FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Valuair Limited (No 2) [2014] FCA 759

THE COURT ORDERS THAT:

1.    The application be dismissed.

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

REASONS FOR JUDGMENT

Buchanan J:

The proceedings

1    The applicant is a statutory appointee of the Commonwealth under s 687 of the Fair Work Act 2009 (Cth) (“the FW Act”) who has standing to commence proceedings under, and apply for orders in relation to contraventions of, the FW Act. On 25 May 2012, the applicant commenced the present proceedings against the respondents.

2    The proceedings allege that the first and second respondents (respectively “Valuair” and “TET”) breached s 45 of the FW Act by contravening clauses 18 and 23.2 of the Aircraft Cabin Crew Award 2010 (Cth) (“the Award”). Those clauses deal, respectively, with entitlements to wages and a requirement to make superannuation contributions for the benefit of employees. The third respondent (“Jetstar”) is alleged to have been “involved in” the contraventions of the FW Act and the Award, within the meaning of s 550(2)(a) and (c) of the FW Act.

3    The alleged contraventions relate to work performed by four employees of Valuair and four employees of TET who worked (or repositioned) on aircraft operated by Jetstar between Australian ports in the period from February to July 2011, inclusive. Further details of the background circumstances will be given in due course.

4    As well as declarations relating to the alleged contraventions, the applicant sought pecuniary penalties and orders for payment of specifically calculated amounts to each of the eight employees to redress alleged underpayment of wages.

The case in outline

5    Jetstar is an Australian company which has an Air Operator’s Certificate (“AOC”) given by the Civil Aviation Safety Authority permitting it to operate both international and domestic air services.

6    For the purpose of its international air services, Jetstar uses a combination of Australian and overseas residents as cabin crew on its aircraft. Valuair and TET each have contractual arrangements with Jetstar which require them to provide cabin crew to Jetstar from bases in Singapore and Thailand respectively.

7    Valuair and TET employees fly to and from Australia on Jetstar international services, arriving at and departing from various Australian ports including Sydney, Melbourne, Cairns and Darwin. In the period with which the proceedings are concerned Darwin was used by Jetstar as a hub, although that is no longer the case.

8    As well as flying to and from Australia, Jetstar international cabin crew sometimes work on flights (or are sometimes repositioned as part of their duty hours) between Australian ports. Sometimes the internal flights commence or finish on the same day as a flight to or from Australia; sometimes (so far as cabin crew are concerned) there is a break until the next, or a later, day. Jetstar calls those internal flights international “tag” flights. They have international flight numbers and appear on Jetstar’s schedule as flights making up part of its international operations. When Darwin was used as a hub there was an increased need for international tag flights between Sydney and Darwin and between Melbourne and Darwin.

9    For the purpose of the proceedings, the applicant sought to identify flights between Australian ports on which the eight cabin crew in question worked in the relevant period which did not immediately precede or follow an international flight on which the crew member in question worked, or was to work. Work on those flights, it was argued, was work to which the Award and the FW Act applied.

10    The amended statement of claim sought to make this distinction in paragraphs 59 and 60 in the following way:

Flights

59.    From 1 February 2011 to 31 July 2011 the Cabin Crew performed work on various flights leaving from their home base in either Singapore or Bangkok to various international destinations.

60.    From 1 February 2011 to 31 July 2011, the Cabin Crew performed work on:

(a)    flights from one international location to another international location (international flights);

(b)    flights between Australian airports which immediately preceded or followed an international flight upon which they had performed work (associated international flights); and

(c)    flights between Australian airports which were not associated international flights and were not international flights (domestic flights).

PARTICULARS

See Schedule A

(Emphasis in original.)

11    In the applicant’s case, the notion of “immediately preceded or followed” meant the same day – i.e. the succeeding flight departed before midnight on the day the earlier flight arrived. Relief sought pursuant to the case pleaded by the amended statement of claim was calculated by reference to the premise or assumption embedded in the amended statement of claim that “international flights” and “associated international flights” were not subject to the Award but so-called “domestic flights” were subject to the Award.

12    I will deal later with an application to further amend the statement of claim, which I refused. However, one difficulty with the suggested distinction between “associated international flights” and so-called “domestic flights” was that it took no account of whether it was possible (by reason of lack of scheduled flights or limitations on permissible working hours) for a crew member to work on an “associated international flight” rather than a “domestic flight”. Another difficulty was that it overlooked instances when the eight crew members repositioned without actually working.

13    The suggested distinction was criticised by the respondents. I am satisfied that the distinction, as framed by the pleadings, is not a satisfactory one. It is arbitrary and pays insufficient regard to operational realities, even if some distinction along those lines was otherwise valid. That is an immediate reason why I would not adopt the calculations of underpayment advanced by the applicant, upon which a good deal of time was spent in the applicant’s case, even if I had adopted the basic premises upon which the applicant’s case depended.

14    Nevertheless, it is apparent that at least in the period to which the proceedings relate, there were a series of movements which may fairly be regarded as reflective of a conscious rostering decision to deploy some of the eight cabin crew on flights within Australia for short periods (generally up to four days), particularly on flights to and from Darwin. That circumstance provides a sufficient factual foundation to examine the basic contention upon which the applicant’s case depends – namely, that there were occasions on which the eight cabin crew worked in Australia in circumstances which engaged the operation of the Award and of the FW Act.

15    I have concluded that the applicant’s basic contention (that the FW Act and the Award applied) should not be accepted. Before I turn to the particular reasons why that is so, it may be helpful to state in more detail the operational circumstances which explain how Jetstar conducts that part of its international air services in which the eight cabin crew were engaged.

16    The respondents’ evidence about those matters was effectively unchallenged, either by countervailing evidence led by the applicant or by cross-examination. It is important to record also that the applicant did not suggest that the arrangements to which I refer below were other than legitimate arm’s length commercial arrangements or that they were in any sense a sham (see, for example, the discussion of sham (and other) employment arrangements in Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174).

Jetstar international operations

17    Jetstar commenced operations in Australia as a commercial airline in 2004. Initially it offered only domestic air services. In 2005 Jetstar expanded its services to include flights to New Zealand and then in late 2006 it further expanded its services to Thailand, Hawaii and Bali. At about this time Bangkok was established as a base of operations in South East Asia.

18    In 2008 Singapore was established as another base of operations for Asia.

The Bangkok base

19    When it established the Bangkok base Jetstar called for tenders from Thai companies to provide it with cabin crew based in Bangkok. The successful tenderer was TET. Qantas, Jetstar’s ultimate owner, is a shareholder of TET.

20    On 17 November 2006 a services agreement was executed between Jetstar and TET. It was varied on 22 October 2007. The variation updated a “statement of work” and a “cabin crew conditions manual”. The terms of the original agreement otherwise continued. The agreement required TET to recruit and supply cabin crew to Jetstar who would perform their work to standards established by Jetstar. TET was to be responsible for meeting all insurance, taxation and other regulatory requirements relating to the employment of the cabin crew supplied by it to Jetstar. The statement of work required Jetstar to be responsible for the creation of a Bangkok base management manual detailing, amongst other things, recruitment procedures, cabin crew capability requirements and a training programme. TET was to be responsible for “legislative, industrial and fiscal responsibilities” including all payments to cabin crew as well as the maintenance of all personnel and cabin crew records. TET was responsible for recruitment in consultation with Jetstar and was required to ensure, amongst other things, that cabin crew employed by it had high levels of fluency in the English language. The statement of work provided for some of TET’s costs to be invoiced to Jetstar at cost and for some other matters to be invoiced to Jetstar at a predetermined amount. TET was to be paid specified administration fees, per head fees and margins.

21    The cabin crew conditions manual applicable at the relevant time (from 1 October 2010) provided that cabin crew employed by TET would be based in Bangkok and employed on a full-time basis by TET for a fixed period of three years. They were required to devote the whole of their working time and energies to services performed for Jetstar. The roster arrangements were identified. The amounts to be paid by TET to cabin crew were also identified on a monthly basis (8,500 Baht per month) with provision for annual increases at the discretion of TET in consultation with Jetstar but not exceeding 3% each year. Other payments to cabin crew were also identified.

22    The Bangkok base management manual made detailed provision for recruitment procedures, cabin crew attributes and other matters.

23    Under the terms of the Bangkok base management manual, and as clearly understood as between Jetstar and TET, Jetstar was to be in charge of rostering matters. Cabin crew are given eight days off at their home base in a 28-day roster period.

The Singapore base

24    When Jetstar established the base in Singapore in 2008 it initially made a contract with a Singapore company, Holiday Tours and Travel (“HTT”), for the provision to it of cabin crew along similar lines to the arrangements in Bangkok. It made a services agreement with HTT on 23 January 2009 and also prepared a Singapore base manual dated 16 October 2008 which largely reflected the Bangkok base manual. The services agreement with HTT largely followed the pattern established by the agreement with TET, although there were different fees payable to HTT and the relevant fees were expressed in Singapore dollars rather than Thai Baht.

25    A cabin crew conditions manual was prepared. It provided for monthly salaries expressed in Singapore dollars (at first $SG700 per month and then $SG800 per month after 12 months) and additional payments. Again, increases in annual base salary rates were to be capped at 3% each year but in the case of the Singapore base they were at the discretion of Jetstar in consultation with the employer of the cabin crew.

26    In 2010 the HTT employees who were provided to Jetstar were “transitioned” to Valuair Limited which is owned by Jetstar Asia, a company related to Jetstar. It was agreed with Valuair that cabin crew would be provided pursuant to the same arrangements that had been in place with HTT. Again, Jetstar was in charge of all rostering arrangements.

27    Although rostering is done by Jetstar on its “Rocade” system, Valuair managers may intervene to achieve rostering changes for individual crew members to accommodate emergency annual leave, sick leave, carer’s duties, etc. Singapore cabin crew are also given eight days off at their home base in a 28-day roster period.

TET

28    TET is a large travel agency incorporated in Thailand. It engages approximately 300 staff in the travel business which deals both with inbound and outbound travel arrangements. To meet its obligations to Jetstar, TET has engaged 217 cabin crew pursuant to the arrangements set out earlier. Those cabin crew are all Thai citizens. Recruitment of cabin crew to be provided to Jetstar is carried out by TET.

29    Evidence in the present proceedings gave a detailed explanation of the recruitment process followed by TET (and Valuair). The evidence also provided detail about the duties and responsibilities of administrative and supervisory staff in each company who are responsible for the day-to-day supervision of cabin crew and for human resource functions including any disciplinary or termination procedures which might be necessary. It is not necessary in the present judgment to discuss those matters in any detail. It was not suggested that the arrangements which are followed are inappropriate, uncommercial or involve any form of pretence.

30    Once a candidate is selected and has accepted an offer of employment, training is carried out by Jetstar to Jetstar’s standards to comply with CASA’s safety requirements. Some training is conducted in Thailand and some is conducted in Australia. Once a year each cabin crew member must attend refresher training in Australia on emergency procedures and dangerous goods. Again, the training is provided by Jetstar.

31    Jetstar has control over rostering. TET staff may not change the rosters but have access to the rosters for the purpose of managing TET’s human resource functions and are able to request ad hoc leave for a crew member to meet leave requests of various kinds. Disciplinary and dismissal procedures are in the hands of TET staff.

Valuair

32    Valuair is a low cost air carrier based in Singapore which was incorporated in Singapore in 2003. It operates flights between Singapore and Indonesia pursuant to its own AOC. To fulfil its obligations to Jetstar, Valuair engages cabin crew who are Singapore residents. With one exception, the four Valuair cabin crew selected by the applicant for attention in the present proceedings are Singapore nationals. The one exception is a national of Japan. She is entitled to a higher rate of pay than other Singaporean cabin crew because of the requirements under Singapore law for her to have a work pass in Singapore and be paid a minimum monthly salary higher than the normal salary of cabin crew employed by Valuair.

33    Singapore based cabin crew are recruited by Valuair. The recruitment and training arrangements are consistent with those which apply to cabin crew employed by TET. As I said earlier, it was not suggested that the arrangements were inappropriate, uncommercial or involved any form of pretence.

34    Valuair liaises with TET in the provision of cabin crew because cabin crew based in Singapore and those based in Bangkok often work on the same flights.

Rostering of international cabin crew

35    As earlier indicated, Jetstar has effectively complete control over rostering of its international cabin crew, no matter where they are based. Jetstar operates both its domestic and international operations under one AOC from a single control centre. However, there is a demarcation of operations between international services and domestic services. Jetstar’s international flights have a different numbering sequence from its domestic flights. Only international cabin crew are rostered to perform duties on international flights and international cabin crew do not perform duties on domestic flights although, occasionally, they might be repositioned while on duty on either a Jetstar domestic flight or a Qantas domestic flight.

36    The international cabin crew (which includes Australian based international cabin crew as well as Singapore and Thai based cabin crew) are rostered in a way which observes both fatigue management requirements (limitations on maximum duty periods) and to ensure that cabin crew are “recent” on aircraft on which they operate. Jetstar’s international flights are carried out using A330, A320 and A321 aircraft and international cabin crew are rostered with a view to maintaining their recency on each of these aircraft types. To achieve that objective “the crew need(ed) to operate each aircraft type at least once in a 90 day period”.

37    At the time when Jetstar was using Darwin as a hub (which includes the period to which the proceedings are addressed) Jetstar initially only had a small number of A321 aircraft and, according to the evidence, perceived a need to “cycle international crew through the network to do as many A321 sectors as possible” in order to maintain their recency.

38    The rostering arrangements also accommodate training needs, during which time cabin crew are rostered for ground duty in Australia.

Internal flights

39    In the period with which the proceedings are concerned (February to July 2011) it was not unusual (for the reasons given above amongst others) for Jetstar international cabin crew to work from time to time on flights between Australian ports. Some of those flights led to or followed flights which departed from or arrived in Australia. As earlier indicated, and particularly when Darwin was used as a hub by Jetstar, it was also the practice in the period to which the proceedings are addressed for international crew to sometimes fly backwards and forwards between Australian ports over a period of some days. Those internal flights were part of Jetstar’s international network, rather than its domestic network and were crewed by international flight and cabin crew rather than domestic flight or cabin crew.

40    As will be seen when I turn to examine the operation of the Award, I do not think that it is appropriate to divide the work of international overseas based cabin crew between international flights and so-called domestic flights in Jetstar’s international network in the way proposed by the amended statement of claim. The amended statement of claim accepted that some domestic flights (defined by it as “associated international flights”) are properly seen as part of Jetstar’s international network. In my view, the imputed requirement that a domestic flight worked by an overseas based cabin crew member immediately precede or follow a flight leaving or entering Australia in order to be seen as part of “international” flying (and thereby avoid coverage by an Australian award) should not be accepted. The time frame is too arbitrary and had no support in the evidence. For example, provided a cabin crew member was working according to flight arrangements which proceeded sequentially into Australia, through Australia and out of Australia, I can see no reason to doubt that such a sequence of flying represented a continuous pattern properly described as international, even if there were delays of a day or so between sectors. Provided no backtracking was involved I can see no persuasive argument that such a cabin crew member was being used to carry out what might reasonably be regarded as domestic flying rather than international flying. It is essentially for that reason that I would not be prepared to adopt the calculations of underpayment which the applicant has made in the present proceedings and, if it was necessary to pursue the matter, it would be necessary for the appropriate calculations to be made in due course.

41    However, the arrangements whereby occasionally (and not infrequently in the first half of 2011) international cabin crew were deployed to fly backwards and forwards on a number of days between Sydney and Darwin or Melbourne and Darwin before continuing on to another overseas destination arguably raise issues of a different character. In my view, it is those internal flights, in particular, which most clearly expose the factual issue upon which the present proceedings are focussed.

42    On the evidence in the present case Jetstar has discontinued the use of Darwin as a hub and the pattern reflective of operations in the first half of 2011 is not reflective of the present day position. That may mean that the present exercise might reasonably be seen as somewhat academic. Nevertheless, I accept that if the Award was engaged the applicant is not disentitled from pursuing the matter.

43    Attention is therefore required to the operation of the FW Act and the Award, based upon the circumstances to which I have referred. One further matter will also need to be addressed. It is whether, despite the limited way the applicant’s case was pleaded by the amended statement of claim (with its proposed distinction between international and domestic flying), the Award (if it applies) could be limited to domestic flying, however described.

The eight cabin crew

44    It is apparent that the proceedings have been commenced as something of a test case. Only a small number of overseas cabin crew who work on Jetstar’s international services have been selected to exemplify the matters which the applicant wishes to agitate. Only a particular period has been selected to test the applicant’s thesis that the Award applied. The alleged underpayments range from $262.07 to $1804.23.

45    However, it is not necessary to examine the personal circumstances, or particular work, of any of the eight cabin crew selected by the applicant for attention. As already indicated, one is a Japanese national resident in Singapore. She is entitled under her contract of employment to a higher rate of base monthly pay than other cabin crew based in Singapore but that is relevant only to the specific calculations made concerning the asserted underpayments to her.

46    Otherwise, the three Singapore nationals and the four Thai nationals hold contracts of employment which reflect the matters I have referred to above. There is no suggestion that any of them is entitled to be treated differently from their colleagues at the same home base. I propose, therefore, to treat their circumstances as examples of a more general issue raised by the proceedings.

The pleaded case

47    Leaving aside those aspects of the pleading which are particular to any of the eight identified cabin crew, the amended statement of claim pleads the following matters:

The First Respondent

2.    The First Respondent:

(a)    is and was at all relevant times a body validly incorporated in accordance with the laws of Singapore; and

(b)    is and was at all relevant times capable of being sued in its corporate name.

3.    The First Respondent was the employer of the following employees:

[four employees]

together the Valuair Cabin Crew.

…

8.    The First Respondent is a constitutional corporation within the meaning of paragraph 51(xx) of the Constitution in that it is a foreign corporation.

9.    By reason of the matters pleaded in paragraphs 2 to 8, 21 and 60(c) below, the First Respondent was at all relevant times a national system employer within the meaning of section 14 of the FW Act.

The Second Respondent

10.    The Second Respondent:

(a)    is and was at all relevant times a body validly incorporated in accordance with the laws of Thailand; and

(b)    is and was at all relevant times capable of being sued in its corporate name.

11.    The Second Respondent was the employer of the following employees:

[four employees]

together the TET Cabin Crew.

…

17.    By reason of the matters pleaded in paragraphs 10 to 16, 21 and 60(c) below, the Second Respondent was at all relevant times a national system employer within the meaning of section 14 of the FW Act.

18.    The Valuair Cabin Crew and the TET Cabin Crew will be hereafter called the “Cabin Crew”.

…

Background

20.    Cabin crew are engaged to undertake work on aircrafts to ensure the comfort and safety of passengers during their carriage by aircraft.

21.    The First and Second Respondents employed persons who undertook the work of cabin crew, of the kind described in the paragraph above, for the Third Respondent on the Third Respondent’s flights.

…

Flights

…

60.    From 1 February 2011 to 31 July 2011, the Cabin Crew performed work on:

…

(c)    flights between Australian airports which were not associated international flights and were not international flights (domestic flights).

…

Coverage of Industrial Instrument

61.    The Aircraft Cabin Crew Award 2010 (Award), pursuant to clause 4.1, covers all employers of aircraft cabin crew and their employees employed throughout Australia in the classifications listed in clause 18.

62.    By reason of the matters pleaded in paragraphs 2 to 20 above, the First, Second and Third Respondents are “employers” within the meaning of clause 3.1 of the Award.

63.    At all material times, the Cabin Crew were responsible for the comfort and safety of passengers in their carriage by aircraft, in accordance with the standards and regulations determined by the Third Respondent.

64.    By reason of the matters in the preceding paragraph, the Cabin Crew undertook duties within the definition of “Cabin Crew member” contained in clauses 3.1 and 18 of the Award.

65.    By reason of the matters in paragraphs 61 to 64 above, during the periods that the Cabin Crew were performing work on the Third Respondent’s domestic flights, the Cabin Crew’s entitlements were subject to the FW Act and the Award.

(Bold emphasis in original, my italics)

48    The basis upon which, as asserted by paragraph 65, work on so-called domestic flights (only) was subject to the FW Act and the Award, was given by paragraphs 9 and 17. Those paragraphs limited the allegation that each of Valuair and TET was a “national system employer” under the FW Act by reference to the so-called domestic flights described in paragraph 60(c).

An application to amend

49    I shall shortly address the applicant’s contentions that Valuair and TET are “national system employers” to whom the FW Act applies and whom the Award covers and that the eight cabin crew were “national system employees” entitled to benefits under the Award, at least when working on the so-called domestic flights.

50    However, before further attention is given to particular terms of the FW Act and the Award, it is desirable to refer to an application which was made, after the trial commenced, to further amend the statement of claim.

51    It will be apparent from the extracts of the pleadings which I have set out that the case pleaded by the amended statement of claim proposed a distinction between some (but not all) flights within Australia upon which cabin crew worked and other flights to and from and within Australia. Relief was sought only upon the basis that it was restricted to the particular flights performed within Australia which were labelled by the amended statement of claim “domestic flights”.

52    As the case went to trial, therefore, it was only work on the so-called domestic flights which was relied on as being the work to which the FW Act and the Award applied but, as I shall discuss, it is not easy to find a clear distinction which would make only this work subject to the Award and exclude other work beginning and/or ending in Australia, including international flights.

53    The Award, as will be seen, extends in terms to both international flying and domestic flying. When the applicant’s case was being opened and before evidence had been taken I queried why, if the FW Act applied because Valuair and TET were national system employers, and the eight cabin crew they employed were national system employees, the Award (if it applied at all) would not apply to all duty undertaken by those eight cabin crew? That is, if a jurisdictional connection was made, why would the Award not also apply to the work of cabin crew on the “international flights” and “associated international flights” identified in paragraph 60(a) and (b) of the amended statement of claim?

54    The response of the applicant was to seek leave to further amend the amended statement of claim to contend that the Award applied to all of the work carried out by the overseas cabin crew provided to Jetstar, wherever that work was performed. However, the applicant did not propose (if permitted to amend) to seek any further or more extensive relief for the eight cabin crew it had named. That is to say, it proposed only to seek orders for payment to those individuals referable to so-called domestic flying (as defined by the applicant) and not to seek, on their behalf, payment of the shortfall referable to other duty which the applicant now wished to contend was also work to which the Award applied. In short, the applicant proposed to argue that the Award applied to the whole of the employment, and all work carried out, but seek payment for only a fraction.

55    The application to amend was resisted by the respondents. I refused the application to amend, primarily for the reason that it could not affect the relief sought.

56    However, that does not dispose of the legal issue, or the necessity to test the applicant’s basic thesis (that the FW Act and the Award each apply) by reference to the possibility that the distinction suggested by the amended statement of claim is not legally meaningful.

57    Both during opening submissions and closing submissions counsel for the applicant was not able to articulate any basis upon which it ought be concluded that if the Award applied to the “domestic flights” purportedly identified by the amended statement of claim it would not also apply at least to other flights to and from Australia and within Australia on which the same cabin crew worked, and perhaps also to flights entirely outside Australia.

58    The question of whether, and if so to what extent, the Award applies is to be answered by reference to matters which extend beyond forensic decisions made by the applicant or procedural rulings of the kind I have mentioned, but the application to amend revealed two matters worth mention. First, it revealed the striking proposition that the Award applied to the whole of the employment of any of the overseas cabin crew provided to Jetstar, at least if they once flew on a so-called domestic flight in Australia, or perhaps even into and from Australia on one occasion. Secondly, it highlighted the gulf between that proposition and the relief sought, which appeared not to be framed with any particular regard to the immediate interests of those said to be entitled to protection by the Award.

The legal issues in broad outline

59    It is convenient first to consider whether Valuair and TET are national system employers within the meaning of the FW Act, and whether the cabin crew employed by them who are provided to Jetstar are national system employees.

60    At the same time, it will be convenient to consider whether (as the applicant argued) award coverage requires only the identification of award-related work or whether (as the respondents argued) the Award applies only to particular employment relationships under which work is performed (i.e. employment relationships “in and of” Australia).

61    If either of those broad issues is resolved against the applicant then the Award does not apply and the proceedings fail.

62    Later, it will also be necessary to examine some of the award provisions in more detail to deal with further arguments confronting the applicant’s case.

The definition of national system employees and employers

63    The FW Act defines “national system employee” and “national system employer” (so far as potentially relevant here) as follows in ss 13 and 14:

13    Meaning of national system employee

A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.

…

14    Meaning of national system employer

(1)    A national system employer is:

(a)    a constitutional corporation, so far as it employs, or usually employs, an individual; or …

(Emphasis in original.)

64    The Award defines the employees and the employers to which it applies in the following terms, in cl 3.1:

employee means national system employee within the meaning of the Act

employer means national system employer within the meaning of the Act

(Emphasis in original.)

(“Act” is the FW Act)

65    Thus, whether attention is focused in the first instance upon the operation of the FW Act (through which the Award is given legal effect) or upon the terms of the Award, it is a critical pre-condition to success in the present case that Valuair and TET are national system employers and that the eight cabin crew are national system employees.

The FW Act and extra-territoriality

66    The defences of Valuair and TET denied that either is a national system employer, or that their employees are national system employees. There are a number of elements involved in consideration of that issue.

67    A constitutional corporation (as referred to in s 14(1)(a) of the FW Act) is a corporation to which paragraph 51(xx) of the Constitution applies, including “foreign corporations”. I accept that each of Valuair and TET is a constitutional corporation.

68    However, it is clear that s 14(1)(a) cannot be construed to have an operation or effect which would render every foreign corporation throughout the world a national system employer, regardless of any connection at all with Australia (see e.g. Re Maritime Union of Australia; Ex parte CSL Pacific Shipping Inc (2003) 214 CLR 397 at [43]). Some sufficient connection must therefore be made with Australia, either so far as the constitutional corporation is concerned, or so far as its employees are concerned.

69    All of the respondents denied that either Valuair or TET was an employer “in and of Australia” or that their employees were employees “in and of Australia”. The respondents thereby relied, as an aid to the construction of the FW Act, on s 21(1)(b) of the Acts Interpretation Act 1901 (Cth) (“the Interpretation Act”), which provides:

21    Office etc. means office etc. of the Commonwealth

(1)    In any Act, unless the contrary intention appears:

…

(b)    references to localities jurisdictions and other matters and things shall be construed as references to such localities jurisdictions and other matters and things in and of the Commonwealth.

70    The Interpretation Act as in force on 25 June 2009 (including therefore s 21(1)(b)), applies in aid of construction of the FW Act (FW Act, s 40A).

71    There are explicit provisions in the FW Act which extend it extra-territorially to Australian ships, Australia’s exclusive economic zone, the waters above the continental shelf and by regulation to Australian employers and Australian-based employees (see ss 33-35) but none apply here.

72    However, there otherwise appears to me to be no legislative intention to displace the provisions of s 21(1)(b) of the Interpretation Act either generally or in any way relevant to the present proceedings. Therefore, an appropriate connection with Australia must be identified.

Operation of the FW Act and the Award upon an employment relationship

73    As the extracts from the amended statement of claim set out earlier reveal, the applicant’s case was focussed almost entirely on the nature of the work done by the cabin crew in question, coupled with a concentration on the place where some work was done. The applicant argued that, as the Award applied in terms to the work of cabin crew, when “domestic” flying was carried out in Australia the Award should be taken to apply to the employment relationship in question, and the relevant employer and employees were to be regarded as a national system employer and national system employees.

74    The respondents argued that in order for the FW Act to apply the applicant must show that the employment relationship itself, between TET and Valuair and their cabin crew employees supplied to Jetstar, may be said to be “in and of Australia”.

75    I accept the respondents’ contention that the FW Act and the Award apply to employment relationships rather than simply to particular work, so that it is necessary first to identify an appropriate connection linking the employment relationship sufficiently with Australia. In my view, the applicant’s approach ignored the overall employment relationship and the contractual setting which underpinned it and should not be accepted.

76    The Award, those parts of the FW Act which give it force and those parts of the FW Act which enact National Employment Standards all depend in the first instance upon a relationship of employment – that is, a relationship based upon and arising from a contract of employment; not a relationship arising from a contract of a different kind. Under a contract of employment, the performance of work is usually part of the consideration provided by an employee, just as the payment of wages or salary is usually part of the consideration provided by an employer. However, those circumstances (performance of work and financial reward in return) are not themselves sufficient to identify a contract of employment. They are also hallmarks of a contract “for services” of an individual kind which is a common method for the provision of labour in Australia. It is therefore important, at the outset, to establish the existence of a contract of employment. It is upon that legal circumstance, not just the performance of work, that awards operate.

77    As the majority judgment in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 (“Byrne”) pointed out (at 420):

A right to the payment of award rates is imported by statute into the employment relationship, which is contractual in origin, and, express promise apart, it is only in that sense that it can be said that award rates are imported into the contract of employment. The award regulates what would otherwise be governed by the contract [of employment].

(Emphasis added.)

78    In the same case McHugh and Gummow JJ referred (at 462) with apparent approval to observations by Beaumont and Heerey JJ that:

… awards will always operate alongside employment contracts, or in a contractual milieu, …

79    As these passages illustrate, it is the contract of employment, and the employment relationship thereby established, upon which awards (given legal force and effect by the FW Act) traditionally operate.

80    Since at least the Work Choices Case (New South Wales v Commonwealth (2006) 229 CLR 1), the exercise of power by the Commonwealth Parliament about industrial matters, and terms and conditions of employment, has depended primarily on the corporations power in s 51(xx) of the Constitution rather than primarily on the conciliation and arbitration power in s 51(xxxv) of the Constitution. Nevertheless, the award system remains directed at employment; not simply at work. Before any occasion arises to consider what an award (or the FW Act) may say about particular work and how it may be rewarded or regulated, it is first necessary to be satisfied that the award or statutory provisions in question are directed to the particular contract of employment and employment relationship.

81    In Barnett v Territory Insurance Office (2011) 196 FCR 116, Mansfield J put it thus (at [24]):

24    … underpinning every employment relationship is a common law contract of employment that is a contract under which a person agrees to work for another person in return for remuneration. The existence, for example, of an award does not create the relationship of employer and employee. That arises from the agreement between the employer to engage, and the employee to be engaged in employment. The contract of employment may, subject to the law, specify the detailed terms and conditions of that employment relationship. If relevant statutory provisions or instruments such as an award or enterprise agreement sourced from a workplace law or the NES, are superimposed over that contract of employment, the agreed terms of the contract are either suppressed or unlawful to that extent. But the contract of employment itself stands. The legislative structures are built upon the premise of an agreement to employ and to be employed.

and (at [40]):

40    It is plain enough from the FW Act that it operates within a framework of a series of relationships between employers and employees. Within that relationship it prescribes minimum terms and conditions through the NES, modern awards and national minimal wage orders: s 3(d) and (f) including reference to the NES in Pt 2.2 of the Act which prescribes minimum terms and conditions that apply to all national system employees.

82    Moreover, it is not usually the case that an award applies to a contract of employment in some partial or fragmented way. It is not necessary to dwell in this case on the exceptional circumstance where that might possibly happen.

83    Normally, in keeping with the statutory scheme, an award applies to, and supplements, a contract of employment in a comprehensive way. That basic notion found no reflection in the pleaded case which sought to establish some form of partial award application to a minority of duties. In my view, that approach was artificial and unsatisfactory. If accepted, it would have introduced considerable complexity and uncertainty into the legal relationships between the parties to each of the contracts of employment.

84    TET and Valuair are foreign corporations. Their cabin crew employees are not resident in Australia. The contracts of employment in the present case were made outside Australia and they are regulated by the laws and practices of either Singapore or Thailand. Payment of wages is made and tax, social security and other liabilities on both employer and employee are acquitted outside Australia. Tours of duty commence and finish at the home base outside Australia. The time on duty in Australia of any of the cabin crew represents only a small proportion of overall working time, and is transient.

85    It is, in my respectful view, incorrect to postulate that the contracts of employment, or the employment relationships, are in and of Australia in any respect. It is also incorrect to postulate that the Award operates on those (overseas) contracts of employment.

86    Leaving the Award aside altogether, the opposite conclusion would mean that, whatever might be the effect of the Award, many other provisions of the FW Act would also apply to the employment by Valuair and TET of the eight cabin crew in the present case. Section 60 of the FW Act has the effect that s 61 and the provisions establishing National Employment Standards apply to national system employers and national systems employees. Section 61 of the FW Act provides:

61    The National Employment Standards are minimum standards applying to employment of employees

(1)    This Part sets minimum standards that apply to the employment of employees which cannot be displaced, even if an enterprise agreement includes terms of the kind referred to in subsection 55(5).

Note:    Subsection 55(5) allows enterprise agreements to include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards.

(2)    The minimum standards relate to the following matters:

(a)    maximum weekly hours (Division 3);

(b)    requests for flexible working arrangements (Division 4);

(c)    parental leave and related entitlements (Division 5);

(d)    annual leave (Division 6);

(e)    personal/carer’s leave and compassionate leave (Division 7);

(f)    community service leave (Division 8);

(g)    long service leave (Division 9);

(h)    public holidays (Division 10);

(i)    notice of termination and redundancy pay (Division 11);

(j)    Fair Work Information Statement (Division 12).

(3)    Divisions 3 to 12 constitute the National Employment Standards.

(Emphasis in original.)

87    Section 61 makes it clear that the National Employment Standards apply to “employment”, rather than just to particular work. If Valuair and TET are national system employers, and if the National Employment Standards apply to those of their employees who are national system employees, there would be no apparent reason to confine those standards to work done in Australia. They would apply to the whole of the employment and purport, under Australian law, to override the contracts of employment. That would appear an odd result to a Singaporean or Thai national, and no doubt also to the courts and regulatory authorities in those countries if asked to deal with any contractual or other disputes. I am satisfied that the FW Act does not operate in that way. It does not so operate because the operation of the FW Act is not at large. Apart from the international understanding about extra-territorial operation of domestic legislation, s 21(1)(b) of the Interpretation Act declares the general intention of Parliament that its Acts not apply in that way unless such an intention appears. In the FW Act itself such a contrary intention does appear, in precisely specified respects, in ss 33 and 34 (which are not relevant to the present case). But there is no apparent intent that, for matters relevant to the present case, such a result, departing from the generally understood position, should be imputed.

88    Additionally, each of the respondents also relied upon ss 47(3) and 48(5) of the FW Act, to which should be added a reference to ss 45, 46 and 47(1). Those various provisions are as follows:

45    Contravening a modern award

A person must not contravene a term of a modern award.

Note 1:    This section is a civil remedy provision (see Part 4-1).

Note 2:    A person does not contravene a term of a modern award unless the award applies to the person: see subsection 46(1).

46    The significance of a modern award applying to a person

(1)    A modern award does not impose obligations on a person, and a person does not contravene a term of a modern award, unless the award applies to the person.

(2)    A modern award does not give a person an entitlement unless the award applies to the person.

Note:    Subsection (2) does not affect the ability of outworker terms in a modern award to be enforced under Part 4-1 in relation to outworkers who are not employees.

47    When a modern award applies to an employer, employee, organisation or outworker entity

When a modern award applies to an employee, employer, organisation or outworker entity

(1)    A modern award applies to an employee, employer, organisation or outworker entity if:

(a)    the modern award covers the employee, employer, organisation or outworker entity; and

(b)    the modern award is in operation; and

(c)    no other provision of this Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity.

Note 1:    Section 57 provides that a modern award does not apply to an employee (or to an employer, or an employee organisation, in relation to the employee) in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment.

Note 2:    In a modern award, coverage of an outworker entity must be expressed to relate only to outworker terms: see subsection 143(4).

…

Modern awards apply to employees in relation to particular employment

(3)    A reference in this Act to a modern award applying to an employee is a reference to the award applying to the employee in relation to particular employment.

48    When a modern award covers an employer, employee, organisation or outworker entity

…

Modern awards cover employees in relation to particular employment

(5)    A reference to a modern award covering an employee is a reference to the award covering the employee in relation to particular employment.

(Emphasis in original.)

89    It is clear from ss 47(3) and 48(5), in particular, that by virtue of the FW Act awards apply to and cover “particular employment”. That is not the same thing as particular work. The particular employment must be judged by reference to all the circumstances. In the present case, it is quite insufficient to isolate a minority of duties and working time and inappropriate to divorce those matters from the employment relationship as a whole.

90    I am satisfied, as I have said, that the FW Act does not apply to the employment of the cabin crew in question, that TET and Valuair are not national system employers, and that the eight cabin crew are not national system employees. The employment to which the present proceedings relate (i.e. employment by Valuair and TET) is not “in and of Australia”. The FW Act does not apply the Award to that employment, or to a minority of the duties performed in that employment.

The terms and coverage of the Award

91    The applicant’s case faced further difficulties also. The respondents contended that the Award, properly construed, does not in any event apply to the particular work to which the proceedings relate – i.e. the so-called domestic flying by overseas based international cabin crew. Examination of that proposition will require attention to particular terms of the Award.

92    I have already mentioned that the Award identifies the employers and employees to whom it applies, initially by reference to ss 13 and 14 of the FW Act. The Award also incorporates the limitations in ss 47(3) and 48(5) upon which the respondents rely. Clauses 4.1 and 4.2 of the Award provide:

4.    Coverage

[Varied by PR994422]

4.1    This award covers employers of aircraft cabin crew and their employees employed throughout Australia in the classifications listed in clause 18, to the exclusion of any other modern award.

4.2    The award does not cover an employee excluded from award coverage by the Act.

93    One effect of cl 4.2 is that the Award does not apply unless it applies to the “particular employment” in question (ss 47(3), 48(5)). That requirement is not satisfied merely by identifying particular work to which the Award might apply if that work was done in the necessary “particular employment”. As earlier indicated, it is first necessary to identify an employment relationship to which the Award is capable of applying, as well as particular work to which the provisions of the Award are specifically directed.

94    The phrase “employed throughout Australia” in cl 4.1 is also an important one for two reasons. First, it is obvious that it does not refer simply to the performance of work “throughout Australia”. That is so because the Award applies to work performed away from Australia – it is concerned in part with international flying which is defined in terms I will set out below. Secondly, the reference to employment throughout Australia draws attention, in my view, to the necessity for the employment relationship in question to be satisfactorily based in Australia, wherever particular duties might be performed. Whatever the territorial reach of the FW Act, I see no basis upon which the Award should be construed to apply to contracts of employment made between foreign corporations and their foreign national employees, based overseas, who enter Australia on special purpose visas for short periods of time, only because some of their work (for which they are paid in their own country) is carried out within the territorial limits of Australia before they return home.

95    Clause 18 of the Award identifies the following classifications:

18.    Classifications and minimum wages

[18.1 varied by PR997951 ppc 01Jul10]

18.1    The classifications and minimum wages for an adult employee are set out in the following table:

96    “Cabin crew member” is defined by cl 3.1 of the Award as follows:

cabin crew member means a person responsible for the comfort and safety of passengers in their carriage by aircraft, in accordance with the standards and regulations determined by the employer, and employed under the provision of this award

(Emphasis in original.)

97    To be a “cabin crew member” within the meaning of the Award, it is necessary to be “employed under the provision of” the Award. It appears, therefore, that the notion of employment under the Award in some haphazard or accidental fashion is an unlikely one. Close attention is accordingly required to how the Award might possibly apply in the present case. These issues were substantially avoided in the applicant’s case.

98    The Award allows for full-time, part-time and casual employment as follows:

11.    Types of employment

11.1    Cabin crew members under this award will be employed in one of the following categories:

(a)    full-time;

(b)    part-time; or

(c)    casual.

11.2    At the time of engagement an employer will inform each cabin crew member of the terms of their engagement and in particular whether they are to be full-time, part-time or casual.

99    Clauses 12, 13.1 and 14.1 identify full-time, part-time and casual employees as follows:

12.    Full-time employment

A full-time employee is an employee who is engaged as such and is rostered between 1716 and 1872 hours per annum.

13.    Part-time employment

13.1    A part-time employee is an employee who is engaged as such and is required to perform less than the full-time hours at the workplace on a reasonably predictable basis.

…

14.    Casual employment

14.1    A casual employee is an employee engaged as such.

…

100    Each of the cabin crew to whom the proceedings are addressed was explicitly engaged on a contract for full-time employment. That presents an immediate difficulty for any proposition (of the kind incorporated in the amended statement of claim until the application was made to further amend it) that the Award could apply differentially to some, but not all, of the duties in question. In substance it means that the Award does not apply, conformably with ss 47(3) and 48(5) of the FW Act, unless it applies on its proper construction to the whole of the employment, even though the proceedings do not seek (and would not have sought) relief based on that premise.

101    However, that is just one more of a number of further difficulties for the applicant’s case.

102    Clause 11.3 provides:

11.3    A cabin crew member can be appointed to:

(a)    predominantly undertake international flying;

(b)    predominantly undertake domestic flying;

(c)    predominantly undertake regional flying; or

(d)    undertake a mix of international and domestic flying.

103    Regional flying is not here relevant. International flying and domestic flying are defined by cl 3.1 as follows:

international flying means flying from a point of departure either:

(a)    within Australia to a point of arrival in another country;

(b)    within another country to a point of arrival in Australia; or

(c)    within another country to a point of arrival in another country,

provided that another country does not mean a place within the territorial waters of Australia

…

domestic flying means any flying that is not international or regional flying

(Emphasis in original.)

104    Correspondingly, international cabin crew member and domestic cabin crew member are defined by cl 3.1 as follows:

international cabin crew member means a cabin crew member predominantly undertaking international flying

…

domestic cabin crew member means a cabin crew member predominantly undertaking domestic flying

(Emphasis in original.)

105    Entitlements of various kinds (including rostering arrangements, hours of work, limitations on duty periods, rest days and periods, allowances and overtime) are dealt with in the Award in different schedules concerning domestic flying, regional flying and international flying respectively. Application of the provisions of one schedule, rather than the others, depends on identification of the predominant character of the flying undertaken by the particular employee.

106    Assessed by reference to their overall duties, there is no doubt that each of the cabin crew identified in the proceedings (and their colleagues in Singapore or Thailand) predominantly undertakes international flying. That leaves no room for any suggestion that the provisions of the Award concerning domestic flying should be applied to them, which appears to be one premise upon which the proceedings were commenced.

107    In the applicant’s evidentiary case this difficulty was avoided because the calculations of underpayment were derived from a different schedule altogether which created some transitional arrangements based on a national minimum wage. That schedule did not deal with the other entitlements I have mentioned.

108    The schedule in question does not apply after 1 July 2014. More importantly, any reference to the transitional arrangements cannot avoid the need to classify employees in accordance with the Award so that all their entitlements may be ascertained and the question of Award coverage itself may be determined. The necessary ingredients of an appropriate classification for the eight cabin crew in question would include the quantum of rostered hours (here full-time) and the nature of the engagement (international flying).

109    The inapplicability of the Award in the sort of piecemeal fashion that the originating application and amended statement of claim appeared to envisage means that the Award, if it did apply to the identified cabin crew, must have applied to the whole of their employment simply because they entered Australian territory. It would not matter legally if the cabin crew flew in and flew out again. On that approach the Award would apply to the cabin crew of every overseas airline flying to and from Australia, and so apply to the whole of the employment of such cabin crew.

110    I do not accept such a potentially bizarre result. It is apparent from the terms of the FW Act that the legal force which is given by s 45 to the terms of awards is accompanied by a legislative intention that such awards (and the terms of the FW Act) be readily enforceable in Australia. The object of the FW Act stated in s 3 includes:

3    Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

…

(b)    ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; …

111    In my view, the Award does not apply in its own terms. First, the cabin crew in the present case (and those on foreign airlines) are not employed in (or throughout) Australia. It is not enough that they perform some work (a minority) within the territorial limits of Australia. Secondly, the Award does not apply piecemeal or to some fragments of overall duties. Rather, it requires classification of cabin crew by reference to the predominant character of the whole of their duties. Thirdly, the Award clearly does not apply (and is not intended to apply) to the employment of cabin crew on every foreign airline flying to Australia. There is no basis on which to legally distinguish those cabin crew from the eight cabin crew in question. It was not suggested to be a sufficient distinction for award purposes that they are flying on Jetstar aircraft.

112    In my view, therefore, apart from the operation of the FW Act the Award does not in its own terms apply to the employment of any of the eight cabin crew selected by the applicant, either generally or piecemeal.

Unpaid wages

113    The conclusions I have expressed about the application of the FW Act and the operation of the Award are sufficient to defeat any claim that legally required Award wages were unpaid. It is not necessary to deal further with the question of the calculations of unpaid wages made by the applicant.

Superannuation

114    Apart from claims that TET and Valuair failed to observe the terms of the Award by making appropriate payments of wages for work done, the amended statement of claim pleaded the following:

Failure to make superannuation contributions

108.    Under clause 23.2 of the Award, the First Respondent and Second Respondent were required to make superannuation contributions to a superannuation fund for the benefit of the Cabin Crew as would avoid the superannuation guarantee charge being payable under superannuation legislation for the periods of time that the Cabin Crew were covered by the Award.

PARTICULARS

Superannuation Guarantee (Administration) Act 1992 (Cth) requires that all employers make superannuation contributions for their employees that are equal to at least 9% of the employee’s salary or pay the superannuation guarantee charge.

109.    The First Respondent did not make any superannuation contributions to a superannuation fund for the benefit of the Valuair Cabin Crew as would avoid the superannuation guarantee charge being payable under superannuation legislation.

110.    By reason of the matters alleged in paragraphs 108 and 109, in breach of section 45 of the FW Act, the First Respondent contravened clause 23.2 of the Award.

111.    The Second Respondent did not make any superannuation contributions to a superannuation fund for the benefit of the TET Cabin Crew as would avoid the superannuation guarantee charge being payable under superannuation legislation.

112.    By reason of the matters alleged in paragraphs 108 and 111, in breach of section 45 of the FW Act, the Second Respondent contravened clause 23.2 of the Award.

115    This claim also fails because the Award does not apply to the employment in question. However, there were other defects in this part of the applicant’s case.

116    The applicant did not plead or particularise what amount was unpaid, or how it would be calculated. Was it to be 9% of the amount alleged to be due, but unpaid, under the Award (which gave some credit for salary already paid)? Was it to be 9% of the whole amount referable to so-called domestic flying? Was it to be 9% of the total salary to which the employee was entitled under both the contract of employment and the Award? These issues were left obscure. On the evidence in the present case, no salary or wages was payable by either of the first or second respondents to any of the cabin crew in question in Australia, or under Australian law. It may be doubted, therefore, that the superannuation guarantee charge legislation has anything at all to say about salary payable by a foreign corporation to a foreign national in another country, but I need not resolve that issue.

117    The particular entitlement sought to be vindicated does not, in any event, arise under that legislation. It depends on cl 23 of the Award. It is the obligation there identified which must be considered. Clause 23 of the Award provides:

23.    Superannuation

[Varied by PR994422]

23.1    Superannuation legislation

(a)    Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.

(b)    The rights and obligations in these clauses supplement those in superannuation legislation.

23.2    Employer contributions

An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.

23.3    Voluntary employee contributions

(a)    Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 23.2.

(b)    An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.

(c)    The employer must pay the amount authorised under clauses 23.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses 23.3(a) or (b) was made.

23.4    Superannuation fund

[23.4 varied by PR994422 from 01Jan10]

Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 23.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 23.2 and pay the amount authorised under clauses 23.3(a) or (b) to any superannuation fund or its successor to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.

118    The applicant bore the responsibility of pleading, and the onus of proving, the material facts on which the claim of breach of cl 23.2 depended. No superannuation fund (within the meaning of cl 23.2) was identified which might legally receive contributions by either TET or Valuair in respect of any of the employees to whom the proceedings related. In any event, the obligation in cl 23.2 appears qualified by cl 23.4. There was no evidence that an Australian superannuation fund had been chosen by any relevant employee as contemplated by cl 23.4, nor that either Valuair or TET was making any superannuation contributions for the benefit of its employees before 12 September 2008, within the meaning of cl 23.4.

119    In short, no breach of any obligation in cl 23 was satisfactorily pleaded or proved.

Accessorial liability

120    In light of my conclusions already expressed I do not need to deal in detail with the allegation that Jetstar was involved in contraventions of the FW Act and the Award by Valuair and TET. That allegation must be rejected.

121    The applicant relied on s 550(2)(a) and (c) of the FW Act, which provide:

550    Involvement in contravention treated in same way as actual contravention

…

(2)    A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

…

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

…

(Emphasis in original.)

122    Proof of a case under s 550(2)(c) need only demonstrate knowledge of the facts upon which liability depends. It does not require proof of the legal consequences of those facts, or proof of intent (see Yorke v Lucas (1985) 158 CLR 661).

123    If Valuair and TET had contravened the FW Act or the Award I do not see how Jetstar could resist a conclusion that it also was liable. In all probability, it would be liable under both s 550(2)(a) and (c) but that would not, in my view, affect any penalty.

124    It is not necessary to deal further with this question. In particular, it is not necessary that I express any view on the correctness of the decision in Potter v Fair Work Ombudsman [2014] FCA 187, on which Jetstar relied.

Conclusion

125    I conclude that neither Valuair nor TET was a national system employer in the relevant period, nor were the eight cabin crew employed by them to undertake duties on Jetstar aircraft national system employees.

126    In my view, the Award does not apply to or cover any of the work done by any of the cabin crew identified by the amended statement of claim in the period identified in the amended statement of claim.

127    The application must be dismissed.

Associate:

Dated:    24 July 2014