Australian & International Pilots Association v Qantas Airways Limited

REASONS FOR JUDGMENT 1 On 23 December 2008, I delivered reasons for judgment in this proceeding, published as Australian & International Pilots Association v Qantas Airways Limited (ACN 009 661 901) [2008] FCA 1972. On that occasion, I ordered that the proceeding be listed on a date to be fixed, for further hearing on the outstanding issues referred to in those reasons for judgment. I also directed the parties to bring in minutes of orders reflecting the conclusions reached in the reasons for judgment. 2 The matter has been fixed for hearing today to deal with the questions identified in those reasons for judgment. Those questions were identified at [129] of the reasons for judgment as: · whether penalties should be imposed in respect of breaches of cll 45.3.1(a) and 46.2 of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2003-2004, described in the reasons for judgment as "EBA6"; · whether, because there were two breaches of cl 45.3.1(a), those two breaches should be regarded as having arisen out of a course of conduct, for the purposes of what was relevantly then s 178(2) of the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act"), and were thereby required to be treated as a single breach; · questions of the quantum of any penalty; · if penalties were to be imposed, a question as to whether the normal order should be made that the penalty be paid to the applicant, or whether all or part of it should be paid into the Consolidated Revenue Fund, pursuant to what was then s 356 of the Workplace Relations Act; · pursuant to what was then s 178(6) of the Workplace Relations Act, the making of an order in respect of an underpayment of $1,385.83 to which Captain Woods, the president of the applicant, was entitled and which had not been paid to him; · questions of the payment of interest on that sum; and · questions of costs in the light of what was then s 347 of the Workplace Relations Act because of the dismissal of a substantial aspect of the original application to the Court. 3 When the matter came before me today, counsel for the respective parties provided me with short minutes of order, to which they both consent. The only orders sought are: · declarations as to the breaches that I found to have occurred; · an order that the respondent pay Captain Woods the amount of his underpayment, less applicable tax, and pay an amount of $501.92 interest on that amount; and · an order that the application otherwise be dismissed with no order as to costs. 4 I have been informed by counsel for the applicant that the applicant has changed its position substantially in relation to the proceeding and no longer seeks financial penalties. Of course, it is necessary for me to determine whether I accept the abandonment of the claim for financial penalties, having ascertained that contraventions of the certified agreement have occurred. If no penalty is ordered to be paid, of course, it will be unnecessary to determine who is to be the recipient of the penalty. In addition, I am informed by counsel for both parties that neither party now seeks costs and neither party seeks, therefore, to argue about the applicability of the terms of what was then s 347 of the Workplace Relations Act. 5 As I see it, two particular issues arise. The first is whether I should accept the agreement of the parties that there should be no financial penalty imposed. The second is whether I should grant declarations in the terms in which they have been sought. 6 As to the first of those issues a number of considerations are relevant. In any event, in the consideration of penalty, there were undoubtedly substantial mitigating circumstances in the present case. An important one is that, at the time when the contraventions occurred, both parties had taken the view that the relevant provisions of the certified agreement known as EBA6 were to be regarded, at least potentially, as non-pertaining provisions, and therefore were to be removed from the succeeding agreement (EBA7) by agreement of the parties, in order to ensure the certification of EBA7. The concern about whether those provisions pertained to the relevant employees of Qantas arose as a result of the judgment of the High Court in Electrolux Home Products Pty Ltd v The Australian Workers Union [2004] HCA 40 (2004) 221 CLR 309. The fact that the applicant, a union, was the effective recipient of a benefit from the operation of those provisions apparently caused both parties to assume that they might be non-pertaining provisions. This resulted in the agreement to remove the provisions from EBA7, to ensure the certification of that agreement. In the event, in my reasons for judgment delivered on 23 December 2008, I held that the provisions were enforceable and that breaches of them had occurred. 7 The breaches occurred in the last days of the operation of EBA6. The employees concerned had already approved by ballot in accordance with the Workplace Relations Act the terms of EBA7, from which the supposed non-pertaining provisions had been removed. Application had been made to the Australian Industrial Relations Commission to certify the new agreement. The hearing of that application had been adjourned at the request of the applicant, with the agreement of the respondent, because the applicant's new office-bearers had just taken office. One of the contraventions, the failure to pay Captain Woods his entitlement to salary calculated at the rate applicable to the president of the applicant under the agreement, was simply the result of neglect. The evidence, and the finding that I made, was that the normal process was to pay in arrears at the end of a future pay period but that was never done in Captain Woods' case. As for the other contraventions, they involved failure to release two pilots from their duties in accordance with the provisions of EBA6, to enable them to attend to the applicant's business. The refusal to release them from duties arose principally from a failure to understand the significance of the expression, "operational requirements," in the relevant provisions and to distinguish operational requirements from inconvenience in managing the pilots' roster. As a consequence, it can truly be said that neither of the contraventions was wilful. Each was explicable and the degree of culpability of the respondent is substantially mitigated by that. 8 There were, and are, no prior findings of any relevant contravention of the certified agreement concerned. During the time that my judgment was reserved in this case, the Federal Magistrates Court of Australia imposed a financial penalty on the respondent, at the suit of the applicant, in AIPA & Anor v Qantas Airways [2008] FMCA 1008 (2008) 176 IR 453. In that proceeding the learned federal magistrate found that the respondent had committed three breaches of clauses of EBA7, unrelated to the clauses of EBA6 that were in issue in the present case. The federal magistrate imposed a penalty in respect of the three breaches regarded as arising out of a single course of conduct, of $5,000 whereas the maximum penalty is $33,000. In doing so, at [84], his Honour expressed the view that the breaches were not particularly severe. They concerned conduct subsequent to the conduct in issue in the present case and the judgment was delivered while judgment in the present case was reserved. The respondent has appealed from the federal magistrate's judgment and it is apparent from the notice of appeal that there is a substantial argument about the proper construction of the provisions concerned. Accordingly, the weight of the findings made by the federal magistrate, in considering parallel conduct by the respondent for present purposes, is minimal. 9 In those circumstances and in the light of the applicant's change of position about seeking financial penalties, it is necessary for me to consider the questions of specific and general deterrence. It is apparent that there is no need for specific deterrence in the present case. There is no indication at all that the respondent has ever had an attitude of turning its back on the relevant provisions of certified agreements. There is no occasion for teaching it the lesson that it must have regard to such provisions at all times and must comply with them. Indeed, on the evidence that emerged in the course of this case, it is undoubtedly the fact that the respondent devotes a substantial amount of its resources to ensuring that it complies with certified agreements on a daily basis. 10 As for general deterrence, the mitigating factors are such that little purpose would be served by imposing a financial penalty. It certainly is not the case that, in every situation a party can insist on a construction of a provision of an award or certified agreement, later found to be unsustainable, and avoid the imposition of a financial penalty. Nevertheless there are cases where the adoption of a construction that is fairly open permits a court to say that the imposition of a financial penalty would not be appropriate. The special feature of this case is that both parties at the relevant time had taken the position that the relevant provisions of EBA6 were not legally enforceable, because they were non-pertaining pursuant to the Electrolux judgment. In those circumstances, it seems to me, that no purpose of general deterrence would be served by the imposition of a financial penalty. 11 For those reasons the agreement of the parties that no financial penalty is any longer appropriate falls within the proper range to which the Court should have regard in determining issues of penalties. Accordingly, I propose to impose no financial penalty in respect of any of the relevant breaches. 12 The parties are, of course, agreed as I suggested they needed to be, that the respondent is obliged to pay Captain Woods the amount of his underpayment and interest on that amount. Those orders will be made. As I have also said, neither party seeks to visit the question of costs, so that no order for costs will be made, on the assumption that the general rule applies that a proceeding in a matter arising under the Workplace Relations Act does not attract costs. 13 There remains the question of the declarations. I have in the past taken the view, to which I adhere that it is generally inappropriate, to make declarations that do no more than record the findings or conclusions the Court reaches on issues of fact and law in any particular case. I have recognised in the past that, particularly under the Trade Practices Act 1974 (Cth), there has grown up a practice of making declarations which express findings as to contraventions of various provisions. My own view is that that practice is unfortunate, because the declarations so made do not amount to true declarations of right, pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth). A true declaration of right provides the parties with a determination of some controversy on which they can base their future relationships. In the present case, the declarations proposed would at least have the effect of expressing the conclusion that the provisions concerned were enforceable at law. Despite Electrolux, they were not non-pertaining provisions, and were therefore binding on the parties and ought to have been complied with, not only in respect of the particular pilots but in respect of all others. For those reasons I am prepared to depart from my usual antipathy towards declarations and to make orders in the terms sought. 14 The orders I make are as follows: The Court declares that: 1. By failing to pay Captain Ian Woods his salary at the rate calculated in accordance with cl 24.2 of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2003-2004, in respect of the period from 7 to 15 November 2005, the respondent contravened cl 46.2, coupled with cl 46.6.1 of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2003-2004. 2. By refusing to release Captain Simon Tuma from his allocated flying duties on 8 November 2005, the respondent contravened cl 45.3.1(a) of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2003-2004. 3. By refusing to release Captain Ian Smith from his allocated flying duties on 11 November 2005, the respondent contravened cl 45.3.1(a) of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2003-2004. The Court orders that: 4. The respondent pay to Captain Ian Woods the sum of $1,385.83 (less any applicable tax). 5. The respondent pay to Captain Ian Woods interest on the sum referred to in para 4 above, in the amount of $501.92. 6. Otherwise, the application be dismissed, with no order as to costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.