C2006/2950, Transcript of Proceedings [2006] AIRCTrans 1065 (14 September 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 15696-1
15697-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

C2006/2950 C2006/2951

NATIONAL JET SYSTEMS PTY LTD
AND
MR L KRUGER
s.170VM(3) - Termination of an AWA by the Commission
(C2006/2950)

NATIONAL JET SYSTEMS PTY LTD
AND
MR A KING
s.170VM(3) - Termination of an AWA by the Commission
(C2006/2951)

ADELAIDE

2.02PM, MONDAY, 04 SEPTEMBER 2006

Reserved for Decision

PN1

THE SENIOR DEPUTY PRESIDENT: Good morning. We might well term this hearing take two, or take three. So we might start given that, as I understand it, new applications have been lodged, we might start with appearances once again please.

PN2

MS K SMITH: Thank you, your Honour. I seek leave to appear on behalf of National Jet Systems Pty Ltd in both applications.

PN3

MR L COX: I seek leave to appear on behalf of Captain Andrew King and Captain Kruger who are the subject of the applications who are on the video and could verify that.

PN4

THE SENIOR DEPUTY PRESIDENT: Yes thank you, Mr Cox. Mr Cox, what’s your position in terms of Ms Smith’s application for leave?

PN5

MR COX: No objection.

PN6

THE SENIOR DEPUTY PRESIDENT: I grant that application, Ms Smith and I grant yours too, Mr Cox. Ms Smith.

PN7

MS SMITH: Your Honour, it’s probably appropriate for me to provide the Commission with fresh authority of my appointment, I suppose, as a bargaining agent to deal with this application to terminate the agreement. Those authorities are in respect of each of the applications.

PN8

THE SENIOR DEPUTY PRESIDENT: I'll start afresh in case we marked the earlier documents.

PN9

MS SMITH: Thank you.

PN10

THE SENIOR DEPUTY PRESIDENT: And keeping with the rest of the afternoon. Who knows, you folks may even reach agreement as a result of this new start.

EXHIBIT #NJS1 APPOINTMENT OF KAYE SMITH AS BARGAINING AGENT IN RELATION TO ANDREW KING
EXHIBIT #NJS2 APPOINTMENT OF KAYE SMITH AS BARGAINING AGENT IN RELATION TO MR KRUGER

PN11

MS SMITH: Thank you, your Honour. On the last occasion I had tendered an outline of argument in respect of each matter and, your Honour, aside from obviously a change to the action numbers we don’t seek to present any further outline of argument in the matter, but I did not have perhaps fresh outlines reflecting the new case numbers to present to the Commission. I wonder whether the previous outlines can be the documents which the Commission looks at at understanding our position.

PN12

THE SENIOR DEPUTY PRESIDENT: Yes, I’m happy to work on that basis.

PN13

MS SMITH: Thank you. I also understand that Mr Cox has filed with the Commission an outline of argument on behalf of his members and I just wish to confirm that the Commission has actually received that and has that as part of its record.

PN14

THE SENIOR DEPUTY PRESIDENT: Yes, I have received that and I looked at that this morning. I'll find it in the file somewhere, but I looked at it this morning. Thank you.

PN15

MS SMITH: Thank you. Your Honour, the tests prescribed by section 170VM(3), that is subsection (3), apply to the company’s application in these particular matters. That section continues to have effect pursuant to - please forgive me for the long reference - but Schedule 7 Part 3 clause 17 of the now amended Workplace Relations Act and your Honour would have noted from our outline of submissions the reference to cases which considered section 170VM(3) and we say they continue to have relevance to the application that is currently before the Commission.

PN16

Your Honour, I am assuming that there is a certain amount of background information which firstly is not in dispute in the matter and secondly is common to both applications in terms of the reasons why replacement AWAs have been put on the table for acceptance by the company. If I could just, your Honour, perhaps take you through, before getting to those matters and that background information, the particular outlines that we have prepared in this matter which set out as a first point the jurisdictional prerequisites that we say in both of these matters. I wonder if your Honour has the outlines handy?

PN17

THE SENIOR DEPUTY PRESIDENT: Yes.

PN18

MS SMITH: Yes. On page 2 of that outline, and I think both I’m running here with perhaps Mr King’s outline of argument, the jurisdictional facts necessary to establish, I think, are not in contention insofar as the application is brought by the employer and insofar as we say that the nominal expiry date of both of the AWAs has past. Now, I think that has certainly been conceded by Mr Cox’s outline of argument which was filed with the Commission. Insofar as the third jurisdictional prerequisite is concerned, your Honour, we call that perhaps the public interest consideration in the matter.

PN19

At paragraph 9 of Mr King’s outline and at paragraph 9 of Mr Kruger’s outline through to paragraph 15 the company has set out what it contends is, I suppose, indicators of the fact that the termination of the AWAs in question is not against the public interest. In providing that outline, your Honour, we have drawn upon various authorities and you will see at paragraph 9 the reference to re RW. I trust your Honour is familiar with that decision. It adopts, if you like, the reasoning of Munro J in re SI & JA as for this proposition, that the notion of public interest encompasses matters of community concern as assessed by the Commission. It’s not a concept to be narrowly or arbitrarily defined.

PN20

We say, your Honour, that in relation to the public interest consideration there are specific matters which go to that issue and which are quite separate from the general discretion to be exercised in determining the outcome of the applications. Your Honour, we say that the matters relevant to the public interest are the fact that there is no wider community interest affected by this application and I think so much is conceded by the employees represented by Mr Cox in that at paragraph 26 of the outline of argument filed by Mr Cox, your Honour, it says:

PN21

The applications by the company and the disadvantage applies to the individual employee.

PN22

We say, your Honour, that in this particular matter given that we’re talking about an individual agreement the application to terminate affects just that employee in question and does not reflect upon any other wider community interest.

PN23

THE SENIOR DEPUTY PRESIDENT: Yes. In the course - I don’t want to disrupt the flow of your submissions, but in the course of those submissions will you be addressing in terms of the fall back award coverage?

PN24

MS SMITH: Yes.

PN25

THE SENIOR DEPUTY PRESIDENT: All right, thank you.

PN26

MS SMITH: I was just coming to that next.

PN27

THE SENIOR DEPUTY PRESIDENT: All right, thank you.

PN28

MS SMITH: At paragraph 11 of the outline we assert that if terminated the provisions of the National Jet Systems Pilot Award 2002 would immediately apply and based upon the case authorities what must be shown to be against the public interest is something bigger than, or more important than, or more graver than the consequence of falling back to the award in question. I understand that there might be some issue about whether or not that Award does immediately apply and we say that it certainly does. It’s an award that is specific to the employer organisation and as a consequence of Work Choices continues to operate in relation to the employer.

PN29

I wonder if I can take your Honour to the point about, or the interaction, of
pre-reform AWAs with other instruments. It’s clear from the Act that an award has no effect in relation to an employee while a pre-reform AWA operates in relation to that employee and that comes from Schedule 7 Part 3 clause 19 of the Workplace Relations Act. So while the pre-reform AWA is in operate the Award doesn’t apply, however a different part of the Act makes it clear that an award continues in force despite the Work Choices amendments and, your Honour, that is from Schedule 6 Part 1 Division 3 clause 4 of the Workplace Relations Act and that commences with this:

PN30

Despite the repeals and amendments made by the Work Choices Act 2005, an award in force immediately before the reform commencement continues in force, on and from the reform commencement, in accordance with this clause.

PN31

And it goes on to say:

PN32

An award that is continued in force by this clause binds -

PN33

And it goes on to say:

PN34

All organisations that were bound by the award immediately before the reform commencement and all employees who, immediately before the reform commencement, were members of organisations that were bound by the award.

PN35

Looking at the National Jet Systems Award - - -

PN36

THE SENIOR DEPUTY PRESIDENT: I should say I don’t have a copy of that award with me, but you just need to bear that in mind.

PN37

MS SMITH: I have a spare copy.

PN38

THE SENIOR DEPUTY PRESIDENT: Brings back memories. I now have one, thank you.

PN39

MS SMITH: At clause 3 of the Award, your Honour:

PN40

This Award will be binding upon National Jet Systems Pty Ltd and the employees in the capacity of pilots whether members or not of the Australian Federation of Air Pilots.

PN41

And pilots are in turn defined by the - - -

PN42

THE SENIOR DEPUTY PRESIDENT: 6.18.

PN43

MS SMITH: Thank you. Sorry, your Honour. In taking your Honour to the Schedule 6 transitional arrangements for parties bound by federal awards, your Honour, the objects of that schedule apply to transitional employers that were bound immediately before the commencement of the Awards and their employees and I’m concerned that I’ve misled your Honour in terms of whether or not that has application to this particular matter before us in the sense that - - -

PN44

THE SENIOR DEPUTY PRESIDENT: The Award is not a transitional award though.

PN45

MS SMITH: No. That’s quite correct, your Honour.

PN46

THE SENIOR DEPUTY PRESIDENT: Yes. National Jet Systems are a body corporate as I understand it.

PN47

MS SMITH: Yes and not an exclusive employer.

PN48

THE SENIOR DEPUTY PRESIDENT: Yes, all right. But before we leave this award the issue that’s causing me concern goes to that definition in 6.18.

PN49

MS SMITH: As to a pilot?

PN50

THE SENIOR DEPUTY PRESIDENT: Yes. It seems to imply, and I invite your comment on this proposition, that there are in effect two sets of prerequisite criteria for coverage of the Award. The first is that the person must be a holder of the appropriate pilot’s licence rating and endorsement and secondly, that the person must be employed in addition by the company pursuant to the Award. Now, if I’m right in that first read of that definition that takes me then to the remuneration clause which defines in one sense the application of the Award in a little more detail and there there appear to be, in effect, four sets of pilots, or categories of pilot.

PN51

There is a trainer, over on 15.3.3 a cadet pilot, a first officer in the two categories of aircraft being the Dash-8 and BAe 146 and then the captain again with two categories. The question that I have for you in that regard is whether or not I’ve correctly construed on my first read those award provisions and secondly whether the two pilots, Mr King and Mr Kruger, are covered by one of those specified categories of pilot set out in that clause of the Award so as to be employed by National Jet Systems pursuant to this Award in accordance with 6.18.

PN52

MS SMITH: Yes. Your Honour - - -

PN53

THE SENIOR DEPUTY PRESIDENT: If you need a couple of moments to confer with your client I’m quite relaxed.

PN54

MS SMITH: Yes. I will probably answer part of that question, but not all of it and I’d be grateful for a couple of minutes.

PN55

THE SENIOR DEPUTY PRESIDENT: All right. Do you need me to adjourn for that couple of minutes?

PN56

MS SMITH: That might be of assistance to us.

PN57

THE SENIOR DEPUTY PRESIDENT: All right. I'll adjourn for a couple of minutes.

<SHORT ADJOURNMENT [2.22PM]
<RESUMED [2.38PM]

PN58

MS SMITH: Thank you for that time, your Honour. My instructions are that
Mr Kruger had the rating and endorsement as a captain Dash-8 and Mr King had the rating and endorsement as a first officer BAe 146. In terms of what we say is necessary to demonstrate we say that provided we can show that both of the employees were employed in that capacity that we satisfied 6.18 in showing that the Award applied to the employer and those employees. The reference to the words “pursuant to this award” we say means within the scope of this award. I don’t have any documentary evidence to indicate that the rating endorsement I’ve just mentioned applies, but I don’t know if that’s disputed by the other side.

PN59

THE SENIOR DEPUTY PRESIDENT: I guess we’ll find out.

PN60

MS SMITH: Yes. That being the case, your Honour, we say that assuming the AWAs are terminated the National Jet Systems Pilots Award has the ability to cover the work that both pilots are capable of performing and they’ve been asked to perform. The AWAs themselves, the ones that we are in dispute about, your Honour, also do not contain a 717 rating and yet the reason why I raise that is because in the outline of argument filed by Mr Cox he makes the point that the Award doesn’t provide for a Boeing 717 aircraft and we say the present AWA in question doesn’t provide for that classification either.

PN61

Your Honour, the other matters that we raise in support of our application have been described as general discretion in the outlines of argument and they commence from paragraph 16 of the outline of argument. Your Honour, we rely on certain objects in the Act to lend support to our argument, namely those that provide for the employer and employee to agree at the workplace level matters of industrial regulation. We say that the offer of a comparable AWA remains open for the employees’ acceptance and we have outlined what we say are the three main differences of the new AWA when compared to the old AWA.

PN62

Those differences appear at paragraph 19 of the outline of submissions. And what we say is that is evidence of the employees’ preparedness to continue to employ the employees on terms that are more favourable than the National Jet Systems Award. The new AWA doesn’t seek to remove those minimum terms and conditions outlined in the Award, but simply seeks to reflect through that document changes that have occurred at its workplace. Your Honour, from 1990 National Jet Systems operated a fleet of BAe 146 planes that were leased and owned by it. That supported a significant part of its business.

PN63

As a consequence of a decision by Qantas to replace those planes with B717 planes it invited a bid from National Jet and one other player to tender for operation and maintenance services of these new aircraft. Those new arrangements were to take effect from 1 July 2005 and presented the company with the real prospect that a loss of that contract would have a significant effect on their continued employment of a substantial part of its workforce. As a consequence of that, your Honour, the company entered into negotiations with the Pilot Group and as a consequence of those meetings, your Honour, it determined with that committee to come to agreement about the terms of a replacement AWA.

PN64

On the basis of those meetings it submitted its best and final offer to Qantas for the operation and maintenance of those new planes and in fact won the tender for that work as a consequence of those negotiations. The Pilot Group committee has a particular significance within National Jet and that’s reflected in the AWAs themselves.

PN65

THE SENIOR DEPUTY PRESIDENT: Are these in the new AWAs or the old ones?

PN66

MS SMITH: The old ones. In Mr King’s AWA it appears at clause 6 and what the company says is that its position was unless contrary authorities are provided to it, it assumes that the Pilot Group has the authority to discuss with the employer any particular changes to terms and conditions. So that’s clause 6 in Mr King’s AWA and in Mr Kruger’s AWA it appears at clause 10. On the basis of the discussions with that Pilot Group, your Honour, as I said earlier the best and final offer to Qantas was submitted and the tender successful. It was critical that National Jet Systems provide the most competitive tender it could in relation to the proposed services and a significant part of the reason why they were successful with that tender went to the issue of training courses for the continued operation of this new aircraft.

PN67

Your Honour, this application doesn’t really concern, we say, the authority of the Pilot Group to agree on behalf of others further terms and conditions. If the company’s position was the new terms of the replacement AWA were in fact agreed by that group we would not be making this application today. Rather, we raise the significance of the group and standing of the committee as indicative of the fact that we do not seek to - sorry - we were open and fair and honest in our negotiations with that committee which we understood by virtue of those claims in the AWA had the ability to discuss with us terms for a replacement document.

PN68

Your Honour, as a consequence of the successful tender Mr Kruger commenced training of the new aircraft which he commenced on 10 June and Mr King also commenced training for that new aircraft on 3 May 2005.

PN69

THE SENIOR DEPUTY PRESIDENT: Sorry, Mr Kruger commenced training on 10 June?

PN70

MS SMITH: 2005.

PN71

THE SENIOR DEPUTY PRESIDENT: 2005 and Mr King on the?

PN72

MS SMITH: 3 May 2005.

PN73

THE SENIOR DEPUTY PRESIDENT: But the bid was submitted with effect from July 2005?

PN74

MS SMITH: Yes. Your Honour, I think it’s fair to say that the critical terms of a replacement AWA have been agreed in principle with the committee and because of the need to commence training on this aircraft quickly for the 1 July 2005 commencement date employees were participating in training before the final terms of the AWA had been put to them.

PN75

THE SENIOR DEPUTY PRESIDENT: I see. So how were training arrangements funded for persons such as Mr Kruger and Mr King?

PN76

MS SMITH: Yes. Your Honour, expressions of interest were called in order to facilitate the deployment to the training in question and those expressions of interest commenced in January 2005. And on the basis of the expressions of interest indicated by Mr King and Kruger they were deployed to commence that training in June. After the commencement of training, but before that training had completed, your Honour, certain letters of offer were sent to all employees including Mr King and Kruger. If I could just hand your Honour this particular document.

EXHIBIT #NJS3 CORRESPONDENCE TO ANDREW KING DATED 24/05/2005

PN77

MS SMITH: And, your Honour, I have a similar letter for Mr Kruger.

EXHIBIT #NJS4 CORRESPONDENCE TO MR KRUGER DATED 27/06/2005

PN78

MS SMITH: So, your Honour, those letters of offer were sent to both King and Kruger after the commencement of training, but prior to the completion of the training which they undertook.

PN79

THE SENIOR DEPUTY PRESIDENT: Were the documents returned in a signed form?

PN80

MS SMITH: No, your Honour.

PN81

THE SENIOR DEPUTY PRESIDENT: I see.

PN82

MS SMITH: Notwithstanding that documentation the employees completed their training and subsequent to that the company sought to obtain from the employees their commitment to the terms which it maintained would be agreed with the Pilot Group through pursuing a returned signed letter of offer. It’s fair to say that that never came and the company and the employees still have not agreed to the terms of the replacement AWA.

PN83

THE SENIOR DEPUTY PRESIDENT: Was the training completed?

PN84

MS SMITH: The training was completed. On my instructions Mr Kruger completed his training on 11 July 2005 and Mr King completed it on 3 June 2005. I understand that - sorry, your Honour. Returning to the outline of submissions what we say is that the company didn’t engage in an unfair bargaining practice by negotiating with the Pilot Group. It assumed that the matters it was discussing with the Pilot Group were representative of all of the employees in question. It sought to attain through the execution of the letters of offer the applicant’s agreement to the terms of that replacement AWA, but that never came.

PN85

I also understand, your Honour, that in addition to the letters of offer there was also a set of documents that were sent to all employees at their residential addresses on or about the 23rd and 24 May and if I could hand to your Honour a copy of those documents.

EXHIBIT #NJS5 ADVICE TO ALL NJS PILOTS DATED 30/04/2006

PN86

MS SMITH: Your Honour, we say the effect of that document demonstrates that the employer was in fact seeking these new conditions in the replacement AWA because it ensured continued employment of the pilots through the service of this new aircraft. And it would appear from the outline of argument filed by Mr Cox that so much wasn’t in dispute in the sense that the employees understood why their new terms were being sought and that it was in response to the changed operation of circumstances that based National Jet Systems. We say that as a consequence of those operational needs we sought about re-establishing terms and conditions of employment through these new documents with all of the employees.

PN87

We get to the point where Mr King and Mr Kruger do not want to execute an AWA in those terms and your Honour will note, or would have noted, from our outline of submissions what we have said is that Mr King and Mr Kruger are one of two employees who had indicated a refusal to be bound by the terms and conditions of that replacement AWA. Your Honour, there are two other employees aside from these particular employees who have not signed an AWA as yet, but the difference, your Honour, is that they have certainly executed the letters of offer and on the basis of the execution of that document the employer remains confident that the only two employees who would not agree to the terms of their replacement AWA are Mr King and Mr Kruger.

PN88

Your Honour, in the outline of submissions we’ve also raised the issue of whether or not termination would be inconsistent with the AWA itself and that calls up clause 8 of the current AWA, if I can call it that, and I’m looking here at
Mr Kruger’s Australian Workplace Agreement on page 4, clause 8.

PN89

THE SENIOR DEPUTY PRESIDENT: Sorry, I’ve just got Mr King’s. Bear with me for a moment. Is that with the other documents?

PN90

MS SMITH: Yes. I was just looking at that, your Honour.

PN91

THE SENIOR DEPUTY PRESIDENT: Yes. What was the clause again?

PN92

MS SMITH: Clause 8 on page 4.

PN93

THE SENIOR DEPUTY PRESIDENT: Yes, I have that.

PN94

MS SMITH: I raise it as a consideration relevant to the exercise of your general discretion that termination of Mr Kruger’s AWA would not necessarily be inconsistent with its terms in that the current arrangement which he has the benefit of results on balance in reduction in the general terms and conditions when compared with others by virtue of the three main differences which we’ve highlighted at paragraph 19. Your Honour, in terms of asserted various dates and meetings that have taken place with the company and the group, to the extent that it would be necessary if those matters are in dispute we can certainly call evidence about that, but at this stage we’ve proceeded on the basis that that background information, if you like, isn’t in dispute.

PN95

Of course, the employees in question haven’t agreed to the terms of the replacement AWA, but what we say is the termination of both of these documents firstly wouldn’t be against the public interest and when assessed against the operational reasons why the company took this course in the first place is not something that should stand in the face of, we say, a discretion to terminate the documents. I wonder, your Honour, if I could respond to some of the matters outlined in Mr Cox’s outline, or whether you want to hear from my friend first?

PN96

THE SENIOR DEPUTY PRESIDENT: Well, I’m in your hands. Whatever you want to say to me I'll listen to.

PN97

MS SMITH: Okay. In terms of the general submissions that are made about the behaviour of the company, your Honour, as I understand the argument it is asserted that the company is behaving in an unfair way, or an unconscionable way, in making this application. Your Honour, we say there’s nothing about the company’s conduct that could be described as coercive or illegitimate in character. Rather it has sought to exercise a right open to it under the Act which is to terminate an agreement or, at least, to make application to do that once the nominal expiry date of that agreement has past.

PN98

THE SENIOR DEPUTY PRESIDENT: Ms Smith, just on that issue. The two pilots in question commenced the necessary training in mid-2005. When would they be next due to commence refresher type training, or check processes?

PN99

MS SMITH: In six months time I’m told, your Honour.

PN100

THE SENIOR DEPUTY PRESIDENT: I see. And tell me how that arrangement will work in the event that National Jet Systems are still in dispute with those pilots. Or let me rephrase it, in the event that National Jet Systems and the two pilots may not have reached agreement at that point about the terms of an AWA.

PN101

MS SMITH: Your Honour, I think the point is that a significant expense has already been incurred in training the pilots to this particular point and in terms of any refresher training that might be offered I’m not sure what cost that comes to the company, but it’s certainly something that it would be open to it to assess at that time in terms of whether that training was offered and on what terms.

PN102

THE SENIOR DEPUTY PRESIDENT: If the training is not offered what happens then?

PN103

MS SMITH: Do you mind if I take some instructions?

PN104

THE SENIOR DEPUTY PRESIDENT: Yes, certainly. Just before you do what I’m getting at here is there are requirements in the Act, section 400 of the post-reform Act, that go to the extent to which the employer is prohibited from engaging in coercion and duress. In fact, the Work Choices Act goes a step beyond its pre-reform predecessor in that regard. It occurs to me that if there is no agreement reached in relation to an AWA when this training again falls due and if the training’s not provided by the employer then it’s quite possible that the employees would then no longer be able to continue to undertake their duties as pilots.

PN105

Now, it may be that’s something quite outside the scope of consideration of this application, but you can see why I ‘m just interested in how you respond to that particular question. It may in fact have far more to do with the negotiation process of the next agreement rather than necessarily the termination of these AWAs. But that might help you in terms of explaining the background to my question.

PN106

MS SMITH: Yes, yes thank you. Do you mind if I just - - -

PN107

THE SENIOR DEPUTY PRESIDENT: Yes, certainly.

PN108

MS SMITH: Thank you, your Honour. I understand that both of the employees have in fact been back twice for refresher training, if I can call it that, and that occurs every six months and that’s already happened twice to date and they will be due for further training in another six months. Now, aside from that issue, your Honour, it remains that they remain qualified to operate the BAe and Dash-8 aircraft and so to that extent, you know, that is the positions which they will, the positions they were employed in in the first place. I don’t expect that the fact that - sorry, I withdraw that.

PN109

On that point, your Honour, at paragraph 14 of the outline of argument filed by Mr Cox a reference is made to this:

PN110

The Commission is being asked to circumvent potential action from the Office of Workplace Services by accepting a cancellation of the current AWA.

PN111

We say that this application can not have that effect in that the powers of inspection by Workplace Services, or the Office of Workplace Services, stands aside irrespective of any outcome of this proceeding. On the issue of a threat to a pay increase, that is referenced at paragraphs 8 and 9 of the outline of argument that’s been filed by Mr Cox. We say that those matters, your Honour, aren’t relevant to the exercise of either the general discretion in these matters, or public interest considerations. Whether or not there has been a threat not to provide a pay increase, your Honour, comes down to how the company understands the agreement ought to be interpreted an in respect of that, your Honour, it’s open to the Office of Workplace Services to conduct its investigations about that quite aside from these proceedings.

PN112

THE SENIOR DEPUTY PRESIDENT: Where abouts do the current AWAs establish pay increases? There’s a schedule presumably that deals with that, is there? It’s referenced in clause 27 and should I understand then that those pay increases are detailed in schedule 1, or those rates of pay are detailed in schedule 1?

PN113

MS SMITH: Yes. I’m looking at Mr Kruger’s AWA now, but yes, 27.3 references the CPI increases. I should also mention that the replacement AWAs which the company has offered also provides for CPI wage increases. This is not about, I suppose, the issue of providing pay increase, rather the company’s position is that that question remains the subject of an interpretation issue that the parties are at odds on.

PN114

THE SENIOR DEPUTY PRESIDENT: I see. And should I understand that the bonus payments referenced in the letter of 24 May that are marked as NJS3 are separate to pay increases?

PN115

MS SMITH: Yes, they are separate.

PN116

THE SENIOR DEPUTY PRESIDENT: And were they paid to Mr King and
Mr Kruger?

PN117

MS SMITH: I think they are triggered by some other part of the - they are due to be paid in 2008.

PN118

THE SENIOR DEPUTY PRESIDENT: I see, yes. Thank you.

PN119

MS SMITH: Your Honour, at paragraphs 15 and 16 of Mr Cox’s outline of argument he’s indicated that there are more than two pilots affected by this application. I think I responded to that, your Honour, by saying that these two employees are the only ones who have not signed their letters of offer which distinguishes them from any other employees employed by the company. Your Honour, also during the break in considering the scope of the National Jet Systems Pilot Award my instructions were that originally the two employees were employed as the AE146 and Dash-8 pilots and that if necessary it will employ them in those capacities should their AWAs be terminated to ensure the application of the Award if in fact a narrow interpretation is taken of the words “employed by the company pursuant to this Award”.

PN120

So in all circumstances we say as a minimum the employees will be guaranteed the terms and conditions provided for by this award following termination of the AWA, assuming that’s the outcome. Your Honour, I think I’ve covered the matters in the outline and I’ve assumed that unless there are particular issues taken about some of the matters I’ve asserted we won’t be calling evidence in support of that background information. Rather, I think the real issues will go to the general discretion that your Honour has in considering the application.

PN121

THE SENIOR DEPUTY PRESIDENT: Yes. I’m just a little intrigued, if
Mr Cox will forgive me, by the reference that he makes in paragraph 18 of his outline. This asserts that the Pilots (General Aviation) Award was used as the Award for the purposes of the no disadvantage test.

PN122

MS SMITH: Yes. The approval notice reflected in that award as being an award which the Office of Employment Advocate used for the purposes of assessing no disadvantage. Now, it’s not clear to me why they’ve used that Award.

PN123

THE SENIOR DEPUTY PRESIDENT: Do you say they got it wrong?

PN124

MS SMITH: I think so.

PN125

THE SENIOR DEPUTY PRESIDENT: All right, thank you. Mr Cox.

PN126

MR COX: Thank you, Deputy President. It’s fair to say that the position that we are lodging today is that this application is perhaps a little bit over the top in terms of the action against the individuals and the purpose of the application is to, in our view, coerce the individuals on to sign the new AWA. The major failure that my friend is putting in the argument in support of the cancellation proceedings is the lack of consultation process that’s been shown has taken place with the individual moving to an AWA. And this is a factor in terms of background, from my perspective as the Federation and certainly in some of the documents which I'll go to shortly, is that the Federation has been quite clear with the company that if you’re going to an AWA it is the individual contract between the individual and the company.

PN127

It is not a collective agreement, it is not a document that has a registered party to it, or even an unregistered party to it and that’s one of the failings that the document has had over the years and we’ve tried to point it out to the company on several occasions. You can’t simply assume that the National Jet Pilot Group is the bargaining agent for each individual employee in the absence of a document. The Act was not designed to do it that way. The Act was designed to say that the individual, on the process of negotiation, was with that individual at the company.
There may well be discussions between parties like the Federation or the body in terms of the National Jet Pilot Group that will come up with a set of terms and conditions which may be favourable, but at the end of the day it is still the obligation to sign that AWA.

PN128

Now, I take you specifically to NJS5, the letter dated 30 April. There is quite clear at the bottom of the last page dated 13 May a letter sent to the Pilot Federation signed by myself that went through the whole steps and processes of what the negotiations were all about in terms of Boeing 717 introduction, what we negotiated in terms of the agreement and the process and we made it clear at the third last paragraph:

PN129

The Federation made its position clear that we prefer a collective agreement rather than an AWA and will continue to seek that over time. The AWA is for you to consider and sign as a part of an ongoing introduction to the 717 program which is replacing the 146 aircraft. You should consider it carefully and determine your acceptance on how it affects you and the ongoing viability of NJS.

PN130

The last sentence:

PN131

The choice is now for you to make.

PN132

There should be no assumption that the National Jet Pilot Group has an authority to enter into terms and conditions that every pilot should automatically be required to adopt and for that matter nor the Federation. So I then turn to the actual application as it’s been put to us and I thank my friends for clarifying the position that they got into last week in terms of the service of the documents and I know that the new application has rectified that, but that was the point that we were trying to make in going through the process. None of these documents had been served on the parties and in actual fact some of the approval notices, whilst it says:

PN133

The approval notice under the Workplace Relations Act, the employer must give the employee a copy of the notice and the approved agreement -

PN134

Has not been done in quite a number of cases in the company and specifically I know in Mr King’s case, I’m not too sure about Mr Kruger, that that wasn’t done at the time the document’s been served, hence our confusion exactly what response we were giving. There’s no doubt under section 170VM(3) of the Act, the pre-reformed Act, that the employer is entitled to make an application as it has done. We’re not disputing that. The employer in this occasion is National Jet Systems and again there’s no dispute over that, although they are now a subsidiary of Cobham Pty Ltd.

PN135

It is clear that the employee and employer have previously entered into Australian workplace agreements and there have been a number of variations over the years. The AWA continue to have force under the Act. The AWA as it stands at the moment has past the nominal expiry date. The Commission has now been asked to exercise its discretion to terminate the agreement on the basis of it not being contrary to the public interest. So we say that we agree with my friend’s argument that the employer is making the application as one party to the agreement. The fact that the agreement has expired is not in contention. The fact is we’ve now triggered the process and the next step is whether it’s in the public interest.

PN136

Now, I’ve gone back and read the RW decision by yourself on 30 April 2003 and the subsequent appeal and the differences in that and the determinations by Munro SDP. The facts of the differences of these in the two cases, in the RW case there was an application by the employees to cancel an agreement when there was a collective agreement in place, as I understood it, and the parties were using that as part of the process of getting back to the collective agreement and in the full knowledge of taking some losses by removing their AWAs as they stood at that time. But it was an application by the employees as a party in that full knowledge.

PN137

What was subsequently upheld on the appeal was that the parties must acknowledge that the application and the people that would be directly disadvantaged by that process, being employees, did so in the full knowledge of that disadvantage. We say the difference here is that the pilots are being disadvantaged by the fact that the company has not undertaken what we deem to be an appropriate or fair negotiation process, or a consultation process. And I state quite clearly for the record, Deputy President, that we take objection to the words that these pilots have refused to negotiate an agreement.

PN138

Nothing’s been tendered other than the statement by the bar table about the refusal. There are issues that the pilots are concerned about, but they have never directly refused the agreement. All we’ve had is the tender of the letter of offer, copies of the proposed AWAs, sorry, and a copy of NJS5 of the differences between the relevant documents. There’s not been a refusal. And I could also say in respect, particularly in Captain King’s case, he actually wrote to the company in September of 2005 offering to express his concerns to Captain Roberts, who is in the court room today, saying that he wanted to have discussions along those lines.

PN139

It took six months before the company responded to that email and there still has not been a discussion taken place. All it was was that the company says we have a collective document that we’re going to apply. End of discussion. You either sign it or you don’t sign it. Whether you got to the opportunity of sending an email in response the matter was in the process of termination of the AWA. We don’t think that that’s particularly fair, we don’t think that’s the intention of the Act and certainly we believe does not fit the objects of the Act in terms of the process of negotiation between the individual employee and the employer.

PN140

We believe that the whole attempt of this process is obviously the cancellation of the AWA in an attempt to make sure everybody’s on the current AWA. I don’t have a problem with that from an employer’s prospective if there was reasonable evidence given that this group of pilots directly affected had flatly refused to negotiate, had flatly refused to have discussions, refused to exercise their ability to have a bargaining agent in place, to conduct that process. None of that’s been given as evidence. All we’ve got is that after six months we’ve got some letters of employment being accepted by some pilots - sorry, letters of offer being accepted by some pilots, not letters of employment - we’ve got some documents that haven’t been signed made in respect to both King and Kruger, which go back to May of last year.

PN141

Now, all we’re saying is that there is a reasonable time frame for the employer to go through, but also should show, quite clearly should show before you exercise the discretion, that they have undertaken that process in fairness. Now, the hurdle that was put in the way today which I - no sorry, I'll withdraw that, I'll come back. The Federation’s concern - sorry. As agent on behalf of the pilots we say that the company is currently under investigation for coercing employers to sign the new version by changing the terminology of the existing AWAs, that is the CPI increase being applied. We say that that is a major factor in this application because there is quite clearly, and my friend states quite correctly for the record, that the AWAs can take an action in respect to a step that’s been taken by the company at a given point in time.

PN142

What is being asked to be exercised by the Commission in today’s process though is that that coercion factor in relation to these agreements will be removed if the termination application is successful in terms of an ongoing process. It’s our submission that that is what the major basis of this application is all about, that they are trying to take - - -

PN143

THE SENIOR DEPUTY PRESIDENT: How does that work though, Mr Cox? How does that work in practice? You see, if the AWAs are terminated the rights that have accrued under them to the date of that termination would remain, would they not?

PN144

MR COX: To the date of the termination.

PN145

THE SENIOR DEPUTY PRESIDENT: Yes.

PN146

MR COX: It would not be an ongoing exercise, to my understanding of the Act, the way the AWAs is going because it’s ongoing steps whilst that threat remains on a daily basis. The intention is still open to litigation.

PN147

THE SENIOR DEPUTY PRESIDENT: But if the AWAs in their present form provide for salary adjustments with effect from 1 July each year to reflect CPI increases then there’s an enforceable right, is there not, for a salary adjustment based on CPI as of 1 July 2006?

PN148

MR COX: That’s correct.

PN149

THE SENIOR DEPUTY PRESIDENT: Yes.

PN150

MR COX: Our point is only in relation to the offence by individuals and by the court room on a daily basis whilst that pay increase has not been applied it’s still potentially open. If the application is successful then quite clearly the ongoing nature of that offence is taken away and that obviously has implications in respect to the operation of the Act. We agree that it’s not necessarily a direct part of this application, but we say that that is the direct impact of the application upon these proceedings. We’ve asserted in the document that the employees have not genuinely been requested to negotiate a new agreement.

PN151

All that they’ve seen is a document that’s been posted to them saying this is the outline and the pilot recommends it, the company recommends it and the Federation recommends it, but again it is an individual AWA. It can not be forced upon the individual and under the Act that is a proper construction of the process. If the individuals chose to have a discussion with their employer they’re entitled to do so. We say that that’s not occurred on this occasion. The company’s assumed wrongly that it applied that collective negotiation through the body or the National Jet Systems Pilot Group as a part of that individual AWA.

PN152

I note that the provisions in the AWA talking about the no disadvantage and the negotiation process, I’m not too sure whether the new Act might have a different view on that application on future AWAs and it’s something that hasn’t been considered by the company in terms of applying the AWA today in terms of what role a person or body will have in relation to the agreement going forward where there is no signed bargaining agents to the authority.

PN153

THE SENIOR DEPUTY PRESIDENT: But what’s that got to do with this application?

PN154

MR COX: Well, I’m just saying it’s our view that the process being adopted by the company at this point in time is to say that the agreement is ongoing in a sense of the bargaining agent is continually negotiating as the pilot group on behalf of the individual under an assumption. The individual did not sign an actual bargaining agent authority that is provided under the Act. It’s simply been incorporated into a document and that document has been assumed to apply continuously. Again we say that there are more - in our outline we’ve said that there are more than two pilots affected by this application.

PN155

My friend has actually put an argument that there are several other pilots perhaps potentially affected that have had signed letters of offer. That in reality is not an AWA. A letter of offer is something completely different to the actual AWA. That’s something that’s been pointed out to the company. I don’t know exactly how many pilots are in that situation, but we are aware that there are a number of affected pilots and it’s the quantum that’s probably being disputed rather than the fact that there are more than one, or in this case two, pilots who are directly affected. We then turn to the issue of where the fall back comes in in 17 and 18 and that was the concern that we had, that again there is confusion as to exactly what award is in place.

PN156

It would be very easy for me to stand here and say it’s my view that the National Jet Systems Pilots Award 2002 which you and I spent some great deal of time going through and wording, as I recall.

PN157

THE SENIOR DEPUTY PRESIDENT: I do recall that too, Mr Cox.

PN158

MR COX: Is the most likely agreement to be in place.

PN159

THE SENIOR DEPUTY PRESIDENT: Most likely Award to be in place.

PN160

MR COX: Is likely to be the Award being place.

PN161

THE SENIOR DEPUTY PRESIDENT: Yes.

PN162

MR COX: However, the approval notice has caused me concern in terms of - - -

PN163

THE SENIOR DEPUTY PRESIDENT: I’m not going to rush to do it again,
Mr Cox.

PN164

MR COX: No, I don’t think we’ve got to. Well, it depends. I don’t know, has a new document been sent out as to whether it’s still going to exist or not anyhow. So we do have concern about the fall back longer term as to whether awards will exist under the new Act and I think there is something that’s suppose to come out shortly in terms of that review process. We are concerned that the Office of Employment Advocate has used the Pilots (General Aviation) Award as the no disadvantage test. Now, maybe not too much hangs on that, but it does concern us in terms of the confusion as to what the status of between the awards and certainly the information that has been provided to the individuals.

PN165

Now, it could be said that the terms, and this would be relating to the success of the application if the termination was made, the Pilots (General Aviation) Award provides for weight carries up to 20,000 kilos namely, and then it nominates some specific aircraft types over and above that. I can’t recall whether the 717 is in it or not. Certainly the 146 was and the 737 and the A320 were, I’m not too sure whether the 717 actually made it into that document. But putting that aside if the award that I suspect is the one that would be the fall back position would be the National Jet Systems Pilots Award then it’s quite clear the argument that we would put on that and that is what you actually put to my friend earlier, that it is quite specific in relation to the employment arrangements it provides.

PN166

Now, the company’s attempted to answer that question today simply by saying well yes, we’ll have them revert back to a Dash-8 or a 146 position, not to the 717. So we then potentially face a further threat that if the application is successful then the employer is going to take action to disadvantage the employees on the current type that they’re flying by reverting them back to the previous types.

PN167

THE SENIOR DEPUTY PRESIDENT: But Mr Cox, where abouts in the existing AWAs is reference made to the 717?

PN168

MR COX: It’s not. We agree. We certainly agree that there is nothing in the existing AWAs about the 717.

PN169

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN170

MR COX: The point of the exercise though is that people must enter into discussions about settling the document. That’s all we’re saying. To come in and say that we’ll cancel the document because we don’t perceive that you’ve had discussions, we think is completely unfair and unjust process to apply to individual employees. I’m not for a moment suggesting that the Boeing 717 is being covered under the pre-existing AWAs that were in force because that only came into effect in the early part of last 2005 when the negotiations occurred. The fact of the matter is the company, with respect, the company has been totally slack in terms of its paperwork.

PN171

The AWAs that are in existence have been in existence and process through a number of variations and the classic example of that is in respect to Captain Kruger’s AWA because the original application said the nominal expiry date was 2004 and on further reflection obviously it was picked up. But Captain Kruger in fact signed what was known as the 1999 AWA, not the later versions, or the 2004 version, or the 2005 version and I think there is actually a 2006 version out at the moment which deals with the 146 pilots issues. But again they are further variations and each has a different effect in itself.

PN172

And what we’re saying is this is the whole problem that’s been brought about, is because people haven’t followed through the paperwork in terms of where their employees are at on the individual basis and if that had been done we certainly wouldn’t be anywhere near this proceeding today and we think that the action that’s been taken by the company is actually an overreaction which could be achieved by simply talking to the individuals. We note obviously that the reversion of the Award is not itself a public interest argument, but we also say that there is no guarantee that the current Award is continuing. We also say that neither the NJS or, in our view, the General Aviation Award ..... with the 707 aircraft and there will be a reduction obviously in standards with that, but again that doesn’t attract the public interest test on the basis of the Munro interpretation.

PN173

We say that if you exercise the general discretion in relation to the application, and we believe you must take into account the principle objects and particularly section 3(d), 3(e) and 3(f) of the Act, we say that ensuring as far as possible the primary responsibility for determining matters between the employment relationship rests with employer and employees at the workplace enterprise level. What we say is that the area that we are concerned that this has offended is that the company has assumed that the Pilot Group has stepped into the area and taken a role which is not a direct role as envisaged in an Australian workplace agreement, would have occurred between Captain King and the company and Captain Kruger and the company. They have assumed that the Pilot Group representatives have automatically taken up the role and have applied.

PN174

So we say it doesn’t fit within 3(d) of the principle objects. And 3(e):

PN175

Enabling the employer and employees to choose the most appropriate form of the agreement for their particular circumstances.

PN176

Well, again whilst the points may be made in terms of what the differences are of a 717 there hasn’t been a reasonable discussion between Captain King and the company as to what his objections are to perhaps the relevant touch points that exist in the new agreement, that being the overtime credit factor, the salary reduction by way of endorsement cost or the general salary reduction that applied for the 146 and same in Captain Kruger’s case, that he might have the same touch points, but of course the difference will be that he was coming from a Dash-8 to that aircraft 146. So on that basis there might be a value applied. In point (f):

PN177

Ensuring compliance with minimum standards, industrial instruments and bargaining processes by combining effective means for investigation, endorsement of employee’s entitlements to right and obligations of employees and their organisation.

PN178

We simply say that we have a concern about the AWA process ongoing at this point. We don’t know exactly where it’s going to go or finish. There have been a number of complaints made as we understand it and that investigation process is underway. What we simplify say is that in accordance with the Act is if this application was successful it would take away what we perceive to be the ongoing offence of the company in terms of the coercive and that has a direct effect on us, or in our view a direct effect on the application. The individual employees have expressed a willingness to enter into discussions over a replacement agreement.

PN179

This is either they’ve refused, ignored or over taken by this application. It is our submission, Deputy President, that the pilots stand ready, willing and able to enter into those discussions. It has not genuinely been tested as to what the actual areas of dispute exist between the two. It may well be that the pilots will sit down and enter into the agreement discussions and make their points known in view of the endorsement cost and that’s a view that was very deeply held by the Pilot Group generally. But as you have seen in NJS5 it was a view that was collectively taken by the Pilot Group and the Federation in negotiations with the company to try and get that business locked away.

PN180

That’s a view that that group had at the table at that point in time, but each individual had to make a determination on their future as a result of those discussions by signing an individual Australian workplace agreement. I have knowledge through the processes of those negotiations there were a number of pilots that said that they will not transfer from the 146 aircraft simply because they were not prepared to undertake the salary sacrifice or payment of the endorsement cost. That was their choice. Accordingly they have gone and signed an AWA which reduced their salary in relation to the 146. Their choice. No offence by that as far as we know and there’s been no application by the company to terminate those agreements.

PN181

Those pilots, to my knowledge, are still on the pre-existing AWAs, not the new AWA, because they see no necessity to sign onto a new agreement which they don’t believe to have a long term effect on them if they choose not to go onto the 717 whilst that salary in cost is upon their endorsement cost.

PN182

THE SENIOR DEPUTY PRESIDENT: And presumably they’ve not incurred, or the employer hasn’t incurred, the training cost and depending on the hours arrangement the only other factor of relevance would be the increase in the point at which overtime does or does not become payable.

PN183

MR COX: Sorry?

PN184

THE SENIOR DEPUTY PRESIDENT: In terms of those pilots who presumably remain on the former aircraft, that is the Dash-8 and the BAe 146, presumably they’re not required to undergo the training for the 717 aircraft. Is that right?

PN185

MR COX: There has been some arguments that there were pilots, in particular the Cairns and Darwin base, that were basically effectively told that if they weren’t prepared to move to the 717 they would have no ongoing employment of 146 at those bases.

PN186

THE SENIOR DEPUTY PRESIDENT: I see.

PN187

MR COX: So they very basically had no choice but to transfer to that aircraft type, or transfer bases potentially.

PN188

THE SENIOR DEPUTY PRESIDENT: Yes.

PN189

MR COX: Now, point 26 of my outline was taken to task by my friend where we said the application is by the company, the disadvantage applies to the individual employees. I was trying to point out there that the difference between this case was the RW decision where the individual employees were the applicants in the matter against the applicants - - -

PN190

THE SENIOR DEPUTY PRESIDENT: Yes, I gathered that.

PN191

MR COX: We say that the disadvantage applying to the individual in this matter is that the corporate has made a decision to withdraw the entitlement rather than the people had full knowledge stepping back from that entitlement.

PN192

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that.

PN193

MR COX: Okay. And the company, we say, has failed to show good faith in not negotiating directly with the pilots, in our view. Deputy President, the matters, I think, have been covered entirely in that if the application was successful in reverting back to the National Jet Pilots Award, that the pilots could only be employed in that effect potentially by the Dash-8 or 146 classifications rather than the 717 or continuing on as we are at the moment, that is pilots flying the 717. They come under the National Jet Systems Pilots Award 2002. The company could chose to exercise its right for continuing employees in that role and pay them accordingly.

PN194

Again we acknowledge that both were employed previously in that capacity, but their employment engagement at this point in time are both as captains of 717, not as pilots on 146 or Dash-8 and that’s where the difference lies in terms of the success of the application. But I do take the point that the current AWAs do not apply to the 717 either, but that’s where we say the negotiation ought have taken place with those individuals. Again we say that the major problem with the whole process has been the company has failed to pursue its obligations in terms of the employment arrangements by not taking the pilots through both the letters of offer and the employment arrangements prior to the commencement of the training processes as we say it was obliged to do and no documents have been presented in any form whether signed or disputed or otherwise, other than they’ve been presented to them.

PN195

Those documents have been genuinely published and presented, but no follow up has been made, in our view, to the extent as to the reason why there would be an issue of concern in signing the document other than we say, particularly in Captain King’s case, there is an email track that exists between himself and Captain Roberts back in September of last year which was not responded to and then there was a flurry of activity in the letter to this application to see what the response was and Captain King asked for discussions but did not get any satisfaction from the company at that point.

PN196

Now, they’re the only points that I want to raise out of the submissions that were made from my friend. It’s our view that generally the employees made the application, the agreement has expired, so it meets the criteria under 170VM on that part. It then turns to the Commission exercising its discretion. We say that the Commission should not exercise its discretion at this point because there are a couple of factors in the background that we believe do attract the public interest, that is the effects of the principle objects of the Act, the 3(d), (e) and (f). There is also the AWS ongoing investigation.

PN197

And thirdly, I think it’s genuinely about the process of the negotiations that should occur between the employee and the employer which haven’t occurred on this occasion. There are other pilots potentially affected by this application because their AWAs they’re not disclosed, but in those circumstances we say that there is a public interest test that has not been satisfied, in our submissions. Accordingly we would make the submission that the application ought be dismissed.

PN198

THE SENIOR DEPUTY PRESIDENT: Mr Cox, if I look through the outline of your submissions the issue that causes me some difficulty goes to the circumstances under which you say I might then terminate these AWAs. What you’re saying is they ought not be terminated at this stage because the discretionary elements of the public interest requirement set out in VM(3) have not been met. Is it fair for me to say then that the next step in the process, what conditions would need to be met. And if I’ve understood your submissions correctly they fall into four broad categories in that you say before I could terminate these AWAs I’d need to be satisfied that the parties have engaged in individual negotiations directed at presumably the determination of a new set of AWAs, secondly that those negotiations ought to have been conducted in good faith, thirdly that there ought to be some form of relevant, if you like, fall back award coverage applicable to the work that the pilots were actually doing and finally that the extent of any Office of Workplace Services investigation ought to be resolved one way or another.

PN199

Now, if I’ve misconstrued those then this is your opportunity to tell me, but it seems to me that you’re saying that unless those conditions, or preconditions, were met then the application to terminate these AWAs should not proceed.

PN200

MR COX: I’d certainly agree with your Honour on point one that the parties engaged should enter into discussions and the evidence before you that the parties in the case of the two individual pilots should be shown to be quite clearly refusing to enter into those discussions, failing by the bargaining agent to discussions themselves or thirdly refusing the terms of the offer of the AWA. But I say they are obvious facts that should be dealt with, in particular in relation to 3(d) and 3(e) of the principle objects of the Act as well. In terms of point two, good faith, I think that basically has disappeared out of the legislation these days so I don’t think - - -

PN201

THE SENIOR DEPUTY PRESIDENT: That’s why I’m asking the question, not to comment on the Act, but just to clarify what you say are the preconditions that would need to be met.

PN202

MR COX: I think I’ve covered that in point one in terms of what I perceive should have been the process to have occurred. Three the relevant award coverage, I think that has an obvious impact as well in terms of ongoing employment protection for the individuals in the event the matter is terminated, where the fall back to, is the agreement relevant to the work being performed. We’d have to say on the current submission and the construction of the wording of the current National Jet Systems Pilots Award 2002 we don’t believe it is relevant to the 717 operation.

PN203

The extent of the AWU exercise, certainly that is a major factor, in our view. It’s got to be taken into account. And certainly those proceedings ought be on foot, or completed, prior to the success of the application or otherwise. It is a matter if the employer is acting in a way that is deemed to be unfair or in coercion in terms of prohibited conduct under the Act to have a proceeding that removes part of the ongoing potential proceedings, we think I’d be against the public interest as well trying to rectify it by use of the big stick by saying well, we’re going to go in and take the employees’ rights away in some form so that we can avoid our prosecutions going forward.

PN204

We may put our hands up and say well, we might have been responsible up to a point, but we’ve actually rectified that by removing the problem by cancelled the AWA. So that still hasn’t resolved the issue as to what employment arrangement they’re on, or what they were entitled to at that point in time. I think that’s a factor that must be brought upon on the exercise of discretion in the proceeding.

PN205

THE SENIOR DEPUTY PRESIDENT: Yes. Are there any others that I’ve missed from your submissions in my list of what you say are the preconditions that ought to be met?

PN206

MR COX: No, I’m satisfied that they’re the major points that we would aim to rely on.

PN207

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN208

MR COX: Thank you. If the Commission pleases.

PN209

THE SENIOR DEPUTY PRESIDENT: Ms Smith?

PN210

MS SMITH: Your Honour, I'll try and stick with the broad categories that you’ve outlined in any reply. The point about individual negotiations is this. The company and both of the employees did have some discussions about where to from here and as a result of those discussions the company understood that the employees were not prepared to accept the terms of the AWA that the company had on the table. It is entitled to insist on those terms as being the terms that it wants to regulate the employment of pilots under its employ. So to the extent that it is necessary to demonstrate individual negotiations I think it would be fair to say that there have been some individual negotiations, it just hasn’t resulted in an agreement between the parties.

PN211

In terms of the Office of Workplace Services investigation we say that the CPI issue is really about the company’s view that it doesn’t have an obligation to apply it. Now, to the extent that it’s being asserted that somehow these proceedings have been brought to coerce, that’s incorrect. The company’s position is that it is using an avenue which is open to it to bring about the termination of this agreement which it no longer wants to be a party to. Your Honour, we also make the point that the company retains the right to employ the pilots on whatever aircraft it is the pilots are qualified for.

PN212

So to that extent I think the point has been properly conceded that the AWA in question doesn’t apply to 717s in any event. The other point about the bargaining agent and the status of the group, your Honour, I think I took you to the two clauses in each of the AWAs which clearly gave the company the impression that the group did have the authority to negotiate on behalf of the individual employees in question. Yes, I think those are out submissions in reply, your Honour.

PN213

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. I’m going to reserve a decision on the matter. I want to have the opportunity to both ponder upon what the parties have given me and more particularly look at this issue in the context of the revised provisions of the Workplace Relations Act. I would hope to be able to give the parties a decision within the next few days. Perhaps before closing the hearing though, can I make two comments. First of all, I’m remiss in that I should perhaps have declared the transcript confidential and the hearing closed at the outset, so I do that now.

PN214

And secondly it does occur to me that almost independently of whatever conclusion I arrive at in this matter the potential exists for a live and continuing difference between the parties about the negotiation of these AWAs and more particularly as they might apply to these two pilots. If I can assist the parties in that regard at any point I’m available to do so and to that end I can confirm that I will be back in Perth within the next week or so if that was of any assistance to the parties. That said I'll adjourn these proceedings.

<ADJOURNED INDEFINITELY [3.57PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #NJS1 APPOINTMENT OF KAYE SMITH AS BARGAINING AGENT IN RELATION TO ANDREW KING PN10
EXHIBIT #NJS2 APPOINTMENT OF KAYE SMITH AS BARGAINING AGENT IN RELATION TO MR KRUGER PN10
EXHIBIT #NJS3 CORRESPONDENCE TO ANDREW KING DATED 24/05/2005 PN76
EXHIBIT #NJS4 CORRESPONDENCE TO MR KRUGER DATED 27/06/2005 PN77
EXHIBIT #NJS5 ADVICE TO ALL NJS PILOTS DATED 30/04/2006 PN85