business (including a member of the Australian Defence Force);
(ii) Australian citizens and residents were restricted in their ability to travel to Australia due to the requirement that they self-isolate for 14 days on arrival;
(iii) non-Australian citizens and non-residents were prevented from travelling to Australia with the exception of the spouses, legal guardians and dependents of Australian citizens and permanent residents; New Zealand citizens living in Australia as Australian residents; and Pacific Islanders transiting to their home countries;
(iv) international air travel could no longer be conducted between Australia and certain international destinations (for example, in view of restrictions imposed on travellers from mainland China), whether directly or through other international destinations;
(v) international air travel could no longer be conducted by using particular airports (for example, Singapore Airport) for the purposes of transiting passengers; and
(b) as regards domestic air travel:
(i) all States and Territories enacted legislation restricting persons from travelling both intrastate and interstate within Australia except for very limited “essential” purposes; and
(ii) some States required travellers entering the State to quarantine for periods of up to 14 days upon entry.
8 The matters set out in paragraph 7 above continued to apply during the period 26 March to 2 May 2020, although there were changes in the precise measures in place from time to time during that period (for example, arrivals into Australia were subject to quarantine in hotels and other accommodation facilities for two weeks of mandatory self-isolation before returning home and some States implemented border restrictions preventing travellers from entering the States except in limited circumstances).
21 The second group of agreed facts is also taken from the Agreed Statement and these agreed facts deal with the steps taken by Qantas and Jetstar from around February 2020 to 2 May 2020, as well as the reasons for those steps being taken:
9 Each of Qantas and Jetstar operates passenger flights using its passenger aircraft domestically within Australia and between Australia and various international destinations.
10. In addition, the Group provides freight services, which involves the commercial transport of cargo (Qantas Freight).
11 Licenced Aircraft Maintenance Engineers (LAMEs) employed by Qantas perform maintenance work in respect of Qantas Freight’s freighter planes in Australian ports, except where these freighter planes are “wet leased” from third party entities, which independently contract for maintenance services.
12 During the period 29 March 2019 to 22 April 2019 (for Qantas) and 1 April 2019 to 2 May 2019 (for Jetstar):
(a) excluding non-regularly scheduled charter flights (see paragraph 27(a) below), Qantas’ domestic and international passenger networks averaged in the order of 4,565 domestic departures and 776 international departures per travel week. This equated to in the order of 433,000 passengers on domestic routes and 177,000 passengers on international routes per travel week; and
(b) Jetstar’s domestic and international passenger networks averaged in the order of 1,836 domestic departures and 845 international departures each travel week (noting that, for internal reporting purposes, Jetstar treats New Zealand domestic flights as part of its “international” network). This equated to in the order of 314,000 domestic passengers and 131,000 international passengers per travel week.
13 Further, during the period identified in paragraph 12 above:
(a) Qantas’ domestic passenger network was serviced by in the order of 140 aircraft (which, on average, were utilised (that is, conducting flights as part of the domestic passenger network) for around 7.9 hours per day), while its international passenger network was serviced by in the order of 53 aircraft (which, on average, were utilised (that is, conducting flights as part of the international passenger network) for around 15.1 hours per day); and
(b) Jetstar’s domestic passenger network was serviced by in the order of 46 aircraft (which, on average, were utilised for around 11.8 hours per day), while its international passenger network was serviced by in the order of 23 aircraft (which, on average, were utilised for around 14.2 hours per day).
…
16 As a result of the COVID-19 pandemic and the progressive impact of the matters described in paragraphs 5 to 7 above, during the period January 2020 to mid-March 2020:
(a) each of Qantas and Jetstar progressively experienced an almost total reduction in travelling passengers (reflected in a reduction in bookings for future flights, an increase in cancellations of existing bookings and/or an increase in passengers not showing up for flights) on their respective international networks;
(b) each of Qantas and Jetstar progressively experienced very significant reductions in travelling passengers (reflected in a reduction in bookings for future flights, an increase in cancellations of existing bookings and/or an increase in passengers not showing up for flights) on their respective domestic networks (including for regional, intrastate flights); and
(c) in view of the reductions identified in paragraphs 16(a) and 16(b) above, progressively the revenue generated from operating each passenger flight on international and domestic routes flown by Qantas and Jetstar (for example, revenue derived from passenger tickets and freight) was not capable of covering the variable costs (comprising fuel, airport landing fees and per passenger charges, and some pilot and cabin crew costs) incurred by operating that flight. That is, the flight was loss-making on a variable basis before even factoring in fixed costs such as aircraft depreciation and ownership costs, head office costs, IT, airport terminal leases and engineering facilities.
17 By reason of paragraph 16 above:
(a) from around late January 2020, from time to time Qantas and Jetstar cancelled or did not schedule certain flights on their respective domestic and international networks where the revenue generated from operating those flights was not capable of covering the variable costs of doing so. This continued to occur from time to time until 28 March 2020 (for Qantas) and 31 March 2020 (for Jetstar) as the progressive impact of the matters described in paragraphs 5 to 7 above continued to be experienced; and
(b) further and for the same reasons, from around early February 2020 to mid-March 2020, each of Qantas and Jetstar progressively announced their intention to make temporary capacity reductions (that is, a reduction in the number of available seats for commercial passengers – usually achieved by reducing the number of flights on particular routes) on their respective domestic and international routes to align with the lower level of travelling passengers as follows:
(i) on 1 February 2020, Qantas suspended its direct services to mainland China with effect from 9 February 2020 until at least 29 March 2020;
(ii) on 20 February 2020, Qantas and Jetstar announced their intention to reduce capacity on their flight routes to Asia by 16% and 14% respectively, and capacity reductions of 2.3% on their domestic routes to take effect from the second half of the financial year. Jetstar also announced its intention to reduce capacity on its flight routes to New Zealand by 5%; and
(iii) on 10 March 2020, Qantas announced its intention to reduce capacity on flight routes across its international network, with changes proposed to come into effect from 30 March 2020 and following. Jetstar also announced its intention to reduce capacity on flight routes across the Asian network, with changes proposed to come into effect from 1 May 2020 and following.
18 As addressed in paragraphs 22 and 27 below, to the extent that the measures described in paragraph 17(b) were expressed to take effect from a later date, they were superseded by further capacity reductions across Qantas’ and Jetstar’s respective domestic and international passenger networks.
19 By mid-March 2020, as a result of: (i) the collapse in passenger travel; (ii) measures implemented domestically and internationally to restrict movement; (iii) the increasing concern that the effects of the COVID-19 pandemic would be sustained; and (iv) uncertainty as to how long the effects of the COVID-19 pandemic would last, the Qantas Group (the Group) had determined that:
(a) most of Qantas and Jetstar’s scheduled flights were loss-making or likely to become loss-making imminently, with Qantas and Jetstar considering there to be a real risk that all of Qantas and Jetstar’s scheduled flights would be impacted in this way; and
(b) because many of the costs of operating the Group’s business were fixed and substantial costs, maintaining its usual passenger flying operations (in the absence of the revenue usually associated with those operations) during the period of the COVID-19 pandemic would be likely to cause the Group to incur net cash outflows in the vicinity of $200 million per week.
20 The existing cash reserves of the business as at 16 March 2020 were approximately $1.8 billion.
…
27 By late March 2020, and as a result of the matters set out in paragraphs 16 to 26 above, the only passenger flights which Qantas and Jetstar were operating were:
(a) limited regularly scheduled and chartered flights by Qantas within regional Western Australia and Queensland for ‘fly in fly out’ workers and very limited international charter flights; and
(b) some additional inter-city domestic and international flying (that is, other than regularly scheduled and chartered flights for ‘fly in fly out’ workers), which was typically conducted at a variable loss to Qantas and Jetstar.
28 During the period 29 March 2020 to 22 April 2020 (for Qantas) and 1 April 2020 to 2 May 2020 (for Jetstar):
(a) each of Qantas and Jetstar continued to experience an almost total reduction in travelling passengers on their respective international networks;
(b) each of Qantas and Jetstar continued to experience significant reductions in travelling passengers for flights on their respective domestic networks; and
(c) in view of the matters identified in paragraphs 28(a) and 28(b) above, Qantas and Jetstar conducted domestic and international passenger flying only to the extent that:
(i) paragraph 27(a) applied;
(ii) until around mid-April 2020, paragraph 27(b) applied; or
(iii) from around mid-April 2020, Qantas and/or Jetstar were required to conduct particular flights in order to meet the requirements of the Commonwealth Government pursuant to arrangements entered into between Qantas and Jetstar, on the one hand, and the Commonwealth Government, on the other.
…
36 Having regard to the Group’s current best assessment of the likely impact of the COVID-19 pandemic on the number of travelling passengers across Qantas’ and Jetstar’s domestic and international networks in the short to medium term and the resultant impact on the Group’s business, as at the date of this Statement of Agreed Facts and Admissions, the Group anticipates that:
(a) Qantas and Jetstar will continue to be loss-making for the duration of the 2020/2021 financial year.
(b) if the Group (including Qantas and Jetstar) is unable to continue to stand down a significant proportion of its workforce for the duration of the 2020/2021 financial year, this will require the Group to incur an additional $1 billion (approximate) of expenses for that financial year.
(c) accordingly, the Group considers that it will have no reasonable option but to maintain the cost-cutting measures it has undertaken, which include standing down a significant proportion of its workforce, until at least 30 June 2021 in order to maintain the Group’s financial viability. In addition, the Group considers that it will be necessary for the Group to undertake further or extended cost-cutting measures including returning aircraft leases and delaying all aircraft deliveries.
…
22 The third group of agreed facts is taken from the Agreed Statement and these agreed facts deal with the standing down of the Aircraft Engineers by Qantas and Jetstar respectively and the financial significance of that action:
62 The standing down of LAMEs employed by Qantas and Jetstar occurred at or around the same time as the standing down of approximately 20,000 other employees of Qantas and Jetstar (for example, pilots, cabin crew and ground handling staff etc).
…
66 The decision to stand down employees across the Group was financially significant, in circumstances where:
(a) as noted in paragraph 45(c) above, during the period of the stand down, the total wages in respect of LAMEs employed by Qantas was in the order of $3.8 million per week and the total annual wages in respect of LAMEs employed by Jetstar is in the order of half a million per week (although, in both cases, not all of those LAMEs were in fact stood down);
(b) the costs savings to the Group (taking into account receipt, and payment, of JobKeeper payments for stood down employees and employees’ base rates of pay, excluding activity based payments such as overtime and allowances) have been calculated by the Group to be approximately:
(i) $4.3million in respect of the Qantas and Jetstar LAMEs for the initial stand down period;
(ii) $31.1million in respect of the Qantas and Jetstar LAMEs for the entire duration of stand downs to 4 August 2020;
(iii) $103.6million in respect of the Group employees who were stood down for the initial stand down periods;
(iv) $428.8million in respect of the Group employees for the entire duration of stand downs to 4 August 2020; and
(c) during the period of the stand down, some employees the subject of the stand down (including, but not limited to, LAMEs employed by Qantas and Jetstar) accessed their annual leave and long service leave accruals.
23 The final group of agreed facts is taken from the Agreed Supplementary Statement and these agreed facts deal with the likely financial consequences to the Qantas Group had it not decided to cease to a significant extent its flying activities and to minimise its costs and cash outflows, including by standing down employees:
1. Given the cash reserves of the Group’s business as at March 2020 and the level of net cash outflow discussed at paragraph 19(b) of the SAFA, if Qantas had not made the decision to significantly cease flying activities and minimise cost and cash outflows as described in the SAFA (including by standing down employees), the rate of net cash outflow would have been such that, if continued indefinitely, it would have challenged the organisation’s viability and the Group would otherwise have had insufficient financial means to fund the eventual return to flying its pre-COVID-19 networks.
2. In the absence of significantly ceasing flying activities and standing down employees, this outcome could not have been avoided because:
(a) the Qantas Group had already explored and implemented every other cost saving measure, such as ceasing payments of rent, ceasing payments to suppliers, renegotiating terms with other suppliers and deferring various payments; and
(b) those other cost saving measures were not, of themselves, sufficient.
Nor would the result have been different, though it might have been delayed, when after March 2020, Qantas was able to raise additional debt and equity capital. Further, had Qantas not taken the steps it took to cut costs at the time it took those steps, its ability to obtain the debt and equity capital which it did, would likely have been constrained, or only been available on more onerous terms.
24 In addition to these facts, the primary judge noted the evidence in the affidavit of Mr Peter Edgar Smith filed in support of the Originating application. Mr Smith is employed by Qantas as the Head of Industrial Relations, International and Engineering.
The Principles Relevant to the Construction of the Enterprise Agreements
25 At the heart of the appeal and cross-appeal is the proper construction and application of the relevant clauses in the enterprise agreements. The primary judge set out the principles of construction in Qantas (No 2) (at [14]–[17]) and no complaint is made about his Honour’s statement of the relevant principles.
26 In the circumstances, it is sufficient for me to refer to the following.
27 In Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182 (Kucks), Madgwick J said (at 184):
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.
28 The Full Court of this Court observed in Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148; (2014) 245 IR 449 (TWU v Coles) that, although the observations in Kucks were made in dealing with the construction of awards, they apply equally to industrial agreements subject to one additional observation. Enterprise agreements are agreements in name only and their construction should not proceed on the premise that they are a form of bargain between agreeing parties (TWU v Coles at [40]; Toyota Motor Corp Australia Ltd v Marmara [2014] FCAFC 84; (2014) 222 FCR 152 at [88]–[89]). In other words, because of the circumstances in which they are made and the consequences of contravention (i.e., penal consequences for contravention: s 50 of the FW Act), enterprise agreements have a legislative character.
29 The main guides to construction are text, context and purpose and there is utility in bearing in mind the facts as they are known at the time the instrument is drafted (Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2] per Gleeson CJ and McHugh J; at [30] per Gummow, Hayne and Heydon JJ; at [64] and [96] per Kirby J; at [129]–[131] per Callinan J; TWU v Coles at [46]; see also Herzfeld P and Prince T, Interpretation (2nd ed, Lawbook Co, 2020) at [16.160] et seq).
The First and Second Declarations
30 I start with the primary judge’s reasons.
31 In determining whether, in the case of Qantas, there had been a “stoppage of work through any cause for which Qantas cannot reasonably be held responsible” and whether, in the case of Jetstar, there had been a “stoppage of work by any cause, which Jetstar cannot reasonably prevent”, the primary judge made a number of findings of fact and identified his approach to causation. Those findings of fact and statements as to the proper approach to causation may be summarised as follows:
(1) The “stoppage of work” was the substantial stoppage of domestic and international passenger flights during the period from 12.01am on 29 March 2020 through to 22 April 2020, other than the very restricted flights that did take place. Each of Qantas and Jetstar progressively experienced an almost total reduction in travelling passengers (Qantas (No 3) at [27]);
(2) The cause of the “almost total reduction in travelling passengers” was: the global pandemic; the progressive steps taken by the Australian government to restrict international air travel, at first restricting travel from certain countries such as China and later culminating in the closure of Australia’s international borders to non-citizens and non-residents (with limited exceptions); the steps being taken by the Australian government and the governments of the States and Territories to restrict the movements of persons intrastate and interstate, other than for essential purposes; and the quarantine restrictions imposed upon those who did travel (Qantas (No 3) at [28]);
(3) The cause of the “stoppage of work” was not the respective decisions of Qantas and Jetstar to stand down the Aircraft Engineers (Qantas (No 3) at [29]);
(4) Although the decision to stand down the Aircraft Engineers might be viewed as the immediate cause for the fact that they stopped work, neither cl 14.6 of the Qantas Agreement which contains the phrase, “through any cause” nor cl 30.5.1 of the Jetstar Agreement which contains the phrase, “by any cause” imposes any requirement to identify the immediate cause of stand downs. The causation issue raised by cl 14.6 of the Qantas Agreement and cl 30.5.1 of the Jetstar Agreement requires attention to be given to the relevant sequence of events and approaching the issue in that way, it is clear on the facts that the “cause” of the stoppage of work was (in summary form) “the global pandemic and the measures taken by the governments of the Commonwealth and the States and Territories to drastically curtail both international and domestic air travel and the movement of people within Australia” (Qantas (No 3) at [29]);
(5) In assessing the reasonableness of the steps taken by Qantas and Jetstar, it was an agreed fact (see [23] above) that the Qantas Group had already explored and implemented every other costs saving measure, such as ceasing payments of rent, ceasing payments to suppliers, renegotiating terms with other suppliers and deferring various payments (Qantas (No 3) at [31]);
(6) The dramatic downturn in airline travel and standing down of employees by Qantas and Jetstar was an “economic reality” or a “necessity” forced on them (Qantas (No 3) at [32]); and
(7) Qantas and Jetstar were not seeking to maximise profits at the expense of the payment of wages to their employees. They were pursuing a course of ensuring their “very economic survival” or “ultimate financial viability” and the case is not one of an employer choosing to prefer the advancement or protection of its own economic interests over that of its employees or a group of its employees (Qantas (No 3) at [33]).
32 In the course of his reasons, his Honour referred to a number of authorities. He found support for his decision in Vehicle Builders Employees’ Federation of Australia v Ford Motor Co of Australia Pty Ltd (1962) 3 FLR 198 (Ford Motor Co) and Townsend v General Motors-Holden’s Ltd [1983] FCA 204; (1983) 4 IR 358 (Townsend) and distinguished Pickard v John Heine & Son Limited [1924] HCA 38; (1924) 35 CLR 1 (Pickard v John Heine). I will refer to these and other authorities in the analysis which follows.
33 I turn now to the submissions of the parties.
34 The appellant accepted that on the facts and on the arguments presented, the result will be the same in the case of both Qantas and Jetstar even though the Qantas Agreement refers to any cause for which Qantas “cannot reasonably be held responsible” and the Jetstar Agreement refers to any cause “which Jetstar cannot reasonably prevent”. It also accepts that the “stoppage of work” is something anterior to the actual stoppage of work by the Aircraft Engineers.
35 The appellant submits that the “stoppage of work” is that identified by the primary judge and reflected in the declarations, that is, subject to certain limited exceptions, the stoppage of each airline’s domestic and international passenger flying. It submits that the cause of that stoppage is the decision made by each airline. It submits that the stand down clauses do not involve a question of whether the decision was a reasonable and rational economic decision otherwise, by way of example, an abattoir or transport company which considered the prices of livestock or petrol to be too high would have a right to stand down employees. The appellant seemed to submit that whenever the employer’s decision was the immediate cause of the stoppage of work, then the case fell outside the stand down provisions.
36 The appellant relied on the decision of Pickard v John Heine. The stand down clause in that case was in the following terms:
Employment to be terminated only by a week’s notice on either side, and such notice may be given at any time during any week. This shall not affect the right of the management to dismiss any employee without notice for malingering, inefficiency, neglect of duty or misconduct, and in such cases wages shall be paid up to the time of dismissal only, or to deduct payment for any day the employee cannot be usefully employed because of any strike by the Union or any other union or through any breakdown of machinery or any stoppage of work by any such cause which the employer cannot reasonably prevent.
The facts of the case were that an employer was charged on information with the breach of an award in failing to pay wages to an employee for the Anzac Day public holiday on 25 April 1923. The employee was ready and willing to work on 25 April 1923. The employer’s defence was that it could not usefully employ the employee because of the absence of assistants and other workmen on the day. The employee contended that the absence of assistants and other workmen on 25 April 1923 was due to the employer’s unwillingness to pay extra holiday pay to them.
37 The magistrate dismissed the information. The High Court (Isaacs ACJ, Gavan Duffy and Starke JJ) upheld the appeal.
38 There was an issue before the Court as to the proper construction of the clause and, in particular, whether the word “such” limited the operation of the clause to a breakdown of machinery or something similar. Justice Starke held the clause was not so limited, but then went on to say the following (at 13):
The stoppage of work was brought about simply because the employer did not choose to pay holiday rates to other workmen. It could not work these men profitably if it had to pay them double-time rates. That is a misfortune, and no doubt hard upon the defendant. But the stoppage of work was brought about by its own action and was wholly within its own volition. The provision in the award for deducting pay has no application to such a case.
39 The appellant submits that economic imperatives or considerations for an employer are irrelevant and that no examination of their nature and extent is relevant; once the employer’s decision is identified as the immediate or direct cause of the stoppage of work, then it cannot be said the cause is one that it cannot reasonably be held responsible for or cannot reasonably have prevented.
40 The appellant submits that the word, “reasonably” only has work to do where the employer’s decision is not the direct cause of the stoppage of work. It submits that Townsend is an illustration of this proposition. In that case, workers were stood down at General Motors Holden’s (GMH) plants because of an absence of heater boxes for motor vehicles. The relevant union claimed that that was in breach of the award which gave GMH the right to stand down employees “for any day an employee cannot be usefully employed because of a strike or through a breakdown in machinery or a stoppage of work by any cause for which the company cannot reasonably be held responsible”. The absence of heater boxes was the result of strikes at the supplier’s plants. Only in that circumstance, the appellant submits, was the reasonableness of GMH’s conduct examined in, for example, its efforts to obtain heater boxes from other suppliers.
41 The appellant referred to Ford Motor Co. In that case, the Ford Motor Co of Australia Pty Ltd stood down employees and the relevant union alleged that that was in breach of the award which gave the employer a right to stand down an employee where that employee could not be usefully employed “because of any strike or through any breakdown of machinery or any stoppage of work by any cause for which the employer cannot be reasonably held responsible”. The employees at the company’s vehicle assembly plant at Broadmeadows were stood down because of an absence of vital components. In dealing with causation, the Commonwealth Industrial Court said (at 200):
As to the first contention we are of opinion that the company has shown, on the evidence and the agreed facts, that the cause of the stoppage of work is a shortage of materials and that the company cannot reasonably be held responsible for this shortage. The shortage is due solely to the action of the shipping clerks in refusing to permit delivery of vital material from the wharves at Melbourne and Sydney and there seems no doubt that this action was taken in an endeavour to force the company to comply with the demand of the Federated Clerks Union. An employer could only “reasonably be held responsible” under the relevant provisions of cl. 7 of the award if a stoppage of work were the natural and probable consequence of his acts and the hold up of vital material following upon a refusal by the employer to force or coerce unwilling employees to join the Federated Clerks Union is not such a natural and probable consequence.
42 The proposition the appellant seeks to extract from this passage is that the chain of causation is only broken if event B is not the natural and probable consequence of event A and it cannot be said in this case that the stoppage of flying and stoppage of work is not the natural and probable consequence of each airline’s decision to stop flying.
43 In its written submissions, the appellant referred to Re Textile Industry (Woollen and Worsted Section) Award 1950 (1963) 5 FLR 328 (Re Textile Industry) which was a case involving the interpretation of an award which provided for the stand down of employees where “the employee cannot be usefully employed because of any strike or through any breakdown of machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible or for a stand-down of employees at any time when no work is offering”. The employer operated a mill where, because of a shortage of orders, employees in different sections of the mill were stood down one day a week. The appellant relies on the observations of the Commonwealth Industrial Court in that case that (at 333) the employer’s rolling stand downs of employees were authorised, not by that part of the clause which provided for a stoppage of work by any cause for which the employer cannot reasonably be held responsible, but by and only because of that part of the clause (not present in this case) which provided for when no work is offering.
44 The appellant submits that when the stoppage of work relates to a decrease in the demand for the employer’s goods or service, it will not fall within a stand down clause of the type in issue in the case before the Court.
45 The respondents submit that the appellant’s submissions contain two errors in that first, it is an error to focus only on the immediate or direct cause without regard to other or underlying factors and secondly, it is an error to read the clauses to mean that reasonableness is irrelevant once the employer is identified in the chain of causation. The respondents submit that the focus of the clauses is whether a stoppage is one for which the employer ought to be held reasonably responsible or could reasonably have prevented.
46 The respondents accept that the “stoppage of work” within the clauses was the stoppage of flying, but submit that the cause to be identified is the “real, substantial or effective” cause of the planes not flying and that is not the decision of the respective airlines to stop flying. The lack of passengers is an obvious cause of the stoppage of flying. Both clauses make it clear that an assessment of reasonableness is part of the operation of the clauses.
47 The respondents submit that to avoid giving an arbitrary operation to the clauses, it is necessary to consider the chain of causation. The respondents submit that both the concept of causation and the concept of reasonable responsibility or reasonable preventability are important. If the acts of the employer are not part of the chain, then it is not necessary to consider reasonable responsibility or reasonable preventability. If the acts of the employer are part of the chain of causation, then it is necessary to consider reasonable responsibility or reasonable preventability.
48 In my opinion, the reasoning of the primary judge is correct. It is supported by the terms of the clauses and the cases to which the respondents referred on the appeal.
49 Plainly, questions of causation arise in many areas of the law and can involve complex issues of fact. In any given fact situation, there will be a but for cause(s) i.e., sine qua non; there may be multiple independent causes; a chain of causation; and causes which may be described as direct or indirect. The approach of the common law to issues of causation involves the application of common sense to the facts of each particular case and it includes a recognition of the part played by policy and value judgments (March v E & M H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at 515 per Mason CJ; at 522–523 per Deane J; at 524 per Toohey J; at 525 per Gaudron J; at 531 per McHugh J). There have been a number of cases addressing the test of causation in the context of s 82 of the Trade Practices Act 1974 (Cth) which uses the word “by” (Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494; Henville v Walker [2001] HCA 52; (2001) 206 CLR 459).
50 I mention these matters to make the point that, in my opinion, the stand down provisions in issue in this case expressly address and deal with the causation and responsibility issues that are so often debated in other areas of the law. There are two important features of the relevant clause in each enterprise agreement. The first is the use of the preposition linking the stoppage of work to the cause. Neither the use of “through” in the Qantas Agreement or the use of “by” in the Jetstar Agreement suggests that the causation analysis should be restricted to the immediate or direct cause. In fact, the use of the word “through” in the Qantas Agreement suggests a chain of causation analysis. Secondly and significantly, the reference to reasonable responsibility in the case of Qantas, and reasonable preventability in the case of Jetstar, means that the task demanded by the clauses is not only a determination of causation and attribution of responsibility, but also a determination of reasonableness in assessing responsibility or preventability. As Gavan Duffy J said in Pickard v John Heine in the context of a stand down clause that operated where the cause was one which the employer cannot reasonably prevent, that directs attention to the conduct of the employer measured against that of the “reasonable man” and “the means which a reasonable man might be expected to employ in such circumstances” (at 10–11).
51 It seems to me that it would be inconsistent with the express terms of the stand down provisions to conclude that the causation and responsibility analysis demanded by the clauses concludes with the identification of the immediate or direct cause. To my mind, to focus only on the immediate or direct cause would give the provisions an arbitrary operation which ignored the real, substantial or effective cause of the stoppage of work. Furthermore, depending on how the provisions were applied, limiting the inquiry to the immediate or direct cause would fail to give any effect to the notions of reasonable responsibility or reasonable preventability. The construction of the clauses which I have identified is supported by the authorities.
52 In Ford Motor Co, the Commonwealth Industrial Court found that the employer was not within the chain of causation because the sole cause was the action of the shipping clerks (see the passage set out above at [41]). The Court went on to say (at 200):
However even if as a matter of law, this is not an end of the matter and we are obliged to ascertain the meaning of the phrase “reasonably to be held responsible” as used in cl. 7 of the award by reference to what might be described as the merits what do we find?
53 That issue was resolved in favour of the employer upon a finding that its refusal to accede to the demands of the shipping clerks was reasonable. The appellant’s reliance in this case on the test of a natural and probable consequence as establishing its case is misplaced. It may establish causation, but it does not establish the second issue concerning reasonableness or reasonable responsibility. That is made clear by the fact that the Court in Ford Motor Co went on to consider that separately and on the assumption that it was wrong in concluding that the sole cause of the stoppage was the action of the shipping clerks.
54 Finally, the decision in Ford Motor Co makes it clear that the inquiry does not end upon a finding of the immediate or direct cause which in that case was the shortage of materials. The Court considered the actions of the shipping clerks and then the interactions between their union and the employer.
55 The decision of Morling J in Townsend also supports the proposition that stand down clauses similar to those in this case involve issues of both causation and reasonable responsibility (or reasonably preventability). In that case, there was a shortage of heater boxes and GMH decided to allocate some of the heater boxes it had to the Acacia Ridge plant rather than the Elizabeth plant. It might have been said that the direct cause of the stoppage at the Elizabeth plant was GMH’s decision to allocate the heater boxes it had to the Acacia Ridge plant. However, that was not the analysis adopted by Morling J. His Honour first considered whether GMH had made all reasonable efforts to obtain alternative supplies of the heater boxes and he found that it had. The union put a further argument that GMH was at fault in sending some of the heater boxes to Acacia Ridge. His Honour rejected that argument holding that GMH had acted reasonably. In the course of his analysis, his Honour referred to economic considerations (at 360–361):
… However, Mr Ryan Q.C., senior counsel for the applicants, submitted that even if GMH could not be criticized for its efforts in obtaining an alternative supply of heater boxes, it was at fault in sending some of them to Acacia Ridge. It was argued that the assembling of Commodore vehicles at Acacia Ridge could have temporarily stopped in March 1981 and that the heater boxes should have been sent to the Elizabeth plant, thus avoiding all, or some, of the stand-downs. I do not think this criticism of GMH’s actions is justified on the evidence. ln the light of the trouble and expense to which the company went to obtain urgent supplies of the heater boxes, it would have been extraordinary if it had not utilized the boxes, when they eventually arrived, in the most efficient way. Mr Vincent McDonald, who was GMH’s supervisor of materials control at the time, took a leading part in obtaining supplies of the heater boxes. He was well aware of the number of Commodore vehicles produced on a daily basis in GMH’s assembly plants. He gave evidence that he considered whether heater boxes should be sent to Acacia Ridge. He said that at the time GMH was assembling both Commodore and Gemini vehicles at Acacia Ridge. Apparently consideration was given to operating the Acacia Ridge plant so as to assemble only Gemini vehicles. But a decision was taken to continue assembling Commodore vehicles as well. It was not put to Mr McDonald in cross-examination that the decision was unreasonable, and I do not think there is any basis for saying that it was. A decision to change the mix of vehicles on the Acacia Ridge assembly line would have involved a consideration of a number of commercial and technical factors of some complexity. There is no basis in the evidence for a finding that GMH did not efficiently handle the problems thrown up by the shortage of heater boxes. I am satisfied that it acted reasonably in allocating some of the heater boxes to the Acacia Ridge plant and that it made a proper allocation of boxes to the assembly plant at Elizabeth.
56 In my opinion, it is not correct to say that economic considerations can never be relevant to the assessment of reasonable responsibility or reasonable preventability. It is true that stand down provisions cannot be engaged by mere market fluctuations or reductions in profitability. On the other hand, what Qantas and Jetstar faced here was an almost complete collapse of the international and domestic market for airline services as a result of the COVID-19 pandemic. This was an extreme case.
57 With respect, I do not find the decision in Pickard v John Heine of assistance. The circumstances in that case were different from those in the present case. Acting Chief Justice Isaacs adopted a different construction of the relevant clause to that adopted by Starke J. His Honour made one observation relied on by the appellant (at 8):
… If outside circumstances, utterly unconnected with the immediate working operations, such as economic reasons, trade competition, quarrels with customers, and so on, can be introduced to test the reasonableness of prevention or non-prevention, there is little or nothing of security or definiteness left to the employee. …
However, his Honour concluded his reasons with the following observation (at 10):
On the question of when and how far economic considerations enter into the determination of whether, in an appropriate case, the employer could “reasonably prevent” the stoppage from the given cause, I express no opinion at present.
58 Justice Gavan Duffy adopted a similar construction to that of Isaacs ACJ, although his Honour did go on to say that the employer had not satisfied him that it would not have been a reasonable course to pay its employees holiday pay rather than close its works.
59 With respect to the appellant’s reliance on Re Textile Industry, it should be noted that the passages relied on by the appellant were obiter dicta and made as part of a short historical survey. The actual issue in the case was whether there was an implication in the stand down provision, which contained the expression, “at any time when no work is offering”, to the effect that it was “an emergency provision to be applied only when through some unexpected circumstance of a temporary character the employer either did not have orders sufficient to keep his workers going or did not have a sufficient expectation of being able to sell his product to justify keeping his workers in employment” (at 331). The Court held that there was no such implication.
60 I reject the appellant’s submission that considerations on the demand side (that is, the demand for the employer’s goods or service) will not engage stand down provisions of the type in issue in this case. It is true that there is no right in an employer to stand down employees whenever it suits the employer (Re Distilleries Award 1976 (1976) 180 CAR 786 at 787 per Sharp J) and that stand down provisions are not to be seen as “an automatic, albeit partial, safeguard for the employer against economic loss” (Food Preservers Union of Australia v All States Ready Foods (1976) 182 CAR 391 at 392 per Gaudron J). However, there is no rule that factors on the demand side can never engage a stand down provision of the type in issue in this case. In each case, careful attention must be paid to the terms of the particular clause and the facts of the case.
61 Counsel for Qantas and Jetstar accepted that it is difficult to argue that the airlines were not “at some level … within the chain of causation”. It seems to me, as it did to the primary judge, that the decisions of the respective airlines may be seen as the immediate cause of the stoppage of work. However, the question then is one of reasonable responsibility or reasonable preventability. As the primary judge said (Qantas (No 3) at [31]), quoting Gavan Duffy J in Pickard v John Heine (at 10–11), questions of reasonableness are to be determined “by reference to the steps which a ‘reasonable man might be expected to employ in the circumstances’”. The circumstances in this case were extraordinary and having regard to his Honour’s findings of fact (see [31] above, particularly the matters in (5), (6) and (7)), the conclusions that the stand downs in this case were within the stand down provisions were correct.
62 The respondents filed a Notice of contention which contained one ground as follows:
Even if the cause of the stoppage of work identified in [27] of [2020] FCA 1428 was that for which the Appellant contended, namely the decisions taken by the Respondents to reduce their operational flying capacity, in the circumstances the Respondents confronted, the stoppage of work would still have been “through any cause for which Qantas [could not] reasonably be held responsible” or “by any cause, which Jetstar [could not] reasonably prevent”.
63 In the circumstances, it is not necessary to deal with this ground over and above the conclusions already expressed.
64 I reject the appellant’s challenge to the first and second declarations.
The Third Declaration – cl 20.4 of the Jetstar Agreement
65 The appellant contends that, in the case of the Aircraft Engineers employed by Jetstar, cl 20.4 of the Jetstar Agreement operates in such a way that they cannot be stood down while the dispute resolution procedures are being followed. My consideration of this contention is premised on the assumption that the dispute resolution procedures were being followed. That is a premise which is challenged by Qantas and Jetstar in the cross-appeal.
66 I start with the primary judge’s reasons.
67 The appellant raised an initial point about the terms of the declaration made by the primary judge. The appellant submitted that on its face, the third declaration interferes with its right to argue before the FWC that there was useful employment for the Aircraft Engineers within cl 30.5.1. I reject this contention because it seems to me that the third declaration makes it clear that Jetstar was not required to do the acts identified in the declaration “by reason of that clause”, that is to say, cl 20.4 of the Jetstar Agreement.
68 At a substantive level, the appellant submits that the primary judge erred in making the third declaration for two reasons. First, his Honour reasoned to his conclusion by making a finding of fact for which there was no evidence, namely, that there was no useful employment or work for the employees who had been stood down by Jetstar. That was the contention in the Notice of appeal, although it must be said that in oral submissions the appellant did not appear to press the matter. Secondly, the appellant submitted that there was no basis for his Honour to conclude that cl 20.4 did not apply to disputes which fell within cl 30.5.1 of the Jetstar Agreement.
69 Whether advanced or not, the first argument must be rejected because the primary judge did not make a finding of fact about whether there was useful employment for the Aircraft Engineers. His Honour determined the issues by reference to the proper construction of cl 20.4 and cl 30.5.1.
70 The primary judge reached two inter-related conclusions about the proper construction of cl 20.4 and cl 30.5.1. First, his Honour concluded that cl 20.4 should be construed so that its operation is confined to those circumstances in which there is available work which the employee can otherwise perform. In that context, his Honour referred to, and relied on, the phrase in cl 20.4, “work will continue as per the status quo”. Secondly, his Honour said that to construe cl 20.4 in the manner advanced by the appellant would render nugatory the right conferred by cl 30.5.1.
71 His Honour expressed his conclusions as follows (Qantas (No 3) at [41]–[42]):
41 So construed, cl 20.4 and cl 30.5.1 are directed to factually different scenarios: the former is directed to imposing an obligation on an employer to maintain the status quo whilst there is work available to be performed and whilst a dispute remains to be resolved; the latter provision is directed to those circumstances in which there is no available work to be performed.
42 These reasons proceed from the construction of cll 20.4 and 30.5.1. As a process of construction, it is concluded that both provisions serve two different purposes. There is, with respect to the contrary submission advanced on behalf of the Union, little circularity in reasoning. If, on the facts as they may ultimately be established in any given case, there is (for example) no right to stand down an employee pursuant to cl 30.5.1 such that there was on the facts as found other available work to be performed, there would be a contravention of both provisions. But the process of construing the terms of cll 20.4 and 30.5.1 solely by reference to the terms of the Jetstar Agreement leads to the construction of cl 20.4 advanced on behalf of Jetstar.
72 Clause cl 20.4 refers to “work” continuing whereas cl 30.5.1 refers to the employer deducting “payment” for any day or part of a day, although I think that in the end, neither party suggested that this difference was material to the resolution of the issue.
73 The appellant asked the Court to note as background circumstances that not all Aircraft Engineers were stood down and that each of Qantas and Jetstar accept that there is useful employment within the stand down provisions for at least some Aircraft Engineers. The matter in dispute is the extent of available work.
74 The appellant submits that the primary judge erred in concluding that cl 20.4 did not operate where there was no useful employment for the employee to do. It does not seem to me that that is a correct characterisation of the primary judge’s approach. It is more accurate to say that his Honour concluded that cl 20.4 does not apply where the very dispute is, or includes, a dispute about whether there is useful employment or work for the employee. It seems to me that that must be how his Honour approached the issue because on two occasions in the relevant section of his reasons, he made it clear that if an employer’s assertion that there was no useful work for the employee was ultimately found to be incorrect, then the employee could seek an order for the payment of monies wrongfully withheld (Qantas (No 3) at [40] and [42]).
75 The appellant relied on the decision of Tracey J in Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020; (2011) 212 IR 327 (CEPU v Thiess) in support of its submissions. The Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) sought the imposition of a pecuniary penalty on an employer for the contravention of an enterprise agreement, being a failure to comply with a disputes settling procedure. The employer proposed to change rostering arrangements for electricians and the CEPU disputed that proposal and sought to engage the disputes settling procedure which contained a clause for the preservation of the status quo while the steps comprising the procedure were being followed. The employer contended that the procedure had no application and that the preservation of the status quo provision did not operate. Justice Tracey held that the disputes resolution procedure applied and that that included the preservation of the status quo provision.
76 As I understand it, the proposition which the appellant seeks to derive from this case is as follows: even if the employer’s right to take the particular course in issue is “unfettered” or “absolute”, if a dispute resolution procedure is engaged and that procedure includes a preservation of the status quo provision, then that procedure operates according to the terms of the agreement. Justice Tracey said (at [70]):
I accept the respondents’ submissions that Clause 1.3 confers an unfettered discretion on them and that the right there conferred may not be abrogated against their will even if the dispute ultimately falls to be dealt with by arbitration. These considerations do not, however, compel the conclusions that Clause 15.1 is not intended to and does not operate in circumstances such as the present or that the processes mandated by Clause 15.1(b) lack practical utility. At each stage prior to a determination being made by the PDP there is scope for the respondents, should they be so minded, to reconsider the decision which has given rise to the disputes. If they do so they might choose to rescind it or to modify the process by which the decision is to be implemented. This could involve, for example, delaying or staggering the introduction of the roster changes or allowing more time for employees who are rendered redundant by the changes to make alternative domestic arrangements or obtain alternative employment. The respondents may be moved to take such ameliorative action, if in the course of negotiations, conciliation or mediation they become aware of matters of which they were previously unaware. Ultimately, however, they may not be so persuaded and, if so, they will be entitled, consistently with the Agreement, to implement their decision to exercise the power conferred on them by Clause 1.3 and to enforce redundancies subject to the requirements of the Agreement.
77 I do not consider CEPU v Thiess to be of assistance in resolving the issue in this case. It does not deal with the issue raised in this case. The case is an example of a status quo provision in a dispute resolution procedure operating according to its terms and the judge rejecting an argument that the engagement of the dispute resolution procedure was futile because by reference to practical considerations, he considered a different result may follow. In this case, the issue is not whether the engagement of dispute resolution procedures might lead Jetstar to make a different decision, but the identification of the interrelationship between cl 20.4 and cl 30.5.1.
78 In my respectful opinion, the primary judge was correct to conclude that the two clauses have different predicates or assumptions, one that there is useful employment for the employee to perform (cl 20.4) and the other, that there is not (cl 30.5.1). The primary judge was also correct to conclude that stand down clauses of the type in issue in this case would be rendered nugatory, or at least largely nugatory, if subject to the status quo provision in a dispute resolution procedure. In most cases, stand downs will be for relatively short periods and would not achieve their purpose if subject to a status quo provision even accepting that the FWC might proceed quickly in terms of its arbitration of a dispute. Furthermore, as counsel for Jetstar noted, the appellant’s construction gives rise to a one-sided result in that if the employer is ultimately proved correct, it has no remedy, whereas on Jetstar’s construction, if the employee is ultimately proved correct, then he or she can recover the wages which have been lost.
79 I reject the appellant’s challenge to the third declaration.
The Cross-Appeal
General
80 Both dispute resolution procedures in the enterprise agreements specify that there is to be a meeting involving an employee and his or her supervisor or manager, which I will refer to as the stage one meeting, followed by (assuming the matter or dispute is not resolved) further discussions or a reference to more senior levels of management, which I will refer to as the stage two meeting, and then, if the matter remains unresolved, the matter or dispute may be referred to the FWC. In those circumstances, the FWC would have jurisdiction under s 739 of the FW Act to “deal with” the dispute.
81 The following matters are not in dispute in the cross-appeal by Qantas and Jetstar.
82 First, it is not in dispute that one employee may fulfil the requirements of a stage one and stage two meeting sufficient to have enabled the appellant to bring an application in the FWC on behalf of its members.
83 Secondly, it is not in dispute that both pre-conditions in the dispute resolution procedures (i.e., the stage one and stage two meetings) must be met before a “dispute” or “matter” is referred to the FWC. The primary judge held that substantial compliance with these provisions was sufficient (Qantas (No 2) at [53] and [56]). His Honour held that the dispute resolution procedure in each enterprise agreement presents a staged process of dispute resolution.
84 Thirdly, it is not in dispute that the requirements for a stage two meeting had been met in this case. The challenge by Qantas and Jetstar by the cross-appeal is to his Honour’s conclusion that the requirements for a stage one meeting had been met.
85 The limited nature of the issues raised by the cross-appeal means that it is not necessary to go beyond the evidence relied on by his Honour to find that there had been a stage one meeting within the dispute resolution procedure in each enterprise agreement.
86 The evidence before his Honour which formed the basis of his conclusion that there had been a stage one meeting under the Qantas Agreement was that of Mr Mark Gant, who was the Duty Maintenance Manager employed by Qantas at Sydney Airport. Since 2001, Mr Gant has also been an Aircraft Engineer. The primary judge referred to the following evidence given by Mr Gant in his affidavit:
16. Between 18 March 2020 and 20 March 2020, I discussed the proposed stand downs with other ALAEA members, including LAMEs I directly supervise on a day to day basis. Several, including for example Kevin Baldacchino, approached me to initiate these discussions. Mr Baldacchino, as an example, questioned if Qantas could stand us down, and indicated that he did not accept this. I was unable to resolve this question to his satisfaction.
17. Many indicated that like me, they did not agree with the stand downs, and wanted our association to challenge them however we could, or as a fallback try and negotiate a more equitable system. I obviously could not resolve the dispute for them.
18. The LAMEs who spoke to me were focused on the stand downs at large, not particular legal arguments. As a general rule, when the members want the ALAEA to dispute a matter for them, they are concerned with the outcome not the process – as one gentleman said to me “they don’t care about the birth, they want to see the baby”.
19. I personally did not agree, and do not agree, that Qantas could or should stand me down without pay.
The primary judge noted that Qantas objected to these paragraphs, but that they were admitted into evidence, subject to considerations of weight, “given the absence of any specification in admissible form as to the content of what was said” (Qantas (No 2) at [38]).
87 The evidence before his Honour which formed the basis of his conclusion that there had been a stage one meeting under the Jetstar Agreement was evidence of a conversation between Mr Adam Teat and Mr Robert Toovey on 19 March 2020 and of a conversation between Mr Gregory Hutchinson and Mr Toovey on the same date.
88 Mr Teat was Mr Toovey’s Duty Operations Manager and Mr Toovey was an Aircraft Engineer employed by Jetstar. Mr Hutchison was Mr Toovey’s Base Maintenance Manager. He occupied a more senior managerial position at Jetstar than Mr Teat.
89 With respect to the Qantas Agreement, the primary judge held that the discussions deposed to by Mr Gant were sufficient compliance with the requirement for a stage one meeting. His Honour said (Qantas (No 2) at [75]):
The conversations recounted by Mr Gant between 18 and 20 March 2020 are, however, sufficient compliance with cl 6.1.1. Mr Gant was the “supervisor” of the employees with whom those conversations were held, including Mr Baldacchino. Notwithstanding the form in which those conversations were expressed in Mr Gant’s affidavit and the objection taken to this part of Mr Gant’s affidavit, it is concluded, sufficient “weight” can be given to that part of the evidence to find, on the balance of probabilities, that:
• there were discussions about the proposed stand downs;
• in addition to Mr Baldacchino, there were a number of other employees with whom Mr Gant had these discussions;
• whatever else was discussed, the employees were questioning if Qantas could stand them down;
• the employees wanted to challenge the actions proposed by Qantas; and
• there was a “dispute” which Mr Gant could not “resolve”.
That is sufficient, it is respectfully concluded, to satisfy the requirements of cl 6.1.1 of the Qantas Agreement.
90 With respect to the Jetstar Agreement, there was a conflict between the evidence of Mr Toovey on the one hand, and the evidence of Messrs Teat and Hutchinson on the other. The primary judge resolved the conflict in favour of the evidence given by Messrs Teat and Hutchinson.
91 The evidence Mr Toovey gave of his conversation with Mr Teat was as follows:
[Mr Toovey]: “Adam regarding the stands downs and the fact that there is no work booked in for April, we don’t agree with them. Why can’t we cycle some aircraft through the hangar to acquit any outstanding work? We can also bring forward the service bulletins so there is no need for them to be done during the C-Checks?”
Mr Teat: “Bob you need to bring this up with senior management as it is above my pay grade.”
92 The primary judge found that Mr Toovey did not say during this conversation words to the effect of, “we don’t agree with them”.
93 The evidence Mr Toovey gave of his conversation with Mr Hutchinson was as follows:
[Mr Toovey]: “Greg, about the stand downs, we don’t agree with them, there’s work that can be done. Why can’t we bring the Non-Mandatory service bulletins forward and then they don’t have to be done during C Checks? This will get the aircraft back into service early making us look good.”
Mr Hutchinson: “The Senior AMO makes that decision along with planning’s advice. You’ll have to take it up with senior management, it’s out of my hands.”
94 Again, the primary judge found that Mr Toovey did not say in this conversation words to the effect of, “we don’t agree with them”.
95 The primary judge did find that Mr Toovey made it clear to Mr Teat and Mr Hutchinson during his conversations with them that he was expressing a view or opinion diametrically opposed to that being advanced by Jetstar and that neither of them could have been left in any doubt that Mr Toovey “was maintaining that there remained useful work which could be performed by LAMEs” (Qantas (No 2) at [45]).
96 The primary judge held that the conversations between Mr Toovey and Mr Teat and then between Mr Toovey and Mr Hutchinson were sufficient compliance with the requirement for a stage one meeting under the Jetstar Agreement. His Honour said (Qantas (No 2) at [85]):
But the finding that Mr Toovey did not say to either Mr Teat or Mr Hutchinson that he did not “agree” with the stand downs does not preclude a conclusion that cl 20.1 of the Jetstar Agreement has been satisfied. For the purposes of cl 20.1, it is sufficient for it to be found that there be a discussion during which opposing views were being expressed; the fact that one or other of those persons participating in the discussion did not use such words as “I agree” or “I don’t agree” does not of itself resolve the question as to whether the was a “dispute” which was “discussed”. It is sufficient compliance with cl 20.1 for Mr Teat (or Mr Hutchinson) to be left in no doubt that Mr Toovey was expressing an opinion contrary to that being advanced by Jetstar. Compliance with that provision is a matter of substance not form. Compliance with cl 20.1 cannot be stripped of its characterisation as a “discussion” about a “dispute” which centred upon “opposing views” by a personal characterisation of the conversation as one during which Mr Toovey was simply “asking questions”. It is sufficient, as Mr Teat accepted, for Mr Toovey to be “questioning that decision”. Similarly, it matters not if Mr Hutchinson was “not sure if [Mr Toovey] was disagreeing” as opposed to Mr Toovey “making a point that he felt that other work could be conducted”.
97 The primary judge started his analysis of the clauses dealing with stage one and stage two meetings by saying that the clauses must be construed with a degree of flexibility consistent with the industrial context in which the two clauses were drafted.
98 The primary judge said that the central concept in the relevant clauses was the concept of a “dispute” and he referred to the definition of that word in the New Shorter Oxford English Dictionary. He said that the word should be given its ordinary English meaning in the relevant clauses and the essence of that meaning was an exchange of “opposing views” or positions and the necessity for there to be an exchange of positions “for and against” a particular result.
99 The primary judge said that the provisions of the dispute resolution procedures would need to be applied to a wide range of circumstances and that factor was relevant in the construction of the provisions. For example, a dispute might involve a discrete personal matter or it might involve a matter affecting a large number of employees. There is no reason to confine the provisions to the former or to require, in the case of a dispute involving a large number of employees, that each individual employee meet with his or her supervisor. For similar reasons, words such as “meeting” and “discussion” should be broadly construed to include meetings which were not formally convened meetings or formal discussions.
100 In response to a submission by Qantas and Jetstar that by reason of the language of the provisions and the potential for liability to civil penalties for non-compliance with the provisions, there had to be a minimum content given to the provisions, including a requirement for a proper articulation of the dispute and at least some understanding that those participating knew that they were in a “dispute meeting”, the primary judge accepted that the provisions had a minimum content. However, he defined that minimum content as that “there needed to be the raising by an employee or a group of employees of an ‘opposing view’ to that of their employer and that view had to be raised at a meeting (however flexibly that term is to be construed) at which it was known or could reasonably be inferred that each of the ‘opposing’ sides knew that there was a dispute in need of resolution” (Qantas (No 2) at [70]). The primary judge said that it was not necessary for those participating in the meeting or discussion to know that they were participating in a meeting which formed part of a dispute resolution procedure.
101 Counsel for Qantas and Jetstar started his submissions with the Jetstar Agreement. He pointed out that cl 20 used both mandatory and discretionary language and asked the Court to conclude that the draftsman was careful to distinguish between the two. Clause 20.1 was expressed in mandatory terms. The primary judge may have concluded substantial compliance with cll 20.1 and 20.2 was sufficient, but that was relevant to other arguments before the primary judge, arguments which are not raised on the cross-appeal. The principal argument raised on the cross-appeal is whether there had been a stage one meeting.
102 Counsel identified other features of cl 20 said by Jetstar to be significant and, in particular, the fact that a failure to comply with the mandatory obligations in the clause could result in the imposition of pecuniary penalties (s 50 of the FW Act) and the fact that the engagement of cl 20.4 depended on the procedures in cll 20.1 to 20.3 being followed.
103 Jetstar submitted that the primary judge’s error lay in not construing cl 20.1 as containing a requirement that the parties knew, or on the facts it should be inferred they knew, that they were engaging in a dispute resolution procedure. The consequences for parties of a breach of the provisions could be very serious. A party not appreciating that there had been a stage one meeting could be liable to a civil penalty by insisting on a course other than the preservation of the status quo required by cl 20.4 or an employee might mistakenly believe cl 20.4 had been engaged and prejudice his or her position by failing to follow the employer’s direction.
104 Jetstar submitted that that error undermined his Honour’s reasoning because he did not ask himself whether both parties knew, or on the facts it should be inferred that they knew, that they were engaging in a dispute resolution process. It submitted that such evidence as there was, suggested that that conclusion ought not to be drawn. For example, the primary judge set out evidence from Mr Teat that he did not consider his conversation with Mr Toovey to be part of a dispute resolution procedure; otherwise, he would have escalated the dispute to the next level. Mr Teat said in cross-examination:
And Mr Toovey in the conversation you had with him on the 19th was questioning that decision, wasn’t he, whether or not there was work that could be done?---Yes, yes.
Yes. He was making suggestions about work that could have been brought forward. Do you agree with that?---Yes, yes.
At this point, Jetstar was saying there is no work to be done and Mr Toovey was saying to you I think there is work to be done. That’s a fair summary?---Yes, yes.
And if Mr Toovey was right, if there was work for LAMEs to do, they wouldn’t need to be stood down. That’s right, isn’t it?---If there was work to be done? Yes.
And that was the point Mr Toovey was making. That he thought there was work to be done so the stand downs didn’t need to happen. Do you agree with that?---Yes, yes.
So the point was that he didn’t agree with what Jetstar was doing, at least in part. That’s right, isn’t it?---The court was asking – sorry, Mr Toovey was asking questions around the maintenance.
Yes. And the questions were, as we’ve just discussed, directed at challenging the conclusion that there was no useful work for you. Do you agree with that?---The conversation I had with Mr Toovey, he was asking a question, so - - -
It was – and you weren’t – the matters he was proposing were totally outside of your authority, weren’t there?---Yes, I – yes. I spoke to – when I spoke to Mr Toovey I told him that we - - -
Mr Teat, this is quite difficult with the video. If you could just confine yourself to the question. If I need an explanation, I will ask you or Mr Parry will ask you later. So the matters Mr Toovey were discussing, they were decisions made by senior management, weren’t they?---Correct.
And you told him that. You referred him to senior management?---Correct.
You told him something like, “This is above my paygrade”?---Incorrect.
Okay. And it is the case that Mr Toovey did not say anything along the lines of, “Hello, Adam. I am disputing the standdowns under clause 20 of the agreement,” did he?---No.
But if he had, your response would have been the same. You would have referred him to senior management?---I would have asked Mr Toovey to send me an email in writing with his dispute.
Which you then would have referred to senior management?---Correct.
Yes. Because you have absolutely no ability to resolve any dispute, big or small, about the standdowns at that point, do you?---No.
105 Jetstar submitted that even on the test formulated by the primary judge, that is to say, that those participating in the meeting knew first, that there were opposing views and secondly, that they knew those opposing views needed to be resolved, the appellant’s case failed because the primary judge did not, in the paragraph in which he set out his findings, make a finding that the second limb was satisfied.
106 Finally, Jetstar submitted that the primary judge erred in concluding that the conversation between Mr Hutchinson and Mr Toovey was a stage one meeting because Mr Hutchinson was not Mr Toovey’s local Line Maintenance Manager or Duty Operations Manager.
107 The arguments advanced by Qantas were essentially the same save that there is no status quo provision in the Qantas Agreement. Qantas also submitted that the meeting between Mr Gant and Mr Baldacchino and others could never be a stage one meeting because Mr Gant was not involved in the meeting as a supervisor. Not only was he an Aircraft Engineer who did not agree with the stand downs, but he appeared at the meetings on 18 March 2020 and 20 March 2020 as a representative of the appellant (Qantas (No 2) at [24] and [31]).
108 The cross-respondent in essence relied on the reasons of the primary judge. There was a suggestion by the cross-respondent that this dispute was a collective dispute in the sense that it was clear that the cross-respondent and not merely an individual employee disputed the stand downs and that, to use counsel for the cross-respondent’s words, an interpretation of the clauses in the case of “collective disputes” that means that there can only be a reference to the FWC “by triggering of an individual employee at the first step … seems an unlikely interpretation”. That suggestion must be rejected. The cross-respondent did not file a Notice of contention in the cross-appeal and the suggestion is inconsistent with the reasoning of the primary judge to the effect that each step is a pre-condition which must be satisfied before a “dispute” or “matter” is referred to the FWC.
109 The cross-respondent referred on a number of occasions in its written and oral submissions to the fact that his Honour had held that substantial compliance with, inter alia, cl 6.1 of the Qantas Agreement and cl 20.1 of the Jetstar Agreement was sufficient having regard to the terms of those clauses and that strict compliance was not required. His Honour made observations to that effect in the course of considering whether those clauses, among others, “imposed mandatory pre-requisites or pre-conditions which needed to be satisfied prior to the exercise of any power to refer a ‘matter’ as a ‘dispute’ to the Commission” (Qantas (No 2) at [50]). As I have said, his Honour concluded that the clauses imposed pre-conditions which must be satisfied before a “dispute” or “matter” can be referred to the FWC (see the discussion in Qantas (No 2) at [50]–[60]).
110 Having made these observations, his Honour turned to consider the meaning and application of the clauses to the facts. Having determined the meaning of the clauses, I do not understand his Honour to analyse the application of the clauses to the facts by reference to notions of substantial compliance. As I read his Honour’s reasons, he determined that there had been compliance with the clauses as he construed them. I think that the cross-respondent ultimately recognised that to be the position because at one point in its written submissions, it said that there had been “strict” compliance with the clauses unless one accepts Qantas’ proposition that some kind of formal declaration of being in dispute must precede the shop floor discussion.
111 It is convenient to begin the consideration of the challenge by Qantas and Jetstar to the primary judge’s reasoning at the point where his Honour considers and rejects the proposition that those participating in the meeting or discussion needed to know that they were participating in a meeting which formed part of a dispute resolution procedure or, as put in oral submissions before this Court, a step in a dispute resolution process. Counsel for Qantas and Jetstar accepted that this requirement was not wholly subjective; it would be met if the facts were such that a reasonable person would understand that the discussion or meeting was a step in a dispute resolution procedure.
112 I reject the submission by Qantas and Jetstar. No such requirement appears in either cl 6.1 of the Qantas Agreement or cl 20.1 of the Jetstar Agreement. In my respectful opinion, the primary judge correctly identified the matters which must be proved in order to establish that there has been a stage one meeting. First, there must be opposing views. That is the essence of a dispute about a matter or relating to a matter within the terms of the clauses. Secondly, the participants must understand that the dispute is one in need of resolution. On the requirements of the clauses as identified by the primary judge, both parties will be aware that they have opposing views and that there is a dispute in need of resolution and that is sufficient to satisfy the requirements.
113 I turn now to deal with Jetstar’s argument that it must succeed on the cross-appeal because the primary judge did not make a finding with respect to the second limb he identified, namely, that the parties recognised that there was a dispute in need of resolution. That would appear to be the case, at least in express terms (see Qantas (No 2) at [85]–[86]). I consider there is an implied finding that the second limb is satisfied on the facts. The evidence accepted by the primary judge is clear. Mr Teat said to Mr Toovey that he would need to bring the matter up “with senior management”.
114 I turn to some subsidiary points raised by Qantas and Jetstar.
115 As to the fact that at the relevant time, Mr Gant was not only a supervisor of various Aircraft Engineers, including Mr Baldacchino, but he was also an Aircraft Engineer, a trustee and representative of the appellant and a person who disagreed with the stand downs, I am unable to see why those matters affect his status to be the employee’s supervisor for the purposes of cl 6.1 of the Qantas Agreement.
116 It is correct that Mr Hutchinson was not Mr Toovey’s local Line Maintenance Manager or Duty Operations Manager and that he occupied a more senior level in the management structure. It is not necessary to consider whether that means the conversation he had with Mr Toovey cannot qualify as a discussion for the purpose of the Jetstar Agreement because that clause was satisfied by reason of the conversation between Mr Teat and Mr Toovey.
117 In my opinion, the cross-appeal must be dismissed.
Conclusions
118 The appeal and the cross-appeal must each be dismissed.
I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Besanko. |
Associate:
REASONS FOR JUDGMENT
BROMBERG J:
119 I have had the opportunity to consider a draft of the reasons for judgment of Besanko J. I generally agree with those reasons and I agree with the orders proposed by his Honour. There are two matters about which I would like to make additional observations. The first relates to the first and second declarations made by the primary judge on 14 October 2020 and concerns the meaning of the phrase “stoppage of work”. The second concerns the third declaration made on 14 October 2020 and the applicability of the requirement in cl 20.4 of the Jetstar Agreement that the status quo be maintained whilst the dispute resolution procedure provided by cl 20 is followed.
120 Unless otherwise stated the abbreviations made in the reasons of Besanko J are continued.
The meaning of “stoppage of work”
121 To address this issue it is convenient first to refer to the relevant terms of the stand down provisions in question.
122 Clause 14.6 of the Qantas Agreement authorises the deduction of pay “for any day an employee cannot be usefully employed because of a strike or stoppage of work through any cause for which Qantas cannot reasonably be held responsible”. Clause 30.5.1 of the Jetstar Agreement authorises the deduction of pay “for any day or part of a day in which [an employee] cannot be usefully employed because of a stoppage of work by any cause, which Jetstar cannot reasonably prevent”.
123 As I will seek to explain, the proceedings before the primary judge and on the appeal were conducted on the premise that the “stoppage of work” referred to in each of the clauses just set out includes a substantial downturn in the economic activities of the employer. The economic activity was identified as the flying of passenger aircraft by each of the airlines.
124 Before the primary judge, the respondent (the Union) did not dispute that there was a “stoppage of work” at Qantas or Jetstar. In its submissions to the primary judge, the Union identified the “stoppage of work” as, in each case, the decisions of the airline “to reduce net weekly outgoings by sharply downsizing [its] flying operations”. Consistently with that seemingly uncontroversial identification of what it was that constituted the “stoppage of work”, the primary judge at [27] of Qantas (No 3) said:
On the facts of the present case, the “stoppage of work” was the substantial stoppage of domestic and international passenger flights during the period from 12.01am on 29 March 2020 through to 22 April 2020, other than the very restricted flights that did take place.
125 The finding made as to what constituted the “stoppage of work” was then reflected in the first and second declarations made by the primary judge on 14 October 2020. The first declaration described the “stoppage of work” as “being the stoppage of Qantas’s domestic and international passenger flying” in the period from 29 March 2020 until 22 April 2020, other than in relation to some 4,150 flights conducted by Qantas in that period. The second declaration specified the “stoppage of work” in relation to Jetstar as “the stoppage of Jetstar’s international passenger flying, and the stoppage of Jetstar’s domestic passenger flying” in the period from 1 April 2020 until 2 May 2020, other than in respect of some 329 flights made by Jetstar in that period.
126 It was erroneous, in my respectful view, for a downturn in the economic or business activities of each of the airlines to be identified as a “stoppage of work”. That error was not the subject of any ground of appeal. To the contrary, the Union maintained its prior reliance on the “stoppage of work” being the reduction of passenger flights.
127 Consequently, that error cannot provide a basis for disturbing the declarations made. Nevertheless, to protect against the result of this appeal and the reasons for it (or at least my reasons for it) being misunderstood or misconstrued, I should explain why I consider that a premise at the heart of the judgment, which must now stand undisturbed, was erroneous.
128 The existence of a “stoppage of work” is one of the limiting circumstances commonly identified in a stand down provision as a precondition for the engagement of that provision. The requirement in a typical stand down provision for a stoppage of work, a strike or a breakdown of machinery is a causal precondition which has the effect of limiting the scope of relief provided to an employer not to pay its employee in a period during which the employee cannot be usefully employed. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited [2020] FCAFC 205 at [130]-[131] (CEPU v Qantas), I construed the purpose of the stand down provision found in s 524 of the Fair Work Act 2009 (Cth) (FW Act), a provision in similar form to those here in question. Although in dissent as to the result, the general observations I made about the purpose of stand down provisions are not controversial:
The mischief to which s 524 is directed is apparent from the very rationale for a stand down provision. As Gaudron J recounted in Food Preservers Union of Australia v All States Ready Foods (1976) 182 CAR 391 at 391, stand down provisions were “introduced into awards of the Conciliation and Arbitration Commission in the 1920’s to temper the effect of the change from daily to weekly hiring”. In circumstances where an employee who “stands and waits” is entitled to be paid irrespective of whether that employee can be usefully employed (Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466 (Dixon J)), the weekly hire of employees was more prone to impose upon employers the burden of paying the cost of employing an employee during a period in which that employee could not be usefully employed. Stand down provisions enabled employers to be relieved of that burden in certain circumstances. However, such provisions have never been open-ended because to do that would effectively have given to the employer the capacity unilaterally to convert ongoing (even if only weekly) employments into casual employments. Accordingly, limitations upon an employer’s capacity to stand down an employee who could not be usefully employed were typically included in stand down provisions. Those limitations commonly took the form of those now found in s 524(1).
…
Where a stand down provision is confined by causal pre-conditions which limit the scope of relief provided to an employer, the mischief to which that provision is directed must be understood by reference to those limits. Correspondingly, the purpose of the provision must also be so understood. The purpose of providing relief to an employer must bear a connection to the mischief sought to be avoided. The intended relief is not open-ended but consequential upon the existence of certain circumstances. It is intended to relieve an employer from the financial consequence of the employer’s inability to usefully employ the employee whose inability to be usefully employed has been brought about by one or other of the causal circumstances which limit the scope of the stand down provision. That the intended nature of the relief provided by a stand down provision is not open-ended but is consequential upon the causal circumstances that typically limit the operation of a stand down provision, is reflected in the following observations made by Morling J in Townsend at 368 (emphasis added):
The reason for the inclusion of the clause in the award is to afford GMH financial relief from the consequences of a strike or a breakdown in machinery or a stoppage of work for which it cannot reasonably be held responsible.
129 It may be observed that there are three inquiries called for by the stand down provisions here in question. First, can the employee not be usefully employed? Second, can the employee not be usefully employed because of a stoppage of work (or, in the case of the Qantas Agreement, a strike or a stoppage of work)? Third, has the stoppage of work (or strike) occurred through or by any cause for which the employer cannot reasonably be held responsible or, in the case of the Jetstar Agreement, could not reasonably have prevented?
130 The first inquiry is specific to a particular individual, the question being whether that employee cannot be usefully employed on a particular day. As I said in CEPU v Qantas about the similarly worded stand down provision in s 524(1) of the FW Act:
The central pre-condition specified by s 524(1) is that “the employee cannot be usefully employed”. In an analogous context that expression has been correctly referred to as “a fact”: Amalgamated Engineering Union v Metal Trades Employers Association (1942) 47 CAR 615 at 616 (O’Mara J). It is an essential fact upon which the existence of a lawful stand down period and the engagement of s 524 depend. However, as will be apparent, the “period” of which s 524(1) speaks is not a period in which the employee cannot usefully be employed for any reason whatsoever. The period is confined to a time during which the employer cannot be usefully employed “because of” one or other of the circumstances specified, namely, industrial action, or a breakdown of machinery or equipment or a stoppage of work for which the employer cannot reasonably be held responsible. The period in which an employee may be lawfully stood down is circumscribed by the causal requirement imposed by s 524(1) that the inability of the employer to usefully employ the employee be one or other of the particular circumstances specified by that provision. Thus, it is only when and for as long as the essential fact exists in relation to the particular employee, by reason of one or other of the causes specified by s 524(1), that the employee is stood down in accordance with the authority provided by s 524.
131 That the employee cannot be usefully employed on a specific day is not the “stoppage of work” to which the stand down provisions here in question refer. The “stoppage of work” is an anterior circumstance or event which has brought about or caused the fact that the employee cannot be usefully employed on the day in question. The “stoppage of work” is therefore not merely the absence of work for the particular employee who is to be stood down. If that were so the phrase “stoppage of work” would be superfluous. The “stoppage of work” is the cessation of work of the particular workforce in which the employee is employed. A cessation of work rather than a mere reduction in the amount of available work for that workforce will constitute a “stoppage of work”: Bristow Helicopters Australia Pty Ltd v Australian Federation of Air Pilots [2017] FWCFB 487 at [45] (Catanzariti VP, Gooley DP and Wilson C).
132 A cessation of work because of rain is a stoppage of work within the meaning of such a clause: Amalgamated Engineering Union v Metal Trades Employers Association; Re Babcock and Wilcox Ltd (1944) 52 CAR 238 (O’Mara J); Federated Ship Painters and Dockers Union of Australia v Peters Slip; Re Ship Painters and Dockers Award (1960) 96 CAR 233. As the Full Bench of the Fair Work Commission in The Peninsula School t/a Peninsula Grammar School v Independent Education Union of Australia [2021] FWCFB 844 (Hatcher VP, Catanzariti VP and Lee C) recently said of the phrase “stoppage of work” found in the stand down provision provided for by s 524 of the FW Act at [37]:
We also broadly agree with the submission advanced by the School concerning the approach taken in the decision as to whether there was a “stoppage of work” within the meaning of s 524(1)(c). We consider that the Commissioner's focus on the “business activities” of the school was, with respect, not founded on the text of the provision and unduly narrowed the ordinary meaning of the expression. On its ordinary meaning, “stoppage of work” simply means a cessation of working activity, and the circumstances in which this may occur are diverse.
133 A cessation of the employer’s economic activities like the provision of passenger flying services may well lead to a cessation of work for employees involved in providing those services. However, a cessation of the economic activities is not the “stoppage of work”. There is neither a textual, contextual or purposive basis for construing the phrase other than literally. Nor is there any basis for thinking that the phrase is a term of art.
134 There is, as the learned authors Professor Anthony Forsyth and Professor Andrew Stewart point out in their article “COVID-19, Employee Stand Downs and the Transfer of Economic Risk” (2021) 34 Australian Journal of Labour Law at 95, a problem in construing “stoppage of work” to include a downturn of business activity. At 107, the learned authors identify that problem by reference to the facts of this very case (citations omitted):
As with the decision in Marson, this ruling takes a broad view of the concept of a ‘stoppage’, regarding it as sufficient that the demand for a particular business activity may have been suppressed by developments outside the employer’s control. That might at first glance seem reasonable. But it creates a problem, which Flick J seems to have overlooked or ignored. Where a business is directly instructed not to trade, it is clear that when the prohibition is lifted, the stoppage of work ends — and so must any stand downs. The same would apply if business premises were destroyed (say in a bushfire), and then alternative premises were found, or the original premises were rebuilt. But if a business simply suffers a sudden drop in customers, who then gradually start to come back as circumstances improve, creating a steadily increased demand for work, where is the ‘stoppage’ and when does it end? If an employer in this situation reinstates some workers, but not others, is the continuing lack of work for those who remain stood down really outside the employer’s responsibility? And if it takes years to fully recover, as seems highly likely for airlines and other travel or tourism-related businesses, does that mean that for some unlucky employees their stand downs can last indefinitely, without ever being entitled to redundancy benefits?
135 Furthermore, treating a cessation or downturn of business activities as the “stoppage of work” results in the wrong inquiry. To illustrate by reference to the facts of this case, the cessation of flying by Qantas for a period will not necessarily lead to the cessation of aircraft maintenance work on Qantas aircrafts. In fact a short cessation of flying may well provide an opportunity for those planes not flying to be serviced or otherwise maintained by the aircraft engineers who Qantas stood down. The inquiry that the provisions in question relevantly called for by reference to the phrase a “stoppage of work” was whether there was a cessation in the work of one or more of the workforces of aircraft maintenance engineers employed by Qantas or Jetstar. That inquiry was not answered by an inquiry which, at the behest of the parties, had the primary judge proceed on the premise that a cessation of certain flying activities was a “stoppage of work”.
The applicability of the status quo requirement in cl 20.4
136 As to the third declaration made by the primary judge, which concerned cl 20.4 of the Jetstar Agreement (dealing with the maintenance of the status quo whilst a matter was subject to the dispute resolution process), there is a conflict between that provision and cl 30.5.1 (being the stand down provision) in relation to a dispute about whether there is useful employment or work for the employee. Whilst there would be utility for the employee, the utility provided by cl 30.5.1 to the employer would, in practical terms, be rendered nugatory if the employer were required to maintain the status quo whilst a dispute about whether there is useful work for the employee is being resolved under the dispute resolution process in cl 20. That conflict must be alleviated by determining which is the leading provision and which is the subordinate provision, and which of cll 20.4 and 30.5.1 must give way to the other in order to give effect to the purpose and language of those provisions whilst maintaining the unity of the scheme to which those provisions belong: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [70] (McHugh, Gummow, Kirby and Hayne JJ); Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at [16] (Gleeson CJ, McHugh, Gummow and Kirby JJ). In relation to a dispute about whether there is useful employment or work for the employee, the leading provision is cl 30.5.1, and cl 20.4 must give way. That approach provides utility to the employer without denying utility to the employee. If the employer’s assertion that there was no useful work for the employee is found to be incorrect, the employee can obtain relief by seeking the payment of monies wrongly withheld by the employer whilst the employee was wrongly stood down. Construing cl 20.4 as having no application where the dispute is a dispute about whether there is useful work or employment for the employee is consistent with the primary judge’s conclusion, as Besanko J has pointed out at [74]. For those reasons, the third declaration was correctly made.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromberg. |
Associate:
Dated: 1 April 2022
REASONS FOR JUDGMENT
WHEELAHAN J:
137 I have had the privilege of reading in draft the reasons for judgment of Besanko J. For the reasons given by his Honour I agree that the appeal and the cross appeal should be dismissed.
I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan. |
Associate:
Dated: 1 April 2022
SCHEDULE OF PARTIES
NSD 1211 of 2020 | |
JETSTAR AIRWAYS PTY LIMITED (ACN 069 720 243) | |
FAIR WORK COMMISSION |
