Fair Work (Registered Organisations) Act 2009

s.158(1) RO Act - Application for alteration of eligibility rules

Australian and International Pilots Association

Application to alter eligibility rule - section 158 Fair Work (Registered Organisations) Act 2009 and Regulation 121 of the Fair Work (Registered Organisations) Regulations 2009- objections resolved - consent to proposed alteration in part - partial consent to proposed alterations approved

• [1] The Australian and International Pilots Association (AIPA or Applicant) has applied for the consent of the Fair Work Commission (Commission) under s.158(1) of the Fair Work (Registered Organisations) Act 2009 (the RO Act) to alter its eligibility rules.

• [2] The Applicant is a union registered under the RO Act that represents pilots employed in the international and domestic aviation industry. Its current eligibility rule extends to persons employed on airline services by an airline principally engaged in international operations or by one of several identified entities. The Applicant submitted that currently those entities fall into two groups, namely, companies that no longer operate (and in respect of which the proposed amendments would remove reference) and companies that form part of the Qantas Group of companies.

• [3] The original application was filed on 10 May 2024. Notice of the application was published in the Commonwealth of Australia Gazette on 15 May 2024. Two objections were lodged in response to the application, one by the Transport Workers' Union (TWU) and the other by the Australian Federation of Air Pilots (AFAP). Conciliation processes were undertaken between the Applicant and the objectors. After the Applicant filed evidence as to its compliance with its rules in relation to the proposed change, the Applicant and objectors reached a settlement, the result of which was that an amended application could proceed unopposed. An amended application was subsequently filed by the Applicant with supporting submissions on 22 January 2025. A copy of the proposed alteration as provided for in the amended application is annexed to this decision as Annexure A.

• [4] The Applicant submitted that there were 4 elements to the amended application. First, the Applicant indicated that it no longer pressed certain parts of the application as originally filed. The Applicant submitted that the proposed changes are now in a more limited form and that the Commission can and should consent to the application in part under s.158(2) of the RO Act and approve the limited form of changes. More is said about this point below.

• [5] The second aspect of the proposed alteration is that the Applicant seeks to delete various redundant parts of its current eligibility rule. This element of the proposed alteration is in two parts. The first is the deletion of references to flight engineers. The Applicant provided evidence to the effect that flight engineers were a class of worker formerly employed in the cockpit of an aircraft. They said that role has been eliminated by technology and references to that category of employee in the rules is no longer necessary. The second part involves the deletion of the last paragraph of the existing rule which, on the Applicant's evidence, was inserted at the conclusion of litigation related to the pilot's strike and makes reference to operators that no longer exist. Evidence was provided to the effect that there are no present members of AIPA whose membership arises because of the relevant paragraph and no-one who would lose the right to join the Applicant because of the proposed change.

• [6] The third and fourth elements to the application are that the Applicant seeks to extend its eligibility rules to include pilots employed by either of two entities called National Jet Systems Pty Ltd (NJS) and Express Freighters Australia (Operations) Pty Ltd (EFA) respectively.

• [7] The Applicant's evidence was that NJS is a wholly owned subsidiary of Qantas and that NJS operates with Sunstate, Eastern Australia Airlines and Network Airlines, also owned by Qantas, under the QantasLink brand. The Applicant provided evidence that it has as members, pilots employed by those other QantasLink brand operators. The Applicant also provided evidence that EFA is the Qantas freight airline operation and that AIPA currently has as members, pilots employed by that entity since they were previously engaged as pilots by Qantas Airways Ltd. The change was sought to clarify that the Applicant can enrol persons employed by EFA as new members.

• [8] The Applicant's evidence on each of the matters referred to above was unchallenged.

• [9] In order for an alteration to the eligibility rules of an organisation to take effect, the Commission[1] must consent to the alteration under s.158 of the RO. Section 158 provides:

158 Change of name or alteration of eligibility rules of organisation

(1) A change in the name of an organisation, or an alteration of the eligibility rules of an organisation, does not take effect unless:

(a) in the case of a change in the name of the organisation - the FWC consents to the change under this section; or

(b) in the case of an alteration of the eligibility rules of the organisation:

(i) the FWC consents to the alteration under this section; or

(ii) the General Manager consents to the alteration under section 158A.

(2) The FWC may consent to a change or alteration in whole or part, but must not consent unless the FWC is satisfied that the change or alteration has been made under the rules of the organisation.

(3) The FWC must not consent to a change in the name of an organisation unless the FWC is satisfied that the proposed new name of the organisation:

(a) is not the same as the name of another organisation; and

(b) is not so similar to the name of another organisation as to be likely to cause confusion.

(4) The FWC must not consent to an alteration of the eligibility rules of an organisation if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the FWC, another organisation:

(a) to which those persons could more conveniently belong; and

(b) that would more effectively represent those members.

(5) However, subsection (4) does not apply if the FWC accepts an undertaking from the organisation seeking the alteration that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the eligibility rules of that organisation and the eligibility rules of the other organisation.

(6) The FWC may refuse to consent to an alteration of the eligibility rules of an organisation if satisfied that the alteration would contravene an agreement or understanding to which the organisation is a party and that deals with the organisation's right to represent under this Act and the Fair Work Act the industrial interests of a particular class or group of persons.

(7) The FWC may also refuse to consent to an alteration of the eligibility rules of an organisation if it:

(a) is satisfied that the alteration would change the effect of any order made by the FWC under section 133 about the right of the organisation to represent under this Act and the Fair Work Act the industrial interests of a particular class or group of employees; and

(b) considers that such a change would give rise to a serious risk of a demarcation dispute which would prevent, obstruct or restrict the performance of work in an industry, or harm the business of an employer.

(8) Subsections (6) and (7) do not limit the grounds on which the FWC may refuse to consent to an alteration of the eligibility rules of an organisation.

(9) Where the FWC consents, under subsection (1), to a change or alteration, the change or alteration takes effect on:

(a) where a date is specified in the consent - that date; or

(10) This section does not apply to a change in the name, or an alteration of the eligibility rules, of an organisation that is:

(a) determined by the FWC under subsection 163(7); or

(b) proposed to be made for the purposes of an amalgamation under Part 2 of Chapter 3 or Division 4 of Part 7 of Chapter 11; or

(c) proposed to be made for the purposes of a withdrawal from amalgamation under Part 3 of Chapter 3.

• [10] Where an application is made under s.158(1) of the RO Act the application must also comply with the requirements of Regulation 121 of the Fair Work (Registered Organisations) Regulations 2009 (the Regulations). Based on the materials filed in support of the application, including the declaration of the Secretary of the Applicant, Mr. Pavlou, I am satisfied that the requirements of Regulation 121 have been met.

Section 158(2)

• [11] Section 158(2) permits an alteration in whole or in part where the Commission is satisfied that the alteration has been made under the rules of the organisation. The Applicant relied on a statement of Mr. Tony Lucas dated 10 October 2024 and made submissions outlining the process that was adopted under the rules of the Applicant in relation to the alteration of the eligibility rule of the Applicant. There was no evidence or submission suggesting that the Applicant had failed to comply with its rules in adopting the proposed change. I am satisfied that the steps set out in the Lucas statement demonstrate compliance with the rules of AIPA.

• [12] Section 158(2) is also relevant to the power of the Commission to consent to an alteration 'in part.' In this case the Applicant said that the Commission could consent to an alteration that differed from the alteration adopted by the Applicant's Committee of Management when it endorsed the proposed alteration and the original application at the Committee's meeting on 23 April 2024.

• [13] The Applicant submitted that the alterations approved by the Committee were more extensive than the changes which it was now asking the Commission to consent to. The Applicant explained that it had reached a compromise agreement with the two objectors, the AFAP and the TWU, the substance of which was that the Applicant would not pursue certain parts of the original application in return for which the objectors would withdraw their objections.

• [14] Further, the AIPA submitted that the power to approve an application in part was more than simply a 'blue line pencil' exercise, meaning that it was open to the Commission to approve changes in a different form, provided the scope of the new coverage consented to fell within the parameters of the extended coverage that had been originally approved by the Committee of Management resolution. Reliance for this proposition was placed on the decision in Australian Licenced Aircraft Engineers Association [2014] FWC 3658 where Hatcher VP (as he then was), described the operation of s.158(2) as follows:

[17] Section 158(2) provides that the Commission may consent to a change or alteration "in whole or part". Section 204(2) of the WR Act made provision to the same effect, as did the Industrial Relations Act 1988 and the Conciliation and Arbitration Act 1904. In National Tertiary Education Industry Union v Community and Public Sector Union the AIRC (Williams SDP) determined that power to consent to an alteration in part was not confined to the "blue pencil test" - that is, "the physical deletion or striking out of parts of the proposed alteration". In this respect, the AIRC followed the Full Bench decision of the Conciliation and Arbitration Commission in _Re Federated Miscellaneous Workers' Union of Australia_6 concerning s.139(2) of the Conciliation and Arbitration Act 1904, which provided in respect to alterations of eligibility rules that "The Registrar may consent to the change or alteration in whole or in part". The Full Bench said:

"The 'blue pencil' rule as it was described by Mr Northrop postulates that section 139(2) divorces from the function of the Registrar any power to alter the rules in form or in substance other than by the mere deletion of words. Taken to its logical conclusion this would mean that if an organization applied for eligibility in respect of, for example, candle-stick makers in New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Australian Capital Territory and the Northern Territory the Registrar could delete the State of Victoria or such further States or Territories from the rule as he saw fit; but if the rules sought coverage for 'candle-stick makers in Australia' the Registrar would not be permitted to qualify the rule by a proviso or exception as to a State or Territory.

We consider that section 139(2) can be construed so as to allow a Registrar to amend rules in respect of which consent is sought for the purpose of consenting in part to the extension sought. The sub-section connotes a consent to the substance of the rules rather than to the form in which those rules have been drafted. Amendment by way of modification of, or qualification to, the form of the rules as drafted must be required from time to time in order to give effect to a partial consent to the substance.

However, two important factors must be borne in mind. Firstly the power to amend must be strictly confined. It can only be used, apart from `blue pencil' deletions, so as to authorise amendment which, as a matter of construction, exclude persons who would otherwise have been eligible under the rules as proposed.

Secondly, no amendment should be made by the Registrar which would be calculated to prejudice the position of an objecting organization or a potential objector to such an amendment. This is a matter to be considered in each particular case. It means no more than procedural justice should be observed in the exercise of the functions under section 139(2)."

[18] Where it has been determined that partial consent should be given to an alteration to an eligibility rule by way of the addition of a textual limitation, it was held in NTEU v CPSU and in Re Shop, Distributive and Allied Employees' Association (Boulton J) that it was not necessary that the partial alteration again be approved in accordance with the organisation's rules.

• [15] Here the difference between the wording originally approved and the wording for which consent is now sought is twofold. First, the Applicant no longer presses for the inclusion of "Alliance Aviation Services Ltd ABN 96 153 361 525" or "any other entity that operates aircraft in the livery used by a company referred to in (i) to (xi) above" in the proposed alteration. Aside from some consequential renumbering of the subclauses in the proposed Rule 4(b), this is a straightforward 'blue line pencil' deletion. It involves a reduction in the scope of the proposed changed and can be dealt with on the basis that by that deletion, the Applicant seeks consent to the approval of the alteration in part under s.158(2).

• [16] The second issue is that the reference to "a related body corporate..." in the alteration to Rule 4(b) as approved by the Committee of Management are to be replaced by a reference to "a wholly owned subsidiary...", of Qantas Airways Limited. Both of these terms are defined in the Corporations Act 2001 (Cth).[2] The Applicant submitted, and I accept, that the terms differ with respect to the level of control and ownership that a company, in this case Qantas Airways Limited, would need to have for the provision to apply, with related bodies corporate being a broader term encompassing majority-owned subsidiaries. However, definitionally, all wholly owned subsidiaries are related corporate bodies. I therefore conclude that it is open to me to consent to the application in part by approving both of these aspects of the proposed change.

Section 158(4)

• [17] Section 158(4) requires the Commission to determine if it is of the opinion that there is another organisation:

(a) to which the persons who would be eligible because of the alteration could more conveniently belong; and

(b) that would more effectively represent those members.

• [18] The principles guiding the application of this section have been conveniently summarised by Deputy President Saunders in Re: Australian Rail, Tram and Bus Industry Union [2020] FWC 1489.[3] It is unnecessary to set them out in full here other than to say the task involves firstly identifying the employees who will become eligible to join the AIPA as a result of the change and then considering whether there is another organisation that satisfies both limbs of s.158(4) (described as the 'better organisation test' in AIPA's written submissions). AIPA advances the following propositions in support of the view that there is no basis to refuse consent to the application under s.158(4):

(a) The other Unions to which the relevant employees are or would be eligible to join have consented to this change, do not object to this change and do not contend that they are better organisations for the purpose of the better organisation test.

(b) No other person or entity, including relevantly Qantas, NJS or EFA objects to the change or contends that there is a better organisation for the purpose of the s.158(4) test.

(c) There is no evidence before the Commission that would support a conclusion of a better organisation.

(d) AIPA has a history of representing pilots employed by EFA.

(e) AIPA has a history of representing pilots in the Qantas Group, including pilots employed by the other subsidiaries that form part of the QantasLink operations, such as NJS.

(f) More than 50% of NJS pilots have indicated an intention to join AIPA if the change is consented to,

(g) AIPA's rules provide for guarantees of representation with AIPA for pilots employed by all entities.

(h) NJS, EFA and any future wholly owned subsidiaries are part of the Qantas Group. AIPA's objectives include "To further and protect the rights and interests of pilots working in the Qantas Group".[4]

• [19] There was no evidence or other submissions in relation to the eligibility or representative capacity of any other organisation.[5] On the basis of the material before me I am not of the opinion that there is another organisation of the kind referred to in s.158(4) and do not consider that I am prevented from consenting to the application by the operation of that provision. Given that conclusion, s.158(5) does not apply here.

• [20] There is nothing before me to indicate that there is any agreement or understanding concerning the representational rights of the AIPA that the proposed alteration would contravene. Nor was I taken to any matter to indicate that the proposed alteration would change the effect of any demarcation order or give rise to a serious risk of a demarcation dispute. Accordingly, there is no basis upon which I would exercise my discretion to refuse the application under ss.157(6) or (7). As there are no outstanding objections or other issues relating to the application, there is no other discretionary basis upon which the application should be refused under s.158(8).

• [21] I conclude that I should consent to the application in the terms sought in the amended application. A copy of Rule 4 of the Applicant, as amended by this application, is attached hereto as Annexure B.

• [22] Pursuant to s.158(9)(a), the alteration will take effect on and from the date of this decision.

(a) Any person who is normally employed as a pilot on regular public transport airline services extending beyond the Commonwealth of Australia or within the Commonwealth of Australia operated by an Australian airline principally engaged in providing international regular public transport airline services or by Australian Airlines Limited shall be eligible for membership in the Organisation.

(b) Without in any way limiting the generality of any other provision of this rule or being limited thereby, all persons who are normally employed as pilots on airline services within or extending beyond the Commonwealth of Australia operated in whole or part and under any name by any of:

(i) Qantas Airways Limited ABN 16 009 661 901;

(ii) Qantas Limited ABN 73 003 613 465;

(iii) Australian Airlines Limited ABN 85 099 625 304;

(iv) Jetstar Airways Pty Limited ABN 33 069 720 243;

(v) Eastern Australia Airlines Pty Limited ABN 77 001 599 024;

(vi) Sunstate Airlines (Qld) Pty Limited ABN 82 009 734 703; or

(vii) Network Aviation Pty Limited ABN 93 533 934 838

(viii) National Jet Systems Pty Limited ABN 11 008 279 203;

(ix) Express Freighters Australia (Operations) Pty Limited ABN 54 119 093 999; or

(xi) A wholly owned subsidiary (as those words are defined in the Corporations Act 2001) of Qantas Airways Limited.

shall be eligible for membership in the Organisation.

[1] Or, in the case of applications made under s.158A, the General Manager.

[2] See s.50 and s.9.

[3] See also Re Australian Licenced Aircraft Engineers Association [2014] FWC 3658.

[5] See AMWU v. ResMed Limited [2016] FWCFB 22 at [120].

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