AG2006/4582, Transcript of Proceedings [2007] AIRCTrans 306 (21 June 2007)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 17012-1

COMMISSIONER RAFFAELLI

AG2006/4582

s.170MD(6) - pre-reform Act Variation of certified agreement to remove ambiguity
Qantas Airways Limited
and
Australian and International Pilots Association
(AG2006/4582)

SYDNEY

9.33AM, FRIDAY, 08 JUNE 2007

Continued from 7/6/2007

Reserved for Decision

PN216

THE COMMISSIONER: Yes, thank you, Ms Bernasconi.

PN217

MS BERNASCONI: Thank you, Commissioner. If I could call Mr Julian Hailes to the stand.

<JULIAN CHRISTOPHER HAILES, AFFIRMED [9.34AM]
<EXAMINATION-IN-CHIEF BY MS BERNASCONI

PN218

MS BERNASCONI: Mr Hailes, would you state your full name and address for the Commission, please?---Julian Christopher Hailes. I live at (address supplied).

PN219

Thank you, and Mr Hailes have you prepared a statement of evidence for the purposes of these proceedings?---Yes.

PN220

Have you got a copy of that with you in the witness box?---Yes.

PN221

Is it correct that you wish to make an amendment to paragraph 2 to reflect some changes which have been made to your position since the time that the statement was prepared?---Yes.

PN222

Could you tell the Commission what your current position is with Qantas?---My current position is the Business Integration Manager Crew Systems Futures.

PN223

Thank you, and can you tell the Commission when you took up that position, roughly?---February 2007.

PN224

Prior to that you were the Manager Industrial Relations at Qantas, responsible for the management of industrial relations issues for flight crew?---Yes.

PN225

In relation to paragraph 4, do you wish to make an amendment to that paragraph as well?---Yes.

PN226

Could you explain to the Commission the nature of that amendment?---Yes, there was an oversight on that part. I should have added myself. I was the lead negotiator in those negotiations for Qantas.

PN227

For the EBA 7 negotiation team for Qantas?---Yes.

PN228

Thank you. Other than those two amendments, Mr Hailes, do you say that the statement of your evidence set out in that document is true and correct to the best of your knowledge and belief?---Yes.

PN229

Commissioner, I tender that statement.

PN230

MR NOLAN: Commissioner, can I just voice an objection similar to the one yesterday, this time for paragraphs 31 and 32 of Mr Hailes' statement.

**** JULIAN CHRISTOPHER HAILES XN MS BERNASCONI
PN231

THE COMMISSIONER: Ms Bernasconi?

PN232

MS BERNASCONI: Commissioner, our submissions would be the same as we made yesterday but in light of the ruling that was made, we don't press those paragraphs.

PN233

THE COMMISSIONER: Yes. Okay. Paragraphs 31 and 32 will be excised and this should be - the rest of the statement will be marked as Exhibit QF3.

EXHIBIT #QF3 WITNESS STATEMENT OF JULIAN CHRISTOPHER HAILES

PN234

MS BERNASCONI: If it please the Commission, I have one additional question for Mr Hailes arising from the statement of Captain Lunt.

PN235

Mr Hailes, have you read the statement of Captain Lunt prepared in these proceedings?---Yes.

PN236

Have you got a copy of that statement with you in the witness box?---Yes.

PN237

If I could take you to paragraphs 14 of that statement and you will see in that paragraph that Captain Lunt that says it was his understanding of the allocation two offsets would occur simultaneously so as to provide pilots a reasonable level of certainty and structure to their rosters. Can you tell the Commission whether that proposition was ever put forward during the negotiations for EBA 7?---Not to my recollection.

PN238

Thank you.

PN239

I have no further questions, Commissioner.

PN240

THE COMMISSIONER: Yes, Mr Nolan.

<CROSS-EXAMINATION BY MR NOLAN [9.38AM]

PN241

MR NOLAN: Mr Hailes, I know you have explained your new role at Qantas but you will agree with me, will you not, that the current enterprise agreement, that is to say EBA 7, passed its nominal expiry date December 2006?---Yes.

PN242

That negotiations for a new EBA have now been underway for, I think, around about five months?---I'm not involved but - - -

**** JULIAN CHRISTOPHER HAILES XXN MR NOLAN
PN243

You are aware of the fact?---I'm aware.

PN244

Yes, and of course you gave evidence for the company in the proceedings before Vice President Watson, when there was an issue about meals and accommodation?---Yes.

PN245

It wast the company's contention, you recall, back there that his Honour should do nothing about the application to vary the agreement in that connection, because of the - at least in part because of the then imminence of the resumption of negotiations of the certified agreement; do you recall that?---Yes.

PN246

That was - the decision of his Honour was 23 April so it was in an earlier time that that hearing concluded and that contention was advanced by Qantas. It was some time - was it March it was proposed, was it? Well, round about then anyway?
---Yes.

PN247

In fact, you agree that negotiations had been under way on a new agreement. Are you familiar with the shape of the issues that have been raised by AIPA and Qantas in those negotiations?---No.

PN248

You don't know at all?---No.

PN249

Now, you will recall however back in the negotiations that lead up to EBA 7 - and I think you point this out in one of the attachments to your affidavit - here I'm looking at, "The log of claims; it was September 2004 that Qantas had prepared". Do you have that attached to your statement? JCH1 I think is the attachment and you have got a number of things - a number of documents there?---I will just find it.

PN250

The first is the one headed up The Competitive Global Environment, but I'm looking at the without prejudice log of claims; do you have that?---Yes.

PN251

You will see there over at - where are we?---Are you in JCH - - -

PN252

I'm still in JCH1. I think it's the last or the second-last document in JCH1. You can see there is a log of claims. September 2004. It's after those landscape pages?---Yes.

PN253

That includes, at page 2 of that particular document and in particular at clause 6.1.4, a claim that Qantas made for pattern protection to be offset on an hour-for-hour basis. Do you see that? That goes over the page to page 3 of the document?---Yes.

**** JULIAN CHRISTOPHER HAILES XXN MR NOLAN
PN254

That was a claim that Qantas advanced but did not achieve in the result, in the clause that was ultimately agreed to?---Yes.

PN255

You sought back there a provision where the pattern protection was subject to multiple offsets on a hour-for-hour basis but in the event the clause that we have presently got before us was the one that was agreed between the parties?---Yes.

PN256

Are you aware whether or not Qantas has a similar particular claim in relation to pattern protection on the table for the new EBA?---No.

PN257

You don't?---No.

PN258

So you have no knowledge at all of the particulars - - - ?---No.

PN259

You well and truly exited the old role?---Yes.

PN260

Apart from you coming to give evidence in these proceedings?---Yes.

PN261

All right. Excuse me for a moment. Yes, there's no more cross-examination..

PN262

MS BERNASCONI: No, re-examination, Commissioner.

PN263

THE COMMISSIONER: Yes, thank you, Mr Hailes. You can go?---Thank you.

<THE WITNESS WITHDREW [9.43AM]

PN264

MR NOLAN: Commissioner, you will recall yesterday I foreshadowed the possibility that we might seek to have Mr Lunt recalled briefly and I propose to do that because I propose to call from Mr Lunt some evidence about the current position of the enterprise agreement negotiations; to support a submission that if you are inclined to - if you are otherwise inclined to turn first of all that there was an ambiguity or uncertainty, then you need to exercise its discretion about whether or not you do something.

PN265

The fact that those enterprise agreement negotiations are currently under way, in our submission, will be sufficient to persuade you in the way that Vice President Watson was persuaded, to not vary the agreement. So we would say the same argument really applies in this case.

PN266

THE COMMISSIONER: What do you say about that?

PN267

MS BERNASCONI: Could I just take instructions for a moment, Commissioner? Commissioner, I've got two submissions. The first is that none of that material arises from any evidence - new evidence that Mr Hailes gave today, either through further examination-in-chief or in cross-examination. It was certainly material that was able to be asked of Captain Lunt yesterday and Mr Ziegenfusz put evidence in yesterday about his understanding of where negotiations were up to and he was not cross-examined about that. The second submission - and so we say that certainly at this stage to reopen that does not arise in the circumstances foreshadowed yesterday, where Mr Lunt might be put back in if anything arose from the evidence of Mr Hailes.

PN268

The second submission is I'm not sure the extent to which my friend seeks to have put into evidence the content of the current negotiations, but our client's position is that those negotiations, given where they are and that they continue to be ongoing, are without prejudice and should not be the subject of evidence in these proceedings; and also that that can't be in any way relevant to the matte that needs to be determined by the Commission in these proceedings. If it please the Commission.

PN269

THE COMMISSIONER: Mr Nolan, what do you say?

PN270

MR NOLAN: Well, perhaps I could concede that it was an omission on my part not to ask Mr Lunt about this yesterday, but I have to say I didn't think it would be particularly controversial. I didn't want to canvass the content of negotiations, save to say that this is a matter that can be the subject - and as I understand it, is the subject of discussions. I didn't want to go into the detail about who said what to whom necessarily and what the stage of negotiations, or what stage negotiations had reached in any particular(sic).

PN271

But the fact that we have reason, I would have thought it was common ground, particularly since what was said in the case before Vice President Watson, that these negotiations were then imminent but now current and that has to have some influence upon the exercise of your discretion. That has, you know, been a constant theme throughout the cases and at the very least it would be difficult, one would have thought, for Qantas not to - or to in any way walk away from what it said to Vice President Watson. In Vice President Watson's reasons in the meals and accommodation case he said - and I'm reading now from paragraph 34:

PN272

Qantas submitted that as EBA 7 expired on the 31st of December 2006 it's open to AIPA to pursue any proposed variation by way of negotiations for a replacement EBA.

PN273

At the time of the hearing in that matter he said the negotiations had not commenced, but of course it was then anticipated that they would commence shortly:

PN274

Counsel to Qantas conveyed his instructions regarding the renegotiation. He indicated that because AIPA had raised matters with senior management which have a direct impact on the proposed EBA negotiations, meetings to negotiate a new EBA scheduled for February, March and April were vacated. He indicated that other issues had now been resolved and that Qantas expects the negotiations between the parties will resume, either at the initiative of AIPA or Qantas or generally accepting the situation outlined by Qantas, counsel for AIPA submitted that based on recent experience, negotiations for a new agreement could take 12 to 18 months to be concluded.

PN275

Now I think all of that was, frankly, common ground and then his Honour went on to take it into account, to make a decision that that was one factor that would support his conclusion that he should reject the application and that's the tenor of what we propose to put. It's an identical situation that was put against us back in the hearing before Vice President Watson.

PN276

MS BERNASCONI: Well, Commissioner, we say that the cause of that is a matter for submissions in respect of whether VP Watson's decision actually is in similar or different circumstances to the current matter; and we say that already in evidence from Mr Ziegenfusz is evidence that negotiations are underway, that they are at an early stage. He gave evidence about how long the last negotiation took and we say it's a matter for submissions and no purpose would be served by bringing further evidence at this stage in relation to that matter.

PN277

THE COMMISSIONER: Yes, but how does it - if Mr Ziegenfusz has already given certain evidence, what additional material, what additional evidence do we need from Mr Lunt or Captain Lunt, Mr Nolan?

PN278

MR NOLAN: Only that those negotiations have commenced and that frankly the issue of pattern protection is something that's in the mix.

PN279

THE COMMISSIONER: Do you - - -

PN280

MR NOLAN: We don't disagree with that and are happy to make submissions on that basis.

PN281

THE COMMISSIONER: Okay.

PN282

MR NOLAN: Well, if that's conceded - - -

PN283

THE COMMISSIONER: Yes, I think that's probably better to do.

PN284

MR NOLAN: Yes.

PN285

THE COMMISSIONER: I wouldn't have denied you calling Mr Lunt just because that's now a reversal of what the parties agreed yesterday. Under normal circumstances Mr Lunt would have gone last anyway. But I'm a bit uncomfortable about venturing into party to party negotiations in open proceedings. But given the concessions that Qantas made, I would have thought there's no disagreement as to that those negotiations are continuing and that pattern protection may very well be an issue for it; and one side more than the other, probably, will make something of what they said in the Vice President Watson case.

PN286

So, yes, so I don't think we need Mr Lunt, Mr Nolan.

PN287

Yes?

PN288

MS BERNASCONI: Thank you, Commissioner.

PN289

THE COMMISSIONER: That's the end of the evidence?

PN290

MS BERNASCONI: That is the conclusion of the evidence and if it's convenient to the Commission, we will make our closing submissions.

PN291

THE COMMISSIONER: Yes.

PN292

MS BERNASCONI: Commissioner, at the outset if I could hand up a bundle of authorities which we intend to refer to during the course of the submissions. I'm sorry, also a copy of EBA 6, which is the previous agreement to EBA 7. I will take the Commission to several clauses in that agreement. Commissioner, if I can just clarify that second bundle, which is EBA 6, is only an extract of Part 6, the Hours of Work parts in that EBA, which includes the relevant pattern protection provisions

PN293

THE COMMISSIONER: Yes, I see.

PN294

MS BERNASCONI: Commissioner, as I said yesterday, this is an application by Qantas under section 170MD(6) for an order to vary the agreement, as set out in the attachment to that application. The relevant principles are set out in the first decision in the bundle, which is Tenex Defence Systems Pty Limited Certified Agreement 2001 - 2004, a decision of the Full Bench PR 917548. Commissioner the relevant principles are summarised or the relevant test to be applied is set out at paragraphs 28 to 35 of that decision and I would like to just take the Commission briefly through the test, before then moving to apply the test in the current circumstances.

PN295

First of all at paragraph 28:

PN296

Before the Commission exercises its discretion to vary an agreement pursuant to section 170MD(6)(A) it must first identify an ambiguity or an uncertainty and it may then exercise the discretion to remove that ambiguity or uncertainty by varying the agreement. The first part of the process is identifying an ambiguity or uncertainty. It involves an objection assessment of the words used in the provision under examination -

PN297

And then there is a quote from Monroe J in the Linfox matter and the Full Bench goes on to say that the exercise is not confined to the identification or the word or words of a clause which give rise to an ambiguity or uncertainty and that a combination of clauses may have that effect. Importantly, at paragraph 31:

PN298

The Commission will generally err on the side of finding an ambiguity or uncertainty whether there are rival contentions advanced and an arguable case is made out for more than one contention.

PN299

They then say that once the Commission has done that exercise and satisfied itself that there is in fact an ambiguity or uncertainty, then this second part of the test applies ie. exercising the discretion as to whether to remove the ambiguity or uncertainty and in particular the Commission is to have regard to the mutual intention of the parties at the time the agreement was made. So that is essentially the test, Commissioner.

PN300

In relation to the first limb of that test, we first would like to take the Commission to the words, the relevant words in EBA 6 to deal with pattern protection. It was in evidence yesterday - well, it's in evidence in this statement from the Qantas witnesses about the way in which EBA 6 was - the terms of the pattern protection provisions in EBA 6 were applied. That is that in circumstances where a pattern protection obligation arose during a bid period, and the number of hours for that pattern protection occasion were less than 25, Qantas could assign one pattern or duty to recover those pattern protection hours.

PN301

To the extent that the hours were not fully offset, then those hours were lost to Qantas and were fixed and paid, credited to the employee. The evidence also is clear that in circumstances where the pattern protection occasion was for a value of greater than 25 hours, Qantas' practice was that they had the opportunity to assign two patterns - up to two patterns or two duties to recover that pattern protection - the value of that pattern protection and that could be done at different times during the bid period.

PN302

Commissioner, you will recall the evidence of Captain Lunt where he was taken to a particular example that related to him under EBA 6, where his pattern protection occasion was greater than 25 hours and he was assigned to two separate duties at different times during the bid period to recover that pattern protection. That is exhibit QF2. Mr Lunt - Captain Lunt conceded during cross-examination that, at least as far as he was concerned, he did not dispute Qantas' application of the provisions in those circumstances and in fact he said that he wasn't in a position to, because Qantas was entitled to do that under EBA 6.

PN303

It is clear also from the evidence of Mr Hailes and Mr Ziegenfusz that as part of the negotiations for EBA 7, Qantas sought increased flexibilities to recover pattern protection; and none of that evidence was contradicted in these proceedings. This morning Mr Hailes was taken to the log of claims from September 2004, set out in JCH1, which clearly identifies in that that Qantas, in respect of pattern protection recovery, was seeking relief in terms of unrecovered pattern protection and seeking greater flexibility, in essence, to recover that pattern protection.

PN304

It was conceded by Mr Hailes this morning that what they were - the initial package ie. multiple offsets over a number of bid periods et cetera was not accepted, but it was agreed that - and the evidence is - in response to their claim put forward for greater flexibility, what they got was some amendments to EBA 7, and I will come back to those. Again, EBA - JCH2, annexure JCH2 to Mr Hailes' statement, is the Terms of Settlement and it is clear there in page 6 of that document at clause 10.3 that the terms of settlement in respect of pattern protection are that clause 27.16.5(f)(i) will be varied so that the maximum number of offsets available to Qantas for each pattern protected occasion is two.

PN305

The evidence of Mr Ziegenfusz and Mr Hailes is that in respect of each pattern protection occasion Qantas could have a maximum number of offsets of two, regardless of whether the pattern protection occasion was less than or greater than 25 hours in value. The amendments to EBA 7 arising from that term of settlement were only - were in respect of two subclauses only. They were clause 27.16.5(f)(i) and in respect of that, Commissioner, if I can get you to look at the corresponding provision in both EBAs and note the differences that were made or the amendments that were made to that provision.

PN306

In EBA 6, this is as page 46 up the top, top numbering of the document and it's the heading Number of Offsets Available to the Company, at the bottom of that page. Then in EBA 7 it is on page B213. Commissioner in the provision in EBA 6 you will see that the wording there is that:

PN307

The crew member can only be assigned to one pattern or other duty provided for in clause 27.15.9 for each pattern protection occasion except that if the pattern protected hours for an occasion are greater than 25, the crew member may be assigned to two patterns or duties in respect of that occasion.

PN308

If you look at the terms which now find - which are now in EBA 7 for that same clause you will see that it says, "The flight crew member can only be assigned to - and where under EBA 6 it said one pattern or one duty or other duty, it is now two patterns or two other duties provided for, for each pattern protected occasion. What has happened is the exception ;- the word "one" has been replaced with the word "two" in the first and second lines and then the exception and the remainder of that paragraph has been deleted.

PN309

The words, "then in making an assignment" remain the same and there is an additional note inserted in EBA 7 which I will now refer to, but the simple fact is that the amendment which was made between EBA 6 and EBA 7 in respect of that first paragraph was to change one to read two and then delete the balance of the paragraph, which dealt with the alternative where it was less than or above 25.

PN310

The second amendment, as I said, to paragraph 27.16.5(f)(i) in EBA 7 was to add the note which is the second paragraph which says:

PN311

For a pattern that overlaps two bid periods the maximum number of offsets is two. Refer clause 27.4.2.

PN312

That does not appear in the words of EBA 6 and it's a drafting note and that is the - the clause 27.4.2 which is referred to there is the only other amendment which was made between EBA 6 and EBA 7 with respect to pattern protection. Looking then at the corresponding provisions, 27.4.2(f)(ii) number 1, that is in EBA 7, Commissioner, it appears at page B163 and (f) is at the top of the page, Midnight Cutoff. Then (ii) is Pattern Protection.

PN313

THE COMMISSIONER: Sorry, you have lost me.

PN314

MS BERNASCONI: Yes, please, Commissioner, let us clarify it.

PN315

THE COMMISSIONER: Yes. Where are we again?

PN316

MS BERNASCONI: I've taken the Commission to the first amendment.

PN317

THE COMMISSIONER: (f)(i), yes. Yes.

PN318

MS BERNASCONI: Then I was referring the Commission to the note which appears in (f)(i).

PN319

THE COMMISSIONER: Yes. Yes.

PN320

MS BERNASCONI: Now I propose to take the Commission to the clause which is referred to in that note, which is the other amendment which was made.

PN321

THE COMMISSIONER: I see. Yes, okay, and that's?

PN322

MS BERNASCONI: That is 27.4.2(f)(ii)(1).

PN323

THE COMMISSIONER: Which is B what?

PN324

MS BERNASCONI: B163.

PN325

THE COMMISSIONER: Yes.

PN326

MS BERNASCONI: In EBA 7.

PN327

THE COMMISSIONER: Yes.

PN328

MS BERNASCONI: In EBA 6 - - -

PN329

THE COMMISSIONER: Just one second.

PN330

MS BERNASCONI: In EBA 6 it is page 6 of the bundle which we have provided and it is D, Pattern Protection. It's a different numbering but it's - - -

PN331

THE COMMISSIONER: It's at page what?

PN332

MS BERNASCONI: Page 6 of EBA 6, the bundle EBA 6.

PN333

THE COMMISSIONER: Yes, I see.

PN334

MS BERNASCONI: Yes. That is the equivalent provision in the old EBA.

PN335

THE COMMISSIONER: I see.

PN336

MS BERNASCONI: Yes. Headed Pattern Protection, where a crew member becomes pattern protected under clause - - -

PN337

THE COMMISSIONER: This is the overlapping of the two bid periods issue?

PN338

MS BERNASCONI: Yes, that's right. Yes, that's right.

PN339

THE COMMISSIONER: Right, okay.

PN340

MS BERNASCONI: Our submission is that there were only two amendments made to pattern protection. The one we just took you to and this clause as well. Other than that, the provisions - - -

PN341

THE COMMISSIONER: But this clause, unless you go - take me a bit more, is not of relevance to this controversy.

PN342

MS BERNASCONI: It is in terms of construction.

PN343

THE COMMISSIONER: Is it? Okay, sorry. Well then go ahead, yes.

PN344

MS BERNASCONI: Yes. But you are right, it did not - this particular clause did not apply to Captain Lunt's situation. But we say it's relevant to the overall construction of the provisions.

PN345

THE COMMISSIONER: Yes.

PN346

MS BERNASCONI: In EBA 6, Commissioner, which is page 6 of EBA 6.

PN347

THE COMMISSIONER: Yes.

PN348

MS BERNASCONI: The provision D Pattern Protection says:

PN349

Where a crew member becomes pattern protected under clause 27.16 number1, for a pattern that overlaps two bid periods the company will have the opportunity to offset the pattern protection on the basis of one occasion for shortfalls of 25 credited hours or less and two occasions for shortfalls of more than 25 hours and the duration of a crew member's pattern protection obligation will be determined under clause 27.16.

PN350

Which is where we were before. That is the other provision which was amended as a result of the terms of settlement in EBA 7 and in EBA 7 the Commission will see that the change is that for a pattern that overlaps two bid periods, the company will have the opportunity of two offsets for each pattern protected occasion. So instead of one below 25 and two above 25, they have two offsets for each pattern protected occasion. Then it says:

PN351

Offsets can be made in accordance with 27.16.5(f)(i) in either the first or the second bid period -

PN352

which is the clause that we were just looking at. Do you have any questions just about that at the moment, Commissioner.

PN353

THE COMMISSIONER: The company would - it's not till later in the existing bid that the company would know about the forthcoming bid opportunities, would it?

PN354

MS BERNASCONI: In the following bid period.

PN355

THE COMMISSIONER: I suppose it does, yes. The bids close quite early on, don't they?

PN356

MS BERNASCONI: Yes. They open before the current bid period closes so there might be some overlap. I might need to get instructions about the timing on that, but yes, that is - - -

PN357

THE COMMISSIONER: Yes, unless it's a big issue don't worry about it.

PN358

MS BERNASCONI: My friend might make one but we will - if we do, then I will get some further instructions on that. So Commissioner the proposition that we put forward, or the clear fact of the matter is that between EBA 6 and EBA 7 there were negotiations and the terms of settlement agreeing to changes to pattern protection provisions and the terms of the settlement were that the provisions would be varied so that the maximum number of offsets available for each pattern protection occasion is two. Only two clauses of the EBA were amended, the two that I've taken you to. Otherwise the balance of the pattern protection provisions did not change.

PN359

Relevantly, if you look at EBA 7 at page B215, the provisions in clause 27.16.5(f)(vii) headed Accepting An Assignment That Does Not Fully Offset Will Result In Fixed Pattern Protection. That provision did not change, nor did - and I will come back in detail to the text of the provisions, but nor did paragraph - clause 27.16.5(g), which appears directly below it, Pattern Protected Hours Are Completely Offset By An Assigned Duty and that's on page B215.

PN360

Qantas' evidence is that the intention of those changes was to simply mean that there was no distinction between a pattern protection occasion above or below 25 and that the position which prevailed in respect of above 25 hours pattern protection ie. they could assign up to two patterns or two duties on separate occasions during the balance of the bid period, would apply irrespective of how many hours was the value of the pattern protection occasion.

PN361

AIPA contends, as set out in Captain Lunt's statement, that his understanding of the effect of the amendments which had been made to EBA 7 mean that Qantas cannot assign the two patterns or two duties referred to in 27.16.5(f)(i), on page B213, on two separate occasions for each pattern protection occasion. He says if Qantas is to have the benefit of offsetting two patterns or two duties, then it can only be done simultaneously. The evidence of Mr Ziegenfusz yesterday in respect of that contention was that there are two consequences - well, two that he named - of that.

PN362

Firstly, Qantas would be worse off under EBA 7 than under EBA 6, because that is a more restrictive approach or outcome than it had under EBA 6 where at least above 25 hours it could assign two patterns or two duties on separate occasions. Whereas with Captain Lunt's or AIPA's contention, we can have the two patterns or two duties but only if we assign them at the same time, irrespective of the number of hours.

PN363

The second consequence that he identified in evidence yesterday was that it would be virtually impossible for Qantas to assign two duties simultaneously under EBA 7 and he gave some evidence about it being around the other rules that operate under the EBA for the order in which work can be allocated, the time at which that work can be offered to a pattern protected pilot, whether - their seniority, how many days out and so forth; such that all of those things - his evidence was that it would be virtually impossible to do it simultaneously.

PN364

We submit that that outcome was clearly not the intention of the parties in the context of the EBA negotiations, where Qantas had a particular right, which is conceded. They sought greater flexibility and a term of settlement was agreed which said that Qantas would have maximum offsets of two and the contention of AIPA would leave Qantas considerably worse off. We say that that cannot be accepted as the position, that Qantas would have agreed to an outcome of that nature in response to its own claim for increased flexibility.

PN365

That's the relevant context for then assessing whether objectively there is an ambiguity or uncertainty in the pattern protection provisions read as a whole and in the context of the whole EBA. The case will suggest that that context is in particular the way in which the provisions are used, the structure of the provisions and the terms of the instrument as a whole. The construction which AIPA contends is - we haven't seen an outline of submissions and I'm sure my friend will correct me if I'm not correctly stating their position, but Qantas has been - the Commission may recall that Qantas has been served with a statement of claim in Federal Magistrates Court proceedings by AIPA in respect of these particular provisions; a claim which was filed on 28 November, suing Qantas for breach of the pattern protection provisions in relation to the assignment of two patterns to Captain Lunt on two separate occasions in March of 2006, to offset a pattern protection occasion.

PN366

In that claim the statement of claim relies on a combination of three provisions and they are the provisions which I have taken you to but in particular, Commissioner, the last two that I took you to which I said had not changed between EBA 7 and EBA 6, which are 27.16.5(f)(vii) and 27.16.5(g). In those proceedings AIPA rely on those two clauses - and I will come back to them - to say that our right, our substantive right in clause 27.16.5(f)(i), which is the number of offsets which we keep coming back to, that's the main Qantas' right to assign; they say that those two later provisions must be read in a way that limits (f)(i) to mean that Qantas can make only one assignment of two flying duties or two other duties for each pattern protection occasion.

PN367

What they say is that once that one assignment has been made, whether it be one or two patterns, if the pattern line holder accepts the assignment and the hours performed do not fully offset all the remaining pattern protected hours for the occasion, then the remaining hours become fixed and are credited to the pattern line holder and are not subject to further offset. They rely on those two provisions on page B215 for that view and I'm sure my friend will expand on the basis for taking that view but we assume, Commissioner, that when you look at those two provisions (vii) Accepting an Assignment and (g) Pattern Protected Hours are Completely Offset, that they rely on the reference in those two provisions of the words "an assignment".

PN368

If a pattern protected flight crew member accepts an assignment and the credit hours accrued do not fully offset all the remaining hours for that occasion, the hours still remaining become fixed and will be credited and will not be subject to any later offset. Then in (g) once a flight crew member accepts an assignment to offset, the assignment will not be subject to further offset by the allocation of additional time. At least from the Federal Magistrates Court claim they say that because of the operation of those two provisions that then must be read to limit the right that Qantas has, the right to assign in (f), to mean that you can only make one assignment, not two separate assignments.

PN369

We concede that on the wording, using the terminology "an assignment", which indicates one, a single assignment rather than multiple assignments, that that is one arguable construction of the provisions. Bu that approach is driven by looking at the two later provisions and then reading down Qantas' right to assign to match those words. We say that that construction of the provisions, whilst arguable, is certainly inconsistent with the way those provisions have been treated or the parties have treated the operation of those clauses under EBA 6 with respect to greater than 25 pattern protection offsetting. As we pointed out, those two provisions have not changed.

PN370

THE COMMISSIONER: So when there was the two times you could do, if it was over 25 hours - - -

PN371

MS BERNASCONI: Yes. Those provisions were in identical terms.

PN372

THE COMMISSIONER: It was still the same. Okay.

PN373

MS BERNASCONI: Captain Lunt's evidence from yesterday, as far as that can be taken, conceded that he did not have an issue with it under EBA 6, greater than 25, and those two clauses have not changed. It is only the description of the right in (f)(i) and 27.4.2 that have changed. Qantas' contention is rival contention about the proper construction of the provisions when looked at as a whole. We say that the starting point for the construction of those provisions is the description of Qantas' right to assign duties to offset pattern protection in (f)(i).

PN374

We say the heading in (f) on page B213 is:

PN375

The Company's right to assign open time flying or other duty to a pattern protected flight crew member who declines an offer of open time f lying or other duty.

PN376

That right then says if a crew member declines to accept an offer, the company may assign in accordance with the following rules and then it sets out the rules in (i) to (vii) below. We say that the company's right to assign is described in two places. First of all in that clause, in (f)(i), the first paragraph there which we've taken you to which is, "A crew member can only be assigned to two patterns or two other duties for each pattern protection occasion". That's the first description of the right and the second description of the right is the one earlier in the EBA which relates to where it overlaps two bid periods, so on page B163.

PN377

That talks about - and that is referred to under (f)(i), the note 27.4.2(f)(ii)(1):

PN378

Where a pattern overlaps two bid periods the company will have the opportunity of two offsets for each pattern protected occasion. Offsets can be made in accordance with 27.16.5(f)(i).

PN379

So it refers you back. But that is a separate right in a sense, in respect of pattern protection arising where it overlaps two bid periods.

PN380

Then if one looks at the heading of (f)(i) on page B213, it says:

PN381

Number of offsets available to the company.

PN382

Then it goes on to describe the company's rights in that regard. We say that on its face that heading talks about offsets in the plural, indicating a number of offsets available to the company and we say that that indicates that more than one offset is available to the company; and we say that that is not at all inconsistent with the words that then follow in that first paragraph. Nor inconsistent with the words in the earlier provision 27.4.2(f)(ii). The words of that right are that the flight crew member can be assigned to two patterns or two duties for each pattern protected occasion.

PN383

AIPA reads those words as meaning that Qantas can make only one assignment of up to two patterns or two duties and that one assignment must occur simultaneously. We say that the words themselves in that paragraph there do not suggest, on their face, that meaning. The words themselves say that a member can be assigned to two patterns or two duties and there was evidence from Mr Ziegenfusz yesterday regarding or pointing out the definition of assigned, which is in section - clause 7 of the EBA on page B32 where:

PN384

Assigned means an allocation to a flight crew member for which the flight crew member has not bid.

PN385

In clarifying what "an allocation" meant, his response was that that meant allocating one duty, one pattern, one standby or one simulated duty. He was not cross-examined about that and on our review of EBA 7, and I stand to be corrected, but we have not found any reference to "an assignment" with the words "of more than one pattern", so an assignment of patterns or duties, plural. We say that that - the way that the provision is worded and Mr Ziegenfusz's evidence supports our position that in Qantas having the right to assign a maximum of two duties or two patterns for each pattern protected occasion, that that refers to the right to have two separate assignments of one duty each, one duty or one pattern each for each pattern protected occasion.

PN386

Again, looking at the note following on in (f)(i):

PN387

For a pattern that overlaps two bid periods the maximum number of offsets is two.

PN388

Again, that's set under the heading number of offsets and it clearly indicates that there are two offsets, meaning two separate occasions to offset. You will recall, Commissioner, that the wording in 27.4.2(f)(ii)(1) refers back to having those offsets in accordance with (f)(i), and again we say that that further supports the contention that two separate offsets - the intention was that two separate offsets would be available.

PN389

Unfortunately for us there is no clear statement of that position in (f)(i) to say that assignments can occur at separate times. Nor is there any statement to the effect that AIPA contends that assignments are to occur simultaneously and we say that their reading or their construction has the right - has the effect of reading down the right provided for in (f)(i) in a way which is not provided for. But we certainly concede that there is no statement of clarification which clearly states whether its one way or the other; one assignment or two separate assignments.

PN390

The clause (f)(i) at the bottom of page B213 goes on to then say:

PN391

In making an assignment under this clause the company will inform the flight crew member of the pattern protected occasion which produced the hours and the number of hours remaining for that occasion.

PN392

That wording is certainly in the singular ie. referring to an assignment meaning a single or we say that that can be read as either the one assignment, as AIPA contents, whether it be one or two duties at the same time, or we say it's equally open - that in making an assignment under this clause ie. one of the two that are available to Qantas, we say that that can have either meaning.

PN393

Finally, in support of our construction of the provisions, Commissioner, is clause - on page B127 it's clause 27.16.5 Roman - sorry, little i, Offsettable Pattern Protections; does the Commission have that?

PN394

THE COMMISSIONER: Yes.

PN395

MS BERNASCONI: That talks about offsettable pattern protection and basically sets out the obligations on a crew member where they are subject to offsettable pattern protection to be available to take offers and assignments to offset the pattern protection for the duration of the bid period. In particular the Commission should note that it's got the opening words, "Two dot points, one dot point or another dot point" and under that it says:

PN396

…whichever occurs first. The flight crew member will be available for offers and/or assignments of patterns and/or other duties as provided for.

PN397

et cetera. We say that the reference to offers in the plural refers back to clause 27.16.5(b) which talks about:

PN398

…offering or awarding open time, flying or other duty to a pattern protected flight crew member.

PN399

Then assignments of patterns and/or other duties refers to clause 27.16.5(f) which is the provision that we have been focussing on, the company's rights to assign. We say that the use of the words there, "assignments" plural or "patterns or other duties" plural again is consistent with the construction that we are putting forward.

PN400

Commissioner, they are the provisions that support our position. The difficulty with our position, which we concede, is that elsewhere within clause 27.16.5, and particularly 5(f) and the rules which follow (f)(i) to (vii) and (g), the drafting which is used throughout that provision is at times quite inconsistent and the terminology leads to some conflict between the provisions. Taking the Commission to some examples of that, firstly as I referred to before in clause 27.16.5(f)(1) on page B213, the main clause we are talking about, as I referred to at the bottom of that clause it talks about that a crew member can be assigned and then it talks about making an assignment under this clause. As I've already submitted, that could be read one of two ways. The one that we contend for or the one that AIPA contends.

PN401

The next reference is 27.16.5(f)(2) which is the next paragraph clause over the page which again talks about, in the second sentence:

PN402

In making an assignment under this clause the company will select and designate the company will select and designate the occasions it wishes to offset with each assignment.

PN403

Again, the use of "an assignment" goes one way and then the use of the words "each assignment" indicates that potentially more than one assignment is available. Thirdly, in clauses 27.16.5(f)(iii) and (iv) there are references there to "an" - singular, "an open time pattern or duty" and the same in (iv). Again it’s the use of the singular which may - which leads to uncertainty in the operation of these provisions as a whole.

PN404

Fourthly, in (v), Declining to Accept Assigned Pattern, again:

PN405

The flight crew member may decline to accept the assigned pattern.

PN406

This is another variation of an assignment, each assignment. "The assigned pattern", which could mean the single assignment which AIPA refers to or one of the two assignments, maximum of two assignments which we refer to. Then clauses (vii) and (g) which I've already taken the Commission to, which are the main provisions that AIPA relies on at least in terms of its Federal Magistrates Court claim; referring to an assignment in the singular and then the consequences that flow once that assignment is assigned.

PN407

THE COMMISSIONER: That was seven, wasn't it?

PN408

MS BERNASCONI: Roman 7 on page B215 and (g).

PN409

THE COMMISSIONER: Yes.

PN410

MS BERNASCONI: Yes, the same - and they are clauses which I have already taken the Commission to which form the foundation, we suspect, for AIPA's contention. Then finally, the clause that I already took the Commission to in 27.16.5(i) on page B217. Again, a different way of referring to assignments of patterns, plural.

PN411

The agreement - the evidence of Mr Hailes is that the provisions, the pattern protection provisions have been in the EBAs since EBA 1 in the form that they currently appear, save for the amendments that have been made to EBA 7, which I've taken the Commission to. The agreement has been drafted by the parties during that time and we say that although our construction is the preferable one, and certainly the one which is consistent with past practice, we say that there is a conflict which arises between the way the right to assign is described in 27.16.5(f)(1) and also the earlier provision, 27.4.2(f)(ii)(1).

PN412

We say that there's a conflict between the way those rights are described and then the variable use throughout the remainder of the pattern protection provisions to the term assignment, particularly the use of the singular an assignment in (vii) and (g), that in combination with the absence of any clear statement in 27.16.5(f) itself or (f)(1) as to whether the two patterns or duties referred to in that clause are to be assigned at the same time or can they be assigned at different times?

PN413

We say that when you look at all of the provisions in their context and as a whole, that there is sufficient ambiguity or uncertainty to enliven the Commission's jurisdiction under 170MD(6). In terms of in the Tenex decision which I referred you to, Commissioner, again at paragraph 30 they say:

PN414

We agree the context is important and 170MD(6)(a) is not confined to the identification of a word or words of a clause which give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.

PN415

We say that that is the situation that we have in this matter. The case law also says that it's not enough for the parties to just disagree about how a clause is to apply to a certain factual situation. We say that is not the case here. We say it is much more than that. It is a fundamental dispute based on the uncertainty that I have set out, as to how the provisions themselves are to be applied in any situation. We say, again, that that is clearly sufficient to satisfy the Commission that there is the requisite ambiguity or uncertainty.

PN416

Again, in a similar situation - obviously each EBA, each of these decisions turns on very specific provisions in specific EBAs, but if the Commission could look at the case CFMEU v Linfox which is PR Q2603 in the bundle.

PN417

THE COMMISSIONER: Yes.

PN418

MS BERNASCONI: At paragraph 34, we say that the approach that Munro J takes in this case is analogous to the current situation. He says that:

PN419

The terms of the agreement generally reflect a make-shift style of drafting to reach an outcome. The preamble to appendix 2 has much work to do. Some of it fits incongruously with the six points in appendix 2 -

PN420

as they were ultimately formulated:

PN421

-because of that apparent inconsistency between the wording of the preamble and the effect of the first paragraph of point 5 -

PN422

which is one of the points in appendix 2:

PN423

I am satisfied that there is an uncertainty manifest in appendix 2 read as a whole.

PN424

Then he goes on to say:

PN425

I don't regard there an ambiguity in the first paragraph. It's a statement, however that declaration was placed under the general prescription of being that type of provision and that placement conflicted with the function of the first paragraph at point 5 and created not only an uncertainty in the operation but an ambiguity in the compound provision.

PN426

We say that whilst the provisions that were being looked at there were quite different, it is that approach that the Commission should take in looking at the current provisions. It is the way that they are placed together and the wording, the different wording which is in conflict, which is used in certain parts of the paragraph, in certain early parts of the clause which conflicts with later parts of the clause. We say that that is the very situation we have here, in the way that Munro J found, supports a plea finding in these circumstances that there is an ambiguity or uncertainty.

PN427

At the first stage of the test the Commission is simply required to identify that there is an ambiguity or uncertainty in the way the provisions operate. The Commission is not required to determine what the words mean or necessarily which contention is preferable. Simply that there are rival contentions which are advanced and that an arguable case is made out, for more than one contention. That is sufficient to enliven the Commission's jurisdiction. We have yet to hear from the other side about their contention on the meaning of the provisions but even with what we have taken the Commission to, we say that no one position is clearly correct and that the rival contentions are arguable.

PN428

Further, we say that in respect of AIPA's position, they have filed a Federal Magistrates Court claim in reliance on their contention or their construction of the provisions. That claim has been certified by their legal practitioners as there being a proper basis for the allegations in those pleadings. Again, that I suppose gives weight to the fact that at least their solicitors have formed the view that the contention that they put forward is - there is a proper basis for that and that it is reasonably arguable.

PN429

As the decision in Tenex makes clear, the Commission - we say that at paragraph 31 the statement that:

PN430

The Commission would generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out.

PN431

We say that that shows that the Commission will take a broader, liberal approach to ascertaining whether an ambiguity or an uncertainty exists and will generally err on the side of finding one in those circumstances. So we say that it's not an overwhelming test and we say that certainly there is sufficient material before the Commission to satisfy it that such an ambiguity or uncertainty exists; such to enable the Commission to then move to Part 2 of the test.

PN432

In respect of Part 2 of the test, Tenex makes it clear at 32 that once the ambiguity has been identified it is then a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made. In addition, the principles then for looking at the second part of the test have been usefully summarised by Senior Deputy President Marsh in the Beltana Number 1 case, which I've handed up, which is PR 932468 and those principles or the guidance can be discerned from authorities which have dealt with 170MD(6), as set out at paragraph 23, Commissioner, on page - I think my copy is 12.

PN433

THE COMMISSIONER: Yes.

PN434

MS BERNASCONI: Paragraph 23, and that deals with the second step.

PN435

THE COMMISSIONER: Sorry, 23?

PN436

MS BERNASCONI: Paragraph 23 of Beltana.

PN437

THE COMMISSIONER: Yes.

PN438

MS BERNASCONI: Yes, where it starts, "The following guidance can be discerned".

PN439

THE COMMISSIONER: Yes.

PN440

MS BERNASCONI: Commissioner, about half way down that page that sets out the - it deals with the first step and that might be a useful summary for the Commission, in looking at the first step; but nothing more, I don't think, than what I've already said. Then in terms of the second step, partway down the page, that's the process of exercising the discretion:

PN441

The Commission may not use its powers to re-write an agreement to install something that was not inherent. The Commission is to have regard to the mutual intention of the parties at the time the agreement was made and subsequent conduct of the parties. The Commission is empowered to remove an ambiguity or uncertainty by varying it in a manner which gives effect to the mutual intentions of the parties at the time the agreement was made. The Commission is not limited by the form of the application before it.

PN442

Then:

PN443

In looking at the context of the provision, the Commission is entitled to consider those matters that are set out there and then the Commission may exercise its discretion to determine whether or not the agreement should be varied.

PN444

Having regard to those provisions, those guiding principles if you like, and sorry, Commissioner, but in addition the Commission might have - should refer to the Telstra Full Bench decision PR 954989, CPSU v Telstra, which affirms the approach adopted in Tenex and also at paragraphs 44 to 46 it deals with, particularly with the second part of the test around ascertaining the mutual intention of the parties. We think those principles there are instructive in this matter, particularly at paragraph 46:

PN445

If a certified agreement has a plain meaning then evidence of the surrounding circumstances will not be admissible to contradict the language of the agreement but if the language of the agreement is ambiguity or susceptible of more than one meaning, evidence of surrounding circumstances is admissible.

PN446

Then those are the surrounding circumstances, so:

PN447

Evidence of prior negotiations so far as they tend to establish effective background facts. Facts so notorious that knowledge of them is presumed. Evidence of a matter in common contemplation.

PN448

Then it goes on in 47 to say that:

PN449

The mutual intention is a relevant consideration but not the only consideration.

PN450

Commissioner, we say that a very important factor the Commission must have regard to is in determining whether to exercise the discretion is the mutual intention of the parties, regarding the construction of the agreement or how it is to be read and the relevant time is the time that the agreement was made, so EBA 7. We say that the background that we have taken you to regarding the surrounding circumstances known to both parties at that time should lead you to conclude that the mutual intention of the parties was that Qantas could assign patterns or duties to recover pattern protection on up to two occasions, in respect of each pattern protection occasion.

PN451

We say that what was known to both parties at the time when EBA 7 was settled or agreed was that particular terms operated in EBA 6 and those words were accepted, the pattern protection provisions were accepted as permitting Qantas to offset on two occasions where the pattern protection occasion was greater than 25 hours. That is accepted. Qantas has put on evidence about that and that has not been contradicted by AIPA and in fact it has been confirmed by Captain Lunt that that was his understanding of the position; and that that in fact occurred to him during the life of EBA 6, where he was assigned to two patterns above 25 hours on different occasions.

PN452

What is also not in dispute, and which comes from the evidence of Mr Hailes and Mr Ziegenfusz, is about what happened during the negotiations for EBA 7. There is detailed evidence from both of those witnesses about the claim for pattern protection or greater flexibility in respect of pattern protection; that it was a claim made by Qantas in the negotiations, not by AIPA; that Qantas sought greater flexibility and certainly the original log of claims went much further than it ended up under EBA 7. But certainly it is not in contest that it was Qantas' claim, they wanted more flexibility and there was an amendment to pattern protection provisions as a result of the negotiations.

PN453

We say the conclusion must be that it was in response to Qantas' claim for more flexibility. Again, the witnesses were not cross-examined about any of the negotiations for EBA 7. We then have the terms of settlement, which I have taken the Commission to in JCH2, which we say, if anything, is the clear reflection of the mutual intention of the parties as to the bargain they had reached for EBA 7. Mr Hailes, at paragraph 26 of his statement, says that:

PN454

The agreement that was reached was reflected in the EBA 7 terms of settlement, which were signed by Captain Robin Hold on behalf of AIPA and by myself on behalf of Qantas.

PN455

Then he refers to clause 10.3, which I've taken the Commission to, which simply says that clause will be varied so that the maximum number of offsets for each occasion is two. We say that that is the clearest statement you can get about what was intended by the parties. What it does not address is whether those two offsets can be done separately or together, but we say the use of that terminology supports - and the surrounding circumstances clearly support - Qantas' submission that the mutual intention was that the distinction would simply be removed and Qantas would be able to assign on two separate occasions, up to two separate occasions, regardless of above or below 25 hours.

PN456

I've then taken the Commission to the drafting amendments which were made to reflect the terms of the settlement and the minimal changes that were made to the pattern protection provisions as a whole, in that only two clauses of the entire set of provisions were amended. We say the effect of those amendments was to replace one with two and remove any reference to a distinction of above or below 25. We say that that drafting, notwithstanding the fact that the rest of the provisions were not amended and probably could have done with some tidying up, the fact that that drafting was done by both parties to then reflect the terms of settlement clearly supports a finding that the mutual intention was to simply remove the distinction, such that Qantas could apply the provisions in the way it had previously for above 25 hours for any pattern protection occasion. That is the intended effect of the amendments between EBA 6 and EBA 7.

PN457

Again in respect of the mutual intention of the parties, you have got the evidence of Mr Ziegenfusz which I referred to earlier, that if you take AIPA's construction of the provisions, that would leave Qantas worse off under EBA 7 than they were under EBA 6, because it was more restricted, and that it would be virtually impossible to assign patterns, two patterns simultaneously rather than on separate occasions. If that was the outcome, that would not give Qantas any additional flexibility which it sought in the EBA 7 negotiations. We say that the mutual intention of the parties must encapsulate what Qantas intended with that, and what AIPA understood that Qantas intended with those changes.

PN458

We say that the evidence from Mr Hailes and Mr Ziegenfusz about he negotiations and how those changes came about, and what was intended by Qantas, and must have clearly been understood by AIPA in the circumstances, means that the mutual intention of the parties was, as I've said, to simply remove the distinction between above and below 25, such that the situation which applied above 25 where Qantas could assign up to two patterns or two duties on separate occasions should apply across the board.

PN459

The only evidence, if you can call it that, from AIPA disagreeing with that was Captain Lunt's evidence that his view, his understanding, which we have no basis for knowing where that understanding comes from, was that he thought that it should be done simultaneously; because that would give greater certainty to pilots and that that wast the goal. Both Mr Ziegenfusz and Mr Hailes have said that that issue was never raised to the best of their recollection in EBA 7 negotiations. There is no evidence from AIPA at all to contradict those submissions that I've put about what the mutual intention of the parties was, at the time that the agreement was reached.

PN460

We say that is the primary factor which should weigh in the Commission's mind in determining to exercise the discretion. The other factors which are relevant to the final exercise of discretion is the subsequent conduct of the parties. The Telstra decision talked about that in the paragraph that I drew your attention t, in 46:

PN461

Objective background facts can include the antecedent and subsequent statements and actions of the parties which reflect their mutual actual intentions.

PN462

Then in particular in paragraph 50 - - -

PN463

THE COMMISSIONER: Sorry, 46, what is it again?

PN464

MS BERNASCONI: "The objective background that can include - - -

PN465

THE COMMISSIONER: Yes. Yes.

PN466

MS BERNASCONI: Yes, "The antecedent and subsequent statements and actions of the parties". In particular in paragraph 50 the Full Bench then says that:

PN467

The obligation on the employer to explain the terms of the agreement to its employees is particularly relevant and it's appropriate to place significant weight on representations as to the effect of an agreement made by an employer to its employees prior to them voting.

PN468

The annexure to Mr Hailes' statement at JCH3 is the explanatory note which was prepared after EBA 7 was agreed, but prior to employees voting on the agreement. This is a document which was prepared jointly by the parties and it talks about:

PN469

Its purpose is to summarise the enterprise bargaining provisions negotiated and where relevant, explain the purpose of a new provision. In some instances a provision will speak for itself and is not able by further explanation.

PN470

At page 5 of that document, the explanatory then, Part 1, Matters Included in the New Agreement and at 10.3, Pattern Protection. This is self-explanatory:

PN471

There is now no distinction between pattern protection above and below 25 hours.

PN472

We say again that that joint document sent to all the employees, being the subsequent conduct of the parties after the agreement has been made, can be taken into account and is entirely consistent with the submissions that we've made about the mutual intention of the parties in making the agreement. Again, Qantas' conduct since EBA 7 was certified in November 05 is to apply the provisions in a way that we say they were intended to operate ie. regardless of the hours of the pattern protection occasion Qantas has the right to assign two patterns or duties on two separate occasions.

PN473

One further consideration which we say should weigh strongly in our favour in having the Commission exercise its discretion to amend, to vary the agreement in a way, we suggest is clause 5.2 of the agreement at page B29. It says that:

PN474

Where it becomes apparent that this revised document does not reflect the intention of the parties or where inadvertent errors or omissions are discovered, both parties agree to review the relevant part or parts and to make any amendments considered appropriate or necessary to properly reflect the original intention of the parties, to reinstate any inadvertently omitted provisions or to correct errors or inaccuracies.

PN475

We say that if the Commission is satisfied as to Part 1 of the test, which we say there is ample material before it to form that view, then the existence of this provision in clear terms in the EBA, as to what the parties would do if there was such a situation where it does not reflect the intention of the parties, then this provision should weight strongly in our favour in the Commission varying the agreement to reflect the intention of the parties.

PN476

In relation to the form of the orders sought, Commissioner, you will see from our attachment to the application that the orders that we seek are not a major re-write of the provisions. Yes, the principles set out in Beltana say that it's not appropriate for the Commission to use its powers to re-write an agreement, to install something that was not inherent to the agreement when it was made. We say that the amendments that we seek, or the variations that we seek are such as to be not a significant re-write of the provisions. They are entirely consistent with the position that we've put in terms of what the mutual intention of the parties was; and that the amendments do not go any further than required.

PN477

In particular, Commissioner, you will see that the amendments are to fix up or to provide certainty in respect of the particular subclauses that I have taken the Commission to. Firstly in (f)(i) to make it clear that the assignments referred to in that clause can occur at different times. It's on page 2 of the attachment. In (ii), "An assignment be changed to assignments". In (v), "The assigned pattern to be an assigned pattern". In (vii) and d(g), "The references to an assignment be changed to assignments or patterns". Then finally in respect of (I), refer to the duties rather than duty on that page.

PN478

Otherwise no other amendments are sought and we say that the amendments are necessary to remove the ambiguity or uncertainty that exists, but that they certainly go no further than necessary to do that. We note the authorities that - - -

PN479

THE COMMISSIONER: Sorry.

PN480

MS BERNASCONI: Yes.

PN481

THE COMMISSIONER: There does not need to be any change to (f)(ii), that overlapping? Probably not because of the note, is it?

PN482

MS BERNASCONI: Yes.

PN483

THE COMMISSIONER: Because the note appears in (f)(i).

PN484

MS BERNASCONI: Yes, that's right and Commissioner, we say that the words of - do you mean 27.4.2(f)(ii), that one?

PN485

THE COMMISSIONER: Yes.

PN486

MS BERNASCONI: Yes, we say that that clearly says two offsets and if the correct - if the amendment is made to 16.5(f)(i) then that will - yes.

PN487

THE COMMISSIONER: Yes, I see.

PN488

MS BERNASCONI: What I was going to say, Commissioner, is that the authorities are clear that once an ambiguity or uncertainty is found to exist by the Commission, the Commission is not restricted by the words that the party suggests to overcome the ambiguity or uncertainty. It is really a matter for the Commission to vary the agreement in a way, if it chooses to exercise its discretion in that way, which would remove the ambiguity or uncertainty. We have drafted the attachment in a way which we think meets that, but certainly if the Commission is of the view that there is other uncertainty which should be removed at the same time, then the Commission is able to do that.

PN489

Finally, Commissioner - sorry, Commissioner, going back to - I may wait to reply to my friend's submissions about the fact that the EBA has expired but succinctly say notwithstanding that the EBA has expired, the evidence from Mr Ziegenfusz was that those negotiations for the next EBA are in their early stages. We conceded that they are on foot. The evidence from Mr Ziegenfusz was that the previous EBA had taken some 12 months to negotiate. We also - we won't deal with his Honour Vice President Watson's decision; I will wait to hear what my friend has to say about that decision. But we say the circumstances in that case would be quite different from this one, other than that the EBA has expired.

PN490

In particular, we would remind the Commission that our application was filed on 27 August 2006, well before the EBA expired and the matter was originally listed for hearing also before the EBA expired, and at AIPA's request was vacated. The subsequent events have been outside of Qantas' control in terms of where the timing and where we now find ourselves. So we say that that cannot necessarily be held against Qantas. Ultimately, the position is that EBA 7 continues in force until such time as it's replaced and we say there is clear value in having an order from the Commission varying the agreement, to remove the ambiguity or uncertainty for so long as the agreement is on foot, notwithstanding that it has expired.

PN491

Finally, Commissioner, in terms of when the orders - if the Commission is to make orders - take effect, we submit that any order removing the ambiguity or uncertainty should be made with retrospective effect from the date of certification, being 16 November 2005. There are a number of decisions which demonstrate that the Commission is certainly empowered to make such an order. We say that the circumstances in previous cases where those orders have been made retrospectively, the same principles apply in these proceedings such that such an order should be made retrospectively.

PN492

There are three decisions which I've handed up. There are a number of other decisions which make retrospective orders in the circumstances of 170MD(6) applications. But the first one is the decision of Watson SDP in the Coles Myer Logistics matter, PR 934488. In particular at paragraph 72 he says:

PN493

It's permissible within the Act for the making of an order varying a certified agreement pursuant to 170MD(6) with retrospective effect. In this respect I note that retrospectivity ordered in Simon Engineering was one issue considered on appeal and that decision was upheld I have decided to exercise the discretion available to vary the agreement with effect from the date of its certification. A prospective operation would not remove the uncertainty in relation to the practical manifestation of that uncertainty which has been found to exist within the agreement. It's proper to vary the agreement from the date of the certification in order to ensure that the agreement operates from its commencement in the manner intended by the parties and that rights and obligations arising from the operation of the agreement reflect those intended by the parties.

PN494

We say, Commissioner, that if you are with us that there is an ambiguity or uncertainty in the way that we've described, and that the mutual intention of the parties is the way that we submit, then we say that principle clearly applies in this mater such that the uncertainty should be removed from the commencement of the EBA.

PN495

Further, in the second decision there, Camberwell Coal Mine Certified Agreement PR 916903 at paragraph 22, the last paragraph of that decision on page 5, his Honour says that:

PN496

In the interests of certainty, give my view as to what the clause means and has meant at all relevant times, the variation should have effect from the date of certification.

PN497

Then finally the decision of Hamilton DP in the Simon Engineering matter in PR 915076, at paragraph 48 he says that:

PN498

The variations apply to work that has occurred in the past and has now been completed. There is no point in a variation which leads to major ambiguity or uncertainty in place when that ambiguity or uncertainty had a real effect on the parties and remove it for the future, when it may have no relevance.

PN499

We say, Commissioner, that in the current situation varying the agreement with prospective effect only does not give certainty to the parties for the period which has passed, and in particular in circumstances where Qantas has continued to apply the clause in a way which it says reflects the mutual intention of the parties. It leaves - and that is reflected in the Simon Engineering case in that it leaves uncertainty at the very time where it had a real effect on the parties ie. during the life of the agreement. There will still be some effects going forward but the bulk of the effect is retrospective. We say that if the Commission is with us on our submissions, then it cannot leave that uncertainty in existence; or should not leave that uncertainty at a time when it had real effect on the parties.

PN500

Again, we say there would be significant prejudice to Qantas if a retrospective order was not made, particularly in circumstances where AIPA and Captain Lunt have commenced Federal Magistrates Court proceedings, suing Qantas for breach of these provisions. Those proceedings, as you know Commissioner, were commenced well after Qantas had brought its application in the Commission. Captain Lunt gave evidence yesterday that the dispute was a test case and depending on how it was resolved, it would flow on to other employees.

PN501

We say that Qantas would be significantly prejudiced if the Commission was to leave that uncertainty in place, prior to an order being made. We say that in respect of the Federal Magistrates Court proceedings, they relate only to the one instance of Captain Lunt being assigned to two patterns on two separate occasions in March of 2006. It clearly is a test case and that if the uncertainty was left during the period prior to the order being made, then that would clearly open the prospect of further claims from other employees in respect of that period.

PN502

We say that there is no prejudice to employees covered by the agreement, by a retrospective order. It's clear from Captain Lunt's evidence that other employees are not disputing the operation of this clause and are not aware of the issue at all., so it is limited to his particular dispute with the company. Finally, Commissioner, we say that in circumstances where there is an uncertainty or an ambiguity found what AIPA is trying to do, in circumstances where immediately after EBA 7 being certified a new team of management from AIPA came in, is seeking to exploit that ambiguity or uncertainty in a way which was never intended by the parties; and that they should not be entitled to do that.

PN503

Where the Commission finds that there is an ambiguity or uncertainty and the mutual intention of the parties was such as we have put forward, we say it would be unfair on Qantas in those circumstances not to have an order made retrospectively. Excuse me, Commissioner. No further submissions-in-chief.

PN504

THE COMMISSIONER: Yes.

PN505

MS BERNASCONI: Did you have any questions for me, Commissioner?

PN506

THE COMMISSIONER: No.

PN507

MS BERNASCONI: Thank you.

PN508

THE COMMISSIONER: Yes, Mr Nolan.

PN509

MR NOLAN: If I may, Commissioner, I might ask Captain Lunt to address this question of the clause (f)(i), the note to clause (f)(i). I think that might be easier and more efficient than me trying to retail(sic) what he says to me, because I haven't myself particularly focussed on that. So I'm quite happy to do that, then I can go on with my submissions.

PN510

THE COMMISSIONER: Yes, thank you.

PN511

Yes, Mr Lunt or Captain..

PN512

MR LUNT: Thank you, Commissioner. Yes, just to clarify a point about that note. It's not actually a contentious issue as far as the proceedings here. It does not come into question, you know, over 25 under 25. What that was put in for, as part of EBA 7 we have got the - where you had the extension of 28 days into the next bid period if you had gone sickie towards the end of the first bid period, and I think you asked the question would the patterns be known. What that was to clarify was that it would still only be two offsets, however they were applied. It wouldn't be two in one bid period and two in the next for the one thing. So it wouldn't account for four offsets. That was all that note was actually about.

PN513

THE COMMISSIONER: I understand that.

PN514

MR LUNT: It was just the fact that it was only two, not two plus two. That was just - - -

PN515

THE COMMISSIONER: Yes, thank you.

PN516

MR NOLAN: Commissioner, I would be grateful to Ms Bernasconi for canvassing the issues in contention as comprehensively as she has done this morning, because it at least saves me going over much of what our contention is about the construction of the clause. So it really is the case that the contentions have been as they've been put. We might prefer to emphasise or put our proposition with perhaps some more emphasis and we point to, for example, the contrast between that preamble in clause (f) that talks about the situation where, of course in the first instance, the company seeks agreement to an alternative assignment. There's no contention about that, as I understand it. But of course in the absence of agreement then the company can assign the crew member to do that additional work; and of courses as I said yesterday, if the crew member declines to accept the assignment, well then they lose money. So there's a real penalty there for a pilot, when a pilot declines that assignment.

PN517

So that's the background, if you like, against which that next step of compulsion operates and it's in that circumstance that we say that that clause has the meaning that we've argued for. Of course all of the things that have been put to you this morning all support the construction that has been advanced. We say that the two successive EBAs can't really compared in the way that has been advanced. We say that the special, specific provision in the old clause (f)(i), which dealt in very specific terms with the two occasions, if you like, under the former EBA, really meant or means that the two clauses really are directed to different things to that extent; and that whereas a position was very clear and unambiguous in the other clause, where those two occasions could be assigned but subject to that very important restriction of the 25 hours.

PN518

The effect of that sentence or that whole paragraph or that part of the paragraph being removed was to really then mean that the assignment spoken about in the present EBA 7 clause operated in the way that you have heard about, mainly that there can be two other duties allocated but that had to occur on one occasion. In other words, the words that follow reinforce that and we are talking about a particular assignment and if that particular assignment entails the two separate duties, well so be it. If that's not done on that occasion well then the right to any further allocation is thereby forfeit.

PN519

So much is really confirmed, in our submission, in those later clauses to which you were referred. Namely, (f)(vii) and (g) because they make it quite clear that, in a sense, once you go through the process you do it once and once only; albeit you could do it for two different tours of duty. But once that process had been gone through, as the clauses say:

PN520

The pattern protected hours still reaming for that occasion will become fixed and will be credited to the flight crew member and will not be the subject to any later offset.

PN521

So those words are clear and unambiguous and they operate in the way that we suggest, it can only operate in the way that we suggest and of course they can only be overcome as they were overcome in the previous EBA, by the very specific prescription made in what was then clause (f)(i). Therein lies the difference between the two clauses, as we would have it.

PN522

I suppose that really leads me to at least concede that there is that stark difference between the parties' positions and therefore that would seem to satisfy the words of the authorities, in particular the Tenex case, where those elements were all teased out. So there is, I think it must be conceded, an ambiguity or uncertainty where there are rival contentions, and here we have rival contentions, and an arguable case is made out for more than one contention.

PN523

Of course what you hear from us in respect of the construction of the words, it is our contention that we say it derives from the claim; the meaning in the words involved in the clauses to which you have been referred. Of course, what you have heard from Qantas is the contrary intention, having regard to the material to which they've referred and the different iterations of the clause and the construction placed upon the words and their different iterations.

PN524

So really that brings us to the point where you are confronted with a difference of opinion or a difference of intention, apparently with the clash of views of the kind contemplated in the authorities and the issue remains then, or becomes then really, having been made aware of at least an arguable position that there is an ambiguity or an uncertainty, what the next step in the process ought to be. Now in our contention, as I've said to you, we say that because of the imminence of the certified agreement negotiations, you take the same approach that his Honour the Vice President took in the earlier case.

PN525

The fact that the Qantas application in this matter was earlier in time than the application which Vice President Watson dealt with in the meal allowances matter is neither here nor there. The critical question as in respect to the exercise of your discretion as to what you do next is really implored by reference to the fact that, notwithstanding the or because of the passage of time, the EBA is up for renegotiation.

PN526

Of course AIPA said exactly what has been said here by Qantas about that to Vice President Watson and we said, in fact I said to the Vice President that the position was that negotiations for a new agreement could take 112 to 18 months to be concluded. It's our contention that those negotiations are commenced now and we would say well advanced. A Qantas witness said they were at their early stages but I suppose the only way one can confidently assess that contention is retrospectively, when the negotiations are finally concluded. Because there's many a slip to reach the cup of the lip as we know and negotiations can go on for many months, or alternatively they could go on for a relatively short period of time and the agreement being fixed.

PN527

But if both parties have got a real and genuine concern about it, as they appear to have about pattern protection, well the logical and appropriate forum for that matter to be addressed is really in the bargaining environment. They can fix up their difficulties there and they can argue out their differences of opinion about the ambit and the impact of the clause. As you' have heard there is no dispute on the grounds that were between the parties in respect of this clause. There's no threat of industrial action, for example, nor is there any disruption as a result of the clause being implemented and applied in a way that Qantas prefers, and the way that Qantas says it has applied the clause during the life of the agreement.

PN528

AIPA has not taken issue with that. AIPA has accepted that position, albeit raising its concerns about competing contentions regarding the way the clause has been interpreted and applied. So we would say that there's no real or pressing concern which would affect Qantas, as a practical matter with respect to matters just taking their course, as we've suggested, and the matter going - - -

PN529

THE COMMISSIONER: Just excuse me for a moment.

PN530

MR NOLAN: To assist that process, provided there's no attempt to an argument about costs in the Federal Court, I should emphasise, on that basis AIPA will discontinue its Federal Court application, to take away what seems to us to be the only practical objection remaining to our contention, that you should take no step at all to vary the agreement but rather allow the parties to deal with the matter as they see fit, in the present enterprise agreement negotiations.

PN531

THE COMMISSIONER: Sorry, Mr Nolan, are you saying that if the Commission decides not to exercise its discretion, and says, "Well let the parties discuss this issue and resolve it".

PN532

MR NOLAN: Yes.

PN533

THE COMMISSIONER: Are you saying that the Federal Magistrates application would be discontinued?

PN534

MR NOLAN: I suppose I put it in a slightly different way but I don't want to be seen bargaining with the Commission about the - of course, what I'm saying is that AIPA will in fact discontinue the Federal Court application and we say that that fact is something that you should take into account in whether or not you exercise the discretion. We say that would, that fact would have a highly persuasive impact upon you in exercising your discretion against the Qantas application. In other words not varying the agreement but simply directing the parties, as Vice President Watson did, to deal with the matter as they see fit in the bargaining round, in light of the fact that the agreement has expired and that bargaining has commenced.

PN535

We would say that in open court and on the basis that we would do so on the basis that each party withdraw without there being an argument about costs in the Federal Magistrates Court.

PN536

THE COMMISSIONER: I take it that is something that has been put to - that both sides have discussed up to now?

PN537

MR NOLAN: No, we haven't.

PN538

MS BERNASCONI: No.

PN539

THE COMMISSIONER: I see.

PN540

MR NOLAN: I sought to get some instructions from Captain Lunt about that and I've got those instructions. They are now in open court, and those are my submissions.

PN541

THE COMMISSIONER: Yes. Yes, sorry.

PN542

MR NOLAN: Yes. So we would say that that, it would seem to us, was the only possible practical impediment to the course that we suggest being taken. That is to say that you decline to vary the agreement and do what Vice President Watson did and say, "Look, this is a matter that really can be dealt with in the bargaining which is now upon us". Unlike the position that confronted Vice President Watson, where there was no bargaining yet started and that that, in all the circumstances, would be the more satisfactory way of dealing with the matter.

PN543

There's no doubt about the fact that there has been an issue between the parties, but that has not been an issue that the unions encouraged to have a wider significance. In other words, it has not taken action on behalf of a range of people. It has only been Captain Lunt's matter that has been taken up, and it's left upon that basis while the various weeks and months have passed by, and it now is prepared to do as I've suggested, in an effort to have the matter dealt with in a satisfactory way and put into the mix for the next bargaining round, which is indeed occurring.

PN544

So far as the second stage, if you like, of the matter goes, we say that that really circumvents all of those sorts of factors that have been taken into account about what kind of variation should occur and the circumstances in which the variation should occur; because there is no real or practical or tangible likely future, or even an impact upon Qantas, in the way the parties have conducted themselves, which would arise. So there would be no real need for you to exercise your discretion to address that practical problem.

PN545

We would suggest to you that in all the circumstances, and in light of that concession on our part, you would take the view that, whilst there may be an ambiguity or uncertainty because of this dispute that has persisted between the parties, that time has passed and we've been overtaken by events; and that the agreement has now passed its nominal expiry date by some many months; the parties have started negotiations and that's the appropriate forum in which to deal with this issue; and that the parties should be left to do precisely that.

PN546

We would submit to you, Commissioner, that you can safely decline and enter upon that second part of the process, and decline to make the variation to the agreement in that knowledge and against that background. If it please the Commission.

PN547

MS BERNASCONI: Commissioner, I wish to make submissions in reply on two matters but would it be possible to have a 5-minute adjournment to get some instructions, because that proposal that has been put forward has never come out before.

PN548

THE COMMISSIONER: Yes.

PN549

MS BERNASCONI: I just wish to - - -

PN550

THE COMMISSIONER: Can I say this to you, Ms Bernasconi, a couple of things. I note Mr Nolan didn't spend a lot of time, if any, challenging the evidence of Mr Hailes and Mr Ziegenfusz.

PN551

MS BERNASCONI: Yes.

PN552

THE COMMISSIONER: So I note that, however I also say that whatever might be said about (ii) and (v) and a few other of those sort of provisions, (vii) and (g) are perhaps - I don't say they trouble me but they are significant matters that put - well, that I would have to attend to. But there has been a point raised. Yes, I will give you an adjournment. The other thing too is that you may, if your instructions are not able to be obtained sufficiently, you could after the brief adjournment address me, assuming that it's as you commenced.

PN553

If on the other hand in the days to come the parties can come to an arrangement, well then I would just be informed about it. It would save me dealing with the matter. So I don't want you to think that you have got to madly run around - - -

PN554

MS BERNASCONI: No. Absolutely.

PN555

THE COMMISSIONER: - - - in the next 5 minutes to try to get some people that you might have to need to talk to more.

PN556

MS BERNASCONI: Certainly.

PN557

THE COMMISSIONER: But anyhow we will adjourn for now.

PN558

MS BERNASCONI: Thank you, Commissioner.

<SHORT ADJOURNMENT [11.47AM]
<RESUMED [12.07PM]

PN559

THE COMMISSIONER: Yes, thank you. Yes.

PN560

MS BERNASCONI: Thank you, Commissioner. I have a couple of points to address in reply. The first is my friend's reliance on the decision of Vice President Watson, and I don't think you have that in your - - -

PN561

THE COMMISSIONER: I have actually got it.

PN562

MS BERNASCONI: Right.

PN563

THE COMMISSIONER: I've got - - -

PN564

MR NOLAN: Sorry I - - -

PN565

THE COMMISSIONER: - - - the Commission's prints.

PN566

MR NOLAN: - - - a copy and forgot.

PN567

MS BERNASCONI: Commissioner, in relation to that matter, when you look at the decision of VP Watson in its entirely you will see firstly at paragraph 17 he sets out the approach to take to whether its appropriate to vary the agreement, in circumstances where he had already had a separate hearing and decision in relation to the first part of the test. So he had already determined that on its face there was an ambiguity or uncertainty.

PN568

He then sets out the factors which he has regard to and in the fourth line he says:

PN569

It's well established that a significant factor is the objectively ascertained mutual intention of the parties at the time the agreement was made and it's not appropriate to rewrite the agreement.

PN570

Further down he says:

PN571

The exercise of the discretion does not give rise to a general discretion to determine a matter based on industrial fairness. The task is to place the parties in the position they intended by their agreement insofar as the wording of the agreement does not reflect that intention. Although a significant factor, the objectively ascertained mutual intention of the parties is not the only consideration. However it would be unusual for other considerations to weigh in favour of a variation that was inconsistent with the intention of the parties.

PN572

So that is the framework within which his Honour is working. He then turns, firstly, from paragraph 20 and following, to look at the question of the mutual intention of the parties; which he says is a significant factor but not the only consideration. In looking at the variation sought by AIPA in that matter, at paragraph 27 he makes the finding - he talks about what the concept of mutual intention is and he makes the finding that its beyond doubt, when making the 2005 agreement:

PN573

The parties intended to continue the long-standing practice of utilising a general phrase rather than a prescriptive one.

PN574

I'm not sure, Commissioner, if you have read the bulk of the decision but the application which was before the Commission was by AIPA to vary the agreement, to insert a proscriptive definition of the meal - in relation to the meal allowance provision in lieu of the general provision. So he makes a clear finding that it's beyond doubt, when making the agreement, that the parties intended to continue the long-standing practice of utilising a general phrase rather than a proscriptive one. Then in the following paragraph:

PN575

The mutual intention of the parties was to continue the practice of the general concept is not consistent with the mutual intention of the parties to replace the general conscript with a proscriptive set of requirements.

PN576

And finally:

PN577

AIPA has therefore not established that the mutual intention of the parties to the agreement supports the granting of the application.

PN578

That is the primary finding in this hearing, we say, and that is something that his Honour identified as being a significant factor in weighing in, in the discretion, as to whether or not to vary the agreement once he had already found an ambiguity or uncertainty. We say that is, on our submissions, a quite different situation than the one we have here, if the Commission was to actually find that the mutual intention was as we have submitted, and which really has not been disputed.

PN579

He then as a second aspect, he obviously says that mutual intention of the parties is not the only consideration, so he then goes and looks at the bargaining issue. It also should be noted in this matter, Commissioner, that the submissions made by Qantas in relation to the expiry of EBA 7 were made in circumstances where Qantas vigorously contested at the outset whether or not there was an ambiguity or an uncertainty. That first part of the decision went against Qantas but certainly again we say that there is a distinction to be drawn between the current proceedings, where the parties are in fact agreed that there are rival contentions, and that an uncertainty and ambiguity of the requisite type exists.

PN580

In paragraph 35 his Honour makes it clear that the fact that the agreement has expired and AIPA is able to pursue its position in the immediate future ie. the position which does not reflect the mutual intention of the parties adds weight to the notion that the parties should endeavour to reach an agreed position in bargaining. So he makes that finding in the context where he has already determined that the amendment sought does not satisfy the - does not represent or is not consistent with the mutual intention of the parties. He simply says that that simply adds weight to his view that that's the most appropriate circumstance.

PN581

In light of a finding that what they are seeking to do, which may be - he indicated that may be preferable because it might give more certainty to the parties, but it did not represent the mutual intention of the parties. So his finding in that regard must be read in context and we say that the circumstances here in these proceedings are quite different to the circumstances in that proceeding. The fact that the EBA itself has expired should not be the overwhelming factor in the exercise of the Commission's discretion, for the reasons that we have already said.

PN582

Now, Mr Nolan suggested that in relation to this relying on what VP Watson said that the parties - it would be best for the Commission not to exercise its discretion to amend or vary the EBA and it should be left to the parties to now negotiate over the matter. Commissioner, we say that there is an inherent unfairness in that argument in that if we are correct, then the situation is that we have already bargained for what we thought we got in EBA 7. We put a claim on the table to get more flexibility and we ended up with the wording which finds its way into EBA 7 and for all the reasons that I've put forward, we say that the mutual intention of the parties was that that would allow us to allocate up to two patterns or duties on two separate occasions, whether the hours were above or below 25.

PN583

To now say, well even if you're satisfied that an ambiguity or an uncertainty exists, and even if you find that the mutual intention is as we've said, that you should just not interfere because the parties are now negotiating; we say that that is inherently unfair and allows AIPA to step away from the bargain which was reached for EBA 7, as part of a package of terms of settlement, and effectively make Qantas renegotiate for something which it says it already has the right, albeit in uncertain terms. We say that that is prejudicial to Qantas' position and for that reason, that argument should be rejected. Again, that the circumstances before VP Watson that what they were seeking to put into the agreement did not reflect the mutual intention and in those circumstances, he thought it best that the parties negotiate over that.

PN584

The second point, your Honour, which I wanted to deal with was the proposal or the offer, the position put by Mr Nolan that they would - AIPA would withdraw - I don't know the wording, but withdraw the current Federal Magistrates Court proceedings relating to Captain Lunt. As foreshadowed, we are not in a position to respond to that proposal and at this stage, Commissioner, we say that it does not change any of the submissions that we have made. It certainly does take away one concern that Qantas has but what that proposal does not give is any certainty to Qantas in relation to claims that other pilots, or AIPA might make on behalf of other pilots, in respect of the way that Qantas has applied the provisions and continues to apply the provisions.

PN585

MR NOLAN: Can I just say something about that? That was an obvious concern, I suppose, but we weren't asked about that. But can I make it quite clear that AIPA's offer includes the fact that AIPA would not support or itself make any further claim. In other words, we wouldn't try to, you know, circumvent that offer by commencing some other proceedings or lending aid and comfort to anybody else, and make a similar application.

PN586

MS BERNASCONI: Finally, Commissioner - and as the Commissioner suggested, if the position changes regarding our submissions, in light of that offer and the further offer, then we will let the Commission know. Finally, Commissioner, just in relation to your comments about (vii) and (g), that that is a concern, I don't wish to repeat the submissions that I've already made about the construction of the provisions, but I would ask the Commission to go back and review those submissions carefully and in particular, in conjunction with the authorities that I've referred to, regarding construing and determining provisions in those circumstances.

PN587

Again, we reiterate that it's the context of the whole provisions in their place in the EBA, not a single phrase that appears in those two clauses that should be paramount in conducting that exercise. I suppose we say that the Commission should not be seduced by the simplicity of the argument that AIPA puts. We say that their argument - Mr Nolan has not - he has simply said that the removal of the words that were previously there has led to the uncertainty or the situation that we just can' read (vii) and (g) in any other way than as a single assignment.

PN588

But again, Commissioner, the difficulty they have with that position is that under EBA 6, and if I could ask the Commission to again go back to page 46 of EBA 6, which is the old 27.16.5(1).

PN589

THE COMMISSIONER: Yes.

PN590

MS BERNASCONI: The wording there in respect of pattern protection occasions greater than 25 hours says:

PN591

A crew member can only be assigned to one pattern or one duty except that if the pattern protected hour for an occasion are greater than 25 the crew member may be assigned to two patterns or duties in respect of that occasion.

PN592

Those words are the same words that are now used in respect of any pattern protection occasion, "may be assigned to two patterns or duties in respect of that occasion". Now, my friend suggests that the amendment to this part of the clause and the removal of the words dealing with the exception and then the following sentence somehow completely change the meaning. But we say that the words that applied above 25, which they've conceded allowed us to allocate on two separate occasions or up to two occasions, are the exact same words that still exist in there.

PN593

The words that follow, "Where the pattern protected hours exceed 25 but have not been reduced", we say that those words there are an explanation of a different situation where initially they are above 25 but because a pilot has been - has accepted another duty rather than be assigned, and it reduces it below 25, then that is a clarification for that particular situation. But when you look at the opening words of(f)(i) we say that there is no difference in respect of the above 25 hour situation there, and are the words that are now used in EBA 7.

PN594

So we say that their concession that we could do it under EBA 6 is, in circumstances where (vii) and (g) were in identical terms, causes them - their construction some difficulty. It's not as simple as saying, "Well, we think you know that (vii) and (g) drives you to a conclusion about what (f)(i) means", and that's the only way that that can be read. We say that that is not the case.

PN595

The other difficulty that their argument does not address is the interaction of clause 27.4.2(f)(ii)(1) with clause 27.16.5(f)(i). 27.4.2(f)(ii) - and Captain Lunt explained that that was to make it clear that you could only get two, not two lots of two, where it overlaps a bid period, but it's clear that you get two offsets for each pattern protected occasion, in accordance with 27.16.5(f)(i); and that (vii) and (g) apply in the same way to pattern protection offsetting under that provision, as well as (f)(i). Their contention does not in any way deal with the contradiction or the conflict between those two provisions, which in fact the contrast is starker with that, in circumstances where there are two offsets; and yet you have got this word "an assignment".

PN596

Finally, Commissioner, just on that point, I don’t have any authorities to hand up and my friend may wish to address this point because it was not anything that I raised before. There is a presumption of interpretation relating to words in the singular and words in the plural, particularly relating to legislation. But we say that a similar principle may be applied if it was necessary and I'm referring here - I don't have a copy, Commissioner, but I can provide it if necessary, reading from Statutory Interpretation in Australia Sixth Edition Pearce & Geddes at page 222. It says that:

PN597

This presumption-

PN598

ie. words in the singular:

PN599

- include the plural and vice versa is heavily relied upon not only by drafters but legal writers. The primary authority cited in Australia in relation to the presumption is the Privy Council decision of Blue Metal Industries v Dilly 1969 111 CLR 651.

PN600

There is an extract from that case that:

PN601

The mere fact that the reading of words in a section suggest an emphasis on singularity as opposed to plurality is not enough to exclude plurality. Words in the singular will include the plural unless the contrary intention appears.

PN602

We raise that really in response to the concern that the Commission has raised, particularly in respect of (vii) and (g). But we rely on the submissions that we have made earlier around that, and we say that the mere fact of the words in (vii) and (g) referring to "an assignment" needs to be looked in the whole context and should not drive the Commission to a result that the only way for that to be read is to read down the right that we have got in (f)(i) and 27.4.2.

PN603

Finally, Commissioner, Mr Nolan's overriding submission I think was that there's no real or practical or tangible impact or benefit of an order being made, whether that be retrospective or prospective. We disagree with that submission and particularly the authorities I took you to about retrospective orders. We say all of those reasons do provide a practical benefit and I think overriding - in light of the proposal that they will drop the current Federal Magistrates Court proceedings and not institute further proceedings, that is of assistance but bear in mind, Commissioner, what I've said out the negotiation; that if you are with us on the rest of our submissions, then it would be highly unfair for Qantas to be in the position where it has to negotiate again in the current round, presumably in circumstances where it will have to offer up something potentially to achieve that again, that is a highly unfair outcome. There would be a practical effect of making the orders sought for that reason. Thank you, Commissioner.

PN604

THE COMMISSIONER: Yes, thank you.

PN605

Mr Nolan, is there anything you wish to reply?

PN606

MR NOLAN: Only in relation to that passage when you referred to Pearce & Geddes. I mean, we would say that when you have a look at that, you will satisfy yourself that that really relates to whether a legislation applies in a particular way and whether statutory terms expressed in the singular will be construed to apply to the plural. That's uncontentious, it's just that in this particular case you won't be assisted by that.

PN607

THE COMMISSIONER: Yes, okay. Well, in the circumstances the Commission will reserve its decision and issue in due course.

<ADJOURNED INDEFINITELY [12.30PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

JULIAN CHRISTOPHER HAILES, AFFIRMED PN217
EXAMINATION-IN-CHIEF BY MS BERNASCONI PN217
EXHIBIT #QF3 WITNESS STATEMENT OF JULIAN CHRISTOPHER HAILES PN233
CROSS-EXAMINATION BY MR NOLAN PN240
THE WITNESS WITHDREW PN263