FEDERAL COURT OF AUSTRALIA

Qantas Airways Limited v Australian and International Pilots Association (No 2) [2024] FCA 756

ORDERS

THE COURT ORDERS THAT:

1.    The parties are to confer and provide to the Associate to Goodman J by 25 July 2024:

(a)    agreed orders, giving effect to these reasons for judgment; or

(b)    failing such agreement, competing orders and written submissions (not exceeding three (3) pages) in support thereof.

2.    The proceeding be listed for a case management hearing at 9:00am on 31 July 2024 or such other date as may be mutually agreed between the legal representatives of the parties and the Associate to Goodman J.

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

REASONS FOR JUDGMENT

GOODMAN J

A.    INTRODUCTION

1    The dispute the subject of this proceeding concerns the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020 (EBA10) (LHEA10), which commenced on 5 May 2020 and at all material times bound the applicant (Qantas) and the respondent (the AIPA).

2    In 2022 Qantas wished, for operational reasons, to allocate some of its most junior pilots – Second Officers under Training (SOTs) – to its A380 aircraft. The A380 is the most lucrative aircraft in terms of remuneration for a pilot, and such an allocation would have involved the by-passing of more senior pilots.

3    LHEA10 provided two methods by which this could be done.

4    The first, which Qantas sought to utilise, was via cl 19.1.2 of LHEA10. That clause provides that upon completion of training, SOTs will be allocated by Qantas to its B787, A330 or A330/A350 SFF aircraft (and not its A380 aircraft) unless: (1) there are insufficient bids from suitably qualified pilots who had been employed before the date on which cl 32.7 of LHEA10 commenced; or (2) such an allocation was otherwise agreed with the AIPA for operational reasons, with the AIPA’s agreement not to be unreasonably withheld.

5    On 20 August 2022, and at a time when there were sufficient bids from suitably qualified pilots employed before the commencement of cl 32.7, Qantas made a request to the AIPA that the AIPA agree to the allocation of 20 SOTs directly to its A380 aircraft.

6    The AIPA did not agree and Qantas subsequently adopted the second available method, utilising cl 16 of LHEA10 which did not require the agreement of the AIPA but did require the payment of compensation to more senior pilots who were by-passed by the direct allocation of SOTs to the A380 aircraft.

7    In this proceeding Qantas claims that the AIPA’s conduct in withholding its agreement under cl 19.1.2 was unreasonable and as such was a contravention of cl 19.1.2 of LHEA10 and of s 50 of the Fair Work Act 2009 (Cth).

8    The AIPA claims, by way of cross-claim, that Qantas allocated SOTs directly to the A380 aircraft in contravention of cl 19.1.2 of LHEA10 and s 50 of the Act.

9    I ordered, pursuant to rule 30.01 of the Federal Court Rules 2011 (Cth), that the questions of whether Qantas and the AIPA had contravened the Act be heard and determined separately from all other questions in the proceeding. These are my reasons for judgment on those separate questions.

B.    LHEA10

10    Before considering the claims made by Qantas and the AIPA, it is convenient to set out the salient terms of LHEA10.

11    Clause 3 provides:

Recognition of the Association’s Role in the Industrial Relationship

The Company will continue to recognise the Association’s established role in the collective representation of pilots.

12    Clause 14 provides the following definition of an SOT:

S/O under Training (‘SOT’)    a new intake pilot undertaking S/O training.

13    Clause 15.1.2 provides:

15.1    Company orders or instructions

    ...

15.1.2    All orders to pilots regarding positions, allocation to aircraft type, promotion, demotion and leave of absence will be given or confirmed by the Company in writing.

14    Clause 16 provides, in so far as is presently relevant:

16    Seniority

16.1    General provisions

16.1.1     Seniority is a pilot’s length of continuous service

Subject to the Integration Award and clauses 16.1.5 and 16.1.6, seniority is the length of continuous service as a pilot with the Company as recognised in the Seniority List published each year pursuant to the provisions of this Agreement.

16.1.2     When seniority commences to accrue and preservation of seniority for certain groups of pilots

(a)    Subject to clauses 16.1.2(b) and 16.1.2(c), the seniority of pilots will commence to accrue from the date contained in the Company’s letter of appointment to the pilot.

...

16.1.9     Seniority order

Seniority order in relation to an offer, award or assignment means, unless specified otherwise:

(a)    for an offer or award, from most senior to least senior; and

(b)    for an assignment, from least senior to most senior (‘reverse seniority’).

...

16.3.1     Letters of preference to specify a preference for a vacancy

A letter of preference may be used to specify preference for:

(a)    a category vacancy;

...

...

16.4    Application of seniority

16.4.1    Seniority determines the order of selection for promotion, transfer to base, posting or aircraft type, and demotion or termination if redundancies occur

(a)    Pilots who are sufficiently qualified

Without limiting any other provision of this agreement and provided that in each case the pilot is sufficiently qualified to undertake the training or duty required, seniority will determine the order of selection of pilots for:

...

(iv)    transfer to, and status on, an aircraft type

...

16.4.2     Advertising initial vacancies

The Company will advertise all initial vacancies planned for a training block by 15 April each year. Each advertised vacancy will specify the bid period in which training is expected to commence and, if possible, the planned date on which the training course is to commence.

16.4.3     Closing date for bids

Bids (either by way of letter of preference or a bid for a specific vacancy) for the advertised initial vacancies will close at 1000 (Sydney LT) on 8 May each year (or, if 8 May is not a business day, on the first business day after 8 May) (‘closing date’).

16.4.4     Awarding vacancies in order of seniority

(a)    Subject to 16.4.4(b), all initial and residual vacancies will be awarded in order of seniority to sufficiently qualified pilots from the letters of preference held on file or bids for specific vacancies received by the Company by the closing date.

(b)    The first 90 Captain and first 90 First Officer vacancies in the respective A330/A350 SFF categories will be reserved in seniority order for A330 qualified crew in the same rank and base as the A330/A350 SFF vacancies. If insufficient bids are received from A330 pilots in the relevant rank and base then 16.4.4(a) applies.

16.5    By-pass

16.5.1    By-pass principles

(a)    Exception to the allocation of vacancies under clause 16.4

Vacancies for promotion or transfer to a higher rated aircraft type will be allocated in accordance with clause 16.4 except where the Company proposes to by-pass a pilot within the terms of this clause 16.5.

(b)    By-pass must be for operational reasons

A proposal to by-pass a pilot must be for operational reasons.

(c)    Consultation with the Association before by-pass can take place

When the Company proposes to by-pass a pilot, the Company will notify and consult with the Association before any by-pass takes place.

(d)    Who will be allocated the vacancy if a pilot is by-passed?

Where a pilot is to be by-passed, the Company will allocate the particular vacancy to the pilot who:

(i)    is next most senior to the pilot being bypassed;

(ii)    is sufficiently qualified for the vacancy;

(iii)    is entitled to the vacancy subject to clauses 16.6.2, 16.6.3, 16.6.4 and 16.6.5; and

(iv)    for operational reasons, is not to be by-passed.

(e)    By-pass on the basis of one for one

By-pass pay entitlements will accrue on the basis of one for one. This means that the number of pilots entitled to by-pass pay and deferred training vacancies will equal the number of vacancies allocated, for operational reasons, to less senior pilots.

16.5.2    Circumstances where by-pass pay accrues as an entitlement

(a)    Where a pilot’s vacancy for promotion or transfer is deferred

In circumstances where:

(i)    a pilot’s bid for a vacancy for promotion or transfer to a higher rated aircraft type is successful but is deferred for reasons other than those set out in clause 16.5.3; and

(ii)    the pilot is by-passed for the promotion or transfer by a less senior pilot,

the pilot will accrue, as an entitlement, by-pass pay calculated in accordance with clause 16.5.4 from the date the less senior pilot commences training plus an agreed training period.

In circumstances where a pilot has an entitlement under this clause and the deferred vacancy is subsequently cancelled, the entitlement to by-pass remains.

...

16.5.4    By-pass pay calculation

By-pass pay accrued each bid period (and pro-rated where applicable) for a pilot will be based on the higher of the pilot’s existing category pay entitlement and the pay calculated in the new category based on the following:

(a)    When allocated a pattern line in the pilot’s current category:

(i)    1105 credited hours divided by 6.5; plus

(ii)    Elements 1A and 1B. (For the purpose of this clause 16.5.4, Element 1A is the average of the AFDPs of PLHs in the new category. The average is to be calculated by reference to the AFDP earned over the entirety of the immediately preceding 8 [4] week bid period);

(b)    When allocated a blank line in the pilot’s current category:

(i)    MGH or the average of accrued credited hours for BLHs in the new category, whichever is greater;

(ii)    plus the greater of:

•    Element 3 (if applicable); or

•    a proportion of Elements 1A and 1B (calculated as the average of the actual credited hours of BLHs in the new category as a ratio of 170 hours).

(c)    Personal training credits and superannuation at new category rate

All personal training credits will be paid, and superannuation will be calculated, based on the category rate (for both PLHs and BLHs) for which by-pass is accruing.

...

16.5.8    By-passed pilot to commence deferred training within two (2) years

(a)    In addition to the by-pass pay entitlement, the pilot will commence the deferred training no later than two (2) years from the date the less senior pilot commenced training for the vacancy except that the Company is not obliged to provide the training if the pilot would not be able to provide the required two (2) year return of service, unless otherwise agreed between the Company and the Association.

(b)    The Company is not obliged to create an additional vacancy to provide an opportunity for the by-passed pilot to undertake the deferred training.

(emphasis in original)

15    Clause 17 provides:

17    Promotion and Demotion

17.1    Status on appointment

On appointment with the Company a pilot will have the status of SOT.

17.2    Status on completion of training

On completion of training (including aircraft type rating and en route flying) a SOT will have the status of S/O on the aircraft type to which the pilot is initially allocated by the Company.

17.3    Status of a pilot

The status of a pilot is ranked in the following descending order:

(a)    Captain;

(b)    F/O;

(c)    Senior S/O;

(d)    S/O;

(e)    SOT.

17.4    Category of a pilot according to aircraft type

The category of a pilot is the pilot’s status on an aircraft type and is ranked in the following descending order:

(a)    A380 Captain;

(b)    B747 Captain;

(c)    B787 Captain, A350 Captain, A330/A350 SFF Captain;

(d)    A330 Captain;

(e)    B767 Captain;

(f)    A380 F/O;

(g)    B747 F/O;

(h)    B787 F/O, A350 F/O, A330/A350 SFF F/O;

(i)    A330 F/O;

(j)    B767 F/O;

(k)    A380 S/O;

(l)    B747 S/O;

(m)    B787 S/O*, A330 S/O, A350 S/O, A330/A350 SFF S/O.

*Subject to the limitations of 16.6.2, a pilot eligible for hourly rates of pay in accordance with clause 32.4.5 will be permitted to bid for an A330 S/O vacancy.

17.5    Promotion

17.5.1    Definition of promotion

A promotion is a change to a higher status.

17.5.2    Seniority determines selection for promotional training

A pilot will be selected for training and promotion beyond the category of S/O in accordance with this clause 17 and clause 16.

(emphasis in original)

16    Clause 19 provides in so far as is presently relevant:

19.1    Allocating pilots to an aircraft type

19.1.1    Aircraft types in this Agreement are rated in the following descending order:

(a)     A380 aircraft;

(b)     B747 aircraft;

(c)     A330/A350 SFF aircraft, A350 aircraft and B787 aircraft;

(d)     A330 aircraft.

19.1.2    Upon completion of training, a SOT will be allocated by the Company to the B787, A330 or A330/A350 SFF aircraft rather than the B747 and A380 aircraft unless there are insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32.7, or otherwise agreed with the Association for operational reasons. The Association will not unreasonably withhold agreement.

...

19.3    Vacancies allocated in accordance with seniority

Without limiting any other provision of this Agreement, vacancies on aircraft types will be allocated in accordance with clause 16 and the Integration Award.

17    Clause 47, which sits within Part 8 of LHEA10, provides a detailed dispute resolution procedure with respect to disputes concerning any matters arising under LHEA10.

C.    FINDINGS OF FACT

C.1    Introduction

18    Qantas relied upon affidavit evidence of Mr Douglas Alley, its Head of Base Operations, Flight Operations; Mr Andrew Coull, its Head of Flight Operations Aircraft Introduction; and Mr Andrew Stead, its Head of Training and Checking. Each was cross-examined.

19    The AIPA relied upon affidavit evidence of Captain Anthony Lucas, its President and A330 Training Captain; Captain Alric Beavan, a pilot and member of its Committee of Management (CoM); and Captain Christopher Hewett, a pilot and member of its CoM; and Mr Glen Hunter an A380 Second Officer, and its treasurer and “long haul representative”. Captains Lucas, Beavan and Hewett were cross-examined.

20    From that evidence and the several thousand pages of documentary evidence, the salient facts are as follows. In view of the issues raised, it is necessary to set out some of the correspondence between Qantas and the AIPA at length.

C.2    The parties

21    Qantas, as is well-known, is in the business of providing commercial air transport of passengers and freight, both domestically and internationally. It employs a number of long haul pilots, holding the ranks (in descending order of status) of Captain, First Officer, Second Officer (or S/O or SO) and SOT. Qantas is also a “national system employer” within the meaning of the Act.

22    The AIPA represents the industrial interests of long haul pilots employed by Qantas. It is governed by its CoM. The AIPA operates by reference to a set of Rules, including rule 3 which identifies the AIPA’s objects as including:

(a)    To further and protect the interests of its members and the interests and rights of the Professions of Air Pilots and Flight Engineers in general.

(b)     To take any lawful action necessary or convenient for furthering and protecting the interests of its members and in particular and without limiting the generality of the foregoing to submit Industrial disputes and industrial questions to conciliation or arbitration or consideration or determination under the Fair Work Act 2009 as amended or replaced from time to time;

(c)     To afford legal protection for members of the Organisation in industrial matters or other matters specifically authorised by the Committee of Management; …

…

(h)    To secure preference of employment and advancement for members of the Organisation; …

…

(o)     To do all such acts and things as are incidental or conducive to attainment of the above objects.

23    Captain Lucas’s evidence was that: (1) the seniority system that is now embodied in LHEA10 has been central to the concerns of the AIPA for many decades; and (2) the AIPA considers that a fundamental aspect of its role and purpose as a representative of Qantas pilots is to maintain the integrity of the seniority system, so far as is reasonable, and having regard to the language of LHEA10.

C.3    Pilots and aircraft

24    Every pilot employed by Qantas is engaged at any given time as either a short-haul (single aisle aircraft) pilot or a long-haul (double aisle aircraft) pilot. Generally, long-haul pilots are employed to fly international routes, but may be required from time to time to fly domestic routes.

25    LHEA10 describes six aircraft types to which the long-haul pilots may be allocated. Those six aircraft types in descending order (according to the value of the remuneration that a pilot can earn as a consequence of being allocated to that aircraft type) are as follows:

(1)    A380 aircraft;

(2)    B747 aircraft (which was retired in around July 2020);

(3)    A330/A350SFF aircraft, A350 aircraft and B787 aircraft; and

(4)    A330 aircraft.

26    The A330/A350SFF, A350 and B787 aircraft types share the same ranking. The A350SFF aircraft has not yet entered service with Qantas, and is expected to do so in late 2025.

C.4    Aircraft type training

27    For many years, every person who has been recruited as a long-haul pilot by Qantas has started their career with Qantas as an SOT. Every SOT undergoes “induction training” and “aircraft type training”.

28    Induction training involves content which is common to all new recruits and aircraft types. It takes two to three weeks, and involves training in matters such as security and emergency procedures including dangerous goods, evacuation commands, and use of emergency equipment.

29    Aircraft type training for SOTs involves the following phases:

(1)    first, ground school training, consisting of computer-based training for the specific aircraft type to which the SOT has been assigned and procedural training modules where SOTs practise the procedures applicable to different flight phases. Procedural training modules may be, but are not always, conducted in a “simulator”. This phase is not about learning to “fly” the aeroplane or take off or land, but to develop competence in the procedural aspects of the take­off and landing, such as the call-outs that crew use, the “patter” of what occurs, and when it occurs; and

(2)    secondly, simulator training, during which SOTs practise their procedures and add on the complexity of a simulator that moves and has visual references for them to refine their flying and management techniques rather than just their procedures.

30    Pilots cannot commence flying a particular aircraft type unless they have successfully completed the aircraft type training specific to that aircraft. Generally, it takes approximately three to four months to train a pilot on a different aircraft type.

31    If a pilot is allocated to a different aircraft type they must be retrained by successfully completing aircraft type training for the new aircraft type.

32    The aircraft type training for pilots is provided and paid for by Qantas. Qantas either delivers the training itself or pays for it to be delivered by an external provider. Qantas is authorised by the Civil Aviation Safety Authority to provide aircraft type training to its pilots and to certify pilots who successfully complete aircraft type training to fly that aircraft.

33    The SOTs are appointed as Second Officers on the particular aircraft type on which they have been trained following the successful completion of their aircraft type training.

C.5    The request and subsequent events

34    On 20 August 2022, Mr Alley (the Head of Base Operations and Flight Operations for Qantas), wrote to Captain Lucas (President of the AIPA) making the request. Mr Alley’s email had the subject line “A380 Recruitment” and was in the following terms:

With the confirmation of Project Sunrise and Project Winton flying, Flight Operations is forecasting a significant rise in the number of training courses needed to be completed over the next 4 years. In addition to the training requirements for Project Sunrise/ Winton, we are seeing A380 aircraft returning earlier than previously forecasted which is driving additional training requirements including into this training year and in circumstances where our training system is already operating at full capacity.

As part of the broader context, and by way of example, between FY23 and FY26 our models are forecasting that we will require more than 1,600 training courses. This is made up of ~1,200 type conversion courses and ~400 new recruit courses. This means our training system will be at maximum capacity throughout this period, and we are already having to utilise offshore training locations on the A330 and A380.

We therefore need to ensure our training and recruitment plans are efficient and do not unnecessarily increase the number of training courses or otherwise compromise our operations as we continue to ramp up our international operations. I am therefore writing to you seeking agreement under LHEA 19.1.2 to allocate new SOT’s commencing employment this training year directly to the A380. In this regard, we are currently forecasting a requirement for 24 additional A380 Second Officers this training year, 20 of whom we would like to recruit directly to the A380. This request is based on the following operational considerations and constraints:

•    As outlined above, our training pipeline is at maximum capacity to the extent that we are already training offshore on the A330 and A380. We therefore need to minimise any additional courses and training ripple. Training new recruits to the A330 /B787 only to release them to the A380 contributes to the ripple and adds additional courses.

•    Our Second Officer categories are our most constrained and we cannot afford to be releasing Second Officers off the A330 and B787 in order to fill A380 Second Officer positions

•    The A330 SO category is projected to be at maximum divisor within the next 6 months with a significant increase in A330 block hours over the NW season with new routes commencing (SYD-BLR, PER-JNB, SYD-ICN) plus existing ports reopening post COVID (HKG, HND, PVG). Release of A330 SOs to the A380 would seriously jeopardise the Company’s capacity to operate the published schedule.

•    Backfilling of additional A330 SOTs is not possible as the training system is congested with no spare capacity.

•    We have invited A380 Second Officers on LWOP to return earlier than their current return date with a view to minimising additional recruitment to the A380, however of the 12 Second Officers we wrote to, only 1 volunteered to return early.

•    Because of the faster than anticipated ramp up of international operations, the Company has made the decision to bring forward the return of an additional 3 x A380’s this training year resulting in the need to bolster our A380 Second Officer establishment.

At this stage, we are proposing to directly allocate SOT’s onto the A380 on courses commencing 11 October 2022.

(emphasis added)

35    On 22 August 2022, Captain Lucas and Mr Alley met. Captain Lucas told Mr Alley that the AIPA would request further information from Qantas to assist the AIPA in its consideration of the request. On the same day, Captain Lucas forwarded the 20 August email to various members of the AIPA’s executive.

36    On 31 August 2022, Mr Alley sent a further email to Captain Lucas:

I refer to our email below and to the meeting with AIPA on 22 August.

At the meeting you indicated that AIPA would be requesting further information from Qantas in order to assist in its consideration of our request. To date no request for further information has been received. Noting that we are proposing to allocate SOT’s to the A380 commencing from 11 October we ask that AIPA now provide us with a substantive response to our request. Should further information be required, we ask that this request be made as a matter of priority and by no later than Friday, 2 September.

37    On 2 September 2022, Captain Lucas responded to Mr Alley:

AIPA is in the process of considering your request for consent pursuant to clause 19.1.2 of the LHEA. To enable us to properly consider your request, please provide the following additional Information:

1.    Training projections for the next 12 months

2.    Training status of current ‘previously stood down’ A380 SOs and when they are planned to complete their training

3.    Number of current suitably qualified pilots that have A380 bids in place on their LOPs

4.    Number of current Melbourne A380 SOs that have base transfer bids to SYD on their LOPs

5.    Flying plans for the next 12 - 18 months (in particular the return schedule of the remaining A380s)

It is likely the matter must be considered by CoM at the September meeting, which is scheduled for 13 September 2022. The earlier the information can be provided, the easier it is for us to communicate with CoM in advance.

If you would like to meet to discuss I am available early next week.

38    On 3 September 2022, Mr Alley responded to Captain Lucas:

Thank you for your response regarding our request for A380 SOT recruitment. I have provided answers to your questions below.

I note also your update regarding the AIPA CoM meeting on 13th of September. As previously advised, we are proposing to recruit the initial 2 A380 SOTs on the 11th of October intake course. We will therefore require a response from AIPA prior to the 13th of September in order to finalise contract arrangements with the new intake pilots. I am happy to meet and discuss this in person early next week, however I am requesting a formal response from AIPA by COB Thursday the 8th of September.

…

1.    Training projections for the next 12 months

2.    Training status of current ‘previously stood down’ A380 SOs and when they are planned to complete their training

Of the ~18 (not incl LTS), 6 of them are planned to have training completed by the end of BP350, a further 6 are planned for BP351 and the remaining 6 will be planned in BP352. They will be prioritised in front of any new trainees. SOTs commencing in Oct and conversions commencing in Nov won’t be ready for sims until the back end of BP352 when the refamils should have been completed.

3.    Number of current suitably qualified pilots that have A380 bids in place on their LOPs

60 qualified S/Os who are eligible and available in FY23

4.    Number of current Melbourne A380 sos that have base transfer bids to SYD on their LOPs Two, and they will be picked up with our four conversions.

5.    Flying plans for the next 12 -18 months (in particular the return schedule of the remaining A380s)

Here is the current A380 Fleet plan:

39    Captain Lucas did not forward this email to the AIPA’s CoM, but excerpts of its contents (including the section dealing with the “operational considerations and restraints”) were set out in a briefing document circulated to the CoM, which was discussed by the CoM at its meeting on 13 September 2022 for at least 60 to 90 minutes.

40    Between 22 August 2022 and 12 September 2022, Captain Lucas discussed the request, the further information that Mr Alley had supplied on 3 September 2022, and the meaning and application of cl 19.1.2 with various people, including: (1) the AIPA’s then executive director, Philip van den Heever; (2) Mr Elliott Dalgleish, the AIPA’s senior in-house lawyer; (3) Captain Beavan; (4) Captain Hewett; and (5) First Officer Mark Knight. Captain Lucas discussed those matters with Captains Beavan and Hewett, and First Officer Knight, because each of them was an experienced member of the AIPA, or had been part of the bargaining teams negotiating for elements of Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2015 (EBA9) (LHEA9) or LHEA10 and/or had significant experience with the construction of enterprise agreements.

41    In those discussions, the following subject matters were discussed or raised by members of the CoM with Captain Lucas:

(1)    if the AIPA were to agree to the request, then the effect of that agreement would be that the by-passed pilots (being the more senior pilots who were willing to take the positions on the A380 aircraft) would lose the opportunity to be allocated to those positions in accordance with the principles of seniority, and would not get the protections of cl 16.5 of LHEA10 to compensate them;

(2)    Second Officers on the B787 and A330 aircraft – that is, the pool of pilots from which the by-passed pilots would come – would consider that the AIPA’s agreement to the direct allocation of the SOTs to the A380 aircraft, without by-pass pay or some other protections, to be contrary to the interests of such Second Officers as a group and inconsistent with the AIPA’s responsibility to represent its members within that group;

(3)    although Mr Alley had said in the request that Qantas’s training system and A330 divisor was “forecasted” to be at capacity for the “foreseeable future”, Captain Lucas’s experience (gained in almost 30 years as a Qantas pilot) was that such forecasts made by Qantas can frequently change quickly; and

(4)    at the time the request was made, there were approximately 10 A380 Second Officers waiting to return to work but who had not yet commenced their re-training programs.

42    On 13 September 2022, the CoM of the AIPA met. As noted above, the CoM was provided with a briefing document which included excerpts from the request. The briefing document also referred to subsequent communications between the AIPA and Qantas and set out some legal analysis on issues raised by the request.

43    The request was considered at the CoM meeting. No formal vote was held or resolution passed with respect to the request and the minutes of the meeting that have been adduced do not deal with the request. Captain Lucas recalls that the following statements were made during the meeting in relation to the request:

(1)    Captain Hewett said:

Prior to LHEA9, SO were allocated type on date of joining. LHEA9 introduced the “first day lottery” clauses whereby pilots came into lower category aircraft first and would only be allocated A380 vacancy due to operational reasons. It changed to the current wording in LHEA10.

(2)    Second Officer Bluston said:

Feedback from members is that we need to strongly represent their interests here. We need to communicate to members that we will be challenging any deviation from the LHEA provisions regarding seniority.

(3)    Captain Hodson said:

It is fundamentally wrong to bring someone in to perform a role when you have someone already in the company who can perform the role.

(4)    Second Officer B Smith said:

Feedback from the members is that we need to strongly represent their interests and ensure that the seniority provisions relating to promotion to the A380 are preserved.

44    Captain Lucas gave particular weight to Captain Hewett’s contributions to the debate because he understood him to be legally qualified, and also to have a deep knowledge of the genesis of what is now cl 19.1.2 of LHEA10.

45    Captain Lucas’s understanding of the effect of the discussion at the CoM meeting was that the AIPA would not give its agreement under cl 19.1.2, but would write to Qantas, noting that it was open to Qantas to directly allocate the SOTs to the A380 aircraft in accordance with cl 16.5 of LHEA10. Captain Lucas put that position to the meeting in terms, and then asked whether members of the CoM disagreed with that proposed course of action. No dissent was expressed.

46    Captain Lucas’s process of reasoning for his support of the position set out in the previous paragraph involved the following considerations:

(1)    LHEA10 required that pilots be allocated to any vacancies in accordance with the seniority provisions of that instrument and, thus, vacancies should be allocated in order of seniority under cl 16.4, or, if pilots are by-passed for operational reasons, they should have the protections afforded by cl 16.5;

(2)    cl 19.1.2 provides for a departure from that general position, in that it allows the AIPA to agree that for operational reasons Qantas can by-pass suitably qualified and more senior pilots so as to directly allocate SOTs to vacancies on, relevantly, the A380 aircraft, without providing the by-passed pilots the protections afforded by cl 16.5;

(3)    the reasons and materials advanced by Qantas in support of its request did not persuade him that the AIPA should give its agreement under cl 19.1.2, because he considered that such agreement would seriously disadvantage the by-passed pilots, without any compensation, and thereby undermine the integrity of the seniority system; and

(4)    if the AIPA were to withhold its agreement, this would not operate as a veto to the direct allocation of SOTs to the A380 aircraft proposed by Qantas, because it was open to Qantas to effect such a direct allocation by complying with cl 16.5 of LHEA10 in relation to the pilots who would thereby be by-passed, or otherwise to come to an agreement with the AIPA about some other way to protect the by-passed pilots.

47    On 14 September 2022, the day after the CoM meeting, Captain Lucas wrote to Mr Alley:

I refer to your email and the information provided therein.

Yesterday the AIPA CoM considered Qantas’ request for AIPA approval under clause 19.2.1 to allocate SOTs directly to the A380.

It was confirmed that AIPA’s general position is that pilots should be allocated to vacancies in seniority and in accordance with the LHEA. As you know, the LHEA states:

17.1    Status on appointment

On appointment with the Company a pilot will have the status of SOT.

17.2     Status on completion of training

On completion of training (including aircraft type rating and en route flying) a SOT will have the status of S/O on the aircraft type to which the pilot is initially allocated by the Company.

And then:

19.1.2     Upon completion of training, a SOT will be allocated by the Company to the B787, A330 or A330/A350 SFF aircraft rather than the B747 and A380 aircraft unless there are insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32.7, or otherwise agreed with the Association for operational reasons. The Association will not unreasonably withhold agreement.

Therefore, it is AIPAs position that SOTs must be allocated to the B787, A330 or B787, A330 or A330/A350 SFF Second Officer categories only and that any vacancies on the A380, must be allocated in accordance with the seniority provisions in the LHEA.

We note the Company has provided AIPA with a number of ‘operational reasons’ that it says prompted its request to seek agreement from AIPA as provided for in clause 19.2.1. AIPA, however, does not believe the reasons provided by the Company justifies a deviation from the agreed provisions of the LHEA in circumstances where:

1.    The LHEA already contains provisions which allows the Company to allocate vacancies not in seniority order. To this end, in accordance with clause 16.5 the parties already agreed to appropriate bypass provisions to ensure more senior pilots are not significantly affected where operational reasons necessitate vacancies to be allocated not in accordance with clause 16.4.

2.    The information provided by Qantas indicate that it holds 60 sufficient bids from suitably qualified pilots -some of these pilots will be directly prejudicially affected by the proposal. These affected pilots have individual rights under the LHEA should the Company elects to bypass them -AIPA is not inclined to waive these pilots’ rights on their behalf;

3.    The Company therefore has the ability to do what it intends to do, and must do so as set out in clause 16.5.

CoM has confirmed today that its position is that the Company complies with the provisions of the LHEA, and in particular clause 16.5 when it proposes to bypass more senior pilots.

(emphasis in original)

48    On 20 September 2022, Mr Alley responded to Captain Lucas in the following terms:

I refer to previous correspondence most recently your email of 14 September 2022 (Response).

Our request to AIPA was first made via email on 20 August 2022. In that email we provided compelling operational reasons for allocating new SOT’s to the A380. In its Response AIPA does not reject these reasons. We therefore proceed on the basis that AIPA accepts there are sound operational reasons for the proposed allocation. Should this not be the case, and should AIPA challenge the operational reasons we have advanced, we ask AIPA to detail its position as part of any further response.

In our view, clause 19.2 of the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020 (LHEA) is plain in its operation; the Company is to allocate SOT’s to B787, A330 or A330/A350 SFF aircraft rather than the A380 unless there are insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32. 7 or unless otherwise agreed with the Association for operational reasons. We accept for present purposes that there are sufficient bids from suitably qualified pilots. The issue then is whether there are operational reasons for the Company to allocate SOT’s to the A380. To the extent there is, and this is not challenged by AIPA, and to the extent the Company seeks AIPA’s agreement to so allocate, the LHEA mandates that AIPA will not unreasonably withhold its agreement. This is the totality of interpretation that should be required.

In its Response, AIPA says SOT’s must only be allocated to the A380 in accordance the seniority provisions at clause 16.4 and that to the extent the Company allocates positions on the A380 other than in seniority order, then the bypass provisions under clause 16.5 apply. AIPA then summarises its position by saying the Company has the ability to do what it wants to do but must do so pursuant to clause 16.5. We cannot accept this argument and observe:

•    Clause 19.1.2 specifically deals with the allocation of SOT’s to aircraft types. There is no basis to read the clause subject to the promotional clauses at clause 16.4 or the bypass provisions at clause 16.5. It is trite to note the particular clause prevails over the general.

•    Clause 16.4 does not have relevance precisely because we are proposing to address the shortfall in our A380 SO’s establishment through the allocation of SOT’s and not through the advertising of vacancies. In any event, clause 16.4.1 (a) expressly provides that the application of seniority does not limit any other provision of the agreement.

•    Had the parties intended to call up the bypass rules when allocating SOT’s to the A380 under clause 19.1.2, such provision could have been simply and readily included in the clause. The parties did not choose this path and there should be no suggestion now that bypass rules apply.

•    Most significantly, on AIPA’s construction, the process of agreement that is contemplated in clause 19.1.2 is made redundant and the concluding words of clause 19.1.2 - or otherwise agreed with the Association for operational reasons. The Association will not unreasonably withhold agreement - would have no work to do. This simply cannot be correct.

In summary, we are satisfied the AIPA interpretation is without merit. We are also concerned that AIPA, either knowingly or mistakenly, places itself in breach and evidences an ongoing intent that it will not be bound by its industrial obligations. This is not a position that Qantas can accept, particularly where it will impact the efficient restart of our international operations. In this regard, and given AIPA has withheld its agreement, we have now cancelled the 2 x proposed A380 SOT training courses which had been scheduled for 11 October. The next tranche of such courses are currently scheduled to commence on 7 November, with 4 x SOT’s scheduled to commence on this date, and with a further 16 x A380 SOT training courses planned over the balance of the training year. We are committed to these courses proceeding.

In light of the matters set out above, we invite AIPA to reconsider its position, remedy its breach, and provide its agreement to the proposed allocation. In the alternative, and if there are any other grounds on which AIPA says it can reasonably withhold agreement, we invite you to provide us with these reasons by no later than COB on 26 September. In the further alternative, if AIPA takes the position that it agrees to the allocation for operational reasons, but contends that the bypass rules should then apply, we again ask you to confirm by COB on 26 September.

Qantas otherwise reserves all its rights and indicates that in the absence of a satisfactory response it may commence proceedings without further notice.

(bold emphasis in original; underline emphasis added)

49    Captain Lucas did not consider this to be a separate or fresh request for the agreement of the AIPA under cl 19.1.2, because it did not appear to him that Qantas had advanced any additional grounds or new information to support the “operational considerations and constraints” that had been set out in the 20 August 2022 email. Thus, Captain Lucas did not consider there to be any need for the CoM to specifically discuss the 20 September 2022 email or how the AIPA should respond to it. He formed the view that the AIPA’s response was covered by the outcome of the meeting of the CoM on 13 September 2022 and he continued to hold the same position and reasoning process that is described at paragraphs [45] and [46] above. He also had in mind that the dispute resolution procedure in Part 8 of LHEA10 was an available mechanism to resolve any questions about the request or the AIPA’s responses thereto.

50    Captain Lucas instructed Mr Dalgleish to respond to Mr Alley’s letter, reiterating the AIPA’s position as set out in Captain Lucas’s 14 September 2022 email, and further illuminating that position as appropriate, including by reference to the availability of the dispute resolution procedure in LHEA10.

51    On 29 September 2022, Mr Dalgleish sent to Mr Alley a letter, which Captain Lucas and Captain Hewett had approved, in the following terms:

I refer to your letter dated 20 September 2022 to Captain Anthony Lucas, AIPA President; and all other relevant correspondence in relation to this matter to date.

1.    AIPA accepts that seniority is not always the only element in the allocation of pilots to a category and that the seniority provisions in the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 20201 (Long Haul Agreement) are specific and limited in scope.

2.    AIPA agrees with Qantas for present purposes that there are sufficient bids from suitably qualified pilots.

3.    AIPA does not accept that there are sound operational reasons for the proposed allocation by Qantas. This is evidenced by the actions of Qantas to date as there are not insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32. 7. AIPA also does not accept that compliance with the Long Haul Agreement will materially impact the efficient restart of Qantas’ international operations.

4.    We are concerned that Qantas has placed itself in a position where it will breach the Long Haul Agreement, and its industrial obligations.

5.    We are satisfied that Qantas’ interpretation is without merit.

6.    The totality of interpretation of the Long Haul Agreement requires an understanding of the following:

a)    Pursuant to clause 16.4, and 16.5, and 19.1.2 of the Long Haul Agreement, a later act or provision impliedly amends or repeals the earlier acts or provisions to the extent of the inconsistency;

b)    Where different words are used and the same words could have been used, there is a presumption that the legislature intended the words to bear different meanings. Both presumptions readily yield to the statutory context: see Commissioner of Taxes (Vic) v Lennon (1921) 29 CLR 579 at 590; McGraw-Hinds (Aust) Pty Ltd v Smith (1978) 144 CLR 633 at 643; Murphy v Farmer (1988) 165 CLR 19 at 27;

c)    An award (and/or Enterprise Agreement) “must not be interpreted in a vacuum divorced from industrial realities”: City of Wanneroo at [57]; Australian Workers’ Union v Cleanevent Australia Pty Ltd at [14];

d)    Notwithstanding, ‘that the history of provisions, specifically the time when it was made and circumstances at the time supply the best and surest mode of interpreting a provision’: Andrew John Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at [6];

e)    In short, narrow, or pedantic approaches to interpretation are misplaced, the search is for the meaning intended by the framer(s) of the document: Kucks v CSR Ltd (1996) 66 IR 182 at 184; and

f)    See Lewison and Hughes, n 38, Ch 7 (for contracts); and Pearce D and Geddes R, Statutory Interpretation in Australia (8th ed, LexisNexis, NSW, 2014) Ch 4, pp 169-187 (for statutes). Latin phrases expressing syntactical presumptions such as:

(i)    generalia specialibus non derogant - Where a general and specific provision conflict, the general provision is to be read subject to the specific provision.

(ii)    expressio unius est exclusio alterius - Express reference to one matter indicates that other matters are excluded.

iii)    ejusdem generis - Where specific matters with a common genus are followed by general words, the general words are constrained by reference to that genus.

(iv)    ‘Maxims are not hard and fast rules to be applied mechanically in order to reveal the answer’: Minister Administering the Crown Lands Act v NSW Aboriginal Land Council (2008) 237 CLR 285 at [14]; Lewison and Hughes, n 38 at [7.01]; and

g)     Lastly, where there is doubt about the interpretation of a provision, the courts are increasingly turning to detailed considerations of the history to seek to understand the purpose of the provision: see Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1.

7.    Applying these rules of interpretation it is clear that clause 19.1.2 pertains to the allocation of SOTs to the A330, B787 and A330/A350 SFF aircraft and such allocation, is not subject to seniority. The B747 and A380 are self­evidently excluded from this list.

8.    It follows that clause 19.1.2 infers, having regards to the history, the industrial realities, and the express terms, that principles of seniority do apply to the allocation to the B747 and A380. Therefore to suggest there is “no basis” to read clause 19.1.2 subject to the seniority provisions, is misconceived.

Proposed resolution

9.    Nevertheless, in our view, if AIPA was to agree to the allocation of SOTs to the A380 SO category for operational reasons, then AIPA would contend that the parties agree to appropriate measures to protect those suitably qualified pilots with bids to the A380 SO category who, but for the parties’ agreement, would have been allocated to that category.

10.    In this regard AIPA suggests the protections afforded by the bypass provisions in the Long Haul Agreement are appropriate in the circumstances; however, we are willing to consider alternative measures Qantas may want to propose.

11.    AIPA notes this proposal, if accepted, will not in any way impact the efficient restart of Qantas’ international operations.

12.    I would be grateful if we could find a satisfactory resolution of this dispute between Qantas and the Association on the basis set out in paragraphs 9 and 10. Alternatively, we propose the parties seek the assistance of the industrial tribunal (an application pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to deal with a dispute in accordance with the dispute settlement procedure pursuant to clause 47 -Dispute Resolution of the LHEA) to resolve the impasse, on an expediated basis.

13.    Please confirm which option is agreeable to Qantas to assist AIPA, and its membership, in assessing the most appropriate course of action in these circumstances by COB Thursday 6 October 2022.

(footnotes omitted; emphasis in the original)

52    On 6 October 2022, Mr Alley wrote to Mr Dalgleish in the following terms:

I refer to recent correspondence in this matter including my email to Captain Lucas dated 20 August, the email from Captain Lucas dated 14 September, my letter to Captain Lucas dated 20 September, and your letter dated 29 September.

Qantas does not propose to enter ongoing debate about the operation of relevant clauses of the LHEA. We will however set out the following matters for your consideration and so they are a matter of record:

1.    In my letter of 20 September I expressly asked AIPA to identify the grounds on which it said it could reasonably withhold its agreement to the proposed allocation. AIPA has identified no such grounds. It has merely repeated its previous assertion it can reasonably withhold agreement on the grounds there are sufficient bids from suitably qualified pilots employed prior to the commencement of clause 32.7. Qantas does not accept this provides a basis for withholding agreement.

2.    It is difficult to reconcile the position taken in the email from Captain Lucas with your letter of 29 September. In his email, Captain Lucas suggested that Qantas could simply proceed with the allocation on the basis of, and subject to, the clause 16.5 by-pass provisions. In contrast, you set out a proposal where AIPA would provide its agreement under clause 19.1.2 on operational grounds in return for Qantas agreeing to pay by-pass consistent with that provided for in clause 16.5, or by otherwise agreeing to some other form of “protection” for pilots who but for the proposed allocation would have been promoted to the A380 SO Category. It is therefore not clear whether AIPA says we can only proceed with AIPA’s agreement, or whether AIPA says we can proceed without agreement but subject to 16.5. We reasonably expect that AIPA will clarify its position.

3.    Our position on clause 16.4/16.5 remains as set out in our letter of 20 September. We do not see that these clauses are enlivened or can be relied upon in circumstances where we have not advertised vacancies and where we are proposing to address our establishment levels on the A380 SO Category through the direct allocation of SOT’s. AIPA’s interpretation of the relevant clauses is fundamentally misconceived and the recitation of general principles of construction at paragraph 6 to 8 of your most recent letter of 29 September 2022 does not advance AIPA’s position. We proceed on basis that agreement from AIPA is required under clause 19.1.2, that agreement not to be unreasonably withheld, and that clause 19.1.2 is not to be read subject to clauses 16.4 or 16.5.

4.    There is no basis for AIPA to suggest that we are in danger of breaching our industrial obligations. We do however reserve all of our rights on the question of the remedies available should AIPA continue in breach of its obligation not to unreasonably withhold agreement.

5.    We respond as follows to the proposal set out at paragraphs 9 and 10 of your letter:

a.    Qantas will not and cannot agree to extend the clause 16.5 by-pass provisions to the identified Second Officers.

i.    We will not agree because AIPA is effectively trying to extract a price to do what it is required to do under the terms of the existing agreement. To the extent that AIPA claims the by-pass provisions should apply when it gives its agreement under clause 19.1.2, this is properly a matter for future bargaining.

ii.    We cannot agree because we say clause 16.5 is not enlivened and any purported agreement between the parties to apply the clause 16.5 provisions would not have the support of the LHEA and would potentially cut across the rights of other pilots.

b.    Should you have any alternative proposal for the “protection” of identified Second Officers please table this proposal as a matter of priority. While Qantas will reasonably consider any such proposal, our fundamental position remains that we should not be required to pay for an agreement that AIPA is obliged to provide. Nor should the tabling of any such proposal result in any further delay to AIPA’s agreement pursuant to clause 19.1.2.

6.    With respect to your alternative proposal as set out at paragraph 12 we say:

a.    It is not clear to us what specific issue or question AIPA proposes be referred to the Commission for determination. If AIPA has in mind a specific issue /question, please advise.

b.    Even if an appropriate issue / question can be identified, and even if the parties agree to the Commission dealing with the matter on an expedited basis, it is unlikely that we would have any arbitrated outcome this calendar year.

c.    Your alternative proposal is therefore not acceptable to Qantas given the operational issues that we have previously identified and given our current need to increase the A380 SO establishment.

7.    Notwithstanding the above, Qantas is prepared to resolve this matter on the basis that:

a.    AIPA provide agreement under clause 19.1.2 to the proposed allocation on operational grounds. This will allow Qantas to proceed with the allocation and the training of SOT’s in the A380 SO Category.

b.     The parties agree to then refer to the Commission the specific question of whether the by-pass provisions under clause 16.5 are triggered in these circumstances.

Having regard to the urgency of the operational matters set out in my original email of 20 August, in the absence of a satisfactory response to the above matters received by no later than 12 October 2022, Qantas reserves its right to take such action as it considers necessary including commencing Federal Court proceedings on an expedited basis seeking such relief as Qantas considers appropriate.

53    On 11 October 2022, the AIPA’s CoM met again. It was agreed at that meeting that the AIPA would seek external legal advice, given the divergence in the positions taken by the AIPA and Qantas. The minutes of that meeting record:

A380 direct entry SO

PVDH – have had correspondence with QF on this issue. QF position is that if there are operational issues, AIPA cannot withhold agreement. AIPA states we can only give agreement if there are operational reasons. AIPA continues to propose that we will agree but there needs to be protections for pilots affected. QF state they will not pay for approval that AIPA is required to give. AIPA is seeking advice.

(emphasis in original)

54    I infer that the reference to “PVDH” is a reference to Mr Philip van den Heever who, as noted above, was the executive director of the AIPA.

55    On 12 October 2022 Mr Dalgleish, on the instructions of Captain Lucas, responded to Mr Alley’s 6 October 2022 letter. Mr Dalgleish’s letter comprised nine pages. It is sufficient for present purposes to set out Captain Lucas’s summary of Mr Dalgleish’s letter, namely that it:

(1)    asserted that:

(a)    the impact of cl 19.1.2 is to both limit the discretion of Qantas management in the allocation of SOTs and increase the control that the AIPA as the representative of pilots has over its members’ working lives, subject to the requirement that it exercise its decision-making discretion reasonably on behalf of its members;

(b)    the introduction of cl 19.1.2 into LHEA10 was a deliberate and purposeful change from the system applicable under LHEA9; and

(c)    the AIPA was not “required” or “obliged” to give its agreement under cl 19.1.2 in the face of the “operational considerations and restraints” identified by Qantas in the 20 August 2022 email, but rather, could reasonably withhold agreement if the withholding was bona fide and not capricious or arbitrary; and

(2)    again sought to engage with Qantas about seeking the assistance of the Fair Work Commission to resolve the dispute.

56    On or around 14 October 2022, on the instructions of Captain Lucas, Mr Dalgleish engaged Mr Ian Neil SC, to provide the AIPA with legal advice in relation to the meaning and application of cl 19.1.2 of LHEA10.

57    On 21 October 2022, Mr Alley responded to Mr Dalgleish’s 12 October 2022 letter:

I refer to AIPA’s letter of 12 October 2022 (Letter) and to previous correspondence.

Despite the length of AIPA’s Letter you have not responded to the core matters raised in our letter of 6 October 2022. To summarise, we reasonably anticipated responses to the following questions:

1.    Does AIPA still take the position that Qantas can simply allocate SOT’s to the A380, absent agreement from AIPA, and with the result that the clause 16.4 / 16.5 bypass provisions would then apply, or has this position changed?

2.    What specific “protections” do you seek for Second Officers who would be “bypassed” if AIPA were to agree to the proposed allocation?

3.    To resolve the impasse, would AIPA provide its agreement to the proposed allocation on operational grounds and with the parties to then refer the question of the applicability of clauses 16.4/16.5 to the Fair Work Commission?

With respect to your proposal for a joint referral to a Full Bench of the Fair Work Commission, being in substance a proposal that had previously been tabled and declined, we again observe that you still have not identified the question that you propose be referred. We otherwise point you back to paragraph 6 of our letter of 6 October where we have set out why such a proposal is not acceptable having regard to current operational issues.

Further to the matters set out in our original email dated 20 August, I also now advise that in BP352 commencing on 7th November 2022 projecting through to the end of the current training year we will be working to a maximum divisor in the A330 Second Officer category with a deficit to required establishment. In these circumstances, we again confirm and reinforce that we are not operationally in a position to release Second Officers to the A380. Therefore, and to the extent that AIPA does not provide its agreement under clause 19.1.2, we put AIPA on direct notice that its ongoing breach is likely to ultimately compromise the A380 flying programme, the revenue associated with this programme, and in turn, the amount of flying available to Captains and First Officers currently on the A380.

Should you have any response on these matters we invite you to provide that response as a matter of urgency and by no later than close of business on 25 October.

(emphasis in original)

58    On 25 October 2022, Mr Dalgleish responded to Mr Alley:

I refer to your email dated 21 October 2022 to Mr Elliott Dalgleish; and all other relevant correspondence in relation to this matter to date.

Does AIPA still take the position that Qantas can simply allocate SOT’s to the A380, absent agreement from AIPA, and with the result that the clause 16.4 / 16.5 bypass provisions would then apply, or has this position changed?

1.    This is not AIPA’s position.

2.    The initial correspondence from Tony Lucas, AIPA President was the Association’s suggestion to deal with Qantas’ request in a practical manner to arrive at a sensible industrial outcome.

3.    In the Association’s correspondence our position was put as follows:

“…if AIPA was to agree to the allocation of SOTs to the A380 SO category for operational reasons, then AIPA would contend that the parties agree to appropriate measures to protect those suitably qualified pilots with bids to the A380 SO category who, but for the parties’ agreement, would have been allocated to that category.”

4.    AIPA proposed that “the protections afforded by the bypass provisions” would be deemed by the Association as an “appropriate measure”.

5.    Unfortunately, the Company has rejected the Association’s proposal without any valid reason and has refused to make any counter-offer.

6.    Rather, the Company stated the Association is in breach for not exercising its decision-making discretion in favour of Qantas. Thereby not permitting the Association to seek such protections on behalf of its members and/or act in our members’ best interests.

7.    The Court or Commission will not interfere with AIPA’s decision making when it was reasonably justifiable. When the Association exercises its discretion reasonably, it is entirely untenable that it would constitute a breach of the enterprise agreement.

What specific “protections” do you seek for Second Officers who would be “bypassed” if AIPA were to agree to the proposed allocation?

8.    Without prejudice to the parties’ ultimate positions, AIPA is willing to discuss with Qantas the resolution of this dispute on the basis of the following proposals:

a.    Additional pay equivalent to bypass pay, and the related protections (without affecting the rights of any employee from the pilot establishment/AIPA membership); or

b.    Additional pay equivalent to bypass pay and an undertaking the Company will not enforce the freeze period (if any) relevant to the affected pilots’ next allocated vacancy; or

c.    The following protections and provisions applying:

i.    Clause 16.5.1(a)

ii.    Clause 16.5.1(e)

iii.    Clause 16.5.2 (a) and (b)

iv.    Clause 16.5.3

v.    Clause 16.5.4

vi.    Clause 16.5.5

vii.    Clause 16.5.6

viii.    Clause 16.5.9

ix.    Clause 16.5.10

x.    The list does not include clause 16.5.8 [Bypassed pilot to commence training within two (2) years]. In lieu of clause 16.5.8, AIPA proposes the Company provides an undertaking that it will not enforce a freeze period relevant to the affected pilots’ next allocated vacancy (if any); or

d. Any other proposal Qantas may have in resolution of the dispute.

To resolve the impasse, would AIPA provide its agreement to the proposed allocation on operational grounds and with the parties to then refer the question of the applicability of clauses 16.4/16.5 to the Fair Work Commission?

9.    No.

10.    The Association does not advance the position that clauses 16.4 and 16.5 apply.

11.    Our proposal is for the parties to agree to afford the affected pilots with similar protections, as those provided in the bypass provisions.

12.    To repeat, the Association will agree to the request provided

“…appropriate measures to protect those suitably qualified pilots with bids to the A380 SO category who, but for the parties’ agreement, would have been allocated to that category.”

13.    Regrettably, Qantas has refused to engage with the Association on what appropriate measures the Company would be willing to consider.

With respect to your proposal for a joint referral to a Full Bench of the Fair Work Commission, being in substance a proposal that had previously been tabled and declined, we again observe that you still have not identified the question that you propose be referred. We otherwise point you back to paragraph 6 of our letter of 6 October where we have set out why such a proposal is not acceptable having regard to current operational issues.

Further to the matters set out in our original email dated 20 August, I also now advise that in BP352 commencing on 7th November 2022 projecting through to the end of the current training year we will be working to a maximum divisor in the A330 Second Officer category with a deficit to required establishment. In these circumstances, we again confirm and reinforce that we are not operationally in a position to release Second Officers to the A380. Therefore, and to the extent that AIPA does not provide its agreement under clause 19.1.2, we put AIPA on direct notice that its ongoing breach is likely to ultimately compromise the A380 flying programme, the revenue associated with this programme, and in turn, the amount of flying available to Captains and First Officers currently on the A380.

14.    Qantas has a duty to mitigate its damages. It has threatened not to do so.

15.    Qantas must take appropriate steps to avoid the alleged “damages”. It has threatened not to do so.

16.    Qantas can agree on a without prejudice basis to our proposal in paragraph 8 above and the dispute will be resolved.

17.    In our view, the Association’s discretionary decision making was not unreasonable. Nevertheless, the parties may seek the assistance of the industrial tribunal (an application pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to deal with a dispute in accordance with the dispute settlement procedure pursuant to clause 47 - Dispute Resolution of the Long Haul Agreement) to resolve the impasse, on an expedited basis, and as such the Industrial Tribunal may determine if the Association was in breach of its obligations.

18.    The AIPA rejects that the Association is in breach of its obligations.

19.    Lastly, we reject Qantas will suffer any damages as alleged.

(emphasis in original)

59    Also, on 25 October 2022, Captain Lucas, on behalf of the AIPA, filed an application in the Commission in which he sought, inter alia, a determination as to the correct interpretation of cl 19.1.2 of LHEA10.

60    On 8 November 2022, the AIPA’s CoM met again. The dispute was discussed again, and there was no support for the AIPA to provide agreement under cl 19.1.2 when Qantas had not offered the protections afforded by cl 16.5 (or similar protections) to the pilots who would be by-passed pilots. The minutes of that meeting record:

(emphasis in original)

61    On 15 November 2022, Mr Dalgleish wrote to Mr Alley and Mr Jim Morton, the Senior Manager of Industrial Relations of Qantas, providing a proposal for a “one-off payment” for by-passed pilots.

62    On 24 November 2022, Mr Morton wrote to Mr Dalgleish:

I refer to previous correspondence in this matter, the report back before Commissioner Ryan on 9 November, and your email below of 15 November which details a “suggested one off payment” to resolve the dispute. We understand the monetary payment is suggested in addition to, and not in lieu of, the already discussed back dating of training freeze periods.

When this matter was last before the Commission, AIPA indicated that in addition to the concessions Qantas had indicated it was prepared to make in relation to training freeze periods that it was also seeking monetary compensation for relevant pilots. AIPA acknowledged that the clause 16.5 bypass provisions are not a good fit for this purpose and said that instead it would be seeking a one off payment for each relevant pilot and that it would identify the quantum of this payment in correspondence that would shortly issue to Qantas. In this context, and given that we first sought AIPA’s agreement to the proposed allocation on 20 August, it is less than satisfactory that AIPA, instead of putting a quantum to us to settle the matter, has in its correspondence of 15 November put an indicative payment to us on the basis of which Qantas is invited to make an offer to then be considered by the AIPA CoM. As you will recall, on 1 November 2022 we made a formal offer to backdate training freeze periods on the basis of positive representations given by AIPA about how such an offer would be received, only for that offer to then be declined by the AIPA CoM. We do not intend to walk down this same path again.

Putting to one side questions of process, the figures put to us by AIPA, with a suggested upfront payment of $203k to each bypassed pilot are entirely unreasonable. By way of benchmarking, the quantum significantly exceeds any amount that would be payable under clause 16.5 (noting that Qantas does not accept that payment under that clause is required or appropriate). Given relative seniority and bidding preferences, we would also expect there would be roughly equal numbers B787 and A330 Second Officers affected by the proposed allocation.

In any event, and consistent with previous communications, and irrespective of quantum, Qantas considers it additionally unreasonable that AIPA would require payments which are not contemplated in LHEA10 to be made to relevant pilots as a pre-condition to AIPA providing its agreement under clause 19.1.2. I therefore advise Qantas will not be making any monetary offer in response to AIPA’s invitation.

Our offer made on 1 November 2022 in relation to the backdating of training freeze periods remains open for acceptance.

63    On 25 November 2022, Captain Lucas wrote to Mr Alley:

I’m available next Monday to discuss this issue further. I can meet after approximately 1030 noting that I’m catching up Dick and Colin Hughes at 0900 on other matters.

Emma will be in touch with some other days/times during the week. I’m scheduled to fly (training trip) to Bangkok on Tuesday.

Please note that I’m not talking legal terms or definitions in the following.

In order to facilitate the meeting it would be helpful to understand a few of the following points:

1.    The precise data of the 20 affected pilots. What fleet they’re on currently and their yearly pay increment.

2.    The assumptions upon which you’ve based your calculations for the quantum that you think bypass would be.

3.    Where you think AIPA has erred in the calculation of our quantum of bypass (noting that our calculations were not based on knowing who the bypassed pilots were).

4.    Any other relevant information that you think could be useful in determining a way forward.

5.    Any other proposals that you might have in order to appropriately address the interests of the bypassed pilots.

I reaffirm AIPA’s position that our first preference is for the pilots who have bids in for the A380 to move to that fleet.

In the alternative, if the operational requirements of Qantas are such that those pilots can not be transferred to the A380, then it remains AIPA’s position that the interests of those pilots be addressed such that they would not be disadvantaged.

64    On 29 November 2022, Mr Alley wrote to Captain Lucas:

Hope you are well.

Please see below the list showing category of the 20x most senior bidders for the A380 SO Category based on Letters of Preference held as at 28 November.

...

Qantas does not accept either that it should be required to compensate relevant Second Officers or that the bypass provisions provide an appropriate basis on which to compensate. Given this, questions about the accuracy and assumptions that underlay the AIPA calculations are largely irrelevant. We are not proposing to engage in what would be an academic exercise and simply confirm that however calculated, Qantas rejects the proposal that it provide bypass pay to relevant Second Officers.

As per our recent communications, our offer of backdating training freeze periods remains on the table and we are open to further discussion on how this backdating might be applied. Otherwise, and in order to progress the matter, we are open to discussing any alternative proposals that AIPA may want to raise, noting that our consistent position has been that we are not prepared to offer monetary compensation to relevant pilots in order to secure AIPA’s agreement.

We look forward to further discussing these matters with AIPA at 1pm tomorrow.

65    A letter of preference is a standing bid by a pilot for allocation to a particular aircraft type.

66    On 21 December 2022, Captain Lucas, along with some other members of the CoM, attended a conference with Mr Neil SC, in which he provided oral advice.

67    On 9 January 2023, Mr Dalgleish received a written Opinion of the same date from Mr Neil SC, which confirmed the legal advice that he had provided in the conference on 21 December 2022.

68    On 31 January 2023, the AIPA’s CoM met again. The dispute was discussed again, this time in the context of the legal advice. Captain Lucas believed the CoM agreed that its previous decisions to not give agreement under cl 19.1.2 did not give rise to any unreasonableness because the reasons for those decisions were within the nature and purpose of LHEA10, and it was open to the AIPA to consider and prefer its assessment of the best interests for its members as to those matters over the “operational considerations and restraints” identified by Qantas.

69    Captain Hewett’s evidence was that: (1) at that meeting the AIPA again revisited its decision to withhold its agreement to the request; (2) there was discussion about the content of the operational reasons advanced by Qantas in support of the request; (3) at the meeting, Mr Dalgleish provided a further briefing on legal advice received by the AIPA from Mr Neil SC; and (4) no participant at the meeting said or did anything to the effect that the AIPA was not acting reasonably in withholding its agreement to the request, or that the AIPA should agree to the request.

70    The minutes of that meeting include:

After very careful consideration by the AIPA CoM of Senior Counsel’s advice, based on counsel’s interpretation of the text of clause 19.1.2 of the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020, applying a purposive approach, and not having regard to any surrounding circumstances, because none have been identified that satisfy the stringent test allowing that to be done, it was decided by the AIPA CoM that its previous decision was within the nature and purpose of the Agreement for the Association, as the representative of its collective membership, to consider, and prefer, the Association’s views as to the best interests of its members.

The Association maintained its preference and conception of the best interests of its membership to any operational justification or requirement asserted by Qantas.

Remedy to dispute is yet to be determined because it is not explicitly mentioned in EA. AIPA position is to still try and get those positions for our members in accordance with EA.

71    On 15 February 2023, and subsequent to Qantas having filed evidence in the Commission, Mr Morton wrote to Captain Lucas in the following terms:

…

Request that AIPA reconsider its refusal to agree

As you are aware, Qantas has now filed evidence supporting the operational reasons for the direct allocation of 20 Second Officers to the A380 aircraft under clause 19.1.2 of the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020 (EBA 10) (LHEA) referred to in Mr Doug Alley’s letter dated 20 August 2020. That evidence provides additional context and detail to the operational reasons set out in Mr Alley’s letter.

We also note a phone conversation yesterday between Mr Dalgleish from AIPA and Mr Chung from Qantas’ solicitors, during which Mr Dalgleish said that if the additional evidential material had been put to AIPA initially, it may have reached a different view (about agreeing to the direct allocation). Having now received Qantas’ evidence in support of the direct allocation and in light of Mr Dalgleish’s observation, we respectfully request that AIPA re-evaluate its position and expeditiously provide its agreement for the direct allocation of 20 SOTs to the A380 aircraft.

Further request to allocate SOTs directly

Further and in any event (and without prejudice to Qantas’ position in the dispute proceedings in the Commission (C2022/7094)), Qantas also relies on the operational reasons set out in the evidence filed by Qantas on 14 February 2023 in those proceedings, being Witness Statements of Doug Alley, Andrew Coull and Andrew Stead, as the basis of a further request by Qantas to AIPA to agree to the direct allocation of 20 new SOTs commencing employment this training year to the A380. Qantas requests that AIPA provide its agreement to that proposed allocation pursuant to clause 19.1.2 of the LHEA.

For the avoidance of doubt, the subject matter of this request is the same as the request made by Mr Alley in his email of 20 August 2022 - that is, Qantas seeks directly to allocate 20 SOTs to the A380 fleet in the current training year.

We would be grateful if you could confirm whether AIPA agrees to the proposed direct allocation by 4pm on 20 February 2023.

(emphasis in original)

72    Captain Lucas’s view was that the evidence filed by Qantas in the Commission did not give additional grounds for the proposed direct allocation of SOTs to the A380 aircraft, but simply provided more detail concerning the previously described “operational considerations and restraints”.

73    On 20 February 2023, Mr Morton wrote to Captain Lucas in the following terms:

We refer to the above matter, your letter to Ms Sonia Millen dated 13 February 2023 and the directions hearing before Commissioner Ryan on 17 February 2023.

In that letter, you stated: “The Association will not seek to facilitate any interim relief (for instance, an injunction) in the Federal Court of Australia or interfere in any way with the Qantas Group’s operational imperatives (operational considerations and constraints) in the request to directly allocate SOTs onto the A380”.

Similarly, during the directions hearing, Mr Elliott Dalgleish stated on your behalf, consistent with the aforementioned letter and in the context of Qantas’ counsel asserting the operational urgency for a decision to be made by the Commission by 27 March 2023, that the decision was not so urgent because AIPA would not seek any interlocutory orders to affect Qantas’ operational imperatives.

Each of these statements suggests that if Qantas needs to directly allocate SOTs to the A380 fleet in upcoming training courses whilst this dispute remains unresolved in the Commission, that AIPA will not stand in the way of it doing so. Whilst Qantas’ counsel at the directions hearing flagged the necessity for AIPA to provide an undertaking about that matter if that reflected its position, the easiest and safest course however is for AIPA to provide its limited agreement, preferably by 4pm, 23 February 2023, to the direct allocation of four (4) SOTs to the A380 aircraft in accordance with clause 19.1.2 of the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020 (EBA 10). If such agreement is provided, this would allow Qantas to allocate the four (4) SOTs to a training course commencing 28 March 2023.

For the avoidance of doubt, this request for agreement for the proposed allocation of these four SOTs form part of the request made by Mr Alley in his email of 20 August 2022 (and repeated most recently on 15 February 2023). Naturally, Qantas would not contend that AIPA’s agreement to this limited allocation had any prejudicial effect on AIPA’s arguments in the Commission.

(emphasis added)

74    On 22 February 2023, Captain Lucas responded to Mr Morton:

I refer to your letter of 20 February 2023 which detailed Qantas’ request to directly allocate 4 SOTs to the A380 in a training course commencing 28 March 2023, whilst this dispute remains before the Fair Work Commission. This is a new request.

Contrary to the Qantas’ view, the Association will not be able to consider your proposal until the next Committee of Management meeting on 28 February 2023. This is because the six listed reasons provided by the Qantas Group on 20 August 2022 has expanded to 176 pages of material and business records, which will require a further reconsideration by the Association.

As previously stated in correspondence to Qantas, the Association will not seek to facilitate any interim relief (for instance, an injunction) in the Federal Court of Australia or interfere in any way with the Qantas Group’s operational imperatives (operational considerations and constraints) in the request to directly allocate SOTs onto the A380. However, AIPA reserves all its rights to take any action as it considers necessary including commencing Federal Court proceedings on an expedited basis seeking such relief as AIPA considers appropriate without further notice on the handing down of the Fair Work Commission decision(s).

This does not constitute a waiver.

The safest course of action for AIPA is to have the Association consider the matter at the next Committee of Management meeting as is required by clause 19.1.2 of the Long Haul Agreement and the Rules of the Association.

75    On 28 February 2023, the CoM met again. It considered Mr Morton’s letters dated 15 and 20 February 2023. The evidence filed by Qantas in the Commission in response to Captain Lucas’s application was not circulated to CoM members. However, that evidence was comprehensively summarised at the meeting by Mr Dalgleish.

76    At that meeting, Captain Lucas asked whether anyone present felt that the AIPA should agree to the request made by Qantas. No one stated or otherwise indicated that they believed that the AIPA should do so. Captain Hewett’s unchallenged evidence of this meeting was that:

(1)    there was discussion at the meeting about the content of the operational reasons advanced by Qantas in support of the request;

(2)    there was extensive discussion of an announcement that Qantas had made on 23 February 2023 concerning a profit of $1.45 billion;

(3)    Mr Dalgleish gave a briefing on the proceedings in the Commission including the content of Qantas’s evidence;

(4)    Mr Hewett’s assessment was that that evidence did not assert new, or different, operational reasons to those identified in the request;

(5)    no participant at the meeting said or did anything to suggest that the AIPA was not acting reasonably in withholding its agreement to the request, or that the AIPA should agree to the requests; and

(6)    a unanimous resolution was passed to the effect that the AIPA had reconsidered Qantas’s request for a fourth time, and maintained its preference for, and conception of, the best interests of its members in the face of the operational reasons asserted by Qantas.

77    The minutes of that meeting record:

Motion 6

BE IT RESOLVED that on 28 February 2023 the AIPA Committee of Management reconsidered the Qantas Group request of 20 August 2022 for a fourth (4th) time and maintained its preference and conception of the best interests of its membership to any operations justification or requirement asserted by Qantas.

Proposed: Tony Lucas

Seconded: John Pavlou

For: 22

Against: 0

Abstain: 2

Motion Carried

(emphasis in original)

78    On 28 February 2023, a number of SOTs commenced employment with Qantas (February SOTs). The February SOTs commenced induction training on that day. Qantas originally anticipated that all of these SOTs would undertake aircraft type training on either the A330 or B787, and upon completion of that training, be allocated to one of those aircraft types.

79    On 14 March 2023, Captain Lucas discontinued his application in the Commission and on 15 March 2023, he filed a second application in the Commission to deal with the dispute in accordance with the dispute resolution procedure in cl 47 of LHEA10 relevantly seeking a determination as to the correct interpretation and operation of cl 19.1.2 of LHEA10.

80    On 24 March 2023, Mr Alley told four of the February SOTs (4 February SOTs) that they would be commencing training on the A380 aircraft, with a view to being allocated to the A380 Second Officer category upon the completion of their training.

81    On 30 March 2023: (1) the 4 February SOTs completed the four-week induction phase of the training program; and (2) Qantas filed an application in the Commission requesting the Commission to deal with a dispute in accordance with the dispute resolution procedure in cl 47 of LHEA10.

82    On 5 April 2023, Qantas confirmed to each of the 4 February SOTs that Qantas would train them on the A380 aircraft with a view to allocating them to the A380 Second Officer category on completion of their training.

83    On 24 April 2023, a further group of SOTs commenced employment with Qantas, of whom four were selected to train on the A380 aircraft. (4 April SOTs).

84    On 26 April 2023, Qantas commenced this proceeding.

85    On 8 May 2023, Qantas advised each of the 4 April SOTs that Qantas would train them on the A380 aircraft, with a view to allocating them to the A380 Second Officer category upon completion of their training.

86    On 19 May 2023, Ms Sonia Millen, Qantas Executive Manager, Industrial Relations and People wrote to Captain Lucas. That letter included:

...

As you are aware (at least in part), Qantas has commenced training eight (8) SOTs on the A380. By 20 June 2023, 20 SOTs in total will have commenced training on the A380. Qantas had scheduled the training of the first four (4) of these SOTs in anticipation of a decision being reached in C2022/7094 by at or around the end of March 2023 and then continued with that training (and commenced further SOT training) in anticipation of a decision in C2023/1371 and C2023/1755, by mid to late June 2023. Qantas did this to expedite the training (and potential allocation) of the 20 SOTs to the A380 aircraft, consistent with its original request on 20 August 2022. It was hoped and expected that the matters in dispute would be heard and determined by the Commission before Qantas had to decide whether to allocate the SOTs currently undergoing training to the A380, upon the completion of that training.

However, as Qantas had made clear in its submissions filed in C2022/7094, and subsequently in mention hearings before the Commission when dealing with C2023/1371, Qantas was not (and is not) in a position to directly allocate any SOTs to the A380 aircraft, pursuant to clause 19.1.2 of the LHEA, in circumstances where the issue of whether AIPA had unreasonably withheld its agreement to that direct allocation, had not been resolved. To do otherwise would have placed it in arguable contravention of the LHEA, in the event that this question was resolved contrary to Qantas’ interests.

That remains Qantas’ position, despite Qantas’ clear contention that AIPA has, on four separate occasions since September 2022, unreasonably withheld its agreement to the direct allocation of up to 20 SOTs to the A380 aircraft this training year.

Given that AIPA has withheld its agreement to the direct allocation of these 20 SOTs to the A380 aircraft, and that the dispute about whether that withholding was unreasonable has not yet been resolved (and cannot now be resolved prior to the completion of the training of the 20 SOTs), Qantas is effectively prevented from being able to directly allocate the SOTs to the A380 aircraft pursuant to clause 19.1.2 of the LHEA.

Because of AIPA’s unreasonable withholding of its agreement to the direct allocation of 20 SOTs to the A380 aircraft this training year and to safeguard Qantas’ ability to operate its international fleet of aircraft (including the A380) as planned and as necessary to meet market demands, plus to mitigate any damages flowing from AIPA’s alleged breaches of clause 19.1.2 of the LHEA, Qantas intends to take the following actions:

(a)    On 23 May 2023 and in lieu of the provision of AIPA’s agreement to the direct allocation of 20 SOTs to the A380 aircraft pursuant to clause 19.1.2 of the LHEA, Qantas will advertise 20 Second Officer vacancies on the A380, pursuant to clause 16.4.14 of the LHEA. Bidding for these vacancies will be open for 28 days, closing on 20 June 2023;

(b)    For operational reasons (being substantially the same operational reasons as set out in the evidence filed in proceedings C2023/1371 and C2023/1755), Qantas proposes to by-pass the 20 most senior bidders for those vacancies in accordance with clause 16.5 of the LHEA. This letter notifies AIPA of that proposal and that Qantas intends to consult with AIPA about it, pursuant to clause 16.5(c) of the LHEA. Qantas confirms that it is available to meet with AIPA to further discuss the proposed by-pass as soon as reasonably practicable;

(c)    Subject to the outcome of consultation with AIPA, the 20 Second Officer vacancies will be allocated to the 20 SOTs referred to above who have (or will have) already commenced A380 training;

(d)    Subject to the outcome of consultation with AIPA, the 20 most senior bidders who will be by-passed, will be paid any by-pass pay to which they become entitled calculated in accordance with clause 16.5.4 of the LHEA; and

(e)    Training of those by-passed pilots within the A380 Second Officer category will commence within the next two (2) years (consistent with clause 16.5.8 of the LHEA).

To be clear, Qantas only intends to take the actions set out above because AIPA has (allegedly), on four separate occasions, unreasonably withheld its agreement to the direct allocation of 20 SOTs to the A380 aircraft (in contravention of clause 19.1.2 of the LHEA), and in an attempt to mitigate and minimise its operational losses flowing from those alleged contraventions.

...

Accordingly and in view of the risk of an adverse outcome for AIPA in those proceedings, Qantas invites AIPA to reconsider its position and provide its agreement to the direct allocation of 20 SOTs to the A380 aircraft, who will have commenced A380 training this training year, under clause 19.1.2 of the LHEA by no later than 4pm on 22 May 2023.

(emphasis in original)

87    On 23 May 2023 Mr Dalgleish, on the instructions of Captain Lucas, responded at length to Ms Millen’s 19 May 2023 letter, reiterating the position previously taken by the AIPA.

88    Also on 23 May 2023:

(1)    Qantas published a notice to flight staff advertising additional vacancies for the training year ending on 30 June 2023. This notice provided for the 20 Second Officer positions on the A380 aircraft in respect of which Qantas had sought agreement from the AIPA to fill with SOTs. The advertised additional vacancies were to be filled from letters of preference from sufficiently qualified pilots which were to be submitted no later than 20 June 2023; and

(2)    a further group of SOTs commenced employment with Qantas, of whom six were selected to train on the A380 aircraft (6 May SOTs). On that day, Qantas notified four of the 6 May SOTs, that Qantas would train them on the A380, with a view to allocating them to the A380 Second Officer category on completion of their training.

89    On 24 May 2023, the 4 April SOTs completed their induction training.

90    On 6 June 2023, Qantas advised the remaining two 6 May SOTs, that Qantas would train them on the A380 aircraft, with a view to allocating them to the A380 Second Officer category on completion of their training.

91    On 19 June 2023, Qantas advised another six SOTs who were a part of a group of SOTs who were to commence employment with Qantas on 20 June 2023 (6 June SOTs), that Qantas would train them on the A380 aircraft, with a view to allocating them to the A380 Second Officer category on completion of their training.

92    On 20 June 2023, the 6 June SOTs commenced their induction training.

93    On 21 June 2023, pursuant to cl 16.5 of LHEA10, Qantas bypassed the 20 most senior bidders for the 20 A380 Second Officer vacancies advertised on 23 May 2023, and allocated those vacancies to the 20 SOTs referred to above (4 February SOTs, 4 April SOTs, 6 May SOTs and 6 June SOTs) who were currently under training (subject to the successful completion of their training) . On that day:

(1)    Mr Morton notified Captain Lucas that Qantas had by-passed the 20 most senior bidding pilots. In this communication, Mr Morton provided details of the by-passed pilots, and the pilots to whom the vacancies would be allocated;

(2)    all 20 SOTs referred to above were notified “in writing pursuant to cl 15.1.2 ... that on successful completion of your training, you will be allocated to the A380 SO category”.

94    On 23 June 2023, the 6 May SOTs completed their induction training.

95    Captain Lucas summarised the reasons why he held the belief that the AIPA should not agree to the request as follows:

(1)    the effect of the AIPA giving its agreement under cl 19.1.2 would be to cause financial and non-financial prejudice to the by-passed pilots, in that they would not be allocated to the 20 A380 Second Officer vacancies in accordance with cl 16.4 of LHEA10, and they would not be provided with the protections afforded by cl 16.5;

(2)    agreement under cl 19.1.2 to the request would have seriously undermined the integrity of the principles of seniority enshrined in cll 16.4 and 16.5 of LHEA10, when in his assessment the content and justification for the “operational considerations and restraints” did not justify such a departure;

(3)    Qantas had not provided any reason why it could not simply implement the proposed direct allocation in accordance with cl 16, which would not require it to seek the AIPA’s agreement, but would give the by-passed pilots the protections of cl 16.5. That is, Qantas did not explain how or why it might be prejudiced if, as a condition of implementing the proposed direct allocation, it was required to afford to the by-passed pilots the protections provided for by cl 16.5;

(4)    by withholding agreement under cl 19.1.2, the AIPA was not thereby vetoing the proposed direct allocation, because:

(a)    it was open for Qantas to effect its proposed direct allocation by complying with cl 16 in relation to the pilots who would thereby be by-passed, or otherwise to come to some agreement with the AIPA about some other way to protect the by-passed pilots; and

(b)    the dispute resolution procedure in cl 47 of LHEA10 was an available mechanism to resolve any questions about these issues; and

(5)    to the extent that he considered that there was substance in the “operational considerations and restraints” set out in the 20 August 2022 email, he considered that Qantas had substantially been the author of the asserted problems that underlay all of those considerations and restraints. In his view, Qantas should have known that these issues would arise once COVID-19 restrictions began to ease, but had taken insufficient, or inadequate steps to prepare and plan to address those problems. He believed that the by-passed pilots should not have to pay for Qantas’s lack of planning and foresight.

96    Captain Hewett summarised the reasons why he held the view that the AIPA should not agree to the request, as follows:

(1)    Qantas should have foreseen the operational reasons it raised in support of the request and, if it was experiencing operational constraints relating to training and Second Officer requirements, that was a consequence of its own mismanagement. Qantas would or should have foreseen that the benefit of short-term savings it achieved during the COVID-19 pandemic by standing down pilots, offering leave without pay and handing out voluntary redundancies would result in a significant future training burden and a “training ripple” once international flights recommenced, yet it had not taken common-sense steps to plan for this, and now wanted the pilots who would be by-passed in the proposed direct allocation of SOTs to the A380 aircraft to bear the consequences;

(2)    the AIPA is obliged by its rules to consider, further and protect the interests of its membership, including in relation to the seniority system established by LHEA10. Qantas had not offered anything, or anything sufficient, to address the prejudice to the pilots who would be by-passed in the proposed direct allocation of SOTs to the A380 aircraft. The negative impact of direct allocation of SOTs to the A380 aircraft on existing Second Officers who had bid for those A380 Second Officer positions would be significant in that: (a) it would hinder their advancement; (b) they would miss the opportunity for improved remuneration amounting, as he assessed, to approximately $100,000 per annum; and (c) they would miss out on other benefits of being an A380 Second Officer, such as crew complement (mostly four pilot operations as against three pilot operations) and desirable rostering differences. The request did not suggest any compensation to the pilots who would be by-passed;

(3)    if the AIPA did not give agreement, Qantas could still address all of the operational reasons it relied upon by simply by-passing in accordance with cl 16.5 of LHEA10, and providing to the by-passed pilots all of the protections afforded by that provision. In other words, by withholding agreement, the AIPA would not be denying to Qantas the right or opportunity to make any of the direct allocations of SOTs to the A380 aircraft that it wanted to make when it wanted to make them. The only consequence of the AIPA withholding agreement would be that Qantas would then have to afford to the pilots who would then be by-passed the protections of cl 16.5; and

(4)    Qantas had not provided any evidence to suggest, or even made any assertion, that taking steps to address the prejudice to the by-passed pilots would be operationally impossible, difficult, or even just inconvenient.

D.    THE CLAIM BY QANTAS

97    I turn now to consider the claim made by Qantas against the AIPA for an alleged contravention of cl 19.1.2 of LHEA10, and thus s 50 of the Act, for unreasonably withholding its agreement to the request made by Qantas for the allocation of 20 SOTs to its A380 aircraft.

D.1    Introduction

98    The central provision of LHEA10 for present purposes is cl 19.1.2, which provides that:

Upon completion of training, a SOT will be allocated by the Company to the B787, A330 or A330/A350 SFF aircraft rather than the B747 and A380 aircraft unless there are insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32.7, or otherwise agreed with the Association for operational reasons. The Association will not unreasonably withhold agreement.

(emphasis added)

99    The wording of cl 19.1.2 invites consideration of whether the requirement upon the AIPA to not unreasonably withhold agreement is promissory or merely a proviso or qualification to the AIPA’s right to withhold agreement. If it is the former, then an unreasonable withholding of agreement may be a contravention of LHEA10 and thus of s 50 of the Act. If it is the latter, then no such contraventions may arise (and Qantas would not be in breach of LHEA10 by making the allocations in circumstances where agreement had been withheld).

100    The Court was not invited to make such a constructional choice. Instead, the parties conducted the hearing on the basis that the requirement upon the AIPA to not unreasonably withhold agreement is promissory.

101    I have reservations as to the correctness of that agreed position, given the wording of cl 19.1.2 and the relevant authorities, such as those collected in New Standard Energy PEL 570 Pty Ltd v Outback Energy Hunter Pty Ltd [2019] SASCFC 132; (2019) 135 SASR 469 (Kourakis CJ, Nicholson and Lovell JJ). I will return to this point after considering whether the AIPA in fact unreasonably withheld its agreement.

102    The prima facie position under cl 19.1.2 is that, upon the completion of their training, SOTs will be allocated to a B787, A330 or A330/A350 SFF aircraft, rather than a (B747 or) A380 aircraft. For a pilot to be directly allocated under cl 19.1.2 upon the completion of their training to an A380 aircraft, there must be either:

(1)    insufficient bids from suitably qualified pilots employed prior to the date on which cl 32.7 of LHEA10 commenced; or

(2)    an agreement between Qantas and the AIPA for such direct allocation to occur for “operational reasons” (with such agreement not to be unreasonably withheld by the AIPA).

103    As noted earlier, it is common ground that: (1) there were sufficient bids from suitably qualified pilots employed prior to the commencement of cl 32.7. Indeed, the evidence establishes that there were 60 such bids; and (2) Qantas requested that the AIPA agree to direct allocations of SOTs to the A380 aircraft because of “operational considerations and restraints” and the AIPA did not agree.

104    At issue is whether the AIPA unreasonably withheld its agreement.

D.2    Relevant principles

105    The onus of proving that the withholding of agreement was unreasonable is on the party making that assertion: Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296; (2013) 17 BPR 32,709 at 32,721 to 32,723 ([51] to [59]) (Basten JA; Barrett JA and Bergin CJ in Eq agreeing); University of Sydney v ObjectiVision Pty Limited [2019] FCA 1625; (2019) 148 IPR 1 at 63 [277(4)] (Burley J); EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 at 57 ([116]) (Buss JA; Owen and Newnes JJA agreeing).

106    In determining whether the conduct of the party that withheld agreement was reasonable or unreasonable:

(1)    that question is a question of fact: Re Idoport (in Liq) Pty Ltd [2012] NSWSC 524 at [50] (Ball J); which is to be determined objectively having regard to all of the circumstances of the case: Boss v Hamilton Island Enterprises Ltd [2009] QCA 229; [2010] 2 Qd R 115 at 130 [12] (Fraser JA; Chesterman JA and Margaret Wilson J agreeing); and as at the date on which such withholding occurs: St Barbara Ltd v Hockley (No 2) [2013] WASC 358 at [147] and [181] (Beech J); EDWF at 57 [116];

(2)    the circumstances of the particular case include:

(a)    any reasons given for withholding agreement: Idoport at [51] to [53]. In this regard, the party that has withheld its agreement is not restricted to reasons communicated at or about the time of such withholding: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 611; JA McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd [1992] 2 Qd R 121 at 129 (Kelly SPJ; Ryan J agreeing); Fulham at 32,720 ([47] to [48]); EDWF at 57 to 58 ([121]);

(b)    the terms of the contract in which the obligation not to unreasonably withhold agreement is to be found: Secured Income at 607 to 608 (Mason J, as his Honour then was); Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385 at [25] to [27] (Nettle J); Fulham at 32,719 [45]. In Cathedral Place, Nettle J stated at [25] that he treated as binding and plainly correct the observations of Mason J in Secured Income that “the terms of the contract are paramount”; and at [27] that “As a matter of principle, the question is one of contract and therefore the terms of the contract must always be determinative”;

(c)    the subjective intention of the party that withheld agreement: Fulham at 32,719 [43] and 32,720 [47]; ObjectiVision at 62 to 63 [277(2)]; and

(3)    the expression “reasonable” should be given a broad and common sense meaning: Idoport at [50].

107    A withholding of agreement is less likely to be found to have been unreasonable where: (1) the reason for the withholding is a matter affecting the subject matter of the contract; and (2) the grounds for withholding agreement are held honestly. Conversely, a withholding of agreement is more likely to be found to have been unreasonable where: (1) the reason for the withholding is a matter extraneous to and disassociated from the subject matter of the contract; and (2) the grounds for withholding consent are not held honestly: see EDWF at 56 to 57 ([115]); Secured Income at 610; Fulham at 32,719 [44]; ObjectiVision at 62 to 63 ([277(1)]).

108    The Court’s task is not to decide the correctness of the decision to withhold agreement or of the carrying out of that decision; rather it is to determine whether the withholding of agreement was reasonable or unreasonable: New Island Developments Pty Ltd v New Island Investments One Pty Ltd [2024] NSWSC 226 at [85(c)] (Rees J); St Barbara at [145]; Noranda Australia v Lachlan Resources NL (1988) 14 NSWLR 1 at 21 (Bryson J (as his Honour then was)). Thus, where a ground for withholding agreement is based upon the withholding party’s interpretation of the contract in question, the Court’s task is not to finally adjudicate upon the correctness of that interpretation, as opposed to determining whether the conduct of the party withholding its agreement on the basis of such an interpretation of the contract is reasonable or unreasonable.

D.3    Consideration

109    The request was made in the 20 August 2022 email (which is set out at [34] above). In that email, Qantas outlined a series of “operational considerations and restraints”, and sought the agreement of the AIPA to the allocation of 20 SOTs directly to the A380 aircraft. Those “operational considerations and restraints” were not supplemented in later correspondence (albeit that some further evidence in support of the asserted “operational considerations and restraints” was provided by Qantas). There is no dispute in this proceeding that the “operational considerations and restraints” described in the 20 August 2022 email were “operational reasons” within the meaning of that expression as it appears in cll 16.5.1 and 19.1.2 of LHEA10. It follows that it was open to Qantas to seek the agreement of the AIPA under cl 19.1.2.

110    It is convenient first to identify the reasons why the AIPA withheld its agreement to the request. In identifying those reasons, I have had particular regard to:

(1)    the acknowledgement by counsel for Qantas [at T122.2] that the reasons of the AIPA for withholding its agreement to the request included:

(a)    feedback from members of the AIPA that the AIPA should challenge any deviation from principles of seniority found in LHEA10, particularly in relation to the A380 aircraft;

(b)    the unfairness of recruiting new SOTs to fill A380 Second Officer vacancies, when existing pilots were available and would be disadvantaged;

(c)    the AIPA being unpersuaded by the reasons and materials advanced by Qantas that it should give the agreement sought, where to do so would seriously disadvantage the by-passed pilots with no compensation offered, and thereby undermine the seniority system; and

(2)    the reasons for that withholding that were recorded in contemporaneous correspondence and minutes, as I consider such documents are likely to be the most reliable evidence of the reasons that the AIPA had for withholding its agreement to the request. I note in this regard that the reasons summarised in (1) above are reflected in the contemporaneous documents.

111    The AIPA’s reasons for the withholding of its agreement with respect to the request when it was first made were communicated by Captain Lucas to Mr Alley in his 14 September 2022 email set out at [47] above.

112    Those reasons started from the proposition that under LHEA10 the prima facie position was that SOTs are to be allocated to aircraft other than the A380; and that vacancies on the A380 aircraft were to be fulfilled in accordance with the seniority provisions in LHEA10.

113    The AIPA’s reasons then moved to the proposition that a change from the prima facie position was not justified in circumstances where Qantas was able to make the 20 direct allocations that it wished to make by using the by-pass provisions in cl 16, and that proceeding in that manner would ensure that the 20 pilots who were to be by-passed for the allocation to the A380 aircraft would be compensated for that event in the manner contemplated by cl 16.1.5.

114    The reasons advanced by the AIPA in Captain Lucas’s 14 September 2022 email were maintained through the extensive correspondence that passed between the AIPA and Qantas, including in correspondence sent by the AIPA in response to subsequent restatements of the request, and in the minutes of meetings of the CoM of the AIPA held on 11 October 2022 and 31 January 2023.

115    Thus, in summary, the AIPA withheld its agreement to the request for the reasons which are common ground and set out at [110(1)(a) to (c)] above, as explained in the contemporaneous documents. Underlying each of those reasons is the construction of LHEA10 adopted by the AIPA and which construction is set out in some length in Captain Lucas’s 14 September 2022 email and reiterated in subsequent correspondence.

116    The interpretation of LHEA10 adopted by the AIPA is one that was well open to it, based upon the terms of LHEA10 and in particular cll 3, 16, 19.1.2 and 19.1.3, which indicate that allocations are in the usual course to be made on the basis of seniority and that a departure from this usual position is usually accompanied by compensation for the by-passed pilots. Of course, it does not follow that the AIPA’s interpretation of LHEA10 was the correct, or even the preferable, interpretation. It need not be. It also does not follow that the interpretation adopted by Qantas was incorrect or inferior. Again, it need not be. For the reasons earlier discussed it is not necessary to decide which interpretation is correct or to be preferred. The important point is that the AIPA’s interpretation was not such that it evidenced an unreasonable withholding of the AIPA’s agreement to the request made by Qantas.

117    Further, the reasons for the AIPA not providing its agreement to the request are all matters directly affecting the subject matter of LHEA10. They cannot be considered to be extraneous to or disassociated from LHEA10.

118    The reasonableness or otherwise of the AIPA not providing its agreement to the request also falls to be considered in a context in which: (1) LHEA10 provides, in cl 47, a dispute resolution mechanism; (2) the AIPA, as part of its continued dialogue with Qantas concerning the requests suggested possible solutions (29 September 2022 email, paragraphs 9 and 10; 15 November 2022 email), invited Qantas to provide any alternative measures for consideration (29 September 2022 email, paragraph 10) and proposed alternative dispute resolution (29 September 2022 email, paragraph 12); and (3) the AIPA commenced a proceeding in the Commission seeking determination as to the correct interpretation of cl 19.1.2 of LHEA10. Such conduct on behalf of the AIPA does not bespeak unreasonableness.

119    I also take into account, in assessing whether the AIPA acted unreasonably, the steps it took to seek and obtain legal advice. In particular: (1) the briefing document provided to the CoM for its 13 September 2022 meeting contained legal analysis of pertinent issues; (2) on 11 October 2022, the CoM of the AIPA agreed to obtain external legal advice given the divergence in the positions that had by then been taken by the AIPA and Qantas; (3) advice was obtained from senior counsel both orally and in writing; and (4) that advice was considered by the CoM on 31 January 2023. Again, such conduct does not bespeak unreasonableness.

120    The AIPA also adduced evidence from Captains Lucas and Hewett as to their reasons for voting to withhold agreement and of their understanding of the reasons of the AIPA (see [46], [95] to [96] above). Qantas has not invited the Court to disbelieve their evidence and their evidence of their reasoning is largely consistent with the reasons that the AIPA expressed contemporaneously (albeit, it does extend in part beyond the reasons expressed contemporaneously). Nevertheless, I have restricted my consideration to the reasons discussed at [110] to [115] above, which are based upon common ground and contemporaneous documents.

121    For completeness, I note that Qantas did not submit that: (1) any of the reasons discussed above were not honestly held; or (2) the AIPA was in fact motivated by other, undisclosed, reasons.

122    Qantas contends the AIPA’s withholding of its agreement based upon the interpretation of LHEA10 adopted by the AIPA was unreasonable, for the following reasons.

123    First, Qantas submitted that if the interpretation of LHEA10 advanced by the AIPA were correct, then in almost every case the answer would be that the withholding of agreement was not unreasonable, rendering cl 19.1.2 somewhat nugatory.

124    I do not accept this submission. The reasons for withholding agreement in a particular case may vary markedly and whether the withholding of agreement is reasonable or unreasonable will depend upon the circumstances of that case. To the extent that a future request upon similar facts were to produce the same result, this would be because that is the result that flows from the application of the law to the facts, and does not support the proposition that a particular construction would render cl 19.1.2 nugatory. The scope of cl 19.1.2 in other factual scenarios remains unaffected. One can readily envisage such scenarios, e.g., if AIPA did not engage at all with the requests and rejected them because it had decided in limine to reject all requests made for its agreement under cl 19.1.2 regardless of their context or the “operational reasons” provided.

125    Secondly, Qantas submitted that the AIPA was seeking to extract rights that it did not otherwise enjoy under LHEA10 as the price for its agreement to the request. In this regard, Qantas submitted that it had two alternative courses available under LHEA10 for a direct allocation of SOTs to the A380 aircraft, namely cl 16 and cl 19, and by insisting that Qantas use cl 16, the AIPA forced Qantas to pay a price that it did not have to pay under cl 19.

126    I do not accept this submission. The difficulty with it is that it operates on the premise that Qantas was able to proceed at no cost under cl 19, when in fact proceeding under that clause required the agreement of the AIPA, which might reasonably involve a cost to Qantas. Further, a reasonable view is available that – reading LHEA10 as a whole – the pilots (and in particular those directly affected) had rights under cl 16 to allocation on a particular basis related to seniority and to compensation if this were by-passed, which rights existed unless waived and which would have been removed if the AIPA had agreed to the course proposed by Qantas; and thus that the AIPA was not extracting a new right but instead preserving the existing rights for which it had contracted.

127    Thirdly, Qantas submitted that the AIPA did not “critically analyse” the “operational considerations and restraints” put forward by Qantas in support of its request and asked rhetorically that given the extraordinary nature of those considerations and restraints, “if not now, when” would agreement be given under cl 19.1.2.

128    I do not accept this submission. It is clear that the AIPA engaged with the “operational considerations and restraints”. Its engagement with and consideration of those considerations and restraints is evident from the history set out above, including at least: (1) Captain Lucas’s meeting with Mr Alley on 22 August 2022; (2) Captain Lucas’s 2 September 2022 email to Mr Alley seeking additional information for the purposes of considering the request; (3) the incorporation of excerpts of the request and Mr Alley’s 3 September 2022 response into the briefing document that was provided to the CoM for discussion at the 13 September 2022 meeting; (4) the discussions that Captain Lucas had concerning the request, the further information supplied on 3 September 2022 and the meaning and application of cl 19.1.2 with various people including other members of the CoM, during the period between 22 August 2022 and 12 September 2022; (5) the 14 September 2022 email from Captain Lucas to Mr Alley which set out the AIPA’s response to the request, which included a reference to the operational reasons and why the AIPA did not consider those reasons to be sufficient; (6) the 29 September 2022 email from Mr Dalgleish to Mr Alley in which he indicated that the AIPA did not accept that there were sound operational reasons for the action proposed by Qantas and set out reasons why; and (7) the provision of a comprehensive summary to the CoM of the evidence filed by Qantas in the Commission and which Qantas relied upon in support of its asserted operational reasons. I do not accept that the AIPA’s consideration of the “operational considerations and restraints” was deficient. I discern no unreasonableness in the manner in which the AIPA engaged with the “operational considerations and restraints” advanced by Qantas.

129    Further, the rhetorical question “if not now, when?” proceeds on the premise that the “operational considerations and restraints” were so extraordinary that the AIPA could not reasonably have withheld its agreement. I am not satisfied that this premise has been made out, particularly in circumstances where Qantas had available to it the option of proceeding under cl 16 and where there is no evidence before the Court (and no submission made) that: (1) the costs of proceeding under cl 16 would have been prohibitive; and (2) this was made known to the AIPA. It is also pertinent to note that in February 2023 Qantas announced a profit of $1.45 billion (see [76(2)] above).

130    Finally, Qantas submitted that the construction of cl 19.1.2 adopted by the AIPA was incorrect. In particular, Qantas submitted that the AIPA’s construction placed too much weight upon the words “Upon completion of training, a SOT will be allocated by the Company to the B787, A330 or A330/A350 SFF aircraft rather than the B747 and A380 aircraft A380 aircraft” at the expense of the remainder of the clause. It also contended that the concept of seniority articulated in cl 16 was not absolute. I accept that constructions of cll 16 and 19 other than that taken by the AIPA are available, however it does not follow that the AIPA acted unreasonably in adopting the construction that it adopted. As discussed above, the question is one of reasonableness of the conduct in withholding agreement, not the correctness of the construction adopted when withholding agreement; and the construction adopted by the AIPA was one that was well open to it.

131    For all of the above reasons, I am not persuaded that the AIPA’s withholding of its agreement to the request was unreasonable. In view of the conclusion that I have reached, it is unnecessary to consider further the constructional choice discussed at [99] to [101] above.

E.     THE AIPA’S CROSS-CLAIM

132    I turn now to consider the cross-claim.

E.1    Salient facts

133    The facts of particular significance to the cross-claim are set out at [78], [80] to [83], [85] to [86] and [88] to [94] above.

134    In summary:

(1)    between March and June 2023, Qantas advised 20 SOTs that they would undergo aircraft type training on the A380 aircraft, with a view to those SOTs being allocated to the A380 aircraft upon completion of their training;

(2)    each of those SOTs commenced their induction training and some of the SOTs (relevant SOTs) had completed that training and commenced aircraft type training on the A380 aircraft;

(3)    on 23 May 2023, Qantas advertised to its staff the 20 Second Officer positions on the A380 which Qantas had sought agreement from the AIPA to directly allocate, with such positions to be filled from letters of preference from sufficiently qualified pilots which were to be submitted no later than 4pm, 20 June 2023; and

(4)    on 21 June 2023, at a time when there were sufficient bids from suitably qualified pilots for the 20 A380 Second Officer vacancies that had been advertised on 23 May 2023, Qantas – pursuant to cl 16.5 of LHEA10 – by-passed the 20 most senior bidders and allocated those vacancies to the 20 SOTs referred to above (subject to their successful completion of their training) . On the same day all of those 20 SOTs were notified in writing pursuant to cl 15.1.2 of LHEA10, that upon completion of their training, they would be allocated to the A380 Second Officer category.

E.2    The claim

135    By its cross-claim the AIPA alleges that Qantas contravened cl 19.1.2 of LHEA10 which, for convenience, is reproduced again:

Upon completion of training, a SOT will be allocated by the Company to the B787, A330 or A330/A350 SFF aircraft rather than the B747 and A380 aircraft unless there are insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32.7, or otherwise agreed with the Association for operational reasons. The Association will not unreasonably withhold agreement.

(emphasis added)

136    It was common ground that the cross-claim principally involved questions of construction of cl 19.1.2 and in particular the words “training” and “allocated”. The principles applicable to the construction of enterprise agreements are well-established and were not in dispute in this proceeding. Those principles were conveniently summarised in James Cook University v Ridd [2020] FCAFC 123; (2020) 278 FCR 566 at 580 [65] (Griffiths and Sarah C Derrington JJ):

The relevant principles applicable to the interpretation of an enterprise agreement may be stated as follows:

(i)    The starting point is the ordinary meaning of the words, read as a whole and in context (City of Wanneroo v Holmes (1989) 30 IR 362 at 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [53]; WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197]).

(ii)    A purposive approach is preferred to a narrow or pedantic approach —the framers of such documents were likely to be of a “practical bent of mind” (Kucks v CSR Ltd (1996) 66 IR 182 at 184; Shop, Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16]; WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197]). The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose” (Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2]).

(iii)    Context is not confined to the words of the instrument surrounding the expression to be construed (City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [53]). It may extend to “… the entire document of which it is a part, or to other documents with which there is an association” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 175 at 178).

(iv)    Context may include “… ideas that gave rise to an expression in a document from which it has been taken” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518).

(v)    Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form …” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518).

(vi)    A generous construction is preferred over a strictly literal approach (George A Bond & Company Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [57]), but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties” (City of Wanneroo v Holmes (1989) 30 IR 362 at 380).

(vii)    Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry (City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379; WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197]).

137    The AIPA’s argument is in essence that: (1) the relevant SOTs completed their training when they completed their induction training; (2) those SOTs were then allocated prior to 21 June 2023 – by dint of their placement in aircraft type training for A380 aircraft and the commencement of that training – by Qantas to the A380 aircraft; (3) there was neither insufficient bids from suitably qualified pilots nor the agreement of the AIPA to such allocations; and (4) consequently, Qantas contravened cl 19.1.2 of LHEA10.

138    The first premise of this argument is that the relevant SOTs completed their training when they completed their induction training. The AIPA submitted that the word “training” within the phrase “Upon completion of training” is limited to the induction training that all SOTs, regardless of their aircraft type, are required to undertake and does not include aircraft type training. Such a construction is submitted to arise from the following matters:

(1)    the subject matter of cl 19.1.2 being expressly the allocation of an SOT, not of a Second Officer;

(2)    under cl 17.2 of LHEA10 , a pilot does not become a Second Officer until they have completed aircraft type training and until that time, they remain an SOT. This, it is submitted, is a strong indication that the pilots whose allocation is the subject of cl 19.1.2 are SOTs from which, it is submitted, it follows that they are yet to complete aircraft type training. Put another way, the AIPA contends that an allocation of SOTs can only occur during the period in which pilots are SOTs and that period finishes upon completion of training. Thus, the AIPA contends, cl 19.1.2 can only apply to SOTs at a point at which they have completed some training but have not yet become Second Officers, and the only point at which this occurs is at the completion of the induction training. That is because at the end of the aircraft type training the SOTs have become Second Officers, such that the clause cannot apply to them; and

(3)    the phrase “completion of training” is also used in cl 17.2, but is qualified by the words “including aircraft type rating and en route flying”, which do not appear in cl 19.1.2. This, it is submitted, is another strong indication that the word “training” in cl 19.1.2 does not include aircraft type training.

139    I do not accept these submissions. On appointment with Qantas a pilot has the status of an SOT (cl 17.1). An SOT is “a new intake pilot undertaking S/O training” (cl 14). On completion of their training (including “aircraft type rating” and “en route flying”) an SOT will have the status of Second Officer on the aircraft type to which the pilot is initially allocated by Qantas (cl 17.2). All orders to pilots regarding allocation to aircraft type are required to be given or confirmed by Qantas in writing (cl 15.1.2).

140    Clause 19.1.2 refers to the completion of training by an SOT. Thus, the training to be undertaken is “S/O training”, namely Second Officer training. The term “S/O training”, as with the term “training”, is not defined in LHEA10. However, it is common ground that the training required for an SOT to become a Second Officer includes induction training and aircraft type training as discussed earlier in this judgment (I note that neither of these expressions appears in terms in LHEA10). Thus, the natural reading of the expression “Upon completion of training” is that it refers to all training required to be undertaken by an SOT to become a Second Officer (relevantly, induction training and aircraft type training).

141    It seems unlikely that the AIPA and Qantas intended that the word “training” as used in cl 19.1.2 should be limited to what has been described as induction training. Such an interpretation requires the reading into that clause of words which limit training to what has been described as induction training in circumstances where such words could have readily been included and were not. Clause 19.1.2 is also capable of operation without the addition of such words. It is also not clear why these words would be read into this clause but not into the many other clauses in LHEA10 which also use the word “training”. In this context, I do not regard the use of the expression “including aircraft type rating and en route flying” in cl 17.2 but not in cl 19.1.2 as supportive of the AIPA’s argument. If anything, cl 17.2 (and similarly cl 35.1) suggests that training is not complete until after aircraft type training has been completed.

142    If the AIPA’s construction were correct it would produce the result – unlikely to have been intended – that upon completion of induction training an SOT will cease to be an SOT and become a Second Officer under cl 17; and “will be allocated” by Qantas to a particular aircraft type under cl 19 at a time when the SOT has not undertaken any aircraft type training much less successfully completed such training.

143    Thus, in my view, the expression “Upon completion of training” is a reference to all of the training that an SOT is required to undertake, including the training that the parties have described as induction training and aircraft type training.

144    The second premise of the AIPA’s argument is that the relevant SOTs were “allocated” by Qantas to the A380 aircraft by dint of their placement in aircraft type training for that aircraft and the commencement of that training. The AIPA submitted that this was because:

(1)    the concept of allocation is purely a matter of fact in circumstances where it is not defined anywhere in LHEA10, whether for the purposes of cl 19.1.2 or otherwise. There is no evidence to suggest that it has any particular meaning special to Qantas and its long-haul pilots.;

(2)    the evidence conclusively demonstrates that an SOT is not “allocated” to an aircraft under cl 19.1.2 upon completion of aircraft type training. For example, the 4 February SOTs were initially offered a contract, that referred to their “initial position” as “Second Officer under Training” on the B787 or A330 aircraft. Then, they were informed that Qantas would train them “on the A380 with a view to allocating [them] to the A380 Second Officer Category on completion of training”. In other words, Qantas considers that upon completion of aircraft type training, a pilot is allocated as a Second Officer, not an SOT. It follows that the allocation of an SOT within the meaning, and for the purposes of, cl 19.1.2 must occur before the completion of aircraft type training; and

(3)    as a matter of fact, “allocation” to an aircraft type for the purposes of cl 19.1.2 necessarily occurs when an SOT is assigned to, and begins, aircraft type training for that aircraft type, because that is the point at which Qantas definitively commits itself and that SOT to a course that, subject to the completion of the training, will inevitably lead to the filling of a vacancy for a Second Officer position on a particular aircraft type.

145    I do not accept these submissions. As noted above, cl 15.1.2 of LHEA10 requires that any order to pilots regarding allocation to aircraft type be given or confirmed by Qantas in writing.

146    Each of the relevant SOTs received notice that Qantas would train them on the A380 aircraft with “a view” to allocating them to the A380 Second Officer category on completion of their training. This is not an allocation to aircraft type nor a definitive commitment by Qantas. It is no more than notice that Qantas would train those SOTs on the A380 aircraft with a particular purpose in mind.

147    Later and on 21 June 2023, each of the 20 SOTs was given written notice – expressly pursuant to cl 15.1.2 of LHEA10 – that upon the successful completion of their training they would be allocated to the A380 Second Officer category. This was the only allocation of those SOTs to the A380 Second Officer category that occurred within the meaning of LHEA10. Further, that allocation occurred under cl 16 and not cl 19.1.2.

148    It follows that the second premise of the AIPA’s argument – that allocation occurred upon the commencement of aircraft type training on the A380 aircraft – is not established.

E.3    Disposition

149    In summary, I do not accept either of the first two premises of the AIPA’s argument. The third premise is common ground. As the conclusion of that argument depends upon the validity of both of the first two premises it must fail and the cross-claim should be dismissed.

F.    CONCLUSION

150    For the reasons set out above, each of the separate questions should be answered “No”. Each party has indicated that it wishes to be heard on the question of costs. I will make orders accordingly.

Associate:

Dated:    12 July 2024