Fair Work Act 2009

s.739 - Dispute resolution

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] - dispute regarding the taking of annual leave - annual leave found to have been taken - applications dismissed.

• [1] In October 2023 the Australian Federation of Air Pilots (AFAP) made three applications to the Fair Work Commission (FWC) under s.739 of the Fair Work Act 2009 (Cth) (the Act) asking the FWC to resolve a dispute about the taking of annual leave. PHI (International) Australia Pty Ltd (PHI) disagreed with the AFAP's interpretation of the annual leave provisions of the PHI International Australia Broome and Truscott Pilots Enterprise Agreement 2021 and the PHI International Australia Pilbara Pilots Enterprise Agreement 2022 and the PHI International Australia Gascoyne Pilots Enterprise Agreement 2022. The annual leave provisions in the three named agreements are essentially identical and so the applications were heard together for convenience.

• [2] In making the applications, the AFAP relied on the findings of a Full Bench of the FWC in Australian Federation of Air Pilots v HNZ Australia Pty Ltd [2015] FWCFB 3124. In that matter, the Full Bench examined the method of acquitting annual leave under a previous agreement, being the HNZ Australia Pty Ltd (Helicopter Pilots - Australian Operations) Enterprise Agreement 2013. In essence, the Full Bench found that the system in that agreement whereby annual leave was in effect deemed to have been taken during an off-swing was impermissible and in breach of the NES. The method used in the three agreements noted at [1] above was essentially the same method but it was subject to agreement with the individual pilot.

• [3] At an early stage the disputes were subject to a jurisdictional objection from PHI. I issued a decision on jurisdiction (AFAP v PHI [2024] FWC 1007) where I found that the FWC had jurisdiction to deal with the disputes under the PHI International Australia Broome and Truscott Pilots Enterprise Agreement 2021 and the PHI International Australia Gascoyne Pilots Enterprise Agreement 2022 (the Agreements) but not the PHI International Australia Pilbara Pilots Enterprise Agreement 2022.

• [4] Thereafter the matter was pursued by the AFAP but in changed circumstances. The main thrust of the AFAP's argument had been that the method of acquitting annual leave in use by PHI was - as per the Full Bench decision noted in [2] above - not permissible and that in any case pilots had not given their agreement to use that method. However, decisions such as that of Industrial Magistrate O'Donnell in AWU v Oil & Gas Repair Australia Pty Ltd 2024 WAIRC 00148 (AWU) found that the method of acquitting annual leave in off-swings was not a breach of the NES. Further, as Her Honour noted in AWU with respect to the practice_:_

"In the offshore oil and gas industry, that is clearly a reasonable requirement..."[1]

• [5] The effect of decisions such as that in AWU led to shift in the emphasis of the dispute towards whether or not the pilots had actually taken any or some of their annual leave. This shift was potentially complicated further by the decision of the Full Federal Court in Corporate Air Charter Pty Ltd v AFAP [2025] FCAFC 45. This decision dealt with how "reserve" or "stand-by" duty periods for pilots should be treated under the Air Pilots Award. The AFAP argued that the interpretations of the Court in that matter should in effect be imported into the Agreements.

• [6] I conducted a hearing into this matter and handed down my decision (AFAP v PHI [2025] FWC 1718) where I found that the Full Federal Court decision should not be imported into the Agreements. The parties were then asked to deliver a set of questions for the FWC to resolve. Between them, they agreed to the following:

(a) Does the Commission have the jurisdiction and power to grant the relief sought by the applicant pilots? (Question 1)

(b) Assuming, arguendo, that the applicant pilots worked the full complement of ordinary hours under the applicable Enterprise Agreement, have the applicant pilots received a benefit equivalent to annual leave? (Question 2)

(c) Is the dispute subject of Question (2) properly within the scope of the dispute notified to the FWC? (Question 3)

• [7] I note that in its submissions PHI conceded that the answer to Question 3 was yes and on that basis, I will say nothing further on that question. Having examined the submissions of the parties I formed the view that answering Questions 1 and 2 in that particular order seemed to be potentially an inefficient use of time. It appeared to me that the FWC would in effect be asking itself: firstly, can I do anything, and then if I can, then is there anything that I need to do something about? I advised the parties at hearing that I believed the questions should be answered in the reverse order, as if the answer to Question 2 was yes, then there was no utility in answering Question 1.

• [8] The parties agreed that the hearing should proceed on that basis. Having heard the parties on Question 2, I adjourned the hearing for a forty-minute period and then delivered an ex-tempore decision that the answer to that question was yes. I now provide further reasons for that decision.

• [9] It was the AFAP's submission that its members had not been given the benefit of any annual leave during their tenure working under the system whereby annual leave was acquitted during off-swing periods. In essence, they submitted that annual leave cannot be taken in such a way as the employee is unaware that they are taking leave. The method in use - which is drawn from clause 14.3.2(b) of the PHI International Australia Broome and Truscott Pilots Enterprise Agreement 2021 and clause 14.5.2(b) of the PHI International Australia Gascoyne Pilots Enterprise Agreement 2022 - does not specify which days or periods are annual leave. The AFAP submits that as such there is no way to identify which periods - if any - were annual leave and the pilots themselves were thus unaware they were taking leave.

• [10] In a similar vein, the AFAP submitted that an employee was not required to take annual leave in times where they are not required to work. The simplest example of this is a standard Monday to Friday worker. Such a worker is not required to take annual leave on Saturday or Sunday. The AFAP submitted that the pilots had been required to take their leave in the off-swing, meaning they were in effect taking leave at a time when they were not required to work.

• [11] In addition, the AFAP submits that as pilots had worked more than their allotted ordinary hours in each three week on-swing - being 240 hours - then there were no hours left which could be apportioned to annual leave. Finally, the AFAP proposed that pilots were not in fact working under the provisions of clause 14.3.2(b) or 14.5.2(b) (the "b" rosters) and were instead working under an alternative roster as provided for in 14.3.2(c) or 14.5.2(c).

• [12] PHI submitted that the pilots had been working under the provisions of the "b" rosters and further advanced an argument that the pilots had actually agreed to do so. I find that I do not need to deal with the matter of agreement as I will make clear later in this decision. They submitted that in accordance with those rosters, part of the pilot's paid time was made up of a portion of annual leave that was acquitted during the three week off-swing. As such, the pilots had already received the benefit of all of their annual leave.

• [13] While I accept the submission of AFAP that it is usual that employees know when they are on annual leave and have specific days and times so apportioned, I note that decisions such as AWU allow for exceptions to the usual. Once it is accepted - as the AFAP largely did - that the method of acquitting leave during off swings is permissible, then it allows a departure from the usual. In this case, I find that the provisions of the Agreements are quite clear when it comes to annual leave.

• [14] Under the provisions set out in the "b" rosters, pilots work what is called an "even time roster" - being three weeks on and three weeks off in every six-week period. Their ordinary hours may be averaged over this period and they may work a maximum of 240 hours per six weeks. During the off-swing, the pilot acquits a certain amount of annual leave, which of course counts as worked time. The effect of this is that the pilot does not have 240 hours of work available during the three week on-swing. Rather, the mathematics suggests that the split is approximately 222.5 hours of ordinary time work in the three week on-swing and 17.5 hours of annual leave acquitted during the three week off-swing. PHI conceded this approximate calculation at hearing.

• [15] This provides a total of 240 hours over six weeks, giving the pilot an average of 40 hours per week as prescribed by the Agreements. Now, clearly the effect of this is that a pilot who worked more than 222.5 hours during their on-swing would be faced with a situation of overtime for all hours in excess of this figure. This is distinguished from the AFAP argument that they have 240 hours available during that three week on-swing. Clearly they do not, as part of their hours are taken up by annual leave during the off-swing.

• [16] It is true that the pilot does not know precisely which days or indeed part days of their off-swing are annual leave. Further, it may appear at first glance that pilots are required to take leave at times when they are not working. However, the Agreements do not require that the annual leave days be specified. Part of the system of the "b" rosters is that some of the time on off-swing is annual leave. For the purposes of that clause, which part(s) is not relevant. Nor is it the case that the entire three weeks of off-swing is time where the pilot is not required to work. Under the "b" roster system some part of that period is deemed to be required to be worked but this requirement is met by virtue of the pilot taking annual leave.

• [17] I should also note that I do not accept the AFAP premise that pilots were working a different roster from the "b" rosters. It is clear that this is the roster system to which they objected in the first instance and it is clear that PHI was carrying out its operations on the basis of this even time roster.

• [18] These findings necessarily create a number of questions, but they are not in my view questions for the FWC to answer, and certainly not in respect of current claims. For example, what is the effect if the pilots have not - as required - agreed to work the even time rosters. In my view they have worked those rosters and been given the benefit of their annual leave. However, the AFAP may take the view that the Agreements have been breached by virtue of the pilots not agreeing. This would appear to put the parties potentially into an argument regarding penalties for such a breach. However, the FWC is not the venue for a penalties argument.

• [19] It may also be the case that, as argued by the AFAP, pilots have worked more than 222.5 hours during some or all of their three week on-swing periods. To work overtime, the Agreements require that a pilot must give their consent / agreement. There may be something to the argument that if such overtime has been worked it was done so without the correct rate of pay and without the requisite consent being given. Again, those issues are beyond the scope of the current applications before the FWC.

• [20] For the reasons set out above, I find that the relevant pilots have received their annual leave benefits in the manner specified in the "b" roster provisions of the Agreements. The answer to Question 2 is therefore "yes". Given this, the FWC does not need to grapple with what - if any - remedy it could provide in circumstances where such benefit had not been received. On that basis the applications will be dismissed and an order to that effect will issue.

Mr Prevot Van der Merwe of Minter Ellison for the Respondent

Wednesday, 13 August 2025, Fair Work Commission, Level 12, 111 St Georges Terrace, Perth, WA, 6000

[1] AWU v Oil & Gas Repair Australia Pty Ltd 2024 WAIRC 00148 at [203].

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