s 739 - Dispute resolution

Dispute resolution - dispute part heard - effect on dispute of Full Court of the Federal Court decision in Corporate Air Charter Pty Ltd v AFAP [2025] FCAFC 45 - Corporate Air decision does not flow into Agreements.

• [1] The Australian Federation of Air Pilots (the Applicant or AFAP) has made a series of applications to the Fair Work Commission (FWC) under s 739 of the Fair Work Act 2009 (Cth) (the Act) for to have the FWC deal with a dispute over annual leave under the PHI International Australia Broome and Truscott Helicopter Pilots Enterprise Agreement 2021 and the PHI International Australia Gascoyne Helicopter Pilots Enterprise Agreement 2022 (the Agreements). PHI (International) Australia Pty Ltd (the Respondent) continues to dispute the AFAP's interpretation and position regarding such annual leave.

• [2] The matter was listed for hearing between 2 April 2025 and 4 April 2025. At the heart of the dispute was whether various pilots had actually been granted their annual leave. The Applicant says the timing of the leave was never agreed and the leave has not been granted. It was the Respondent's view that even if the Applicant was correct in asserting that the timing of such leave had not been agreed with the pilots, the leave had nonetheless been granted during periods of downtime and could thus be subject to an offset claim.

• [3] It appeared to me that this was an important issue to be determined. If it could be demonstrated that the pilots had in fact taken their leave, then the issue was confined to what - if anything - the FWC could or should do regarding the timing of the taking of that leave. On the other hand, if the leave had not been granted, there would be a significant claim for re-crediting of the leave. As part of the exercise of trying to determine if the annual leave had in fact been taken, I was seeking information from the parties as to the number of hours the relevant pilots had worked in the periods in question.

• [4] However, on 4 April 2025 during the hearing the Full Court of the Federal Court handed down its decision in Corporate Air Charter Pty Ltd v AFAP [2025] FCAFC 45 (Corporate Air). The effect of this decision - in summary - is that under the Air Pilots Award 2020 (the Award) stand-by (or "reserve") time should be counted as time worked and paid accordingly. The Applicant contended that the effect of this decision should be imported into the Agreements. The Respondent disagreed with this proposition. As such, I directed the parties to make submissions on the issue of whether Corporate Air held any relevance for the Agreements. This discreet issue was then heard on 26 May 2025 and the following is my decision with respect to that discreet issue.

• [5] The Applicant was represented by Mr Jared Marks who is an employee of the federation and thus no permission was required. As per previous decisions, I accepted that as the Applicant was represented by internal counsel the Respondent should be permitted representation in the interests of fairness between the parties.

• [6] I note at the outset that the Applicant filed three witness statements with its submissions. However, the witness statements are more relevant to the issue of how many hours the pilots have worked and were essentially tendered to counter the information provided - at my request - by the Respondent regarding its records of hours worked. This information will be of relevance to the question of whether the annual leave hours were granted but does not touch on the issue of whether Corporate Air is relevant. Given this, the material to be considered in this decision is limited to the parties' submissions and the various forms lodged with the applications to approve the Agreements which were tendered as evidence by the parties, and in the possession of the FWC in any case.

• [7] The Applicant submitted that Corporate Air has direct relevance for the Agreements. It submits that while stand-by has always been part of a pilot's role, it was not - prior to Corporate Air - apparent as to how such hours should be remunerated. However, any lack of clarity had been dealt with by the Federal Court in deciding that for the purposes of the Award where a pilot is under a continuous direction to be fit for duty, contactable and ready to commence duty on short notice they are in effect at work and should be paid.

• [8] The Applicant submits that this finding is not restricted to the Award. Rather, the construction of the Award identified in Corporate Air should inform and be read into any agreement that is underpinned by the Award, even where such agreement is silent or ambiguous on the issue of stand-by. To support this proposition, the Applicant draws upon the notion that industrial agreements should be interpreted in their industrial context, including the award on which they are based.[1]

• [9] In further submissions, the Applicant makes the following assertion about the findings of Deputy President Hampton in CFMEU v Flinders Logistics:

"A more explicit example of where the terms of the underpinning Award were read in is Construction, Forestry, Maritime, Mining and Energy Union v Flinders Logistics Pty Ltd [2022] FWC 2823 - a case about whether the sick leave provisions of the Stevedoring Industry Award 2020 could be read into the enterprise agreement. Deputy President Hampton held that, absent a contrary intention in the enterprise agreement, the award terms in question could be incorporated."[2]

• [10] The Applicant submits that given these findings, if follows that enterprise agreements should be construed in harmony with their underpinning award and should not undercut the award's safety net minimum entitlements unless such entitlements are explicitly and lawfully excluded. It further submits that absent any explicit contrary intention, the Corporate Air decision informs how terms such as "work", "ordinary hours", "standby" and "duty" are to be construed in the Agreements.

• [11] The Applicant submits that as both Agreements contemplate that standby is a duty to be performed by pilots and there is nothing in the text or context of the Agreements that supports the proposition that standby is not paid work, it should be treated in the same manner as in the Award. It contends that this is necessary to ensure that the minimum safety net objectives of s 134 of the Act are preserved unless expressly excluded.

• [12] The Applicant further submits that had the Respondent intended standby to not be paid work and pass the BOOT it needed to make this clear to the FWC upon application for approval by virtue of the wording of the Agreements and the answers provided in the requisite FWC forms. As the Applicant points out - correctly - such exclusions are not mentioned in the applications which both declare that neither of the Agreements contain any provisions less beneficial than the Award.

• [13] The Applicant also addressed in its initial submissions what it perceived to be the Respondent's objections to the incorporation of the Corporate Air findings, which are found in the Respondent's objections to the production order sought by the Applicant. The Applicant notes firstly the Respondent's observation that the Agreements contain a provision that states that the Agreement will "totally regulate the terms and conditions of Pilots covered by this Agreement". The Applicant submits that this statement is unsound in that a number of other documents - such as CASA regulations and PHI internal policies - also regulate the terms and conditions of employment of the employees covered by the Agreements. Given this, a literal meaning of those words would be at odds with the actual operation of the Agreements and such a meaning should be avoided. Further, the Applicants submit that the exclusion does not limit the interpretive aids that may assist the FWC in properly construing the terms of an agreement and the Award is clearly part of the relevant industrial context.

• [14] The Applicants also take issue with the Respondent's notion that concepts of "reserve" and "standby" are only mentioned in clauses 14.3.3 and 14.3.6 of the Agreements and as such not relevant to the issue at hand. The Applicants submit that the use of the terms demonstrates that the Agreements contemplate those types of duties being performed by pilots. Further, the particular usage is consistent with the commonly accepted meaning - being periods where the pilot is contactable, fit for duty and available at short notice.

• [15] The third of the Respondent's objections is submitted to be the assertion that the Full Federal Court was at pains to confine its analysis to the provisions of the Award. The Applicant say that this should have no bearing on the issue at hand, as the Agreements are "products of the Award" and contemplate standby duties. As such, standby periods ought to be regarded as work. The Applicants submit that to the extent the Respondent relies upon paragraph 33 of Corporate Air it was wrong to do so. That paragraph is repeated here:

"We accept that, on balance, these authorities support the proposition that if an employee is instructed by their employer to do certain things and not to do certain other things during a period, then during that period they are on duty and the time is generally to be regarded as time worked. Of course, whether that is so in the case of a particular award or enterprise agreement will depend on the way in which those instruments use particular expressions, and on whether they provide for certain periods when employees are subject to instructions to be compensated for in other ways - for example, by the provision of a special allowance."

• [16] The Applicant states that the above passage:

"...does no more than to say that the propositions made in case law considered in Corporate Air may not apply equally to every award or enterprise agreement for two reasons - (1) the way those instruments use particular expressions; and (2) whether employees directed on standby are compensated in other ways. The Court's observations plainly were not directed to the Air Pilots Award, or Agreements that do not express a contrary intention to the Air Pilots Award."[3]

• [17] Finally, the Applicant submitted that the FWC should reject the notion that there are decisive factual differences between the present matter and Corporate Air. The Applicant submitted that the pilots covered by the Agreements were under the control of the Respondent during the entirety of their 21-day tours of duty and required to be available at short notice. As such, they were on standby at all times when not performing duties.

• [18] The Respondent submitted that Corporate Air is irrelevant to the matter presently before the FWC. It proposed a number of reasons why this should be the case, some of which were anticipated by the Applicant and dealt with at [13] to [17] above. The Respondent submits that firstly, the case dealt with interpretation of the Award which is not an issue that arises in the present case. Secondly, the Agreements expressly exclude the provisions of the Award in clause 6.2. Thirdly, the Applicant's assertion that the Corporate Air finding informs how various terms in the Agreements should be construed is unsupported by any reasoning and in any case misplaced. The Respondent submits that the Award provision requires the setting of stand-by duty start and finish times, meaning the concept in the Award is rostered standby duty.

• [19] The Respondent highlights the differences between the concept of standby in the Award and the concept of standby in the Agreements, noting that there are differences in the obligations placed on the pilot in addition to the process of determining when and if a pilot is on standby. Given these differences, the Respondent questions how the Award definition could inform the definition in the Agreements. The Respondent also took issue with the Applicant's contention that Corporate Air could somehow impact on the definition of ordinary hours and work in the Agreements.

• [20] The Respondent further submitted that the Corporate Air decision drew upon the text and context of the Award, which could be clearly distinguished from the Agreements. It submitted that even if the Award's construction was to inform the construction of the Agreements, it could only do so as part of a matrix of objective background facts known to the parties at the time the Agreements were made. The Respondent then looks to the Applicant's submission that prior to Corporate Air it was not apparent as to how standby hours were remunerated. It notes that the Applicant's further submission is that parties assumed that industrial instruments were subordinate to CASA regulations. The Respondent submits that the relevance of this is that:

"(t)here is no apparent dispute that relevant CASA regulations treat rest periods (such as periods during which pilots are asleep, and periods during which a pilot is prohibited under those same regulations from duty) as off-duty time. The AFAP advances nothing to suggest that the position with respect to the Agreement was any different to that "common view". It is that common view - whether or not it reflected the proper construction of the Award - which forms the relevant industrial context in which the Agreement falls to be construed.

On the AFAP's own case, then, there was no objective common understanding prior to Corporate Air Charter that standby hours were to be treated as paid time. It follows that there could have been no such common understanding at the time the Agreement was made. Whether or not Corporate Air Charter has subsequently shifted that position with respect to the Award cannot bear upon the Agreement's construction."[4]

• [21] Finally, the Respondent notes the practical effect of a situation where all hours on a 21-day swing were either rostered working hours or standby hours. It submits that in such a situation, a pilot would work an inordinate amount of overtime that would have created issues with the BOOT. However, it notes that the Applicant made no mention of such issue in its material lodged in support of approval of the Agreements. The Respondent submits that the lack of any mention of the issue by the Applicant - or indeed the Respondent itself - in the approval paperwork could be taken to be an indication that the parties were of one mind with respect to the issue and that state of mind was not that all hours on swing were paid time.

• [22] In its reply submission, the Applicant focused mainly on arguments to the effect that with Corporate Air having made it clear that standby - where an employee is required to be contactable, fit for duty and available at short notice whether rostered to be so or not - is paid time, such a definition must also now apply in the Agreements. A variety of reasons were offered for this assertion and it is not necessary that I canvass them all here. The Applicant also took issue with the Respondent's submission that as they had not raised the issue of standby at the time of application for approval, this conferred some different status on disputes over that issue.

• [23] I should note at the outset that there are many questions raised by this issue that may be pertinent at other times. However, I have confined my analysis to the issue of whether as a matter of principle and law the findings in Corporate Air should be able to be imported into the Agreements. In assessing the various arguments put forward by the parties, I find that - like the Respondent - I disagree with the assertion from the Applicant about the relevance of Deputy President Hampton's decision in Construction, Forestry, Maritime, Mining and Energy Union v Flinders Logistics Pty Ltd (Flinders Logistics). The Applicant contends that the decision stands for the proposition that absent a contrary intention in the enterprise agreement, the award terms in question could be incorporated. However, I note the following extract from that decision (my emphasis)"

"Part of the relevant context is the statutory setting, and this includes s 57 of the Act. Under that provision, the Modern Award does not apply to the present parties given the coverage and application of the Enterprise Agreement. This means that the Modern Award will only be relevant as a term of the Enterprise Agreement if it is incorporated or otherwise forms part of the Agreement. Given the import of s 57, which excludes the application of the Modern Award where an enterprise agreement applies, this incorporation or continuing application must be expressly stated in the Enterprise Agreement or otherwise clear from its terms."[5]

• [24] In my view this decision, with which I concur, makes it clear that the operation of s 57 of the Act means that for any modern award provisions to apply in an enterprise agreement they must be expressly and explicitly incorporated by a provision in that agreement. There is no such provision in either of the Agreements.

• [25] I should note in connection with this that I disagree with the Applicant regarding the Award exclusion provisions. Those particular provisions are to be found - again as noted by the Respondent - in a clause entitled "Relationship with Principal Award and the NES". In my assessment it is clear that the provision is designed to establish the relationship between the Agreements and the Award and it does so by making clear that it is the Agreement that totally regulates the terms and conditions of Pilots covered by the Agreement. While other documents may well intrude in various ways on those terms and conditions, it is clear that the provision in question is to establish that the Award has no application.

• [26] I also find that I cannot agree with the Applicant's submission that the Corporate Air definition must flow into the Agreements to preserve the minimum safety net objective of modern awards as set out in s 134 of the Act. While it is correct that s 134 sets an objective for modern awards to maintain a fair and relevant minimum safety net, the reality of the Act is that amendments to awards - such as new allowances or entitlements - do not automatically flow through to agreements underpinned by those awards.

• [27] While parties to those agreements will need to consider any variations to their award(s) for BOOT purposes when negotiating a new agreement, unless they have expressly incorporated any prospective new award terms into their current agreement, any such new award terms are not relevant until such re-negotiation. This does not in any way denigrate the minimum safety net role of an award but instead recognises the certainty of terms and conditions that an enterprise agreement which has been approved by the FWC provides to the parties.

• [28] Having considered the submissions of the parties, I have formed the following views with respect to the relevance of the principles established in Corporate Air. Firstly, I should note that the question before me is not "are all hours on a swing that are not rostered work hours automatically standby under the Agreements." Whether or not a pilot is on standby would appear to be a question of fact to be decided based on the circumstances in each instance. It does not bear on whether the provisions of the Award as clarified by the Court should or can be imported into the Agreements.

• [29] I also note that the Agreements have both been approved by the FWC using the usual processes. Having perused all the material submitted by the parties, with the approval application, and looked at the FWC's own internal assessment material, it is clear that nothing specific to the issue of standby was submitted or considered. It is therefore difficult to form a view as to how the parties and the FWC envisaged standby would work under the Agreements. A prima facie case can be made that, based on the wording of the Agreements, standby is to be considered part of the ordinary hours of work of an employee.

• [30] The relevant provisions are found in clause 14 - Hours of Work. The notion of standby (expressed in this instance as "reserve") appears first in cl.14.3.3, where it can be seen that the Agreements contemplated standby as being one of at least three states in which a pilot might find themselves: (my emphasis)

"...flying schedules for day one of the tour of duty shall have the pilot either rostered off, or on night shift, or on reserve."

• [31] The second reference is in cl.14.3.6: (my emphasis)

"A Pilot who is available for night standby on day one will not be rostered for night standby on the last day of a tour of duty."

• [32] Clearly, pilots could be available or not available for standby, would appear to need to be rostered to be on standby, and could find themselves neither on standby or on shift but "rostered off". There is nothing in this to suggest standby is unpaid. However, logically standby under the Agreements must be paid or unpaid - leaving aside the unlikely scenario that it is only paid in certain circumstances.

• [33] If it is the case that it is paid, then there would appear to be no real variance from the interpretation in Corporate Air. In such circumstances it would in my view be of no utility in adopting Corporate Air because the major concept is already there. However, what if standby is unpaid under the provisions of the Agreements?

• [34] I do not see the answer as being the FWC should automatically import the Corporate Air finding. The Agreements have been approved in their current form and contain no provision to automatically adopt new Award provisions or definitions. It would appear to me that s 57 of the Act thus effectively closes the Agreements off from the Award. In my view if the Applicants have an objection, their objection is to the approval of the Agreements as they would potentially not pass BOOT against an Award that pays standby as worked time. In practice, it may be that as this issue was either unclear or viewed differently at the time of approval none of the parties - including the FWC - performed such a BOOT analysis. However, the Agreements were nonetheless approved.

• [35] There may be other avenues of inquiry for the Applicants - for example they may say the Agreement is ambiguous with respect to payment for standby and seek a ruling on this issue. However, in the context of the current application I do not think the answer is to simply proceed on the basis that the Corporate Air finding is automatically part of the Agreements.

• [36] I am satisfied that the Agreements, consistent with their express provisions and consistent with s 57 of the Act, operate independently of the Award. Clearly, the Award definition of standby as now clarified by the Court will need to be factored into any future negotiations for replacement agreements. However, in considering the applications that are currently before the FWC, I cannot see how the Corporate Air findings can be incorporated into the Agreements for the purposes of my deliberations.

[1] See City of Wanneroo v Holmes [1989] FCA 369 at [43] and Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10 at [2] and [77].

[2] AFAP Submissions page 4 paragraph 15.

[3] AFAP Submissions Page 9 Paragraph 36.

[4] See Respondent Submissions Page 5 paragraphs 17-18.

[5] Construction, Forestry, Maritime, Mining and Energy Union v Flinders Logistics Pty Ltd [2022] FWC 2823 at [92].

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