//
[2007] AIRCFB 796
General information, not legal advice.
Australian Industrial Relations Commission (Full Bench)
2007-12-20
Original judgment source is linked above.
s.121 - Appeal against decision and order
Appeal against the decision [[2007] AIRC 420] issued on 23 May 2007 and order [PR977345] issued on 13 June 2007 by Senior Deputy President Kaufman
s.158(1) RAO Schedule - Application for alteration of eligibility rules
Application by the Australian and International Pilots Association
[1] This matter concerns an appeal, for which leave is required, by Qantas Airways Limited (Qantas), Jetstar Airways Pty Limited (Jetstar), Eastern Australia Airlines Pty Limited (Eastern), Sunstate Airlines (Qld) Pty Limited (Sunstate), hereinafter referred to as the Qantas Group, and the Australian Federation of Air Pilots (AFAP) against a decision [1] and order[2] issued by Senior Deputy President Kaufman on 23 May 2007 and 13 June 2007 respectively.
[2] The decision and order concerned an application by the Australian and International Pilots Association (AIPA) for the consent of the Commission to the alteration of its eligibility rules.
[3] By its application the AIPA proposed that the Commission consent to an alteration of Rule 4 - Eligibility for Membership of its rules as follows (the alterations for which consent was sought are underlined):
Any person who is normally employed as a pilot or flight engineer on regular public transport airline services extending beyond the Commonwealth of Australia or (except in the case of flight engineers) 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 or by any successor transmittee or assignee (whether immediate or not) of the whole or a part of the business of such Australian airline or of Australian Airlines Limited shall be eligible for membership in the Organisation.
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:
(iii) Australian Airlines Limited ABN 85 099 625 304;
(iv) Jetstar Airways Pty Limited ABN 33 069 720 243;
(v) Jetstar Asia Holdings Pty Limited ABN 86 108 623 123;
(vi) Eastern Australia Airlines Pty Limited ABN 77 001 599 024;
(vii) Sunstate Airlines (Qld) Pty Limited ABN 82 009 734 703;
(ix) any successor transmittee or assignee (whether immediate or not) of the whole or a part of any company airline or entity referred to in any of the preceding sub-paras (i) to (viii) above; or
(x) any subsidiary, related body corporate or associated entity (as those words are defined in the Corporations Act 2001) of any company airline or entity referred to in any of the preceding sub-paras (i) to (ix) above
shall be eligible for membership in the Organisation.
All persons who are normally employed as pilots on airline services within or extending beyond the Commonwealth of Australia operated by any of:
(i) Ansett Australia Limited or Mayne Nickless Limited trading as Ipec Aviation (IPEC);
(ii) any successor assignee or transmittee (whether immediate or not) to or of any of the business of Ansett Australia Limited or IPEC including a corporation that has acquired or taken over or acquires or takes over the business or part of the business of Ansett Australia Limited or IPEC, in relation to that business or part of that business; and
(iii) any employer not included in the preceding sub-paragraphs (i) or (ii) who is or becomes a successor assignee or transmittee (whether immediate or not) to or of any of the business of any of Ansett Transport Industries (Operations) Pty Ltd (ATI), East West Airlines (Operations) Pty Ltd (EWA) or Mayne Nickless Limited trading as Ipec Aviation (IPEC) including a corporation that has acquired or taken over or acquires or takes over the business or part of the business of any of ATI, EWA or IPEC, in relation to that business or part of that business
shall be eligible for membership in the Organisation."
[4] The Senior Deputy President refused to consent to the alteration of paragraph 1 of Rule 4 of the AIPA's rules. However, his Honour did consent to the alteration of Rule 4 of the AIPA's rules by the insertion of the new paragraph after the first paragraph of Rule 4, except in respect of the additions of Jetstar Asia Holdings Pty Limited and Jetconnect Limited.
[5] The order issued by his Honour was in the following terms:
"Further to the decision [PR977163] issued on 23 May 2007, the Commission consents in part to the alteration of 'Rule 4 - Eligibility for Membership' of the Rules of the Australian and International Pilots Association, filed in the Registry on 17 May 2006, as follows:
1. By inserting the following new paragraph immediately after the first paragraph of Rule 4:
'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:
(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;
(vii) any successor transmittee or assignee (whether immediate or not) of the whole or a part of any company airline or entity referred to in any of the preceding sub-paragraphs (i) to (vi) above; or
(viii) any subsidiary, related body corporate or associated entity (as those words are defined in the Corporations Act 2001) of any company airline or entity referred to in any of the preceding sub-paragraphs (i) to (vii) above
shall be eligible for membership in the Organisation.' "
[7] Section 158 of Schedule 1 - Registration and Accountability of Organisations - of the Workplace Relations Act 1996 (Cth) (the Act) provides as follows:
"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 the Commission consents to the change or alteration.
(2) The Commission may consent to a change or alteration in whole or part, but must not consent unless the Commission is satisfied that the change or alteration has been made under the rules of the organisation.
(3) The Commission must not consent to a change in the name of an organisation unless the Commission 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 Commission 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 Commission, 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 Commission accepts an undertaking from the organisation seeking the alteration that the Commission 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 Commission 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 Schedule and the Workplace Relations Act the industrial interests of a particular class or group of persons.
(7) The Commission 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 Commission under section 133 about the right of the organisation to represent under this Schedule and the Workplace Relations 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 Commission may refuse to consent to an alteration of the eligibility rules of an organisation."
[8] The bases of the appeals made by the appellants can be conveniently summarised in the ways set out below.
[9] The appellants contend s.158(4) of Schedule 1 of the Act required the Senior Deputy President to identify the class of persons who would become eligible for membership of the AIPA because of the alteration to its eligibility rule and make the s.158(4)(a) and (b) comparison findings in respect of each sub-class. They submit his Honour:
(i) failed to make a clear finding as to whether pilots employed by Australian Airlines Limited are eligible to be members of the AIPA under its existing eligibility rule. [3]
(ii) included Qantas Airways Limited and Australian Airlines Limited pilots in the class of persons who would become eligible for membership of the AIPA because of the alteration when such pilots are already eligible for membership of the AIPA. [4]
(iii) failed to make the s.158(4)(a) and (b) comparison finding or the other s.158 required findings in respect of persons employed as pilots by each of Jetstar, Sunstate and Eastern. [5]
[10] In respect of relevant considerations, the appellants say his Honour:
(i) failed to make direct reference to and express a view as to the weight, if any, which he gave in his consideration of ss.158(4) and (8) of the Act to the submissions of the Qantas Group that: [6]
"146. By around late 2004, early 2005, AIPA realised that Jetstar was up and running and that it had to try to get Jetstar pilots 'inside the tent' (PN6153 to 6158, AFAP 34).
147. Despite this, and the best efforts of Captain Woods in oral evidence to paint himself as more pragmatic than his predecessor, AIPA's actions have shown more hostility towards Jetstar under his stewardship. This is especially so in the context of Jetstar's emergence into international services. The following actions of AIPA under Captain Woods' leadership speak volumes for AIPA's hostility against Jetstar and its emergence into international RPTAS:
(iii) failed to refer to the unchallenged evidence of Jetstar pilots called as witnesses by the AFAP, who are AFAP members and who, notwithstanding the fact Qantas pilots are afforded significantly better terms and conditions of employment than Jetstar pilots, were strongly supportive of continued AFAP coverage to the exclusion of AIPA. [10]
(iv) failed to make any findings regarding the very serious matters raised by Eastern and the AFAP in respect of the conduct of the AIPA regarding the formation of the Eastern Pilots' Group and the subsequent disruption of enterprise bargaining negotiations between Eastern and the AFAP. [11]
(v) failed to take into account the AIPA's misleading of Jetstar and Eastern pilots who were prospective members concerning those pilots' ability to determine their own issues if they became AIPA members. [12]
(vi) failed to make a finding in relation to the submission advanced by Eastern and Sunstate "that the nature of the operation of regional airlines is significantly different from that of Qantas and that the AFAP with its long experience, contrasted with the AIPA's lack of experience, demonstrates that the AFAP is a better organisation than the AIPA" and to refer to any discrete interests of Eastern and Sunstate compared to other companies within the Qantas Group. [13]
(vii) failed to make reference to the "Qantas Group Opportunity List" proposal which was said by the President of the AIPA to be the primary purpose of and inextricably linked to the AIPA rule change application or to the Qantas Group submission that the Qantas Group Opportunity List proposal "is a classic illustration of AIPA protecting the interests of QAL pilots. The so called Group Opportunity List is a proposal that freezes the seniority of existing QAL pilots. This means that for many years no one from regional airlines has any realistic chance of successfully bidding for a vacancy within QAL. Today, if a Dash 8 Captain who has 15 years of seniority at Eastern wants to take up a First Officer position in QAL on a B 737, he has no chance. A Second Officer at QAL with two years seniority there has bidding rights ahead of the Eastern Captain. On the other hand, QAL pilots will be able to access opportunity within the regional airlines such as Jetstar which are growing fast and therefore creating lots of new jobs." [14]
(viii) failed to make a finding as to what weight, if any, he attributed to the concessions made by the President of the AIPA that the AIPA had shown insufficient interest in respect of Sunstate pilots. [15]
(ix) failed to make findings in respect of the factual contentions advanced by the Qantas Group, namely that:
[11] The appellants also submit his Honour had regard to considerations that are irrelevant to the application of s.158(4), namely his conclusions that:
(i) the mere extension of the scope of the AIPA's eligibility rule will not lead pilots from Jetstar, Eastern or other airlines to join it unless they are satisfied their industrial interests can be better catered for by the AIPA than the AFAP or some other group.
(ii) were the AIPA able to enrol all pilots employed by the Qantas Group, it would act in the interests of all of them. [18]
[12] Further, the appellants say the Senior Deputy President stated that "much was made by the objectors of the alleged antipathy shown by the AIPA and its Qantas pilot members towards other airlines and their pilots in the Qantas Group" and concluded that he had "no reason to doubt that were it able to enrol all pilots employed by the Qantas Group, it would act in the interests of all of them." [19] However, they maintain his Honour:
[13] The appellants went on to say his Honour failed to apply the test in s.158(4) in respect of Qantas Limited. [21]
(f) Successor, transmittee or assignee and subsidiary, related body corporate or associated entity
[14] In addition, the appellants submit his Honour consented to the variations concerning any successor, transmittee or assignee and any subsidiary, related body corporate or associated entity because it was consistent with his reasons for consenting to the other variations, when his reasons for consenting to the other variations were affected by error as outlined and when the variations and their application are too vague and uncertain. [22]
[15] Moreover, the appellants say, his Honour incorrectly placed the onus on the AFAP to establish that it was a better organisation within the meaning of s.158(4). [23]
[16] Finally, the appellants contend his Honour gave no consideration to the exercise of the discretion in s.158(8). [24]
[17] Section 158(1) of Schedule 1 of the Act provides that an alteration of the eligibility rules of an organisation does not take effect unless the Commission consents to the alteration.
[18] Section 158(4) of Schedule 1 of the Act provides that the Commission 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 Commission, another organisation to which those persons could more conveniently belong and that would more effectively represent those members.
[19] Section 158(4) of Schedule 1 of the Act clearly requires the Commission to identify the persons who would be eligible for membership because of the alteration to the eligibility rules of the applicant organisation, for the purposes of forming an opinion as to whether there is another organisation to which those persons could more conveniently belong and that would more effectively represent those members.
[20] As much was stated by the Full Federal Court in Re Australian Workers' Union; Ex parte Construction, Forestry, Mining and Energy Union. [25]
[21] In that case, Gray and Moore JJ stated that:
"… it was not in issue that it is necessary for a designated Presidential Member, when considering an application for consent to an alteration to eligibility rules, to identify the relevant employees in order to consider the issues raised by s 204(4). That is, it is necessary to identify the 'persons who would be eligible for membership because of the alteration' …
Determining who are the relevant employees would ordinarily involve ascertaining the scope of the pre-existing eligibility rules of the applicant organisation and the scope of the alteration. This will often entail construing both the pre-existing eligibility rules and the alteration on the assumption that it formed part of the eligibility rules." [26]
"Plainly, in determining that consent is not to be withheld by reason of s 204(4) a designated Presidential Member is to form an opinion in respect of persons the Member must identify as persons 'who would be eligible for membership because of the alteration'. It is difficult to envisage how such an opinion can be formed without identifying the persons who will be covered after the alteration that were not covered before it.
However, it does not follow that the same identification must be made if an opinion is formed that the consent is required to be withheld under s 204(4). In that case the consent must be withheld if the Member forms the opinion that because of the alteration there are persons who would be eligible for membership who 'might more conveniently belong' to another organisation that 'would more effectively represent those persons'. The requisite opinion need not be formed in respect of all persons who would be eligible because of the alteration. Putting to one side de minimis issues, if the opinion is formed that there are persons who fall within the categories described in s 204(4)(a) and (b) then the consent to the alteration must be withheld, notwithstanding that there may also be persons who would be eligible because of the alteration but who do not fall within the categories described in s 204(4)(a) and (b). In such a case, although the consent is required to be withheld in respect of the proposed alteration, the Member may, nonetheless, be required to consider the discrete issue arising under s 204(2) of whether the consent should be given to the alteration in part that is, to the rule alteration insofar as it applies to persons who do not fall within the categories described in s 204(4)(a) and (b). Of course, the resolution of that issue will require the formulation of the re-altered rule and the determination of whether consent to the re-altered rule is to be given or refused under s 204.
Accordingly, while it will usually be helpful to a decision under s 204(4) to identify the persons currently within the scope of unaltered rule and those who would fall within it because of the alteration, it is not always necessary to do so. Relevantly, for present purposes, in a case of refusal of consent under the subsection the Member does not necessarily fall into jurisdictional error by failing to identify the persons who were eligible under the unaltered rule and the persons who would be eligible because of the alteration." [27]
[23] Section 204(4) of the Act was in substantially the same terms as s.158(4) of Schedule 1 of the Act.
[24] In respect of the AIPA's application for the consent of the Commission to the rule alteration concerning the insertion of a new paragraph after the first paragraph of Rule 4, Senior Deputy President Kaufman said:
"It names various Qantas Group companies in subparagraphs (i) to (vii) and the successors, subsidiaries, etc of those companies in the following subparagraphs. Mr McDonald noted that under this part of the rule there is no requirement that any of the airlines be an Australian airline. I also observe that there is not even a requirement that the airline be engaged in providing RPTAS; they merely need to be providing airline services. Qantas Limited, for instance, does not provide RPTAS. Such an outcome is not surprising given that the main reason for the proposed alteration is the AIPA's desire to be able to enrol as members pilots employed by the Qantas Group generally." [28]
"It seems to me that insofar as Qantas is concerned, the rule change may be said to have the effect that all pilots employed by the named Qantas companies as well as their successors, assignees, transmittees and related companies will be eligible for membership of the AIPA. In deciding whether or not to consent to the alteration, in whole or in part, it is necessary to have regard to the operations of all those entities." [29]
[26] His Honour had defined the "Qantas Group" earlier in his decision as "Qantas Airways Ltd, the overall parent company, and its subsidiaries". [30] Further, his Honour said that Qantas "is the holding company for each of the subsidiaries sought to be included by name in the AIPA's eligibility rule."[31]
[28] His Honour noted that Qantas is not directly affected by the AIPA's application for the consent of the Commission to the alteration to its eligibility rules. [37]
[29] In his consideration of the rule alteration in the context of s.158(4) of Schedule 1 of the Act, his Honour said the rule alteration "would make eligible for membership of the AIPA pilots employed by the Qantas Group and their successors, transmittees and assignees as well as related bodies corporate and associated entities." [38]
[31] In the course of detailing these submissions, his Honour said that in his view "the mere extension of the scope of the AIPA's eligibility rule will not lead to pilots from Jetstar, Eastern or other airlines joining it unless they are satisfied that their industrial interests can be better catered for by the AIPA than by the AFAP or some other group." [41]
[32] Senior Deputy President Kaufman concluded, in respect of the AIPA's application for the consent of the Commission to the rule alteration concerning the insertion of the new paragraph after the first paragraph in Rule 4, as follows:
"[111] In my view, the AFAP is not a better organisation on either limb of the test in s.158(4) insofar as pilots employed by the Qantas Group are concerned. Both unions are organisations to which pilots employed by the Qantas Group can conveniently belong. Both are able to effectively represent those pilots. I have set out some material describing the two unions. I have had regard to the material about the organisational structure of each organisation, including, its membership, financial position, history of representation, effectiveness in servicing awards and agreements and staffing. Although each union goes about its tasks in a different manner, there is nothing in the material that persuades me that the AFAP is a better organisation than the AIPA.
[112] Much was made by the objectors of the alleged antipathy shown by the AIPA and its Qantas pilot members towards other airlines and their pilots in the Qantas Group. I have referred to the more significant aspects of this conduct earlier in these reasons. It is put by the objectors that this conduct should persuade me that the AFAP is a better organisation insofar as pilots in the Qantas subsidiaries are concerned. I disagree. The material demonstrates that the AIPA is a fierce defender of the rights and interests of its members. I have no reason to doubt that, were it able to enrol all pilots employed by the Qantas Group, it would act in the interests of all of them. I do not accept the contentions of the objectors that there is an inherent and irreconcilable conflict of interest between the interests of Qantas pilots, whether they be international or domestic, and pilots employed by other entities in the Qantas Group. Nor do I believe that to grant the application would lead to an increased likelihood of demarcation disputes between the two organisations. Indeed, there is an inconsistency in the arguments of the objectors. There seemed to be a segue from the proposition that the interests of Qantas international pilots, who comprise the majority of the AIPA members, are different to those of domestic pilots, to the proposition that the interests of Qantas pilots, international and domestic, are different to those of those of the remainder of the Qantas Group. I am not persuaded as to this. Although there are obvious differences between the types of aircraft flown, the distances flown and the time spent in the air, all pilots essentially perform the same task - that of flying aircraft. No matter what type of aeroplane is flown, specific training for that type of aeroplane is required. Particularly insofar as Jetstar and Qantas are concerned, the differences are not so much those between the aircraft flown, but rather the nature of the service provided by each carrier. Qantas generally provides a full two class service, whereas Jetstar is a 'no frills', one class, low cost carrier. That the Qantas Group wishes, or even needs, to operate Jetstar on a lower cost base than it does Qantas is not relevant to the ability of the AFAP or the AIPA to represent the interests of either airline's pilots. Indeed, to the extent that the AIPA might try to achieve for all pilots terms and conditions closer to those provided for Qantas pilots, it can be said that this is in the best interests of all pilots, particularly those employed by Jetstar, although not necessarily in the interests of the Qantas Group as an employer. I have had particular regard to the requirements of s.103(2) of the Act and s.5(1) of the Schedule in relation to this aspect of the matter. In regard to this I note Mr Woods' evidence that he accepts that Jetstar pilots would not achieve the same terms and conditions of employment as those of Qantas, however, his desire is, at least, to lift Jetstar pilots' remuneration to the level of remuneration afforded to pilots employed by Australian Airlines [Transcript at PN6703]. Mr Woods said that he believes Jetstar Boeing 767 pilots are paid 38% below Qantas pilots [Transcript at PN6277] and 20% below Australian Airlines pilots [Transcript at PN6278]. He was of the view that had the AIPA been involved in the 2004 enterprise negotiations for Jetstar pilots, terms and conditions akin to those afforded to Virgin pilots could have been achieved [Transcript at PN6174].
[113] Although pilots employed by Qantas are afforded significantly better terms and conditions of employment than the pilots employed by Jetstar, they perform much the same work on similar aircraft. Although it may be in Qantas' interests that Qantas domestic and Jetstar pilots be represented by different unions, it is not necessarily in the best interests of the pilots, especially those employed by Jetstar, that that situation prevail.
[114] I have decided to consent to the rule change insofar as the second paragraph is concerned, with the exception of Jetstar Asia Holdings Pty Limited and Jetconnect Ltd. Jetstar Asia Holdings, which is based in Singapore, is a wholly owned subsidiary of Qantas. It does not employ any pilots, nor does it intend so to do. It is a holding company which owns 44.5% of the shares in a Singaporean registered company that operates the Jetstar Asia brand. Jetconnect is also a wholly owned subsidiary of Qantas, but is incorporated in New Zealand. Its pilots are all based in New Zealand, eligible to be members of the New Zealand Air Line Pilots Association Industrial Union of Workers, which is registered under the Employee Relations Act 2000 (NZ). Presumably, Jetconnect and its pilots are amenable to New Zealand industrial relations regulation. I consider it inappropriate that the AIPA should be able to enrol its pilots. Having reached that conclusion, it is unnecessary that I determine the issue raised by Mr McDonald as to whether pilots of Jetconnect are eligible to be members of the AIPA.
[115] It is apparent from my reasons thus far that the Qantas Group arranges its corporate affairs in a manner that it considers most beneficial to its operations. For example, it has created and utilizes subsidiaries to operate many of its air services. The AIPA has not pressed any argument that the Qantas Group has done so for other than bona fide reasons. It has not pursued its claim that the Qantas Group has arranged its affairs in order to prevent some pilots of the group being eligible for membership of the AIPA. There is no evidence that would have supported such a claim. Nevertheless, the perfectly proper conduct of the Qantas Group has the result that some pilots of the group are not eligible for membership of the AIPA. I have concluded that they should be. I see no reason to except pilots of Qantas Ltd which is engaged in the provision of air freight services.
[116] Sub-paragraph (ix) of the proposed second paragraph would make eligible for membership of the AIPA 'pilots on airline services within or extending beyond the Commonwealth of Australia operated in whole or in part under any name by any of …. Any successor transmittee or assignee (whether immediate or not) of the whole or part of the business of any company airline or entity referred to in the preceding sub-paras …' The objectors contend that this paragraph is too wide, vague and uncertain in its operation. They point out that were one of the named companies to transmit even a part of its business the transmittee would be caught. Although this submission is correct, nevertheless employees of a transmittee, etc. would only be eligible to be members of the AIPA if they were pilots on airline services within or extending beyond the Commonwealth operated in whole or part by those entities. Although those entities might no longer be 'owned' or controlled by Qantas, such an outcome is nevertheless consistent with my reasons for allowing the first part of the new second paragraph because of the nature of the work performed by the pilots. I will consent to the inclusion of sub-paragraph (ix).
[117] Sub-paragraph (x) of the new second paragraph would render eligible for membership of the AIPA 'pilots on airline services within or extending beyond the Commonwealth of Australia operated in whole or in part under any name by any of any subsidiary related body corporate or associated entity (as those words are defined in the Corporations Act 2001) of any company airline or entity referred to in the preceding sub-paras …' Again the objectors contend that the inclusion of this paragraph would render the rule too wide, vague and uncertain in its operation. Subsidiaries, related bodies corporate and associated entities are described in Division 6 of the Corporations Act 2001. Having regard to those provisions and having regard to the requirement in the proposed rule that, in order for a person employed by one of the entities referred to therein be eligible for membership of the AIPA, that person would have to be employed as a pilot on airline services within or extending beyond the Commonwealth operated by the entity, this part of the rule is also consistent with my reasons for allowing the first part of the new second paragraph. I will consent to the inclusion of paragraph (x)." [42]
[33] We think it is apparent his Honour erred in forming his opinion under s.158(4) of Schedule 1 of the Act that "the AFAP is not a better organisation on either limb of the test in s.158(4) insofar as pilots employed by the Qantas Group are concerned" and that "both unions [AFAP and AIPA] are organisations to which pilots employed by the Qantas Group can conveniently belong" and "both are able to effectively represent those pilots." [43]
[34] Under s.158(4) of Schedule 1 of the Act, his Honour was required to form the opinion "in relation to persons who would be eligible for membership because of the alteration" to the eligibility rules of the AIPA. However, his Honour formed his opinion in relation to both persons who would be eligible for membership because of the alteration to the eligibility rules of the AIPA and persons who are already eligible for membership of the AIPA.
[35] In this regard, his Honour says in his conclusion in respect of s.158(4) of Schedule 1 of the Act:
[111] In my view, the AFAP is not a better organisation on either limb of the test in s.158(4) insofar as pilots employed by the Qantas Group are concerned. Both unions are organisations to which pilots employed by the Qantas Group can conveniently belong. Both are able to effectively represent those pilots. I have set out some material describing the two unions. I have had regard to the material about the organisational structure of each organisation, including, its membership, financial position, history of representation, effectiveness in servicing awards and agreements and staffing. Although each union goes about its tasks in a different manner, there is nothing in the material that persuades me that the AFAP is a better organisation than the AIPA." (Underlining added) [44]
[36] His Honour had earlier in his decision defined the "Qantas Group" as including Qantas and its subsidiaries [45] and found the pilots of Qantas to already be eligible for membership of the AIPA.[46] We agree that Qantas pilots are already eligibile for membership of the AIPA. For reasons we outline later, we also think Australian Airlines Limited pilots are already eligible for membership of the AIPA.
[37] As a result, we think his Honour's opinion under s.158(4) of Schedule 1 of the Act that the AFAP is not a better organisation than the AIPA on either limb of the test in s.158(4) is affected by error.
[38] We add that we consider his Honour's opinion under s.158(4) of Schedule 1 of the Act was also affected by error because his Honour failed to make a finding as to whether Australian Airlines Limited pilots were persons who would be eligible for membership because of the alteration to the eligibility rules of the AIPA. As a result, his Honour did not identify "the persons who would be eligible for membership because of the alteration". [47]
[39] In the circumstances, we grant leave to appeal. We do not need to deal with the other bases of appeal. We will deal with the AIPA's application for the Commission's consent to the alteration of Rule 4 of its rules by the insertion of the new paragraph after the first paragraph of Rule 4. We turn now to do so.
[40] Section 158(1) of Schedule 1 of the Act provides that an alteration of the eligibility rules of an organisation does not take effect unless the Commission consents to the alteration.
[41] Section 158(2) of Schedule 1 of the Act provides that the Commission may consent to an alteration in whole or part, but must not consent unless the Commission is satisfied that the alteration has been made under the rules of the organisation.
[42] In respect of the provisions of s.158(2) of Schedule 1 of the Act, Senior Deputy President Kaufman pointed out that the objections to the AIPA's application to the Commission for consent to the alteration of its eligibility rules generally fell into two categories, being "technical" objections and "merit" objections. His Honour said:
"The technical objections were to the effect that the alterations had not been made in accordance with the Act or the RAO regulations and further, they had not been made under the rules of the AIPA as required by s.158(2) of the Schedule. The technical objections were not pursued at the hearing. As there is nothing that suggests to me that the technical requirements have not been met, I need not deal further with this issue." [48]
[43] The AIPA's application for the consent of the Commission to the alteration of its eligibility rules contained a declaration to the effect that the alteration had been made in accordance with the rules of the AIPA, stating the action taken under the rules to make the alteration and verifying the facts stated in the application. The verification was signed by Captain Ian Woods, the AIPA President and the application was signed by Captain Woods and Captain Lunt, the AIPA Vice President.
[44] It was not suggested on appeal that the alteration to the eligibility rules for which the consent of the Commission was sought had not been made under the rules of the AIPA.
[45] In the circumstances, we are satisfied the alteration to the eligibility rules of the AIPA, for which the AIPA in its application seeks the Commission's consent, were made under the rules of the AIPA.
4. MORE CONVENIENTLY BELONG / MORE EFFECTIVELY REPRESENT (s.158(4))
[46] Section 158(4) of Schedule 1 of the Act, as we have already indicated, provides that the Commission 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 Commission, another organisation to which those persons could conveniently belong and that would more effectively represent those members.
(a) Australian and International Pilots Association Submissions
[47] The AIPA submitted the pilots who may become its members as a result of the proposed rule change could be described as pilots employed by the Qantas Group. [49]
[48] It maintained Qantas Group employees could more conveniently belong to the AIPA because of the very great experience it has in dealing with the very tightly controlled Qantas Group of businesses. Experience deriving from its long term coverage of Qantas long haul and short haul pilots. [50]
[49] The AIPA said that while the AFAP maintains it has experience in "no frills" airlines, that experience relates in substance only to Virgin Blue Airlines Pty Ltd (Virgin). The AFAP's experience of industrial representation in respect of Jetstar is much more limited, it has only about a third of the Jetstar pilots as members and although it was made a party to the certified agreement covering Jetstar pilots it did not negotiate it. In any instance, the AIPA said, the cost of an airline ticket is irrelevant to the more conveniently belong issue. [51]
[50] Further, the AIPA said it has undertaken to make provision in its rules to grant autonomy to pilots of different employers and has granted effective autonomy to the Australian Airlines Pilot Council. It also said there is no basis on which it could be said that the pilots at the various Qantas subsidiaries could more conveniently belong to the AFAP on the basis of the provision for sub-councils in the AFAP Rules as those sub-councils merely have power to recommend. [52]
[51] Finally, the AIPA submitted the AFAP's provision of loss of licence insurance is not relevant to the more conveniently belong issue as such insurance is available from other providers, pilots receive contributions to it as a result of certified agreement provisions and the Qantas loss of licence policy is superior to that of the AFAP. [53]
[52] With respect to the more effectively represent issue, the AIPA submitted it was not really challenged that the AIPA effectively represents its members and there is no reason why the AIPA cannot represent members employed in different parts of the Qantas Group or outside the Qantas Group.
[53] In this regard, it said it is not unusual for a union to represent persons employed by business competitors in the same industry and it is not its position that it would favour one group of members over another. The AIPA has accommodated Australian Airlines Limited pilots, enabling them to elect their own representatives, conduct their own negotiations and give their views to the AIPA Committee of Management through surveys. In addition, its proposals for a Qantas Group Opportunity List and for the crewing of the Qantas A330s transferred to Jetstar make it clear it has the interests of pilots as a profession at heart rather than just a group of pilots within Qantas. [54]
[54] Further, it said the AFAP industrial representation of the pilots who would become eligible to join the AIPA if its rule alteration is consented to has not been on the whole successful. [55]
[55] In this regard the AIPA pointed out that:
[56] The Qantas Group submitted pilots employed by Eastern and Sunstate could more conveniently belong to the AFAP than the AIPA.
[57] In support of this, the Qantas Group said:
[58] Further, the Qantas Group submitted the AFAP would more effectively represent Eastern and Sunstate pilots than the AIPA.
[60] In respect of Jetstar, the Qantas Group submitted Jetstar pilots could more conveniently belong to the AFAP than the AIPA. [59] In this regard, the Qantas Group said:
[61] The Qantas Group also maintained the AFAP would more effectively represent the interests of Jetstar pilots than the AIPA. [67] The Qantas Group said this is because:
[62] In respect of Qantas Limited, the Qantas Group submitted the AIPA is not capable of effectively representing pilots employed in freight services. It said the AIPA has no track record in freight, apart from being given coverage rights over IPEC in 1996, and the AFAP is the union which has long been recognised in the freight industry, it being a party to the Pilots (General Aviation) Award 1998 which covers numerous freight operators. [73]
(c) Australian Federation of Air Pilots' Submissions
[63] The AFAP submitted Jetstar pilots could more conveniently belong to it than the AIPA. In this regard, the AFAP said:
[64] The AFAP also submitted Sunstate and Eastern pilots could more conveniently belong to it than the AIPA. In this regard, the AFAP said:
[65] Further, the AFAP submitted the pilots who would be eligible for membership of the AIPA because of the alteration to its rules could more conveniently belong to the AFAP than the AIPA because:
[66] In respect of effective representation, the AFAP submits it would more effectively represent Jetstar pilots than the AIPA because:
[67] The AFAP says it would more effectively represent pilots employed by regional airlines than the AIPA because:
[69] In his decision, Senior Deputy President Kaufman provides a useful summary about the formation of the AIPA and the AFAP and their membership and respondency to various awards and agreements. His Honour also provides useful summary information about the airlines relevant to this matter. We repeat the parts of those summaries which were not really challenged on appeal. We think the summaries accurately reflect the material before his Honour. His Honour said:
[9] The AIPA was formed on or about 3 March 1981 when the overseas branch of AFAP broke away from that organisation. The AIPA was registered as an industrial organisation under the Conciliation and Arbitration Act 1904 on or about 1 October 1986. The AIPA currently has approximately 2327 members [Exhibit AIPA 14, para 9].
[10] The AIPA is a respondent to the following Awards and Certified Agreements[Exhibit AIPA 14, para 73 - 74]:
[11] The AFAP was formed as the Australian Airline Pilots Association in 1949 and became the AFAP in 1959. It was registered as an industrial organization under the Conciliation and Arbitration Act 1904 in 1985. The AFAP currently has approximately 2300 members employed in the international, domestic, regional and general aviation sectors [Exhibit AFAP 3, para 12].
[12] The AFAP is relevantly party to and responsible for the maintenance of the following Awards and Certified Agreements[Exhibit AFAP 3, para 13]:
[13] AFAP's current eligibility/membership rule is as follows:
(a) Any person (not being a person normally employed as a pilot on regular public transport airline services extending beyond the Commonwealth of Australia operated by an Australian airline principally engaged in providing international regular public transport airline services and not being a person normally employed as a pilot on airline services within or extending beyond the Commonwealth of Australia operated by any of:
(i) Ansett Australia Limited or Mayne Nickless Limited trading as Ipec Aviation ("IPEC");
(ii) any successor assignee or transmittee (whether immediate or not) to or of any of the business of Ansett Australia Limited or IPEC including a corporation that has acquired or taken over or acquires or takes over the business or part of the business of Ansett Australia Limited or IPEC, in relation to that business or part of that business; and
(iii) any employer not included in the preceding sub-paragraphs (i) or (ii) who is or becomes a successor assignee or transmittee (whether immediate or not) to or of any of the business of any of Ansett Transport Industries (Operations) Pty Limited ("ATI"), East West Airlines (Operations) Pty Ltd ("EWA") or Mayne Nickless Limited trading as Ipec Aviation ("IPEC") including a corporation that has acquired or taken over or acquires or takes over the business or part of the business of any of ATI, EWA or IPEC, in relation to that business or part of that business)
who is employed or is usually employed either wholly or partly in the profession of pilot in civil aviation, including a person normally employed as an air pilot by a domestic operator other than those specifically excluded by the foregoing provisions of this Rule, but excluding pilots, seeking, or holding, part time employment, where such pilot, offering his services on a part time basis is, permanently established in a career or interests outside the aviation industry, and who holds a Commercial Pilot's Licence, Senior Commercial Pilots Licence, Airline Transport Pilot's Licence or such equivalent as may be issued from time to time by the Department of Aviation or other appropriate Authority, is eligible for membership, together with such other persons who have been appointed officers of the Federation or who are honorary members pursuant to Rule 2.2(c).'
[14] Qantas Airways Ltd, the overall parent company, and its subsidiaries are commonly described as the 'Qantas Group'. I shall so refer to them in these reasons
[15] Qantas is the holding company for each of the subsidiaries sought to be included by name in the AIPA's eligibility rule. Qantas is an airline principally engaged in providing international regular public transport airline services. (In these reasons I shall refer to regular public transport airline services as 'RPTAS') Qantas employs approximately 1600 long haul (international) and 600 short haul (domestic) pilots. There is no issue between the parties that all Qantas pilots are eligible to be members of the AIPA.
[16] Eastern and Sunstate are wholly owned subsidiaries of Qantas and provide RPTAS under the brand 'Qantaslink'. Eastern and Sunstate employ approximately 300 pilots. Both Eastern and Sunstate were wholly owned subsidiaries of Trans Australian Airlines, which later changed its name to 'Australian Airlines' prior to the acquisition of that airline by Qantas in September 1992. Both Eastern and Sunstate are regional airlines ...
[17] Eastern provides RPTAS to regional destinations in New South Wales, Victoria and Tasmania. It employs 190 pilots [Exhibit AFAP 3, para 12] of whom 155 [Transcript at PN942] are members of the AFAP. The AIPA currently has 99 Eastern pilots as its members [Exhibit AIPA 14, para 9]. Of these only one is financial, the others having paid a reduced joining fee of $50.00 in 2004, but nothing since [Transcript PN5101 - 5103; PN6923].
[18] Sunstate provides a RPTAS to regional destinations in Queensland and New South Wales. It employs 115 pilots [Exhibit AFAP 3, para 12] of whom 104 are members of the AFAP [Exhibit PN755]. The AIPA does not claim to have any Sunstate pilots as members.
[19] Airlink Pty Limited is also a wholly owned subsidiary of Qantas. However, Airlink flights are operated by a non-Qantas Group company, National Jet Systems. National Jet Systems provides cabin and technical (which I take to mean 'flight') crew, maintenance and operation of the aircraft [Exhibit Qantas 1, para. 23]. Neither Airlink nor National Jet Systems is named in the proposed amended rule, and as neither is engaged in the provision of any international RPTAS, it seems to me that neither would be caught by the amended rule.
[20] Eastern and Sunstate, together with Airlink/National Jet Systems, operate flights under the 'QantasLink' brand. Each is an Australian airline providing RPTAS, operating under its own Air Operator Certificate (AOC), and with its own crew, operational control and management.
[21] On 23 December 2003, 'Impulse Airlines Pty Limited' changed its name to 'Jetstar Airways Pty Limited' and on 25 May 2004, Jetstar commenced domestic RPTAS operations [Exhibit Qantas 3, para 20]. Jetstar is a wholly owned subsidiary of Qantas and operates under its own AOC with its own crew, operations control and management.
[22] Jetstar flies from Brisbane, Sydney, Melbourne, Adelaide and the Gold Coast to some 20 Australasian destinations [Exhibit Qantas 3, para 25]. It currently employs 360 [Exhibit Qantas 1, para 75 and Transcript at PN3140] pilots, 124 of whom are AFAP members [Exhibit AFAP 3, para 12] and approximately 30 who are AIPA members [Exhibit AIPA 14, para 9 ]…
[24] Jetstar Asia Holdings Pty Limited is a wholly owned subsidiary of Qantas. It does not employ any pilots nor does it propose to do so. It is a holding company which owns 44.5% of the shares in Orange Star Investment Holdings Pte Ltd, a Singapore based company and the owner of the Jetstar Asia brand [Exhibit Qantas 1, paras 39 - 41].
[25] Jetconnect Ltd is a low cost airline and a wholly owned subsidiary of Qantas. It is incorporated in New Zealand and operates approximately 290 flights per week within New Zealand and 63 Trans Tasman flights between New Zealand and Australia. All pilots employed by Jetconnect, together with the company's management, are based in New Zealand …
[27] Qantas Ltd is a wholly owned subsidiary of Qantas. It changed its name to Express Freighters Australia Pty Ltd in August 2006 when it commenced operations as a domestic air freight business. I shall refer to it as Qantas Ltd in these reasons. It operates under its own AOC. It currently employs 16 pilots but it is expected that up to 40 pilots may be required as the freight business expands [Exhibit Qantas 2, paras 5 - 12]. It does not employ, nor does it propose to employ, any pilots on RPTAS, as it does not provide such a service …
[28] Australian Airlines Ltd (ABN 85 009 625 304) is a wholly owned subsidiary of Qantas. It is not to be confused with the 'Australian Airlines' referred to in the opening paragraph of the AIPA's eligibility rule. The reference in the eligibility rule is to the successor to Trans Australian Airlines, a company which is now defunct. Australian Airlines Ltd operates under its own AOC. It commenced operation as a full service single class international leisure carrier in October 2002 [Exhibit Qantas 19, p.16]. Australian Airlines 'ceased to exist as a brand' in July 2006 as part of a Qantas group 'two brand strategy'. However it has provided pilots and crew to Qantas pursuant to a wet lease arrangement, under which Qantas provides two class, full service international flights [Exhibit Qantas 21, p.11]. As I understand it, a 'wet lease' means that, for all intents and purposes, a flight under those arrangements appears as a normal Qantas flight insofar as the flying public is concerned. The Qantas Annual report of 2006 discloses that: The focus on Qantas and Jetstar saw all-economy international leisure carrier Australian Airlines cease to exist as a brand on 30 June 2006. While Australian Airlines' fleet of B767-300 aircraft and crew continues to fly from their existing Cairns base, services now operate under the Qantas brand as two-class, full service international flights [Exhibit Qantas 21 p.11]. However, the crew continues to be employed by Australian Airlines and it appears that Qantas owns the aircraft [Exhibit Qantas 21, p.88]. Although there was no evidence led as to the precise arrangement between the companies, it is likely that the aircraft are leased by Qantas to Australian Airlines and then back-leased to Qantas pursuant to the wet lease. Although the pilots provided by Australian Airlines under this arrangement are employed by Australian Airlines they are, in fact, Qantas pilots on leave of absence from Qantas. This arrangement was facilitated by a letter of agreement between the AIPA and Qantas [Exhibit Qantas 30] …
[41] Mark Thomas Wheeler is employed by Jetstar as General Manager Flight Operations. On 3 October 2006, he made a statement for use in these proceedings. It is convenient to set out several paragraphs:
'15 The Jetstar airline business was launched in May 2004, using Impulse Airlines Pty Limited (Impulse) as its operating entity.
16 In or around December 1992, Oxley Airlines Pty Limited (Oxley) was acquired by the Impulse Group. The Impulse Group took over the assets and rights to the name of 'Oxley Airlines' following the appointment of an administrator. Impulse operated as an airline business, flying selected regional routes along the Eastern seaboard.
17 In November 2001, Qantas purchased Impulse. Between November 2001 and May 2004, Impulse operated a regional airline service under the 'QantasLink' brand.
18 In October 2003, Qantas decided to use Impulse as the operating entity for its new low cost carrier airline.
19 Impulse held in its own right a high capacity AOC, and managed its own engineering heavy maintenance base, situated in Newcastle. At that time Impulse was already equipped with a fleet of 14 Boeing 717-200s and a workforce of approximately 650 people, including pilots, engineers and cabin crew.
20 On 1 December 2003, the Chief Executive Officer and Managing Director of the Qantas Group, Mr Geoff Dixon, announced that its new low cost domestic airline would be called 'Jetstar'. On 23 December 2003, Impulse Airlines Proprietary Ltd changed its name to 'Jetstar Airways Proprietary Ltd'. In February 2004, Jetstar opened for bookings. On 25 May 2004, Jetstar commenced operations.
22 Currently, Jetstar operates 23 Airbus A320 aircraft. By November 2006, Jetstar will commence flights on two Airbus A330-200s, increasing operations to six A330s by mid-2007.
23 The A320 is used by many of the world's most successful low cost carriers and offers significant fuel and technology efficiencies operating short-haul domestic routes.
24 Jetstar currently operates approximately 1,000 flights a week, on 45 existing point to point routes. This will increase once the additional A330 aircraft enter service.
25 Jetstar flies from Brisbane, Sydney, Melbourne, Adelaide and the Gold Coast to 20 Australasian destinations. Its focus is the price sensitive, domestic leisure market with routes less than three and a half hours from key destinations (for example, the Whitsundays, the Gold and Sunshine Coasts, Cairns and Tasmania). Jetstar also operates from Avalon Airport near Geelong, making Jetstar the first Australian commercial carrier to fly scheduled services from a 'second' city airport.
27 In December 2005, Jetstar commenced a trans-Tasman service between Australia and Christchurch, New Zealand using its existing fleet of narrow bodied Airbus A320 aircraft.
32 On 11 April 2006, Jetstar announced that from November 2006, it intends to commence flights to 6 international destinations (Bali, Bangkok, Honolulu, Ho Chi Minh City, Phuket and Osaka), on routes directly from Sydney, Melbourne or Brisbane. It is proposed that this flying will be initially undertaken by an interim fleet of six A330-200 aircraft. This will then transition to a fleet of 12 new Boeing 787 aircraft from August 2008 to 2011.'
[42] During the giving of his oral evidence Mr Wheeler updated the position. In addition to flying to Christchurch from December 2005, Jetstar did commence flights to Bali, Bangkok, Honolulu, Ho Ch Minh City, Phuket and Osaka in late 2006. A significant majority of its flights constitutes domestic routes. It provides a low cost alternative to Qantas' flights between many capital cities. It also flies between capital cities and larger regional cities and holiday destinations …
[44] I have set out the excerpts from Mr Wheeler's evidence to demonstrate how fluid is the corporate structure used by the Qantas group to organize its schedules. This approach is not of recent origin. Both Eastern and Sunstate were wholly owned subsidiaries of Australian Airlines, itself a successor to Trans Australian Airlines, prior to the acquisition of that airline by Qantas in 1992. Australian Airlines is also used as a vehicle, on a 'wet lease' basis by Qantas in the provision by it of some international flights.
[45] Although there has not been a detailed breakdown produced in these proceedings, I infer that since Jetstar has introduced flights on routes that Qantas flew prior to 2004, the number of flights operated by Qantas has reduced on those routes. Indeed, on some routes previously flown by Qantas, Jetstar is now the only Qantas Group airline flying on those routes.
[46] In mid 2004, Jetstar, Qantas, representatives of Jetstar pilots and the AIPA (on behalf of Qantas pilots) reached an agreement whereby Qantas pilots could be employed by Jetstar and vice versa. As a result of that agreement 85 Qantas pilots have applied for positions at Jetstar, of whom 21 were offered positions, 18 accepted and two were considering their positions at the time of the hearing. All the pilots who transferred from Qantas to Jetstar moved from second officer positions at Qantas to command positions at Jetstar. All, but one, who resigned from Qantas to take up permanent employment with Jetstar, are on leave without pay from Qantas whilst they are employed by Jetstar. No pilot has moved from Jetstar to Qantas under the agreement [Exhibit Qantas 3, paras 95 - 98] …
CONSIDERATION - s.158(4) - AFAP A BETTER ORGANISATION - THE QANTAS GROUP
[79] … Four witnesses in managerial positions gave evidence on behalf of Qantas. They were Gareth Evans, who is employed by Qantas as Group General Manager Finance, Network Operations and Pricing; Mark Wheeler who is employed by Jetstar as General Manager, Flight Operations; Paul Lidbury, employed by Qantas as General Manager, Operations, Regional Airlines; and Mark Davey who is employed by Eastern as Manager, Flying Operations.
[80] Their evidence demonstrates that each airline in the Qantas Group operates as a separate RPTAS. Each of the airlines has its own AOC. To a significant extent, Qantas and each of its subsidiaries operates as an independent entity. Each employs its own staff, including pilots, each has its own directors and each administers its own recruitment processes for pilots. I have earlier in these reasons set out some details of Qantas and its subsidiaries.
_[81] However the fact remains that Qantas is the overall parent company for all the entities falling within the Qantas Group. As Mr Evans said at paragraph six of his witness statement: '_Because Qantas Airways Limited wholly owns these companies within the Qantas Group, it wants the subsidiaries to operate in a way that maximises their individual value and to maximise the value of the Qantas Group as a whole. Because the subsidiaries are involved in airline services, there is considerable scope for synergies and coordination.' For organisational convenience the Qantas Group is divided into five business segments, the relevant ones for the purposes of this case are Qantas Airlines, Jetstar and Qantas associated businesses. An executive general manager is responsible for each segment and has the task of running the segment as a profitable business. Although each has considerable autonomy in running the business segment, that autonomy is subject to the decision of the general manager being consistent with the overall strategy of Qantas as set by its board. The Chief Executive Officer of Qantas bears the ultimate responsibility for Qantas and its subsidiaries. Although the business segments involved in flying are managed in an independent manner, major network decisions are made at a Qantas Group level. Significantly, all network decisions which involve changes to the operating carrier on a route (for example switching from Jetstar to Qantas mainline or vice versa) are made at a senior Qantas Group level in order to ensure optimum network coverage and to ensure that other strategic and political issues are addressed. Market pricing decisions are coordinated between the various Qantas Group airlines as are decisions as to which airline flies on which route and when [Exhibit Qantas 1, para 5FF]. It seems that Qantas owns all the aircraft flown by the Qantas Group [Exhibit Qantas 20, p 88 and Transcript at PN7737-PN7739].
[82] For Jetstar, Mr Wheeler detailed how its business model is different from that of Qantas because Jetstar is a low cost carrier. Jetstar operates in the price sensitive segment of the Australian domestic airline market and has operating costs that are consistently around 30%-40% below those of Qantas' domestic operations. Jetstar competes much more directly with Virgin than does Qantas." [106]
[70] The AIPA is also respondent to the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 [EBA 7].
[71] In our view, Qantas pilots and Australian Airlines Limited pilots are already eligible for membership of the AIPA pursuant to the first part of the first paragraph of Rule 4 of the AIPA's eligibility rules. That is, pilots of Qantas Airways Limited ABN 16 009 661 901 and Australian Airlines Limited ABN 85 099 625 304, being the companies referred to in the new paragraph for which the Commission's consent is sought, are already eligible for membership of the AIPA. We recognise, of course, that the Australian Airlines Limited referred to in the latter part of the first paragraph of Rule 4 of the AIPA's eligibility rules is not the Australian Airlines Limited ABN 85 099 625 304 that we are dealing with in the rule alteration for which the Commission's consent is now sought.
[72] Jetstar Asia Holdings Pty Limited does not employ pilots. Accordingly, we do not believe it appropriate to consent to its inclusion in the AIPA's eligibility rules.
[73] Jetconnect Ltd is incorporated in New Zealand and all its pilots are based in New Zealand and eligible to be members of the New Zealand Air Line Pilots Association Industrial Union of Workers, which is registered under the Employee Relations Act 2000 (NZ). In those circumstances, we do not believe it is appropriate that we consent to its inclusion in the AIPA's eligibility rules.
[74] The phrase "any successor transmittee or assignee (whether immediate or not) of the whole or a part of any company airline or entity referred to in any of the preceding sub-paragraphs (i) to (viii) above" gives the AIPA the potential under its eligibility rules to also cover pilots not employed by the Qantas Group. Pursuant to such an alteration to its eligibility rules the AIPA could cover pilots employed by any successor, transmittee or assignee of one of the named companies in the Qantas Group and such successor, transmittee or assignee need not be a company in the Qantas Group.
[75] In its opening submissions, the AIPA indicated that "the pilots who may become members as a result of the proposed rule changes may be described as follows: …
[76] The case was essentially run on that basis. Accordingly, we do not believe it is appropriate to consent to the alteration concerning "any successor transmittee or assignee (whether immediate or not) of the whole or a part of any company airline or entity referred to in any of the preceding sub-paragraphs (i) to (viii) above".
[77] The phrase "any subsidiary, related body corporate or associated entity (as those words are defined in the Corporations Act 2001) of any company airline or entity referred to in any of the preceding sub-paras (i) to (ix) above" does not allow us to ascertain the nature of the subsidiaries, related bodies corporate or associated entities whose pilots would be eligible for membership of the AIPA if we consented to that particular alteration to the AIPA's eligibility rules. For example, we do not know the extent of control that Qantas may exercise over them, which is a factor the AIPA substantially relies on in respect of the comparison under s.158(4) of Schedule 1 of the Act. [108] In addition, the case that was run by the AIPA was very much about the named companies, airlines or entities. Accordingly, we do not believe it is appropriate to consent to such an alteration to the AIPA's eligibility rules.
[78] As a result, the pilots who would be eligible for membership of the AIPA because of the alteration to its eligibility rules are, "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: …
(iv) Jetstar Airways Pty Limited ABN 33 069 720 243; …
(vi) Eastern Australia Airlines Pty Limited ABN 77 001 599 024; …
(vii) Sunstate Airlines (Qld) Pty Limited ABN 82 009 734 703".
[79] We turn to consider whether those pilots of Qantas Limited, Jetstar, Eastern and Sunstate could more conveniently belong to the AFAP than the AIPA and whether the AFAP would more effectively represent those pilots than would the AIPA. We deal with them in the following order: Jetstar, Eastern, Sunstate and Qantas Limited.
[80] We do not believe the pilots of Jetstar could more conveniently belong to the AFAP than the AIPA.
[81] The AFAP has some 2,300 pilots as members, 124 of which are Jetstar pilots. This represents about a third of the Jetstar pilots. It is a party to or bound by many awards and agreements covering pilots in general aviation, regional airlines, the Civil Aviation Safety Authority, Virgin Blue Airlines Pty Ltd and Jetstar. The AFAP has represented Jetstar pilots in enterprise bargaining negotiations and employee grievances.
[82] The AFAP has also recognised Jetstar is a low cost airline and has agreed to changes to enable Jetstar to expand. Further, it can provide Jetstar pilots with access to loss of licence insurance. Although, loss of licence insurance is otherwise available and the value Jetstar pilots place on the loss of licence insurance they can obtain through the AFAP must be questioned when only a third of the Jetstar pilots are members of the AFAP.
[83] In addition, the AFAP rules provide that, subject to the supreme governing body of the AFAP, a Council may be established where a minimum of 15 members of the AFAP are permanently employed by a company. Such Councils have autonomy in matters affecting their members and direct representation on the AFAP Convention and Executive Committee. However, Jetstar pilots have not sought to establish a Jetstar Pilots Council under the AFAP rules.
[84] On the other hand, Jetstar is part of the Qantas Group. Captain Wheeler, General Manager Flight Operations at Jetstar, gave evidence that Jetstar is managed separately and operates independently of the other airline businesses in the Qantas Group. [109] However, other evidence indicates Qantas exercises considerable control over Jetstar. For example, a Qantas Executive General Manager heads up the Jetstar business. The decisions of the Qantas Executive General Manager responsible for running Jetstar must be consistent with the overall strategy of Qantas.[110] Further, two of the three directors of Jetstar are also directors of Qantas, all the directors of Jetstar are Qantas executives or employees and Qantas industrial relations personnel are involved in Jetstar industrial relations issues, including those concerning pilots.[111]
[85] It is the AIPA which has extensive experience in dealing with Qantas in respect of pilots. The AIPA has some 2,300 pilot members, including 2,100 Qantas long haul (international) and short haul (domestic) pilot members and 80-90 Australian Airlines Limited pilot members. About 95% of the Qantas pilots are members of the AIPA.
[86] The AIPA has accommodated the smaller Australian Airlines Limited pilot group within its membership by allowing its 80-90 Australian Airlines Limited pilot members to form an Australian Airlines Pilots Council (AAPC). The AAPC looks after the representational needs of Australian Airlines Limited pilots. The Chairman of the AAPC is on the Australian Airlines Limited enterprise bargaining agreement negotiating team and attends the AIPA Committee of Management meetings as an observer. A position on the AIPA Committee of Management is to be created for the Chairman of the AAPC at the next elections. [112]
[87] The AIPA is a party to many awards and agreements covering Qantas and Australian Airlines Limited pilots. We note s.170M(3) of the Workplace Relations Act 1996 (Cth) prior to its amendment by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) precluded the AIPA being bound by the certified agreement covering Jetstar pilots as Jetstar pilots were not eligible for membership of the AIPA at the date of certification. The AIPA represents Qantas and Australian Airlines Limited pilots in enterprise bargaining negotiations and employee grievances.
[88] In addition, the AIPA is party to a 2004 Agreement with Qantas and Jetstar and representatives of Jetstar pilots providing for Qantas pilots to be employed by Jetstar and Jetstar pilots to be employed by Qantas. Some Qantas pilots are at Jetstar pursuant to this agreement.
[89] Further, the AIPA has recently pursued with Qantas the idea of a Qantas Group Opportunity List concerning the promotion of Qantas, Jetstar and other Qantas Group pilots across the Qantas Group. While Qantas and the AFAP are critical of the AIPA Qantas Group Opportunity List proposal and Qantas has rejected it, the fact remains that the AIPA has pursued the concept of promotion of Qantas, Jetstar and other Qantas Group pilots across the Qantas Group. The AIPA has pursued its Qantas Group Opportunity List proposal notwithstanding its membership is dominated by Qantas pilots, particularly long haul Qantas pilots. It does not appear the AIPA has ruled out being prepared to negotiate on their particular proposal. [113]
[90] Much was made by the AFAP and the Qantas Group of conflicts of interest that it was said favoured a conclusion that Jetstar pilots could more conveniently belong to the AFAP than the AIPA.
[91] It was also put by the AFAP and the Qantas Group that if the Commission consented to the rule alteration sought by the AIPA, there would be potential conflict between the Jetstar pilots and Qantas pilots which could lead to demarcation disputes.
[92] Typically, the evidence given in this regard was as follows.
[93] Mr Terrence O'Connell, Executive Director of the AFAP, said:
"46. Based on my long experience of industrial relations in Australian aviation, I believe that if AIPA succeeded in its application it would give rise to a serious risk of demarcation disputes which would affect the various airlines in question. These disputes would be likely to arise from the friction resulting from changes in flying as between the various airlines and Qantas. AIPA would be determined to protect the Qantas pilots' existing flying and that would clash with the interests of pilots in the subsidiaries and those of Virgin Blue pilots. This would lead to divisions in the various pilots groups between those who were members of AIPA and those that were not. In my experience and observations, the protection of flying is an issue highly likely to excite the passions of pilots under threat.
47. Under s.158(8), the Commission is of course entitled to take into account wider matters, and the potential for disruption of the airlines' operational plans as a result of the frictions referred to in the preceding paragraph is also substantial. There has already been evidence at Eastern of the difficulties created in the enterprise bargaining as a result of the presence by proxy of a second competing union. They difficulties will be come more acute if AIPA succeeds in this application." [114]
[94] We have not found Mr O'Connell's evidence helpful in establishing that the Commission's consent to the alteration of the eligibility rules of the AIPA could lead to demarcation disputes.
[95] This is because Mr O'Connell's evidence makes it clear it is "the friction resulting from changes in flying as between the various airlines and Qantas", rather than the Commission's consent to the alteration of the AIPA's eligibility rules, that is likely to give rise to demarcation disputes.
[96] His evidence also seems to be based on the assumption that the AIPA will act purely in the interests of Qantas pilots even if the Commission consents to the rule alteration to give it eligibility to cover Jetstar pilots. We do not accept that assumption given the accommodations the AIPA has made in respect of its Australian Airlines Limited pilot members, its Qantas Group Opportunity List proposal and the AIPA President's acceptance, in wanting to lift Jetstar pilots' remuneration to at least that of Australian Airlines Limited pilots, that Jetstar pilots will not achieve the same terms and conditions of employment as Qantas pilots. [115]
[97] To the extent Mr O'Connell is suggesting the Commission's consent to the rule alteration to give the AIPA eligibility to cover Jetstar pilots will lead to demarcation disputes between the Jetstar pilots who are members of the AIPA and other Jetstar pilots including those who are members of the AFAP, his evidence does not go beyond asserting that there would be "divisions in the various pilot groups between those who were members of AIPA and those that were not." This assertion appears to be based on the assumption that the AIPA will act purely in the interests of Qantas pilots even if the Commission consents to the rule alteration to give it eligibility to cover Jetstar pilots. An assumption we have rejected. His evidences does not otherwise explain why the Commission's consent to the rule alteration in respect of Jetstar pilots would lead to such divisions.
[98] We deal with Mr O'Connell's evidence concerning events at Eastern later in this decision.
[99] Mr Paul Basaraba, a First Officer with Jetstar, a member of the AFAP and a former pilot representative for AFAP members, said:
"19. I do not believe that allowing AIPA to represent Jetstar pilots would be of advantage to us. I believe it would damage us by creating division, dissent and disunity. Allowing AIPA to represent Jetstar pilots would only be disruptive and counter to the interests of Jetstar pilots. Allowing two unions to represent Jetstar pilots cannot assist Jetstar pilots in improving their working conditions. In my opinion, it will have the opposite effect." [116]
[100] Mr Marcus Diamond, a First Officer with Ozjet, a member of the AFAP and a member of the Victorian Branch Committee of the AFAP, said:
"27. I believe that allowing AIPA to become involved in pilot groups already covered by the Federation would be a disaster for those pilots. The division created by such a move would make for pilot discontent and could lead to friction in the cockpit." [117]
[101] Captain Craig Devitt, a Captain with Jetstar and a member of the AFAP, said:
"11. I do not believe that allowing pilot allegiance to be split along the lines of AIPA and the Federation would be in Jetstar pilots' best interests. I want the Federation to act on my behalf and it is contrary to the interests of Jetstar pilots to allow another union to compete for our allegiance.
12. If AIPA's application is successful it will provoke disagreement and controversy amongst Jetstar pilots when we should be working together to further our interests. I believe that Jetstar pilots do not want to see their conditions of employment eroded due to differences in union allegiance." [118]
[102] None of this evidence by Mr Basaraba, Mr Diamond and Captain Devitt was subject to cross-examination. We do not doubt that these pilots believe what they have said. However, the value of this evidence is reduced by the fact that the bases for their beliefs are either not apparent from the remainder of their evidence or they are based on other personally held beliefs which are not grounded in the remainder of their evidence. For example, it is not apparent from the evidence of Mr Basaraba why allowing the AIPA to represent Jetstar pilots would be disruptive and counter to the interests of Jetstar pilots. Similarly, it is not apparent from the evidence of Mr Diamond why allowing the AIPA to become involved in pilot groups already covered by the AFAP would create division. Further, it is not apparent from the evidence of Captain Devitt why it is contrary to the interests of Jetstar pilots to allow another union to compete for the pilots' allegiance, why differences in union allegiance will erode Jetstar pilots' conditions of employment or why the Commission's consent to the alteration of the AIPA's eligibility rules will provoke disagreement and controversy amongst Jetstar pilots.
[103] Captain John Cowan, a Captain with Jetstar and a member of the AFAP, said:
"4. The interests of Qantas pilots and Jetstar pilots are not identical. Jetstar pilots are not Qantas pilots. I am employed by Jetstar, not Qantas. Qantas pilots' interests will inevitably conflict with the interests of Jetstar pilots. A number of Jetstar pilots have expressed similar concerns with me. It is my belief that AIPA would not more effectively represent our interests because when such conflict does arise, AIPA will act in the best interests of the majority of its members, namely, the Qantas pilots, to our detriment. It is my belief, and the belief of a growing number of my Jetstar colleagues, that the Federation would more effectively represent our interests than AIPA …
6. The interests of Qantas and Jetstar are not identical. They both compete for passengers and market share with each other. The interests of Qantas domestic pilots will conflict with the interests of Jetstar pilots. I am concerned that AIPA will act to protect the interests of Qantas domestic pilots above the interests of Jetstar pilots …
13. I do not see the benefit of splitting pilot allegiance along the lines of AIPA and the Federation. It is contrary to the interests of Jetstar pilots to allow another union to compete for our allegiance. If AIPA's application is successful it will only create disunity and disharmony amongst Jetstar pilots. I believe that Jetstar pilots do not want to see their conditions of employment eroded due to differences in union allegiance." [119]
[104] Under cross-examination, Captain Cowan said:
"PN2849 So your comments about representation of pilots at Jetstar would be less valid in respect of representation of long haul pilots, wouldn't they?---Well, we've got - I think we've got to consider that we've got one group of Qantas pilots, we've got one group of Jetstar pilots and the main issue to me is that we, Jetstar pilots, have different interests to the interests of the Qantas pilots.
PN2850 Why do you say they have different interests?---Well, I think it's quite obvious that the interests are different just in the actions that have been taken by AIPA just recently, trying to stop Jetstar flying internationally. I mean, Ian Woods is only doing what he was elected to do and that's service the interests of the Qantas pilots and it's certainly not in the best interests of Jetstar pilots …
PN2855 Would that be any different to the conflict of interest you might have with Virgin pilots?---I think it's quite different, yes, because you've got two groups under the one management umbrella effectively, whereas with Virgin, they are under a separate management. You've got - we're outside the management versus management. I don't see any conflict between Virgin pilots and Jetstar pilots.
PN2856 If I understand your evidence correctly, Mr Cowan, you say that AIPA couldn't represent Jetstar pilots effectively because Jetstar is under the same management as Qantas, is that right?---Well, whether it's been intentional or not, there's been a division created in the workforce and we - like, it's been expressed to me by Qantas pilots that they should be doing it and this came directly from one of their captains that I happened to meet, he said directly, they are the ones who should be doing it and not us."
[105] The cross-examination of Captain Cowan's evidence on the conflict of interest reveals his evidence in this regard is quite narrowly based as it is founded on the AIPA's actions in attempting to stifle Jetstar's growth. Actions that have been pursued in the best interests of those the AIPA currently has eligibility to represent. Further, his evidence does not make it apparent why the Commission's consent to the alteration of the AIPA's eligibility rules will create disunity and disharmony amongst Jetstar pilots or why differences in union allegiance will erode Jetstar pilots' conditions of employment.
[106] Captain Mark Wheeler, General Manager Flight Operations at Jetstar, said:
"113. Based on my experience in the airline industry and particularly the low fares market, the AFAP is better equipped than AIPA to represent the needs of pilots employed by Jetstar, due to its experience and knowledge of the part of the domestic aviation industry in which Jetstar operates." [120]
[107] When asked by Senior Deputy President Kaufman about this statement, Captain Wheeler said:
"PN3222 THE SENIOR DEPUTY PRESIDENT: In paragraph 113, Mr Wheeler, you opine that AFAP is better equipped than AIPA to represent the needs of pilots employed by Jetstar. Could you tell me the basis of that opinion, please?---Traditionally the AFAP, from my experience as having been a member and operating domestic airlines for a long time in Australia, traditionally that has been the pilot group that they have represented. In my time as the chief pilot of Jetstar my only dealings with the AFAP has been through that body representing individual pilots on their behalf when there has been certain actions taken up with those pilots between Jetstar and the individuals. AIPA has never represented any Jetstar pilots in any dealings that I've had with our pilots. That's the reason for the statement, your Honour." [121]
[108] Captain Wheeler's evidence is helpful in establishing that Jetstar pilots can conveniently belong to the AFAP. However, it is not particularly helpful in establishing that Jetstar pilots can more conveniently belong to the AFAP than the AIPA given the limited basis for his opinion that the AFAP is better equipped than the AIPA to represent the needs of pilots employed by Jetstar.
[109] We are not persuaded on the evidence that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Jetstar pilots will create the demarcation disputes contended by the AFAP or the Qantas Group.
[110] We think the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Jetstar pilots will create demarcation disputes within the AIPA because Qantas pilots, who are in competition with Jetstar pilots, form the vast bulk of the AIPA's members and the AIPA's Committee of Management is controlled by Qantas long haul pilots pay too little regard to a number of counterbalancing factors. Relevant factors in this regard are that the AIPA has accommodated the 80-90 Australian Airlines Limited pilots within its membership of about 2,300 and will similarly need to accommodate the Jetstar pilots if it is to retain their membership, the AFAP is party to the 2004 Agreement providing for Qantas pilots to be employed by Jetstar and Jetstar pilots to be employed by Qantas, the AIPA has pursued a Qantas Group Opportunity List proposal and the AIPA President accepts that Jetstar pilots will not achieve the same terms and conditions of employment as Qantas pilots.
[111] Further, we think the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Jetstar pilots will create demarcation disputes between the AFAP in respect of its Jetstar pilot members and the AIPA in respect of its Qantas pilot members, including over the flying of A330 planes transferred from Qantas to Jetstar, fail to recognise that such demarcation disputes have existed without the Commission consenting to the alteration to the AIPA's eligibility rules. The Commission's consent to the alteration may reduce such demarcation disputes as it will enable the AIPA to enrol Jetstar pilots who it will need to accommodate if it is to retain their membership.
[112] We do not accept the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Jetstar pilots will create demarcation disputes between the AIPA in respect of its Jetstar pilot members and the AFAP in respect of its Jetstar pilot members or between the Jetstar pilots who are members of the AIPA and other Jetstar pilots including those who are members of the AIPA. Such submissions are not grounded in the evidence and it is not obvious or inevitable that the Commission's consent to the rule alteration will create such demarcation disputes.
[113] In addition, we think the AIPA's accommodation of its Australian Airlines Limited pilots, its Qantas Group Opportunity List proposal and the President of the AIPA's acceptance that Jetstar pilots will not receive the same terms and conditions of employment as Qantas pilots indicate that the AIPA will be willing and able to manage appropriately the conflicts of interest contended by the Qantas Group and the AFAP. We think the litigation the AIPA has engaged in in aid of Qantas pilots and its other challenges to the way Jetstar operates are indicative of the AIPA's effective representation of its members in circumstances where it has not had eligibility to cover Jetstar pilots. It follows that we do not accept that the conflicts of interest contended by the Qantas Group and the AFAP mean Jetstar pilots could more conveniently belong to the AFAP than the AIPA.
[114] We take into account, however, that no Jetstar pilot was called by the AIPA to give evidence on the more conveniently belong issue. It is a factor going against a conclusion that Jetstar pilots could conveniently belong to the AIPA and a factor favouring a conclusion that Jetstar pilots could more conveniently belong to the AFAP than the AIPA.
[115] As to the other arguments raised by the Qantas Group and the AFAP on the more conveniently belong issue, we think it matters little that, contrary to some suggestions it previously made to Jetstar pilots, the AIPA has not sought to change its rules to provide autonomy for Jetstar pilots. We think it matters little given Jetstar pilots have not established a Jetstar Pilots Council under the rules of the AFAP and the AIPA does not yet have coverage of Jetstar pilots under its eligibility rules.
[116] We deal with the 1985 agreement between the AIPA and AFAP on coverage rights later in this decision. However, we do not think the 1985 agreement is relevant to the conveniently belong issue given the history on union coverage of pilots that has elapsed since 1985.
[117] With respect to the submissions that Jetstar pilots could more conveniently belong to the AFAP than the AIPA because of issues concerning the operation of the AIPA, the evidence is not sufficient to compel a conclusion that the AIPA is any less adequately staffed or any less experienced in airline industrial relations than the AFAP. Further, the evidence reveals that the payment of membership dues issue, which was raised in submissions in support of the contention that Jetstar pilots could more conveniently belong to the AFAP than the AIPA, concerns the non-payment of dues by persons who are not eligible for membership of the AIPA. The evidence is also insufficient to compel a conclusion that the AIPA operates in disregard of its rules with respect to the recording of its Committee of Management decisions. Finally, we do not believe the evidence is sufficient to establish that the AIPA or Captain Woods and Captain Elsass gave no proper consideration to the scope of the rule alteration for which the consent of the Commission is sought.
[118] After weighing up the considerations before us, we think that Jetstar pilots could conveniently belong to the AIPA or the AFAP. However, as we indicated earlier, in all the circumstances and having particular regard to the balancing of the AFAP's existing coverage and representation of Jetstar pilots against the AIPA's experience in dealing with Qantas in respect of pilots and the control Qantas exercises over Jetstar, we are not of the opinion Jetstar pilots could more conveniently belong to the AFAP than the AIPA.
(ii) Jetstar Pilots - More Effectively Represent
[119] We do not believe the AFAP would more effectively represent the Jetstar pilots than would the AIPA.
[120] In our view the evidence in this matter supports a conclusion that the AIPA effectively represents pilots it has eligibility to cover, including those employed by Australian Airlines Limited as well as its more numerous long haul and short haul pilot membership in Qantas.
[121] For example, the AIPA is a respondent or party to various awards and agreements covering such members. While the nominal expiry dates of the Qantas pilots' and Australian Airlines Limited pilots' agreements to which it is a party have expired without replacement agreements to which it is a party being made, on the evidence we do not think this is because the AIPA is not effectively representing its members.
[122] Further, the AIPA has vigorously attempted to advance the interests of those it has eligibility to cover through such actions as Federal Court proceedings, the 2004 Agreement between Qantas, Jetstar, the AIPA and representatives of Jetstar pilots and its Qantas Group Opportunity List proposal.
[123] Similarly, we think the AFAP effectively represents Jetstar pilots. However, we do not think the bases on which we have concluded the AFAP effectively represents Jetstar pilots, including the size of its membership, its capacity and resources, its assistance to Jetstar pilots to negotiate a certified agreement and its becoming respondent to it and its assistance to individual Jetstar pilots, means the AFAP would more effectively represent Jetstar pilots than would the AIPA. The AFAP has been no more effective in representing its Jetstar pilot members than the AIPA has been in representing those it has eligibility to cover.
[124] As to the proposition that the AIPA would not also effectively represent Jetstar pilots because of demarcation disputes and conflicts of interests, for the reasons previously given, we are not persuaded on the evidence or submissions that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Jetstar pilots will create the demarcation disputes contended by the Qantas Group and the AFAP. For the reasons already given, we also think the AIPA will be able and willing to manage appropriately the conflicts of interest contended by the Qantas Group and the AFAP.
[125] Further, we reject the contention that the AIPA would not also effectively represent Jetstar pilots because it has allowed unfinancial "members", since the contention concerns pilots who are not eligible for membership of the AIPA. We think the litigation the AIPA has engaged in in aid of Qantas pilots and its other challenges to the way in which Jetstar operates, through such actions as its demands for undertakings in respect of Qantas pilots covered by the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (EBA7) and its declared intolerance for the undercutting of the remuneration of Qantas pilots, is indicative of its effective representation of its members in circumstances where it has not had eligibility to cover Jetstar pilots. We also note that the President of the AIPA has accepted that Jetstar pilots will not achieve the same terms and conditions of employment as Qantas pilots, but wants to lift Jetstar pilots' remuneration to at least that of Australian Airlines Limited pilots.
[126] We do not believe the fact no Jetstar pilot invoked the right to be represented by the AIPA in the Jetstar certified agreement negotiations is relevant to the more effectively represent issue because, as Captain Wood points out, the agreement was negotiated by representatives of the Jetstar pilots and those representatives' failure to involve the AIPA in the negotiations led to the representatives being voted out of office by the Jetstar pilots. [122]
[127] Further, the AIPA advised Jetstar pilots it was going to add to its rules the necessary structure to enable a fully independent Pilot Council for Jetstar representation but has not done so, we do not think that means the AFAP would more effectively represent Jetstar pilots than would the AIPA. The AFAP rules provide for autonomous Councils, subject to the supreme governing body of the AFAP, but such a Council has not been established for Jetstar pilots. Moreover, the AIPA has accommodated a smaller pilot group within its membership, being the 80-90 Australian Airlines Limited pilots who are members of the AIPA, by allowing them to form an Australian Airlines Pilots Council to look after the representational needs of Australian Airlines Limited pilots.
[128] We have earlier dealt with the limited value of the evidence given by those who gave evidence for the AFAP in respect of the more conveniently belong issue and Jetstar pilots. Our observations about that evidence apply equally in respect of the more effectively represent issue and Jetstar pilots.
[129] We take into account, however, that no Jetstar pilot was called by the AIPA to give evidence on the more effectively represent issue. It is a factor going against a conclusion that the AIPA would effectively represent Jetstar pilots and a factor favouring a conclusion that the AFAP would more effectively represent Jetstar pilots than would the AIPA.
[130] After weighing up the considerations before us, we think that both the AIPA and the AFAP would effectively represent Jetstar pilots. However, as we indicated earlier, in all the circumstances and having particular regard to the fact the AIPA effectively represents pilots it has eligibility to cover under its rules against the fact the AFAP effectively represents Jetstar pilots, we are not of the opinion the AFAP would more effectively represent Jetstar pilots than would the AIPA.
(iii) Eastern Pilots - More Conveniently Belong
[131] We do not believe the pilots of Eastern could more conveniently belong to the AFAP than the AIPA.
[132] The AFAP has some 2,300 pilots as members, including 155 of the 190 Eastern pilots as members. Eastern is a regional airline. The AFAP is party to or bound by many awards and agreements covering pilots in general aviation, regional airlines, the Civil Aviation Safety Authority, Virgin Blue Airlines Pty Ltd and Jetstar, including the Regional Airlines Pilots' Award 2003 and the Eastern Airlines Pilots Enterprise Agreement 2006. It encourages regular regional pilot meetings. The AFAP has represented Eastern pilots in enterprise bargaining negotiations and employee grievances. Further, it can provide Eastern pilots with access to loss of licence insurance. Although, such insurance is otherwise available but is relatively expensive.
[133] In addition, the AFAP rules provide that, subject to the supreme governing body of the AFAP, a Council may be established where a minimum of 15 members of the AFAP are permanently employed by a company. Such Councils have autonomy in matters affecting their members and direct representation on the AFAP Convention and Executive Committee. However, Eastern pilots have not established such a Council under the AFAP rules. There is a body called the Eastern Australian Airlines Pilots Council (EAAPC) but it is, in fact, a sub-council under the AFAP rules, without the autonomy and direct representation afforded a Council under the AFAP rules. [123] The functions of a sub-council under the AFAP rules are to make investigations and recommendations to the appropriate Branch/Council Committee of the AFAP on matters affecting the AFAP members employed by the particular company and to establish liaison between the appropriate Branch/Council Committee of the AFAP and the AFAP members employed by the particular company.[124]
[134] On the other hand, Eastern is part of the Qantas Group and the evidence indicates Qantas exercises considerable control over Eastern. For example, the one Qantas Executive General Manager heads up Qantas, Eastern, Sunstate and Australian Airlines Limited. [125] The decisions of the Qantas Executive General Manager responsible for running those airlines, including Eastern, must be consistent with the overall strategy of Qantas. Further, two of the three directors of Eastern are also directors of Qantas, all of the directors of Eastern are Qantas executives or employees and Qantas industrial relations personnel are involved in Eastern industrial relations issues, including those concerning pilots.[126]
[135] It is the AIPA which has extensive experience in dealing with Qantas in respect of pilots. The AIPA has some 2,300 pilot members, including 2,100 Qantas long haul (international) and short haul (domestic) pilot members and 80-90 Australian Airlines Limited pilot members. About 95% of the Qantas pilots are members of the AIPA.
[136] The AIPA has accommodated the smaller Australian Airlines Limited pilot group within its membership by allowing its 80-90 Australian Airlines Limited pilot members to form an Australian Airlines Pilots Council (AAPC). The AAPC looks after the representational needs of Australian Airlines Limited pilots. The Chairman of the AAPC is on the Australian Airlines Limited enterprise bargaining agreement negotiating team and attends the AIPA Committee of Management meetings as an observer. A position on the AIPA Committee of Management is to be created for the Chairman of the AAPC at the next elections. [127]
[137] The AIPA is a party to many awards and agreements covering Qantas and Australian Airlines Limited pilots and represents Qantas and Australian Airlines Limited pilots in enterprise negotiations and employee grievances.
[138] The AIPA has also assisted the EAAPC by providing office space, computers, stationery and administrative assistance. Further, the AIPA has provided professional staff to assist the EEAPC, has provided individual representation to Eastern pilots [128] and has attempted to gain Eastern pilots access to the Qantas loss of licence insurance.[129]
[139] In addition, the AIPA has recently pursued with Qantas the idea of a Qantas Group Opportunity List concerning promotion of Qantas, Jetstar and other Qantas group pilots, including Eastern pilots, across the Qantas Group. While Qantas and the AFAP are critical of the AIPA Qantas Group Opportunity List proposal and Qantas has rejected it, the fact remains that the AIPA has pursued the concept of promotion of Qantas, Jetstar and other Qantas Group pilots across the Qantas Group. The AIPA has pursued its Qantas Group Opportunity List proposal notwithstanding its membership is dominated by Qantas pilots, particularly long haul Qantas pilots. It does not appear the AIPA has ruled out being prepared to negotiate on their particular proposal.
[140] While the AFAP has a long history of representing Eastern pilots, the evidence reveals that over recent years many Eastern pilots have been dissatisfied with the representation the AFAP has afforded them. Many Eastern pilots have sought to join the AIPA. [130]
[141] Much was made by the AFAP and the Qantas Group of conflicts of interest that it was said favoured a conclusion that Eastern pilots could more conveniently belong to the AFAP than the AIPA. The Qantas Group suggested overlapping coverage between the AFAP and the AIPA in respect of Eastern pilots would produce demarcation disputes. The AFAP submitted there would be potential conflict between pilots which could lead to demarcation disputes, if the Commission consented to the alteration of the AIPA's eligibility rule in respect of Eastern pilots. In this regard they referred to the evidence of Captains Harget and O'Dougherty.
[142] In his evidence Captain Harget, an Eastern pilot and Vice Chairman of the New South Wales Branch of the AFAP, said:
"7. If AIPA was to be successful in its Application I believe that the result would be not harmonious to say the least. It certainly would not be conducive to a pleasant working environment and would not be as efficient as it could be. It would make negotiations for enterprise agreements and other industrial matters a long and laborious process." [131]
[143] Captain O'Dougherty, an Eastern pilot and Vice Chairman of the Victorian Branch of the AFAP, said:
"8. For the reasons I have stated, I believe that allowing AIPA to represent Eastern pilots is contrary to the best interests of Eastern pilots. The damage caused by allowing two unions to compete over the allegiance of Eastern pilots is already apparent." [132]
[144] Mr O'Connell, Executive Director of the AFAP also gave evidence, which we have set out earlier, of his belief that the Commission's consent to the rule alteration sought by the AIPA would give rise to a serious risk of demarcation disputes. We have already commented that we have not found Mr O'Connell's evidence helpful in establishing that the Commission's consent to the alteration of the eligibility rules of the AIPA could lead to demarcation disputes.
[145] This is because Mr O'Connell's evidence makes it clear it is "the friction resulting from changes in flying as between the various airlines and Qantas", rather than the Commission's consent to the alteration of the AIPA's eligibility rules, that is likely to give rise to demarcation disputes
[146] Mr O'Connell's evidence also seems to be based on the assumption that the AIPA will act purely in the interests of Qantas pilots even if the Commission consents to the rule alteration to give it eligibility to cover Eastern pilots. We do not accept that assumption given the accommodations the AIPA has made in respect of its Australian Airlines Limited pilot members and its Qantas Group Opportunity List proposal.
[147] To the extent Mr O'Connell is suggesting the Commission's consent to the rule alteration to give the AIPA eligibility to cover Eastern pilots will lead to demarcation disputes between the Eastern pilots who are members of the AIPA and other Eastern pilots including those who are members of the AFAP because the AIPA will act purely in the interests of Qantas pilots, notwithstanding the Commission's consent to a rule alteration to give it coverage of Eastern pilots, we reject the suggestion for the reasons just given.
[148] In respect of Mr O'Connell's evidence that "there has already been evidence at Eastern of the difficulties created in the enterprise bargaining as a result of the presence by proxy of a second competing union" and "they (sic) difficulties will be come (sic) more acute if AIPA succeeds in this application" and the evidence of Captains Harget and O'Dougherty, we think it is apparent from other evidence that for some time there has been disharmony between Eastern pilots about their representation in industrial matters. We do not believe that disharmony has been due to competition between the AFAP and the AIPA in respect of Eastern pilots. Rather, we think the disharmony is primarily a product of differing objectives amongst the Eastern pilots. For example, in his evidence Captain Alphandary, a former Eastern pilot and member and Chairman of the EAAPC, said:
"14. I attended a meeting of the EAAPC on 5 January 2004 a resolution was passed at that meeting in the following terms: 'Let it be resolved that EAAPC approaches both the AFAP and AIPA in regards to union representation of the pilot body' (attachment MA-1). From that time EAAPC members, including me, contacted representatives of AIPA in an effort to get the best advice and deal for Eastern Pilots.
15. The Eastern Pilots Enterprise Agreement 2002 expired in July 2004. Negotiations for a replacement agreement commenced in late in 2004. Mr Cox from the AFAP was involved in those negotiations. The AFAP arbitrarily removed the duly nominated EAAPC negotiators from the negotiations and replaced them with pilot negotiators of their choosing. This action eventually gave rise to the 'Eastern Pilots Group' (EPG), which was born out of frustration with the AFAP's ongoing refusal to take direction from the majority of EAAPC members. Despite having over 75% of the pilot group in the EPG the AFAP refused to allow any input from the EPG into the negotiation of the new agreement. In late 2005 an agreement was reached between Eastern Airlines and the AFAP.
16. I believed the agreement reached was sub-standard. I expressed my view that I would be voting 'no' about the proposed agreement in writing on an on-line chat site called 'Qrewroom'. I did so because I believed the proposed agreement was not in a fit state to be put to a popular vote. I never encouraged a 'No' vote. I logically laid out my reasons for voting 'no' and allowed other people to make their own assessment. I certainly never encouraged a 'No' vote on the basis that AIPA would get a better deal. I am not aware of anybody encouraging a 'no' vote on that basis. My aim was always to get the best deal possible for the Eastern pilots. I did speak to representatives from AIPA at this time as AFAP representatives were refusing to advise any of the EAAPC members who they believed wanted to leave the AFAP. I did so in an endeavour to get the best advice and best outcome for Eastern pilots.
17. In December 2005 the agreement was voted on and the results were set out in a memorandum from the AFAP to Eastern Pilots (attachment MA-2). The results were:
18. Further negotiations commenced in March 2006. I recall that changes were made to the agreement voted down in December 2005. The new agreement was voted up in July 2006. The new agreement was voted up partly because changes were made and partly because the pilots were frustrated that they had not received any indexation to their pay since 2003." [133]
[149] We think it of little consequence that the Eastern Pilots Group no longer exists. As Captain Alphandary explained:
"20. At no time did I say to Mr O'Connell or Mr Cox that I had made a mistake in speaking to AIPA or in seeking to get the best deal possible for Eastern pilots.
21. I did say to Mr Cox that I would work with the AFAP. It was clear to me that in the short term we had no choice but to do so, given the AFAP's refusal to allow input from the EPG despite its majority support. Consistent with wanting the best for Eastern Pilots I said I would work with the AFAP because the welfare of the Eastern pilots was suffering while the AFAP refused to take direction from members in the EPG. Given this was a majority of Eastern Pilots it meant the wishes of most were being ignored. I am prepared to work with any union in an effort to get the best results for Eastern pilots. I did not say to Mr Cox that I would work with the AFAP at the exclusion of any other union." [134]
[150] The EPG was not an organisation registered under the Workplace Relations Act 1996 (Cth) and the AIPA did not have eligibility to cover Eastern pilots.
[151] We do not believe it is appropriate to lay blame for the disharmony between Eastern pilots on either the AFAP or the AIPA or to criticise their conduct in responding to it or dealing with it. Further, given the primary cause of the disharmony we do not accept that the Commission's consent to the rule alteration sought by the AIPA to give it eligibility to cover Eastern pilots is likely to increase the disharmony amongst Eastern pilots.
[152] We are not persuaded on the evidence that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Eastern pilots will create the demarcation disputes contended by the AFAP or the Qantas Group.
[153] We think the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Eastern pilots will create demarcation disputes within the AIPA because Qantas pilots, who may be in competition with Eastern pilots, form the vast bulk of the AIPA's members and the AIPA's Committee of Management is controlled by Qantas long haul pilots pay too little regard to a number of counterbalancing factors. Relevant in this regard is the fact that the AIPA has accommodated the 80-90 Australian Airlines Limited pilots within its membership of about 2,300 and will similarly need to accommodate the Eastern pilots if it is to retain their membership and the AIPA has pursued a Qantas Group Opportunity List proposal.
[154] Further, we think the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Eastern pilots will create demarcation disputes between the AFAP in respect of its Eastern pilot members and the AIPA in respect of its Qantas pilot members, fail to recognise that such demarcation disputes are not dependent on the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Eastern pilots. The Commission's consent to the alteration may reduce such demarcation disputes as it will enable the AIPA to enrol Eastern pilots who it will need to accommodate if it is to retain their membership.
[155] We do not accept the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Eastern pilots will create demarcation disputes between the AIPA in respect of its Eastern pilot members and the AFAP in respect of its Eastern pilot members or between the Eastern pilots who are members of the AIPA and other Eastern pilots including those who are members of the AIPA. Such submissions are not grounded in the evidence and it is not obvious or inevitable that the Commission's consent to the rule alteration will create such demarcation disputes.
[156] In addition, we think the AIPA's accommodation of its Australian Airlines Limited pilots and its Qantas Group Opportunity List proposal indicate that the AIPA will be willing and able to manage appropriately the conflicts of interest contended by the Qantas Group and the AFAP. It follows that we do not accept that the conflicts of interest contended by the Qantas Group and the AFAP mean Eastern pilots could more conveniently belong to the AFAP than the AIPA.
[157] With respect to the submissions that Eastern pilots could more conveniently belong to the AFAP than the AIPA because of issues concerning the operation of the AIPA, the evidence is not sufficient to compel a conclusion that the AIPA is any less adequately staffed or any less experienced in airline industrial relations than the AFAP. Further, the evidence reveals that the payment of membership dues issue which was raised in submissions in support of the contention that Eastern pilots could more conveniently belong to the AFAP than the AIPA concerns the non-payment of dues by persons who are not eligible for membership of the AIPA. The evidence is also insufficient to compel a conclusion that the AIPA operates in disregard of its rules with respect to the recording of its Committee of Management decisions. Finally, we do not believe the evidence is sufficient to establish that the AIPA or Captain Woods and Captain Elsass gave no proper consideration to the scope of the rule alteration for which the consent of the Commission is sought.
[158] We think the considerations before us indicate that Eastern pilots could conveniently belong to the AIPA or the AFAP. However, as we indicated earlier, in all the circumstances and having particular regard to the balancing of the AFAP's existing coverage and representation of Eastern pilots against the AIPA's experience in dealing with Qantas in respect of pilots and the control Qantas exercises over Eastern, we are not of the opinion Eastern pilots could more conveniently belong to the AFAP than the AIPA.
(iv) Eastern Pilots - More Effectively Represent
[159] We do not believe the AFAP would more effectively represent the Eastern pilots than would the AIPA.
[160] In our view the evidence in this matter supports a conclusion that the AIPA effectively represents the pilots it has eligibility to cover under its rules, including those employed by Australian Airlines Limited as well as its more numerous long haul and short haul pilot membership in Qantas.
[161] For example, the AIPA is a respondent or party to various awards and agreements covering such members. While the nominal expiry dates of the Qantas pilots' and Australian Airlines Limited pilots' agreements to which it is a party have expired without replacement agreements to which it is a party being made, on the evidence we do not think this is because the AIPA is not effectively representing its members.
[162] Further, the AIPA has vigorously attempted to advance the interests of those it has eligibility to cover through such actions as Federal Court proceedings, the 2004 Agreement between Qantas, Jetstar, the AIPA and representatives of Jetstar pilots and its Qantas Group Opportunity List proposal.
[163] Similarly, we think the AFAP has effectively represented Eastern pilots. However, we do not think the bases on which we have concluded the AFAP effectively represents Eastern pilots, including the size of its membership, its capacity and resources, its involvement in the negotiations for the Eastern pilots enterprise agreement and its respondency to it and its assistance to individual Eastern pilots, means the AFAP would more effectively represent Eastern pilots than would the AIPA. The AFAP has been no more effective in representing its Eastern pilot members than the AIPA has been in representing those it has eligibility to cover.
[164] Since an autonomous Eastern Pilots Council has not been established under the AFAP rules and there was conflict between the EAAPC and the AFAP during the recent enterprise bargaining negotiations for Eastern pilots, we do not believe the AFAP rules' provisions concerning separate representation and pilot choice as to their representative structure is supportive of a conclusion that the AFAP would more effectively represent Eastern pilots than would the AIPA.
[165] The Qantas Group said that the matters it had raised in respect of Eastern pilots and the more conveniently belong issue were also relevant in respect of Eastern pilots and the more effectively represent issue. We reiterate what we have said about those matters in dealing with Eastern pilots and the more conveniently belong issue, here, in dealing with Eastern pilots and the more effectively represent issue. We similarly reiterate what we have said about the AFAP's contentions and the evidence given for it to the effect that the Commission's consent to the rule alteration in respect of Eastern pilots will create demarcation disputes. We also reiterate what we have said about the conflicts of interest contended by the AFAP and the evidence given for it in that regard.
[166] We add that we think the suggestion that the AFAP would more effectively represent Eastern pilots than the AIPA because of the predominance and influence of Qantas pilots, particularly Qantas long haul pilots, in the membership of the AIPA and because of the different interests of Qantas and Eastern is undermined by the assistance the AIPA has already given to Eastern pilots and the role the AIPA has played in respect of the Australian Airlines Limited pilots who form a minority of its membership.
[167] We disagree with the proposition that the AIPA would not also effectively represent Eastern pilots. As earlier indicated and for the reasons already given, we do not believe the AIPA should be criticised for its role in the recent enterprise bargaining negotiations for Eastern pilots or its involvement with Eastern pilots. Further, with respect to the extent of its achievements for Eastern pilots, it needs to be remembered that the AIPA has not had eligibility to cover such pilots. We also reject the contention that the AIPA would not effectively represent Eastern pilots because it has allowed unfinancial "members", since the contention concerns pilots who are not eligible for membership of the AIPA. We think the litigation the AIPA has engaged in in aid of Qantas pilots is indicative of its effective representation of those it has eligibility to cover under its rules.
[168] We think the considerations before us indicate that both the AIPA and the AFAP would effectively represent Eastern pilots. However, as we indicated earlier, in all the circumstances and having particular regard to the fact the AIPA effectively represents pilots it has eligibility to cover under its rules against the fact the AFAP effectively represents Eastern pilots, we are not of the opinion the AFAP would more effectively represent Eastern pilots than would the AIPA.
[169] We do not believe Sunstate pilots could more conveniently belong to the AFAP than the AIPA.
[170] The AFAP has some 2,300 pilots as members including 104 of the 115 Sunstate pilots as members. Sunstate is a regional airline. The AFAP is party to or bound by many awards and agreements covering pilots in general aviation, regional airlines, the Civil Aviation Safety Authority, Virgin Blue Airlines Pty Ltd and Jetstar, including the Regional Airlines Pilots' Award 2003 and the Sunstate Airlines (QLD) Pty Limited Pilots Enterprise Agreement 2005. It encourages regular regional pilot meetings. The AFAP has assisted Sunstate pilots in enterprise bargaining negotiations and represented them in employee grievances. While the AFAP provides its pilot members with access to loss of licence insurance, Sunstate pilots are covered by the Qantas loss of licence insurance.
[171] In addition, the AFAP rules provide that, subject to the supreme governing body of the AFAP, a Council may be established where a minimum of 15 members of the AFAP are permanently employed by a company. Such Councils have autonomy in matters affecting their members and direct representation on the AFAP Convention and Executive Committee. However, no such Council has been established under the AFAP rules in respect of Sunstate pilots.
[172] On the other hand, Sunstate is part of the Qantas Group and the evidence indicates Qantas exercises considerable control over Sunstate. For example, the one Qantas Executive General Manager heads up Qantas, Eastern, Sunstate and Australian Airlines Limited. [135] The decisions of the Qantas Executive General Manager responsible for running those airlines, including Sunstate, must be consistent with the overall strategy of Qantas. Further, two of the three directors of Sunstate are also directors of Qantas, all of the directors of Sunstate are Qantas executives or employees and Qantas industrial relations personnel are involved in Sunstate industrial relations issues, including those concerning pilots.[136]
[173] It is the AIPA which has extensive experience in dealing with Qantas in respect of pilots. The AIPA has some 2,300 pilot members, including 2,100 Qantas long haul (international) and short haul (domestic) pilot members and 80-90 Australian Airlines Limited pilot members. About 95% of the Qantas pilots are members of the AIPA.
[174] The AIPA has accommodated the smaller Australian Airlines Limited pilot group within its membership by allowing its 80-90 Australian Airlines Limited pilot members to form an Australian Airlines Pilots Council (AAPC). The AAPC looks after the representational needs of Australian Airlines Limited pilots. The Chairman of the AAPC is on the Australian Airlines Limited enterprise bargaining agreement negotiating team and attends the AIPA Committee of Management meetings as an observer. A position on the AIPA Committee of Management is to be created for the Chairman of the AAPC at the next elections. [137]
[175] The AIPA is a party to many awards and agreements covering Qantas and Australian Airlines Limited pilots and represents Qantas and Australian Airlines Limited pilots in enterprise negotiations and employee grievances.
[176] The AIPA has recently pursued with Qantas the idea of a Qantas Group Opportunity List concerning promotion of Qantas, Jetstar and other Qantas group pilots, including Sunstate pilots, across the Qantas Group. While Qantas and the AFAP are critical of the AIPA Qantas Group Opportunity List proposal and Qantas has rejected it, the fact remains that the AIPA has pursued the concept of promotion of Qantas, Jetstar and other Qantas Group pilots across the Qantas Group. The AIPA has pursued its Qantas Group Opportunity List proposal notwithstanding its membership is dominated by Qantas pilots, particularly long haul Qantas pilots. It does not appear the AIPA has ruled out being prepared to negotiate on their particular proposal.
[177] Much was made by the AFAP and the Qantas Group of conflicts of interest that it was said favoured a conclusion that Sunstate pilots could more conveniently belong to the AFAP than the AIPA. The Qantas Group suggested overlapping coverage between the AFAP and the AIPA in respect of Sunstate pilots would produce demarcation disputes. The AFAP submitted there would be potential conflict between pilots because of the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots which could lead to demarcation disputes. In this regard they referred to the evidence of Captain Millroy and Mr Diamond.
[178] Captain Millroy, a Sunstate pilot and AFAP member, gave evidence that:
"22. If AIPA is successful in this application it can only create tension and cause conflict amongst Sunstate pilots. I cannot see the merit in allowing another union to destabilise the pilot group and create hostility and an unsafe environment in the cockpit. Allowing another union to divide the loyalty of Sunstate pilots will only undermine the SPC's [Sunstate Pilots Committee] ability to effectively negotiate our working conditions with Sunstate. The Federation has a stable working relationship with Sunstate pilots and the respect of Sunstate management. No one at Sunstate, whether it is the pilots or management, are interested in supporting this application." [138]
[179] Mr Diamond, a First Officer with Ozjet Airlines, a First Officer with Sunstate from 1996-1999 and an AFAP Victorian Branch Committee member, gave evidence as follows:
"27. I believe that allowing AIPA to become involved in pilot groups already covered by the Federation would be a disaster for those pilots. The division created by such a move would make for pilot discontent and could lead to friction in the cockpit." [139]
[180] This evidence was not subject to cross-examination. We do not doubt that those pilots believe what they have said. However, we do not find this evidence helpful. Captain Millroy's evidence seems inconsistent. For example, on the one hand, he says no one at Sunstate is interested in supporting the AIPA's application for the consent of the Commission to the alteration of its eligibility rules in respect of Sunstate. On the other hand, he suggests that if the Commission gives such consent it can only create tension and cause conflict amongst Sunstate pilots. It is difficult to reconcile why the Commission's consent will create tension and conflict if no one at Sunstate is interested in supporting the application. Presumably, if no Sunstate pilot is interested in supporting the application, no Sunstate pilot will join the AIPA if the Commission gives its consent and if no Sunstate pilot joins the AIPA then it is hard to see how tension and conflict amongst Sunstate pilots will be created by the Commission's consent. With respect to Mr Diamond's evidence, Mr Diamond has not been employed by Sunstate for a considerable period of time. It is not apparent from his evidence why the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots would be a disaster for Sunstate pilots, create division or lead to friction in the cockpit.
[181] Mr O'Connell, Executive Director of the AFAP also gave evidence, which we have set out earlier, of his belief that the Commission's consent to the rule alteration sought by the AIPA would give rise to a serious risk of demarcation disputes. We have already commented that we have not found Mr O'Connell's evidence helpful in establishing that the Commission's consent to the alteration of the eligibility rules of the AIPA could lead to demarcation disputes.
[182] This is because Mr O'Connell's evidence makes it clear it is "the friction resulting from changes in flying as between the various airlines and Qantas", rather than the Commission's consent to the alteration of the AIPA's eligibility rules, that is likely to give rise to demarcation disputes.
[183] Mr O'Connell's evidence also seems to be based on the assumption that the AIPA will act purely in the interests of Qantas pilots even if the Commission consents to the rule alteration to give it eligibility to cover Sunstate pilots. We do not accept that assumption given the accommodations the AIPA has made in respect of its Australian Airlines Limited pilot members and its Qantas Group Opportunity List proposal.
[184] To the extent Mr O'Connell is suggesting the Commission's consent to the rule alteration to give the AIPA eligibility to cover Sunstate pilots will lead to demarcation disputes between the Sunstate pilots who are members of the AIPA and other Sunstate pilots including those who are members of the AFAP because the AIPA will act purely in the interests of Qantas pilots, notwithstanding the Commission's consent to the rule alteration to give it coverage of Sunstate pilots, we reject the suggestion for the reasons just given.
[185] We are not persuaded on the evidence that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots will create the demarcation disputes contended by the AFAP or the Qantas Group.
[186] We think the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots will create demarcation disputes within the AIPA because Qantas pilots, who may be in competition with Sunstate pilots, form the vast bulk of the AIPA's members and the AIPA's Committee of Management is controlled by Qantas long haul pilots pay too little regard to a number of counterbalancing factors. Relevant in this regard is the fact that the AIPA has accommodated the 80-90 Australian Airlines Limited pilots within its membership of about 2,300 and will similarly need to accommodate the Sunstate pilots if it is to retain their membership and the AIPA has pursued a Qantas Group Opportunity List proposal.
[187] Further, we think the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots will create demarcation disputes between the AFAP in respect of its Sunstate pilot members and the AIPA in respect of its Qantas pilot members, fail to recognise that such demarcation disputes are not dependent on the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots. The Commission's consent to the alteration may reduce such demarcation disputes as it will enable the AIPA to enrol Sunstate pilots who it will need to accommodate if it is to retain their membership.
[188] We do not accept the submissions to the effect that the Commission's consent to the alteration of the AIPA's eligibility rules in respect of Sunstate pilots will create demarcation disputes between the AIPA in respect of its Sunstate pilot members and the AFAP in respect of its Sunstate pilot members or between the Sunstate pilots who are members of the AIPA and other Sunstate pilots including those who are members of the AIPA. Such submissions are not grounded in the evidence and it is not obvious or inevitable that the Commission's consent to the rule alteration will create such demarcation disputes.
[189] In addition, we think the AIPA's accommodation of its Australian Airlines Limited pilots and its Qantas Group Opportunity List proposal indicate that the AIPA will be willing and able to manage appropriately the conflicts of interest contended by the Qantas Group and the AFAP. It follows that we do not accept that the conflicts of interest contended by the Qantas Group and the AFAP mean Sunstate pilots could more conveniently belong to the AFAP than the AIPA.
[190] We take into account, however, that no Sunstate pilot was called by the AIPA to give evidence on the more conveniently belong issue. We also take into account the AIPA's lack of involvement with Sunstate pilots. They are factors going against a conclusion that Sunstate pilots could conveniently belong to the AIPA and factors favouring a conclusion that Sunstate pilots could more conveniently belong to the AFAP than the AIPA.
[191] With respect to the submissions that Sunstate pilots could more conveniently belong to the AFAP than the AIPA because of issues concerning the operation of the AIPA, the evidence is not sufficient to compel a conclusion that the AIPA is any less adequately staffed or any less experienced in airline industrial relations than the AFAP. Further, the evidence reveals that the payment of membership dues issue which was raised in submissions in support of the contention that Sunstate pilots could more conveniently belong to the AFAP than the AIPA concerns the non-payment of dues by persons who are not eligible for membership of the AIPA. The evidence is also insufficient to compel a conclusion the AIPA operates in disregard of its rules with respect to the recording of its Committee of Management decisions. Finally, we do not believe the evidence is sufficient to establish that the AIPA or Captain Woods and Captain Elsass gave no proper consideration to the scope of the rule alteration for which the consent of the Commission is sought.
[192] After weighing up the considerations before us, we think that Sunstate pilots could conveniently belong to the AIPA or the AFAP. However, as we indicated earlier, in all the circumstances and having particular regard to the balancing of the AFAP's existing coverage and representation of Sunstate pilots against the AIPA's experience in dealing with Qantas in respect of pilots and the control Qantas exercises over Sunstate, we are not of the opinion Sunstate pilots could more conveniently belong to the AFAP than the AIPA.
(vi) Sunstate Pilots - More Effectively Represent
[193] We do not believe the AFAP would more effectively represent the Sunstate pilots than would the AIPA.
[194] In our view the evidence in this matter supports a conclusion that the AIPA effectively represents the pilots it has eligibility to cover under its rules, including those employed by Australian Airlines Limited as well as its more numerous long haul and short haul pilot membership in Qantas.
[195] For example, the AIPA is a respondent or party to various awards and agreements covering such members. While the nominal expiry dates of the Qantas pilots' and Australian Airlines Limited pilots' agreements to which it is a party have expired without replacement agreements to which it is a party being made, on the evidence we do not think this is because the AIPA is not effectively representing its members.
[196] Further, the AIPA has vigorously attempted to advance the interests of those it has eligibility to cover through such actions as Federal Court proceedings, the 2004 Agreement between Qantas, Jetstar, the AIPA and representatives of Jetstar pilots and its Qantas Group Opportunity List proposal.
[197] Similarly, we think the AFAP effectively represents Sunstate pilots. However, we do not think the bases on which we have concluded the AFAP effectively represents Sunstate pilots, including the size of its membership, its capacity and resources, its involvement in the negotiations for the Sunstate pilots enterprise agreement and its respondency to it and its assistance to individual Sunstate pilots, means the AFAP would more effectively represent Sunstate pilots than would the AIPA. The AFAP has been no more effective in representing its Sunstate pilot members than the AIPA has been in representing those it has eligibility to cover.
[198] Since an autonomous Sunstate Pilots Council has not been established under the AFAP rules, we do not think the AFAP rules' provisions concerning separate representation and pilot choice as to their representative structure is supportive of a conclusion that the AFAP would more effectively represent Sunstate pilots than would the AIPA.
[199] The Qantas Group said that the matters it had raised in respect of Sunstate pilots and the more conveniently belong issue were also relevant in respect of Sunstate pilots and the more effectively represent issue. We reiterate what we have said about those matters in dealing with Sunstate pilots and the more conveniently belong issue, here, in dealing with Sunstate pilots and the more effectively represent issue. We similarly reiterate what we have said about the AFAP's contention and the evidence given for it to the effect that the Commission's consent to the rule alteration in respect of Sunstate pilots will create demarcation disputes. We also reiterate what we have said about the conflicts of interest contended by the AFAP and the evidence given for it in that regard.
[200] We add that we think the suggestion that the AFAP would more effectively represent Sunstate pilots than the AIPA because of the predominance and influence of Qantas pilots, particularly Qantas long haul pilots, in the membership of the AIPA and because of the different interests of Qantas and Sunstate is undermined by the role the AIPA has played in respect of its Australian Airlines Limited pilots who form a minority of its membership.
[201] We do not accept that the AIPA's history with respect to Eastern pilots indicates the AIPA is unsuitable to represent Sunstate pilots or is not able to effectively represent them. As earlier indicated and for the reasons already given, we do not believe the AIPA should be criticised for its role in the recent enterprise bargaining negotiations for Eastern pilots or its involvement with Eastern pilots. We also reject the contention that the AIPA would not effectively represent Sunstate pilots because it has allowed unfinancial "members", since the contention concerns pilots who are not eligible for membership of the AIPA. We think the litigation the AIPA has engaged in in aid of Qantas pilots is indicative of its effective representation of those it has eligibility to cover under its rules.
[202] We take into account, however, that no Sunstate pilot was called by the AIPA to give evidence on the more effectively represent issue. We also take into account the AIPA's lack of involvement with Sunstate pilots. They are factors going against a conclusion that the AIPA would effectively represent Sunstate pilots and factors favouring a conclusion that the AFAP would more effectively represent Sunstate pilots than would the AIPA.
[203] After weighing up the considerations before us, we think that both the AIPA and the AFAP would effectively represent Sunstate pilots. However, as we indicated earlier, in all the circumstances and having particular regard to the fact the AIPA effectively represents pilots it has eligibility to cover under its rules against the fact the AFAP effectively represents Sunstate pilots, we are not of the opinion the AFAP would more effectively represent Sunstate pilots than would the AIPA.
(vii) Qantas Limited Pilots - More Conveniently Belong
[204] We do not believe Qantas Limited pilots could more conveniently belong to the AFAP than the AIPA.
[205] The AFAP has some 2,300 pilots as members. Qantas Limited is an airfreight operation. The AFAP is party to or bound by many awards and agreements covering pilots in general aviation, regional airlines, the Civil Aviation Safety Authority, Virgin Blue Airlines Pty Ltd and Jetstar, including the Pilots' (General Aviation) Award 1998 which covers numerous freight operators. The AFAP assists pilots in enterprise bargaining negotiations and represents them in employee grievances. The AFAP can provide its pilot members with access to loss of licence insurance. Although, such insurance is otherwise available but is relatively expensive.
[206] In addition, the AFAP rules provide that, subject to the supreme governing body of the AFAP, a Council may be established where a minimum of 15 members of the AFAP are permanently employed by a company. Such Councils have autonomy in matters affecting their members and direct representation on the AFAP Convention and Executive Committee. However, no such Council has been established under the AFAP rules in respect of Qantas Limited pilots.
[207] On the other hand, Qantas Limited is part of the Qantas Group and the evidence indicates Qantas exercises considerable control over Qantas Limited. For example, a Qantas Executive General Manager is responsible for running Qantas Limited and the decisions of the Qantas Executive General Manager responsible for running Qantas Limited must be consistent with the overall strategy of Qantas. [140] There are also systems of collaboration between Qantas Limited and others in the Qantas Group. Qantas Limited has contracted to purchase a range of support services from various entities in the Qantas Group. Such support services include crew, dispatch, operations control, security, airport support, maintenance and the purchase of fuel. Further, senior Qantas personnel hold positions with Qantas Limited and are key personnel in respect of its operations, including Captain Chris Manning, the Head of Flight Operations for Qantas. Qantas Limited pilots are employed under Australian Workplace Agreements pursuant to the Workplace Relations Act 1996 (Cth).[141]
[208] It is the AIPA which has extensive experience in dealing with Qantas in respect of pilots. The AIPA has some 2,300 pilot members, including 2,100 Qantas long haul (international) and short haul (domestic) pilot members and 80-90 Australian Airlines Limited pilot members. About 95% of the Qantas pilots are members of the AIPA.
[209] The AIPA has accommodated the smaller Australian Airlines Limited pilot group within its membership by allowing its 80-90 Australian Airlines Limited pilot members to form an Australian Airlines Pilots Council (AAPC). The AAPC looks after the representational needs of Australian Airlines Limited pilots. The Chairman of the AAPC is on the Australian Airlines Limited enterprise bargaining agreement negotiating team and attends the AIPA Committee of Management meetings as an observer. A position on the AIPA Committee of Management is to be created for the Chairman of the AAPC at the next elections. [142]
[210] The AIPA is a party to many awards and agreements covering Qantas and Australian Airlines Limited pilots and represents Qantas and Australian Airlines Limited pilots in enterprise negotiations and employee grievances.
[211] We note that it was really the Qantas Group rather than the AFAP that pressed s.158(4) submissions in respect of Qantas Limited.
[212] Nonetheless, to the extent reliance is placed by either the AFAP or the Qantas Group on Mr O'Connell's evidence, as set out earlier, in respect of the more conveniently belong issue and Qantas Limited pilots, we repeat that we have not found Mr O'Connell's evidence helpful in establishing that the Commission's consent to the alteration of the eligibility rules of the AIPA could lead to demarcation disputes. We think what we said about that evidence in respect of Sunstate pilots also applies in respect of Qantas Limited pilots.
[213] We take into account, however, that no Qantas Limited pilot was called by the AIPA to give evidence on the more conveniently belong issue. We also take into account the AIPA's lack of involvement with Qantas Limited pilots. They are factors going against a conclusion that Qantas Limited pilots could conveniently belong to the AIPA and factors favouring a conclusion that Qantas Limited pilots could more conveniently belong to the AFAP than the AIPA.
[214] With respect to any submissions that Qantas Limited pilots could more conveniently belong to the AFAP than the AIPA because of issues concerning the operation of the AIPA, the evidence is not sufficient to compel a conclusion that the AIPA is any less adequately staffed or any less experienced in airline industrial relations than the AFAP. Further, the evidence reveals that the payment of membership dues issue which was raised in submissions in support of the contention that Qantas Limited pilots could more conveniently belong to the AFAP than the AIPA concerns the non-payment of dues by persons who are not eligible for membership of the AIPA. The evidence is also insufficient to compel a conclusion that the AIPA operates in disregard of its rules with respect to the recording of its Committee of Management decisions. Finally, we do not believe the evidence is sufficient to establish that the AIPA or Captain Woods and Captain Elsass gave no proper consideration to the scope of the rule alteration for which the consent of the Commission is sought.
[215] After weighing up the considerations before us, we think that Qantas Limited pilots could conveniently belong to the AIPA or the AFAP. However, as we earlier indicated, in all the circumstances and having particular regard to the balancing of the AFAP's existing coverage and representation of pilots employed by freight operators against the AIPA's experience in dealing with Qantas in respect of pilots and the control Qantas exercises over Qantas Limited, we are not of the opinion Qantas Limited pilots could more conveniently belong to the AFAP than the AIPA.
(viii) Qantas Limited Pilots - More Effectively Represent
[216] We do not believe the AFAP would more effectively represent the Qantas Limited pilots than would the AIPA.
[217] In our view the evidence in this matter supports a conclusion that the AIPA effectively represents the pilots it has eligibility to cover under its rules, including those employed by Australian Airlines Limited as well as its more numerous long haul and short haul pilot membership in Qantas.
[218] For example, the AIPA is a respondent or party to various awards and agreements covering such members. While the nominal expiry dates of the Qantas pilots' and Australian Airlines Limited pilots' agreements to which it is a party have expired without replacement agreements to which it is a party being made, on the evidence we do not think this is because the AIPA is not effectively representing its members.
[219] Further, the AIPA has vigorously attempted to advance the interests of those it has eligibility to cover through such actions as Federal Court proceedings, the 2004 Agreement between Qantas, Jetstar, the AIPA and representatives of Jetstar pilots and its Qantas Group Opportunity List proposal.
[220] Similarly, we think the AFAP effectively represents its pilot members, including those employed by freight operators. However, we do not think the bases on which we have concluded the AFAP effectively represents its pilot members, including the size of its membership, its capacity and resources, its involvement in enterprise negotiations for its pilot members, its respondency to various pilot awards and agreements covering its pilot members and its assistance to individual pilots, means the AFAP would more effectively represent Qantas Limited pilots than would the AIPA. The AFAP has been no more effective in representing its pilot members, including those employed by freight operators, than the AIPA has been in representing those it has eligibility to cover.
[221] We note that it was really the Qantas Group rather than the AFAP that pressed s.158(4) submissions in respect of Qantas Limited.
[222] Nonetheless, to the extent reliance is placed by either the AFAP or the Qantas Group on Mr O'Connell's evidence, as set out earlier, in respect of the more effectively represent issue and Qantas Limited pilots, we repeat that we have not found Mr O'Connell's evidence helpful in establishing that the Commission's consent to the alteration of the eligibility rules of the AIPA could lead to demarcation disputes. We think what we said about that evidence in respect of Sunstate pilots also applies in respect of Qantas Limited pilots.
[223] Since an autonomous Qantas Limited Pilots Council has not been established under the AFAP rules, we do not believe the AFAP rules' provisions concerning separate representation and pilot choice as to their representative structure is supportive of a conclusion that the AFAP would more effectively represent Qantas Limited pilots than would the AIPA.
[224] We think any suggestion that the AFAP would more effectively represent Qantas Limited pilots than the AIPA because of the predominance and influence of Qantas pilots, particularly Qantas long haul pilots, in the membership of the AIPA and because of the different interests of Qantas and Qantas Limited is undermined by the role the AIPA has played in respect of the Australian Airlines Limited pilots who form a minority of its membership.
[225] We do not accept that the AIPA's history with respect to Eastern pilots indicates the AIPA is unsuitable to represent Qantas Limited pilots or is not able to effectively represent them. As earlier indicated and for the reasons already given, we do not believe the AIPA should be criticised for its role in the recent enterprise bargaining negotiations for Eastern pilots or its involvement with Eastern pilots. We also reject any contention that the AIPA would not effectively represent Qantas Limited pilots because it has allowed unfinancial "members", since such contention concerns pilots who are not eligible for membership of the AIPA. We think the litigation the AIPA has engaged in in aid of Qantas pilots is indicative of its effective representation of those it has eligibility to cover under its rules.
[226] We take into account, however, that no Qantas Limited pilot was called by the AIPA to give evidence on the more effectively represent issue. We also take into account the AIPA's lack of involvement with Qantas Limited pilots. They are factors going against a conclusion that the AIPA would effectively represent Qantas Limited pilots and factors favouring a conclusion that the AFAP would more effectively represent Qantas Limited pilots than would the AIPA.
[227] After weighing up the considerations before us, we think that both the AIPA and the AFAP would effectively represent Qantas Limited pilots. However, as we indicated earlier, in all the circumstances and having particular regard to the fact the AIPA effectively represents pilots it has eligibility to cover under its rules against the fact the AFAP effectively represents its pilot members including those employed by freight operators, we are not of the opinion the AFAP would more effectively represent Qantas Limited pilots than would the AIPA.
[228] In summary, for the foregoing reasons, we are not of the opinion the pilots of Jetstar, Eastern, Sunstate or Qantas Limited could more conveniently belong to the AFAP than the AIPA and we are not of the opinion the AFAP would more effectively represent Jetstar, Eastern, Sunstate or Qantas Limited pilots than would the AIPA.
[229] There is no need for us to deal further with s.158(5) of Schedule 1 of the Act. This is because, in relation to the persons who would be eligible for membership of the AIPA if we consented to the alteration to the rules of the AIPA for which our consent is sought, we are not of the opinion there is another organisation to which those persons could more conveniently belong or that would more effectively represent those members.
[230] Section 158(6) of Schedule 1 of the Act provides that:
"(6) The Commission 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 Schedule and the Workplace Relations Act the industrial interests of a particular class or group of persons."
[231] In respect of this matter, Senior Deputy President Kaufman said:
[96] If the Commission is satisfied that the alteration would contravene an agreement or undertaking dealing with the AIPA's representational rights and to which the AIPA is a party, it may refuse its consent.
[97] To properly understand how the objectors say that the rule change would breach several agreements, it is necessary briefly to have regard to the AIPA's initial registration and also to the proceedings before Hancock SDP in 1994.
[98] The first agreement was made in 1986 between the AIPA and the AFAP at around the time of their respective applications for registration as organisations. At that time, their rules were more or less complementary and mutually exclusive with the AIPA broadly representing Qantas international pilots and the AFAP representing pilots employed by Ansett, Trans Australian Airlines and in general aviation.
[99] The 1986 agreement [Exhibit AFAP 30] made it clear that the AFAP would have the right to enrol pilots employed by domestic airlines, even if those airlines, or their subsidiaries, were to operate international routes. The AIPA was confined to Qantas and to any new Australian company incorporated primarily to operate international RPTAS.
[100] After 1986 there were several significant developments in the Australian airline industry. The most significant is the so-called 'pilots' dispute' of 1989-1990.
[101] 'On 18 August 1989, the AFAP instituted industrial action in support of a wage claim. This took the form of refusals by members to work outside the hours 9am - 5pm. The 'nine-to-five' campaign continued for 6 days. On 24 August, all but a few line pilots employed by Ansett, Australian, East-West and Ipec resigned [Ansett Transport Industries (Operations) Pty Ltd and Others v Australian Federation of Air Pilots_, Print [L5128], Hancock SDP, 22 Sept 94 at [4].' Following the pilots' dispute there were several applications made to the Commission under s.118A of the_ Industrial Relations Act 1988 in relation to the industrial representation of domestic pilots.
[102] After much litigation involving numerous applications, Hancock SDP handed down a decision on 22 December 1992 . [Print [L8187]]. His Honour decided to issue orders which deprived the AFAP of the right to represent the industrial interests of pilots employed by Qantas, Ansett, Australian Airlines, East-West and Ipec. He did so despite the fact that the AIPA [did] not at that stage have the right to represent the industrial interests of those pilots. His Honour said '…I now decide that orders will issue which will deprive the AFAP of the right to represent the industrial interests of pilots…This course of action has the obvious disadvantages that pilots will, for a time, lack representation by an organisation…This problem is a manifestation of [the pilot's dispute]. The employed pilots rejection of the AFAP has left them imperfectly represented [Print [L8187]].'
[103] In 1995, Hancock SDP made an order whereby the AIPA was granted, to the exclusion of the AFAP, the right to represent the industrial interests of pilots employed by Qantas, Ansett, Australian Airlines, East-West and IPEC [Print [M1220], 1 May 1995]. There had been much litigation before his Honour dealing with the industrial representation of pilots, leading to orders on 1 May 1995, but I do not turn to the detail. It is usefully summarised in the decision of a Full Bench of December 1995 [Print [M7298], McIntyre VP, Munro J, O'Shea C].
[104] The upshot of the litigation was that the AFAP was excluded from representing the industrial interests of pilots employed by Ansett, Qantas, Australian Airlines, East-West and Ipec. As a consequence, it seems to me that the orders of 1 May 1985 [sic] were inconsistent with the terms of the 1986 agreement and brought it to an end. The alteration to the AIPA's rule would not contravene the 1986 agreement.
[105] As to letters of 29 and 30 January 1996, said to constitute an agreement between the two unions that the alteration would contravene, it seems to me that they do no more than state the unions' understanding of the effect of Hancock SDP's demarcation orders, in order that alterations to the AIPA's rules, consistent with the demarcation orders, could be made without further resort to arbitration.
[106] In my view, the granting of this application would not result in a contravention of any so-called agreement constituted by those letters.
[107] Finally, it is put that a one page document entitled 'THE COVENANT OF AusALPA' over the signature of 'G.J. Duggan V.P For and on behalf of the Australian and International Pilots' Association' is yet another agreement that the rule change would contravene. Even if that document is an agreement between the organisations, which I think it is not, an agreement 'to respect the constitutional machinery for the settling of such differences as may arise between Member Associations and to abide by the decisions reached' would not be contravened by the rule change.
[108] In the event that I am wrong as to the nature of the 'agreements' and in my belief that the rule change would not constitute a contravention of any of them, I would not exercise my discretion to refuse consent to the alteration to the rule change on that basis. The changed nature of the industry over the past 10 years or so, in particular, leads me to the view, having regard to the nature of the alleged agreements, that consent ought not be withheld pursuant to s.158(6) of the Schedule." [143]
[232] We think his Honour properly dealt with the contentions that the alteration of the eligibility rules of the AIPA for which the consent of the Commission is sought would contravene agreements or undertakings to which the AIPA is a party. Accordingly, and subject to the correction of the date 1 May 1985 to 1 May 1995 in paragraph 104 of his Honour's decision, we adopt what his Honour said, as set out above, in respect of s.158(6) of Schedule 1 of the Act in this matter, including the conclusions his Honour reached therein.
7. ORDERS UNDER s.133 OF SCHEDULE 1 OF THE ACT (s.158(7))
[233] We do not believe the circumstances in s.158(7) of Schedule 1 of the Act arise in this matter.
8. OTHER GROUNDS FOR REFUSAL OF CONSENT (s.158(8))
[234] Section 158(8) of Schedule 1 of the Act provides as follows:
"(8) Subsections (6) and (7) do not limit the grounds on which the Commission may refuse to consent to an alteration of the eligibility rules of an organisation."
[235] The Qantas Group submitted that the following strongly support the exercise of the Commission's discretion under s.158(8) to refuse to consent to the alteration to the AIPA's eligibility rules:
"▪ The fact that AIPA, without explanation, has effectively abandoned a significant part of its stated reasons in support of the application.
▪ The very significant level of uncertainty as to what is the intended/actual effect of the proposed alteration.
▪ The strong likelihood of demarcation disputes, both within AIPA and between AIPA and AFAP if the proposed alteration is consented to.
▪ The unsatisfactory conduct of AIPA, particularly during the period 2004 to 2006, including:
i. deliberately misleading prospective members in Jetstar and Eastern as to the extent to which they would be able to determine their own issues if they became AIPA members;
ii. the highly coordinated strategy of AIPA of launching a raid on AFAP's established membership base in Eastern together with the undermining of the legitimate aspirations of Eastern and the AFAP to negotiate a s.170LJ Agreement. As noted in AFAP 34 this 'master strategy' was undertaken in order to enhance AIPA's prospects of succeeding in its rule change application
▪ The hostility of AIPA towards the existence of Jetstar as a low cost carrier, as evidenced by its repeated attempts to frustrate the expansion of Jetstar's operation." [144]
[236] The Qantas Group contended that such issues pointed strongly to the conclusion that the Commission's consent to the alteration would be inconsistent with Parliament's intention in enacting Schedule 1 of the Act, as set out in s.5(1) of Schedule 1, in that it would not enhance relations between any of the Federal system employees sought to be covered by the proposed alteration and their respective employers.
156. There is an abundance of evidence before the Commission as to the detrimental effects that would be likely to follow upon the grant of this rule change application, for pilots and employers. The Commission should take those effects into account, and they weigh strongly in favour of a refusal of the application.
157. The Commission can and should also take into the manner in which this application has been prosecuted by AIPA. For example:
(a) The formulation of the proposed rule change does not seem to accord with Captain Woods intention for it.
(b) The reasons advanced do not support the case as it has been put. It is to be recalled that reasons (presumably genuine reasons) are required by the regulations to allow the application to be properly considered.
(c) The evidence filed in the Commission is simply a reproduction of the evidence from the 2005 application with any real effort having been made to address the case as he put it for the first time in the witness box.
(d) There is an absolute dearth of supporting evidence from pilots in the affected airlines: even pilots who provided statements last time have not done so this time.
(e) There was no evidence from Captain Holt who was directly involved in the affairs with EPG, to put AIPA's position.
158. These factors all call for the refusal of consent for this application." [145]
[238] The AIPA submitted, in summary, as follows:
57. A number of matters appear to have been raised under this heading. For the objectors the following points seem to be agitated:
[239] We have previously decided to refuse our consent to the alteration in so far as it concerns Jetstar Asia Holdings Pty Limited, Jetconnect Ltd and "any successor transmittee or assignee (whether immediate or not) of the whole or a part of any company airline or entity" referred to in the earlier part of the alteration or "any subsidiary, related body corporate or associated entity (as those words are defined in the Corporations Act 2001) of any company airline or entity" referred to in the earlier part of the alteration.
[240] We are not persuaded we should exercise our discretion under s.158(8) to further refuse our consent to the alteration of the eligibility rules of the AIPA.
[241] We do not agree that the remaining part of the alteration naming certain companies, including Qantas and Australian Airlines Limited, is of uncertain effect.
[242] As we have previously indicated, we do not believe the evidence is sufficient to establish that the AIPA or Captain Woods and Captain Elsass gave no proper consideration to the scope of the rule alteration for which the consent of the Commission is sought. Further, we consider there is ample material before the Commission in respect of the application for the consent of the Commission to the alteration of the eligibility rules of the AIPA to enable the parties and the Commission to properly consider it.
[243] We have previously dealt with and rejected the notion that the Commission's consent to the alteration of the AIPA's eligibility rules will lead to the demarcation disputes contended by the Qantas Group, the AFAP and their witnesses. For the reasons earlier given, we do not believe that the conflicts of interest contended by the Qantas Group, the AFAP and their witnesses are grounds for refusing our consent to the alteration of the AIPA's eligibility rules.
[244] Given no autonomous Council has been established under the AFAP rules in respect of Jetstar, Eastern, Sunstate or Qantas Limited pilots and given the structure the AIPA has allowed its Australian Airlines Limited pilot members to establish, we think it is of little consequence that the AIPA has not yet altered its rules to provide Jetstar, Eastern, Sunstate or Qantas Limited pilots with autonomy.
[245] As previously indicated, we do not believe it is appropriate to criticise the AIPA for its conduct in respect of Eastern pilots. We have also said that we think the litigation the AIPA has engaged in in aid of Qantas pilots and its other challenges to the way in which Jetstar operates is indicative of its effective representation of its members in circumstances where it has not had eligibility to cover Jetstar pilots. At the same time, we have noted that the AIPA has been involved in and advanced proposals which have contained elements for Jetstar pilots and the President of the AIPA has accepted that Jetstar pilots will not achieve the same terms and conditions of employment as Qantas pilots but wants to lift Jetstar pilots' remuneration to at least that of Australian Airlines Limited pilots.
[246] The fact that the AIPA has not called any Jetstar, Sunstate or Qantas Limited pilots to give evidence and has had a lack of involvement with Sunstate and Qantas Limited pilots is not sufficient to persuade us to exercise our discretion under s.158(8) to refuse consent to the alteration of the eligibility rules of the AIPA, in light of the other grounds that exist for granting such consent.
[248] As indicated, we are satisfied that the alteration of the eligibility rules of the AIPA for which the consent of the Commission is sought by the AIPA has been made under the rules of the AIPA. We refuse our consent to the alteration in so far as it concerns Jetstar Asia Holdings Pty Limited, Jetconnect Ltd and any successor or subsidiary provisions. We are of the opinion that in relation to persons who would be eligible for membership because of the alteration to which we are prepared to consent there is no other organisation to which those persons could more conveniently belong or that would more effectively represent those members. Further, we are satisfied that alteration would not contravene an agreement or understanding to which the AIPA is a party and that deals with the AIPA's right to represent under Schedule 1 of the Act and the Act the industrial interests of a particular class or group of persons. There are, in our view, no other grounds for us to refuse our consent to that alteration. We do not think the circumstances in ss.158(5) and (7) of Schedule 1 of the Act arise in this matter. In dealing with the provisions of s.158 of Schedule 1 of the Act in this matter, we have had regard to the provisions of s.103(2) of the Act.
[249] Accordingly, we consent to the alteration of the eligibility rules of the AIPA in the following terms:
1. By inserting the following new paragraph immediately after the first paragraph of Rule 4:
"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:
(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; or
(vi) Sunstate Airlines (Qld) Pty Limited ABN 82 009 734 703
shall be eligible for membership in the Organisation."
[250] The alteration to which we have consented will come into effect on 2 January 2008. As a result of this decision, the eligibility rules of the AIPA on and from that date until further alteration shall be as set out in the Annexure to this decision.
Re Australian and International Pilots Association, [2007] AIRC 420, 23 May 2007 per Kaufman SDP.
[2] Re Australian and International Pilots Association, PR977345, 13 June 2007 per Kaufman SDP.
[3] Appeal Exhibit M1 at paragraphs 11-15.
[4] Appeal Exhibit M1 at paragraphs 16-23.
[5] Appeal Exhibit M1 at paragraphs 24-27 and Appeal Exhibit B1 at paragraphs 49-56.
[6] Appeal Exhibit M1 at paragraphs 32-36.
[9] Appeal Exhibit M1 at paragraphs 37-39 and Appeal Exhibit B1 at paragraphs 57-64.
[10] Appeal Exhibit M1 at paragraphs 37-39.
[11] Appeal Exhibit M1 at paragraphs 42-43.
[12] Appeal Exhibit M1 at paragraphs 44-46.
[13] Appeal Exhibit M1 at paragraphs 48-50.
[14] Appeal Exhibit M1 at paragraphs 51-52.
[15] Appeal Exhibit M1 at paragraphs 53-56.
[17] Appeal Exhibit M1 at paragraphs 57-59.
[18] Appeal Exhibit M1 at paragraphs 60-61 and Appeal Exhibit B2 at paragraph 21.
[19] [2007] AIRC 420 at paragraph 112.
[20] Appeal Exhibit M1 at paragraphs 64-78 and Appeal Exhibit B1 at paragraphs 15-32.
[21] Appeal Exhibit M1 at paragraphs79-81.
[22] Appeal Exhibit M1 at paragraphs 82-84 and Appeal Exhibit B1 at paragraphs 72-73.
[23] Appeal Exhibit B1 at paragraphs 34-42.
[24] Appeal Exhibit B1 at paragraph 75.
[28] [2007] AIRC 420, 23 May 2007 per Kaufman SDP at paragraph 35
[33] Ibid at paragraphs 27 and 49.
[39] Ibid at paragraphs 84-86 and 88.
[42] Ibid at paragraphs 111-117.
[50] Appeal Book at pp. D0007-D0008.
[51] Appeal Book at pp. D0007-D0008.
[52] Appeal Book at pp. D0008-D0009.
[56] Appeal Book at pp. D0009-D0013
[57] Appeal Book at pp. D0060-D0061.
[58] Appeal Book at pp. D0062-D0067.
[61] Appeal Book at pp. D0067-D0068.
[68] Appeal Book at pp. D0068-D0071.
[74] Appeal Book at pp. D0103-D0104.
[76] Appeal Book at pp. D0104-D0105.
[85] Appeal Book at pp. D0106-D0107.
[87] Appeal Book at pp. D0108-D0109.
[88] Appeal Book at pp. D0109-D0111.
[90] Appeal Book at pp. D0114-D0115.
[96] Appeal Book at pp. D0116-D0117.
[97] Appeal Book at pp. D0116-D0117.
[98] Appeal Book at pp. D0116-D0117.
[99] Appeal Book at pp. D0116-D0117.
[100] Appeal Book at pp. D0117-D0118.
[101] Appeal Book at pp. D0117-D0118.
[106] Re Australian and International Pilots Association, [2007] AIRC 420, 23 May 2007 per Kaufman SDP at
paragraphs 9-22, 24-25, 27-28, 41-42, 44-46 and 79-82.
[110] Appeal Book at p. C0890-C0891.
[112] Appeal Book at p. B0698 at PN6758-6761.
[113] Appeal Book at p. C0349-C0351.
[115] Appeal Book at p. B0692 at PN6703.
[116] Appeal Book at pp. C0586-C0587.
[119] Appeal Book at pp. C0672-C0674.
[121] Appeal Book at pp. B0265-B0266 at PN3222.
[122] Appeal Book at p. B0668 at PN6448-6450.
[124] Rules of the Australian Federation of Air Pilots, Rule 4(10).
[125] Appeal Book at pp. C0890-C0893.
[127] Appeal Book at p. B0698 at PN6756-6761.
[128] Appeal Book at p. C0368-C0369.
[130] Appeal Book at pp. C0095-C0098 and C0367-C0372.
[131] Appeal Book at p. C0621.
[132] Appeal Book at p. C0665.
[133] Appeal Book at pp. C0096-C0097.
[134] Appeal Book at p. C0098.
[135] Appeal Book at pp. C0890-C0893.
[137] Appeal Book at p. B0698 at PN6756-6761.
[138] Appeal Book at p. C0684.
[139] Appeal Book at p. C0671.
[140] Appeal Book at pp. C0890-C0893.
[141] Appeal Book at pp. C0897-C0899.
[142] Appeal Book at p. B0698 at PN6756-6761.
[143] Re Australian and International Pilots Association, [2007] AIRC 420, 23 May 2007 per Kaufman SDP at
[144] Appeal Book at p. D0074.
[145] Appeal Book at pp. D0130-D0131.
[147] Re Australian and International Pilots Association, [2007] AIRC 420, 23 May 2007 per Kaufman SDP.
[148] Re Australian and International Pilots Association, PR977345, 13 June 2007 per Kaufman SDP.
Australian and International Pilots Association
Any person who is normally employed as a pilot or flight engineer on regular public transport airline services extending beyond the Commonwealth of Australia or (except in the case of flight engineers) 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.
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:
(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; or
(vi) Sunstate Airlines (Qld) Pty Limited ABN 82 009 734 703
shall be eligible for membership in the Organisation.
All persons who are normally employed as pilots on airline services within or extending beyond the Commonwealth of Australia operated by any of:
(i) Ansett Australia Limited or Mayne Nickless Limited trading as Ipec Aviation (IPEC);
(ii) any successor assignee or transmittee (whether immediate or not) to or of any of the business of Ansett Australia Limited or IPEC including a corporation that has acquired or taken over or acquires or takes over the business or part of the business of Ansett Australia Limited or IPEC, in relation to that business or part of that business; and
(iii) any employer not included in the preceding sub-paragraphs (i) or (ii) who is or becomes a successor assignee or transmittee (whether immediate or not) to or of any of the business of any of Ansett Transport Industries (Operations) Pty Ltd (ATI), East West Airlines (Operations) Pty Ltd (EWA) or Mayne Nickless Limited trading as Ipec Aviation (IPEC) including a corporation that has acquired or taken over or acquires or takes over the business or part of the business of any of ATI, EWA or IPEC, in relation to that business or part of that business
shall be eligible for membership in the Organisation.
Printed by authority of the Commonwealth Government Printer
(1959) 101 CLR 298
(2002) 120 FCR 527