C2007/3616, Transcript of Proceedings [2007] AIRCTrans 641 (4 December 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17765-1

SENIOR DEPUTY PRESIDENT LACY
DEPUTY PRESIDENT MCCARTHY
COMMISSIONER EAMES

C2007/3616

s.120 - Appeal to Full Bench
Appeal by Qantas Airways Ltd
(C2007/3616)

MELBOURNE

10.12AM, TUESDAY, 13 NOVEMBER 2007

Reserved for Decision

MR C O'GRADY: I seek leave to appear on behalf of the appellant.

MR A HATCHER: I seek leave to appear as counsel for the respondent.

SENIOR DEPUTY PRESIDENT LACY: Yes, thank you. Leave is granted in both cases. The Transport Workers Union has raised an issue about the competency of the appeal. In the circumstances it might be appropriate if we deal with that issue first. Mr Hatcher?

MR HATCHER: Do you wish to hear me first?

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR HATCHER: Well, we say that the appeal is not competent. Firstly, can we note, having relied upon the written submissions filed for the appellant, that there's no suggestion that this is a jurisdictional appeal, therefore it necessarily turns on the question as to whether the decision under appeal or anything within it that is subject to the appeal can be characterised as I think we can leave aside award as an order. As we've said in our written submissions we think that given that this was an arbitration carried out under section 170LW as preserved as what I'll call the pre reform Workplace Relations Act we understand the position to be that the relevant provision is section 45(1)(d) of the pre reform Act, and we cite the authority of AWU v Tristar in paragraph of our written submissions in that connection, although I don't think at the end of the day anything turns upon that.

So it is incumbent in order for the appeal to be competent for the appellant to demonstrate that his Honour, Senior Deputy President O'Callaghan made an order when he in his decision expressed his views as to how the part time conversion provisions of the agreement, which I think is colloquially referred to as EBA VI, should operate. We say that upon a reading of the decision it's clear that no order was made. And to make that good can I ask the Commission to turn to the decision which appears in the Appeal Book at volume 1 at page 4 and following, and in my version it's behind tab C, although I'm not sure whether that's relevant or not.

Now, firstly, just taking the Commission to paragraph 1 on Appeal Book page 4, the last sentence, the Bench will see that his Honour identified the nature of the dispute that was before him, and he used these words:

This dispute involves differences between the parties over the extent to which EBA VI requires the conversion of a certain number of part time employee positions to full time positions at the Adelaide Airport terminal.

Then moving on to paragraph 4 of the judgment, his Honour recorded that in April 2007 the parties agreed that the conciliation process had been exhausted and that consistent with the identified clause of EBA VI a number of matters should be referred to the Commission for arbitration. And there's two matters. The second matter is not relevant because it's not the subject of Qantas's appeal, that is, his Honour made certain conclusions about that and that's, as we understand it, not under appeal.

The first matter is the number of full time permanent employee conversions required under the agreement. Now, the Bench would have seen from the judgment and the submissions that EBA VI contains a clause 18.5.2 which, subject to certain criteria, requires Qantas to convert part time positions to full time positions. And in effect the contention of my client was that the criteria had been met, that is, circumstances had arisen whereby a requirement had fallen upon Qantas to convert the number of positions. Qantas resisted that both as to whether any position should be converted and, if any were to be converted, as to the number.

And then in paragraph 7 on Appeal Book page 5 his honour records that the two matters he identified in paragraph 4 were the subject of arbitration on 6, 7 and 8 August. Now, then can I turn to paragraph 21 of the judgment which is on Appeal Book page 7. And this paragraph in the first two sentences summarises the position advanced by my client below. In paraphrasing, that we argued that a number of part time employees exceeded the cap with a consequence that Qantas was required to convert, and we contended that the number to be converted, subject to some confirmation calculations, was 24.

So my client was in the dispute in general advancing the position that Qantas was required under the terms of the agreement to convert 24 positions from part time to full time. And there's additional contentions advanced by my client below in the paragraphs which follow, which are not currently relevant. And going over to Appeal Book page 8 at paragraph 25, the Commission will see that Qantas's position in response is recorded, and again I don't think I need to elaborate upon that.

Then can I ask the Commission to turn to paragraph 32 at Appeal Book page 14. And this is of significance in terms of the submission of competency. His Honour said this, correctly, as follows:

There is no suggestion that the TWU is seeking an order that a certain number of full time positions should be created. Rather what is sought by both parties is endorsement by the Commission of approach on methodology which ultimately allows the parties to agree on a number if any of full time conversions.

SENIOR DEPUTY PRESIDENT LACY: What does that mean?

MR HATCHER: I'm sorry, your Honour?

SENIOR DEPUTY PRESIDENT LACY: What does that mean?

MR HATCHER: What it means is that before the Commission or, indeed, the parties could be in a position to determine precisely how many if any positions could be converted there needed to be resolved a difference between the parties, which is being re-agitated in this appeal, as to how the criteria for part time conversion should be applied in practice. Can I give this example? It's not the only issue which was before his Honour, but can I give this example, and it's elaborated at length in the written submissions.

That there was a difference between the parties as to the time period upon which the criteria should be assessed. In short, Qantas contended that the approach that should be taken is that the criteria should be assessed in an annual calculation period calculated by reference to each employee's anniversary date, that is an anniversary day from their date of service. We had taken a different position and had performed the calculations on that basis, and that took the first year of the operation of EBA VI.

SENIOR DEPUTY PRESIDENT LACY: But the proper characterisation of that difference was a dispute over the meaning or the application of the agreement wasn't it?

MR HATCHER: In part we've characterised it, as you would have seen from the written submissions, slightly differently. We certainly accept that issues of interpretation or construction arose, but as I'll demonstrate there was also an issue of practicality here, that is, in the context of a clause which in its drafting did not give a lot of detail as to how it was to be applied in practice or the machinery by which it was to operate. There was really a need for the Commission to identify a practical way in which the parties could give effect to the clause.

For example, read literally the clause required hours to be calculated for each individual day by day over a period of a year. And there was a broad acceptance I think that in certain aspects that was simply an impractical task, that some method of averaging might be needed. So certainly issues of interpretation or construction were involved, but overlaying that was the need for the Commission to identify a practical way in which the parties could give effect to this clause and work out what the number of conversions if any was.

So that's the characterisation we seek to give of the task that was confronting his Honour. And it was to be done in this context. That what it was hoped - and this was in a position expressly put forward by Qantas, and in the end it was the approach which the proceedings followed - was that by identifying a methodology the parties could then go away, sit down and do the calculations and hopefully come up with an agreed number of conversions, and if there was still a dispute then come back to the Commission for further conciliation and then, if necessary, arbitration.

So it was never the case that this hearing and this decision was going to be determinative by itself of the number of conversions that were going to occur.

SENIOR DEPUTY PRESIDENT MCCARTHY: It seems to be what Qantas is said to have said in paragraph 27.

MR HATCHER: That's right. The way the proceedings went forward is that Qantas had not done any calculations at all and were pressing for the issue of methodology to be, as it were, sorted out by the Commission before any calculations were done. My client had done calculations but had done different calculations depending upon different ways in which the clause was applied. So one outcome, the third outcome we advance had the highest number, I think it was 24, and then there was a cascading series of numbers below that depending upon the various permutations you could give to the operation of the clause.

SENIOR DEPUTY PRESIDENT LACY: But isn't it the case that the reason Qantas didn't do any calculations was because it disputed the construction which the TWU placed upon clause 18.5.2?

MR HATCHER: Yes. I should qualify that. Qantas didn't do any calculations because - I'm hope I'm putting accurately what they put below - Qantas didn't do any calculations because it thought it would be more fruitful for the issues of methodology to be sorted out before the calculations were done.

SENIOR DEPUTY PRESIDENT LACY: But the issues of methodology require construction didn't it of the relevant clause, 18.5.2, or clause 18 in its entirety I suppose to some extent?

MR HATCHER: Well, we've conceded that there were constructional issues arising, there's no doubt about that. But what we've put is overlaying that was a need to give the clause some sort of practical operation which people could actually apply in real life, that is, there was a theoretical - if you read the clause literally even between the competing constructions it put an impossible task on the parties to actually find a way to work out what the numbers were in practice, and I think there was a concession on both sides that some aspects would need to be averaged.

But leaving that aside, I don't quarrel with your Honour's proposition that there were issues of construction involved in the dispute. The qualification we make is that there was another level on top of that as to the practical method both to do the calculation and resolve the dispute hopefully without further arbitration about calculation of numbers. And by the way, even to the extent that there was a dispute about interpretation, that of itself we say is not determinative of the question of whether his Honour made an order.

Then can I turn to - I'm sorry, I was at page 14 of the Appeal Book. This really summarises the point I was making in subparagraph 1 of 33, and this is the three issues which his Honour identified as arising from the issue which is the subject of the appeal. His Honour characterised it in a way which we respectfully agree. He said it was:

The extent to which the agreement provisions enabled a determination of a methodology ...(reads)... at clause 2.3.

So there was an issue about whether the dispute clause allowed the process. The process his Honour described was a determination of a methodology relative to the practical application of clause 18.5.2. And we say that when the Commission reads the judgment it should bear those words in mind, as it were, defining what his Honour was trying to do by way of the decision making process.

SENIOR DEPUTY PRESIDENT LACY: So are you saying the nature of the dispute as notified in the TWU application changed in the course of the proceedings?

MR HATCHER: No. What I am saying is that this proceeding was merely a step along the way of the outcome which the TWU hoped and still hopes to achieve, that is, absent agreement, an order from the Commission that Qantas is required to convert 24 positions. And that's the point. That was the issue that was notified. That was always the intended outcome of the ultimate issue in dispute. But what this decision was, was in effect an interlocutory decision to deal with a preliminary issue before the issue of actual numbers and people being ordered to covert actually arose.

SENIOR DEPUTY PRESIDENT LACY: So are you suggesting then that the end point from your client's point of view is an order that Qantas convert 24 part time positions to full time positions?

MR HATCHER: Yes, absent, obviously absent agreement. And the starting point of the process identifies that, but we say that Qantas was required to convert a number of positions. The case we advanced was meant to achieve that end, but this was in effect an interlocutory or preliminary decision before one got to the stage because, as we've side, we've done alternative calculations, Qantas had no calculations, even our calculations were subject to confirmation of certain factual issues.

Then can I take the Commission to Appeal Book page 33 in the judgment and to paragraph on that page 150. There there's reference to the objectives of the parties which his Honour had really summarised. I think I've taken the Commission to that. His Honour records that irrespective of the expiry date the parties both agree that EBA VI provides a licence for them to reach a further facilitative agreement given that arrangements - with arrangement of part time hours and full time conversions. In effect his Honour was opening that up as a way for the parties to finally resolve the matter.

And then if you go to - there's a matter dealt with at 151 which is not the subject of the appeal, but note that below Qantas asked his Honour, in a way opposed by us, but asked his Honour to in effect exercise a general industrial discretion as to the issue of how many positions should convert. And that again demonstrates that at least so far as the contest below was concerned it wasn't confined to any issues of construction. We submitted below that it wasn't open to the Commission to exercise discretion in a way which didn't give effect to or departed from the provisions of the agreement itself and, as that paragraph shows, his Honour declined to follow the Qantas invitation. And then in paragraph 153 his Honour says this:

I intend to use the discretion available to the Commission at clause 12 of EBA VI ...(reads)... dispute resolution procedures.

Et cetera. So again that's demonstrative of the point I made before, that is, his Honour characterised what he had done as proposed certain approaches to the application of the clause, and that was for the purpose of the parties going away trying to apply that to try to resolve the dispute between themselves. And then 154 deals with the issue in other locations in Australia. But 155 again emphasises further options that might be available between the parties to resolve the issue, and they're set out in four dot points. And then finally at Appeal Book page 36 at paragraph 180 his Honour says this:

I have set out in this decision the Commission's findings with respect to a methodology ...(reads)... in the first instance.

And that clearly at least implicitly recognises that further arbitration may be necessary. And again in paragraph 181 his Honour recognises that further differences might arise in the future, and he identified options to resolve those. So what one sees from that is the characterisation I've already given to the Commission, that is that this is in effect an interlocutory or preliminary decision about issues of construction and issues of practicality going to the methodology of how the parties might resolve this dispute.

Ultimately my client was seeking 24 conversions either by agreement or order. This decision was a step along the way. His Honour proposed or found that certain methodologies were appropriate to the practical application of the division. What is absent is anything in the decision of a binding or determinative nature.

SENIOR DEPUTY PRESIDENT LACY: You say that he purports the need to - well, he does in fact give a decision about the interpretation or the construction of clause 18.5.2.

MR HATCHER: Well, I can only repeat the answer I've given before, your Honour.

SENIOR DEPUTY PRESIDENT LACY: Well, there's a decision there about that isn't there?

MR HATCHER: There's a decision.

SENIOR DEPUTY PRESIDENT LACY: And that's a binding decision, a final decision.

MR HATCHER: Well, no, we don't accept that.

SENIOR DEPUTY PRESIDENT LACY: You don't?

MR HATCHER: No.

SENIOR DEPUTY PRESIDENT LACY: Well, if you don't accept that how are you going to work out the methodology? How are you going to apply the methodology if you don't accept that final decision on the interpretation of the clause?

MR HATCHER: It's not a final decision as to the matter. What is open to the parties to do is two things. Firstly, in the light of the decision, have discussion amongst themselves as to how the issue might be resolved in the light of that decision. That might be through agreement, in which case the matter is resolved. If the matter is not resolved the parties then return to the Commission for further conciliation, we seek an order that 24 positions convert.

SENIOR DEPUTY PRESIDENT LACY: But if we follow through that process logically, Qantas disputes the finding, or his Honour's construction of the clause. If the course was to go the way you're suggesting, Qantas could go through that whole process and then at the end of all of that you would say there's a final decision, Qantas could then appeal on the issue of the construction of the clause.

MR HATCHER: Well, that's a matter of - that might be a matter going to convenience, but that's not relevant to jurisdiction. Whether my submission is a convenient one or not is beside the point. Either it's right on jurisdiction or it's wrong.

SENIOR DEPUTY PRESIDENT LACY: Yes, okay.

MR HATCHER: And our only point is that this is a preliminary decision to assist the parties. Ultimately if it's necessary the parties will go back and get a final order from the Commission, and at that stage either party will have full rights to mount an appeal as to the whole case. In any event we suggest that that would be more convenient, that is, dealing with any appeal in the whole rather than trying to deal with it on an interlocutory basis.

COMMISSIONER EAMES: If you go down that track I hope we'll still be around to help you.

MR HATCHER: Yes. Well, this has already been marred by a number of requirements, so I hope it won't be marred further. Really Qantas is forced to contend that what his Honour was doing was engaging in a judicial function, not an arbitral function, a judicial function of making some sort of declaratory order about the meaning of the agreement. Now, one would need express words in the relevant dispute settling clause in order to support that result. Can I take the Commission to the dispute settling clause. The agreement is in volume 2 of the Appeal Book and the relevant clause is in volume 2 at page 540. Yes, it's clause 12, and the arbitral provision is contained at 4.3 at the foot of the page, and it says this:

Provided that the dispute settlement procedure is followed the parties are committed to the Commission ultimately having the capacity to determine any matters in dispute.

And then these are the words that are of significance, that is:

Matters that have been traditionally regarded as arbitral matters or as traditionally coming within the Commission's jurisdiction.

Now, one could not think of words less apposite to confer on the Commission jurisdiction to make binding declarations of legal right under the terms of agreement. I think it would be trite that that sort of function, a judicial type function, is not something which is traditionally regarded as an arbitral matter and is not something which traditionally comes within the Commission's jurisdiction. Certainly what the Commission does in arbitrating matters is often on the way along a route to an arbitral outcome, people need to make an interpretation of a provision of an instrument, but that's never regarded as by itself a binding, legally binding declaration of the meaning of the agreement.

This is what Qantas needs to contend. We say his Honour was on the route to an arbitral outcome, that is, how many positions should convert, and in the normal way that arbitrations occur that needed him to look at the provisions of the agreement and how they operate. That's not to say that he either had jurisdiction or was actually going about making some sort of binding order about the meaning of the agreement which stood in isolation of the ultimate arbitral outcome.

SENIOR DEPUTY PRESIDENT LACY: Is this a section 170LW type of clause?

MR HATCHER: Well, yes. The arbitration was conducted pursuant to that provision, that is, the clause was regarded as conferring jurisdiction on the Commission pursuant to section 170LW of the pre reform Act. There's no issue about that. But of course the Commission's jurisdiction in that context is the jurisdiction conferred on it by the clause itself. Now, one doesn't get out of that that the Commission, absent reaching an arbitral outcome, the Commission can in isolation make an order declaring the meaning of an industrial instrument.

In our submissions - I don't think I need to go to the cases, they're well known, but in our submissions we've referred to a number of decisions. In paragraph 3 we refer to the Minister for Employment and Workplace Relations v CPSU for the meaning of an order in a legal context, that is, a command by a court or tribunal requiring something to be done being a command for the court or tribunal as authorised by law to hear. And we say the decision upon any perusal of it does not have anything of that characteristic.

And then in paragraph 5 we refer to what we regard as the relevant authority, that is, Woolworths v Miller, in paragraph 8. I might just provide the Commission with copies of that judgment. The relevant paragraph is paragraph 8 on page 3, where the Full Bench here referred to two authorities, BWIU v Glass, and the second authority of Wright v Australian Customs Service. The first was good for the proposition that orders made in the course of arbitration appellable whether formally expressed to be an order or not, and we don't obviously have any demur from that, but it's not an issue of form, it's an issue of substance.

As to the second authority that was good for the proposition that a decision which finally disposes of a proceeding before the Commission is an order for the purposes of section 45(1)(b). Again the decision here is clearly not of that characteristic. In fact it did precisely the opposite. It was designed to facilitate further resolution of the dispute rather than dispose of the matter. And then the Full Bench says this:

While the Senior Deputy President's determination was not expressed to be an order it is clear that it was intended to have binding effect. Furthermore, it constituted a final determination of the matter. For those reasons the determination is an order for the purposes of section 45(1)(b).

Now, on the basis of our analysis of the decision under appeal we say that the decision has neither of those characteristics, certainly not a final determination and, for the reasons we have outlined, not intended to have binding effect in the way that an order does as defined in Minister for Employment and Workplace Relations v CPSU. And finally in the written submissions we have - I'm sorry, in paragraph 5 of the written submissions we refer to a recent Full Bench case of Qantas v TWU, where there was a competency argument mounted again by my client, by me in fact. That was an appeal from a recommendation. That got in as a jurisdictional appeal. There's no issue about a jurisdictional appeal here. But the Commission rejected the notion that that was an order, and the reasons are set out in the quoted paragraph, that is, created no legal obligation for rights, did not or did not purport to dispose of the proceedings or purport to bind the parties.

SENIOR DEPUTY PRESIDENT LACY: There's a recent decision that suggests otherwise about recommendations isn't there?

MR HATCHER: Well, if there was I didn't cite it in that case. I didn't find it, perhaps usefully.

SENIOR DEPUTY PRESIDENT LACY: That was only last week I think.

MR HATCHER: I see, yes. Well, I might have missed that, your Honour. I don't know that decision.

SENIOR DEPUTY PRESIDENT MCCARTHY: Recommendations out of arbitration.

MR HATCHER: Yes. In any event the principles are clear, that is, it needs to be dispositive of the proceedings. That doesn't arise here. And needs to have legal effect. Not here. So for those reasons we say the appeal is not competent. And finally in the submissions we refer to a case relied upon by Qantas in its written submissions, Telstra v CPSU - that's CEPU sorry. That's an entirely different type of case, perhaps were some orders for reinstatement were made.

SENIOR DEPUTY PRESIDENT LACY: Well, actually orders weren't made.

MR HATCHER: I'm sorry. The outcome, the determination was that persons were to be reinstated, and a Full Bench characterised that as being in the nature of an order, and clearly that was intended to bind the parties and did dispose of the matter in that case. So that, with respect, doesn't assist the appellant, and there's no comparison to what is brought here. If it please the Commission.

SENIOR DEPUTY PRESIDENT LACY: Thank you, Mr Hatcher. Mr O'Grady?

MR O'GRADY: Your Honour, can I commence with the position that was put by my learned friend that there's no jurisdictional issue arising out of our appeal. In my submission that's not right, and it's not right for two reasons. Firstly, if one has regards to grounds three and four set out in the notice of appeal, and this concerns the counting of non relief hours, what is put by my client in those submissions is that the learned Senior Deputy President failed to act judicially as he was required to do by making a determination contrary to the evidence, or failing to make a determination on the evidence.

In my submission if those grounds are made out that would give rise to a jurisdictional error of the type that would fall under section 45(1)(g) of the pre WorkChoices Act. The second basis upon which we would say that a jurisdictional issue arises, particularly in the light of the submissions that my learned friend has just made, is that if the learned Senior Deputy President was not making a determination or an order in the decision there arises a very real question about what he was doing, with the greatest of respect.

My learned friend has taken you to clause 12.3 of the dispute resolution procedure. That's also conveniently set out at page 9 of the Appeal Book, which is the decision of the learned Senior Deputy President. But if what the learned Senior Deputy President was doing was simply declaring what the certified agreement means in a judicial way, it's clear that that's not a function that the parties have conferred upon him under clause 12.3. If it's not a function that the parties have conferred upon him under clause 12.3 it's something that he did not have jurisdiction to do.

And that point is made good, your Honours and Commissioner, by the Qantas decision that my learned friend referred to just prior to sitting down, the one concerning the recommendation, which is (2007) AIRC FB915. And if I could hand up copies of those decisions. I have folders that have these decisions in them, tab 15. The Bench will see at paragraph 7 that there were two bases upon which Qantas submitted that an appeal lay, namely under 45(1)(b) and 45(1)(g), and the Bench will see that the Full Bench held, as my learned friend has said, that the recommendation made by the learned Commissioner was not an order and therefore there was no ground of appeal under 45(1)(b).

However, the Bench then went on to examine what the dispute resolution procedure provided for, and found that there was no conferral of a power to make a recommendation in that dispute resolution procedure, and that the Commissioner having purported to make such a recommendation had acted beyond jurisdiction in those circumstances, and upheld the appeal on that basis. So our position is that there is an order that has been made by his Honour in this case, and I want to take the Bench to his Honour's decision in a moment to explain why we say that's the case.

But we say that if he hasn't made an order then what he has done is not something that he was empowered to do under clause 12.3, and that raises a further jurisdictional basis for the appeal. Can I turn to the decision of the learned Senior Deputy President? And before I take your Honours and Commissioner to that can I simply put to the Commission the way it was put to his Honour by my learned friend in his opening before Senior Deputy President O'Callaghan. And this appears at page 43 of the Appeal Book, where he said at PN274:

The material and submissions filed today by Qantas do not seem as it were to take issue with the mathematical calculations carried out by my client, but certainly what has emerged are methodological differences based upon differing interpretations of the various provisions of EBA VI which need to be resolved.

We think that what we have been able to do is work out the correct number of conversions which need to be carried out depending upon the answer your Honour gives to various aspects of the controversy at least as between the parties. So it was clear that in opening my friend was asking for matters to be resolved, to be determined, and then what would happen was that the figures if you like would be plugged into the determinations made by his Honour to give rise to the number of conversions that should follow.

It is analogous in my submission to the sort of situation that one often confronts in the courts where there is a splitting of the case between the issue of liability and quantum, where the court determines liability initially and then once that's done the parties go away and do their sums, and if they can't reach agreement they go back before the court and the matter is then determined as to quantum as well. Now, whilst it may be said that that is, strictly speaking, an interlocutory order, in my submission it remains nonetheless an order of the type that is amenable to an appeal under section 45(1)(b).

If I can take your Honours briefly to the decision to just go through the language that was used by his Honour that, in my submission, makes it clear that his Honour wasn't simply putting forward some suggestions for the parties to consider, but rather was determining the construction issues that had been placed before him. You will see, and to an extent these have been covered by my learned friend, but in paragraph 4 the learned Senior Deputy President talks about the matters that are being referred to him for arbitration, and he says in paragraph 7 that these are the matters that are dealt with in his decision.

SENIOR DEPUTY PRESIDENT LACY: What was that, paragraph which?

MR O'GRADY: Paragraph 7, this is at page AB5. And are dealt with. It's not language of a preliminary kind in my respectful submission. Rather what his Honour is saying throughout his decision is that this is what I have decided, this is the way you guys are to apply these provisions, and to that extent his Honour's determination should be seen as intended to be binding upon the parties as to the application of the various clauses that his Honour was considering.

In paragraph 32 of the decision once again his Honour uses language that, in my submission, is consistent with him determining the construction issues that were alive between the parties. In the second sentence he says:

Rather what is sought by both parties is endorsement by the Commission of an approach or methodology which ultimately allows the parties to agree on a number if any of full time conversions.

His Honour is saying I will determine liability, you can then determine the quantum.

SENIOR DEPUTY PRESIDENT LACY: But that sounds as though the parties have come to some sort of an arrangement or an agreement about what was the meaning of the provision and was simply seeking the Commission's endorsement about the approach that should be followed. I mean, the word endorsement is a little confusing, well, to me anyway.

MR O'GRADY: Yes. Well, it's clear, and I can't imagine there being contention with this proposition from the other end of the bar table, that the parties were at odds about the methodology, and even the most preliminary or cursory reading of the transcript shows that there was evidence led going to why they were at odds about the particular methodology. In my submission what his Honour means by the word endorsement in that sentence is that he is to endorse or sanction a particular construction which is then to be applied by the parties. It's clear from the decision in my submission, your Honour, that there was no agreement as to the methodology to be applied, and that the parties were simply seeking the Commission to endorse in any other sense of the word.

COMMISSIONER EAMES: The comparison between paragraphs 4 and the first item that's noted and 32 seems to create some confusion doesn't it? Initially the Senior Deputy President seems to be saying that the matter that was referred is the number of full time permanent employee conversions required.

MR O'GRADY: Yes.

COMMISSIONER EAMES: In 32 it talks about the methodology and not an order. There is no suggestion that the TWU is seeking an order that a certain number of full time positions should be created. What do you say about that?

MR O'GRADY: Well, in my submission the particular question that was referred to the Commission for determination is of course not conclusive, that one goes beyond the way in which the question was formulated and see exactly what the Commission did. And if authority is required for that proposition it's found in a case by the name of Gridcomm, which is a Full Bench decision. It's tab 10 of the authorities that I've handed up, and at paragraph 18. It's a Full Bench of Vice President Watson, Senior Deputy President Drake and Commissioner Roberts.

SENIOR DEPUTY PRESIDENT LACY: And it's paragraph?

MR O'GRADY: Paragraph 18. And you'll see in the bottom third of that paragraph:

We do not believe that the formulation of specific questions for determination by the Commission is the touchstone ...(reads)... by the disputes settlement procedure of the agreement.

But more substantively what I would say, Commissioner, is that whilst various issues had been referred to his Honour, what his Honour then did was make this distinction between liability and quantum and then purported to determine the matters that went to liability, if I can continue to use that analogy. At paragraph 39 his Honour considered clause 12.3, and what his Honour finds in paragraph 39 is that:

A determination of methodology relative to the practical application of clause 18.5.2 is within the jurisdiction bestowed on the Commission by 12.3.

Now, that finding in my submission makes it very clear that his Honour was determining these issues, because on no reading of clause 12.3 did his Honour have the power to do anything else. He didn't have the power to make a recommendation, he didn't have a power to simply put forward suggestions as to how these clauses might be read. At paragraph 68, this is a matter that of course I'll have to deal with in more substance in due course if the Commission proceeds to hear the appeal. But you will see in paragraph 68 in the second last sentence he speaks in terms of having decided that the evidence of Mr Ross about the approximate four vacant lines in existence should be taken as the position of Qantas at that time. It's not a preliminary determination, rather it is a final determination in my respectful submission.

Paragraph 70, once again there's language:

I have concluded that whilst the concession that there were approximately four vacant lines as at 19 May should be maintained.

And that language of having concluded issues is repeated when his Honour summarises what he's done in this decision at paragraphs 175 to 177. In respect of all of the issues that his Honour has purported to determine his Honour expresses himself as having concluded various matters. Now, in my submission it could not be said in that context that it would be open for my client to simply say, well, we want you to think about it again, or we want you to go back and properly determine these issues. His Honour is determining these issues for the purposes of the arbitration that was before him.

And that's consistent with what he also says at paragraph 180 where he sets out in his decision the Commission's findings with respect to the methodology. Once again, in my submission, what his Honour has done is he has determined the matter. My friend took you to a number of authorities on the meaning of order, and we don't differ with him that they are the appropriate authorities. We simply say that on a proper reading when one considers what his Honour has done in this decision, they make good the proposition that an order here has been made.

I don't know whether he handed it up but it's in our material, the decision of Building Workers Industrial Union v G James Glass and Aluminium, which is at tab 13. And if I could take the Bench to page 231, and you'll see in the second substantive paragraph there's a reference to ex parte Custom Officers Association of Australia. And then the Bench continues:

That case dispute any such view the granting of leave to intervene subject to conditions was there had to be an appellable order. The case must be considered having decided that orders made in the course of arbitral proceedings are appellable.

And then in the next paragraph:

The authorities to which we refer on this appeal support the view that orders including adjudications, directions and determinations made during the course of proceedings which bind the parties affected thereby are properly the subject of an appeal.

Now, in my submission given the way in which his Honour has expressed himself then it is clear that my client is in the context of these proceedings bound by the determinations and adjudication that his Honour has made as to the construction of the EBA. In those circumstances the better view in my submission is that what his Honour has done is made orders in respect of them. The next authority I'd take the Commission to is Wright v Australian Customs Service which is at tab 12, and if I could take the Bench to 351 you will see at the middle of the page, which is the foot of paragraph 12, the Bench says:

However, what in our view is abundantly clear from these decisions is that a decision of a member of the Commission that effectively disposes of the proceedings before the Commission at least in a final manner is properly to be described as an order for the purposes of 45(1)(b) of the Workplace Relations Act.

Now, in my submission the issues of construction before his Honour were effectively disposed of in the decision that is subject to appeal. And finally could I take the Commission to the Woolworths v Miller decision which, as I understood it, my friend handed up, which is behind tab 3. And you will see at page 238 and onto 239 the Full Bench considers a number of authorities including the authorities that I've taken the Full Bench to here. And you will see at the foot of that discussion which appears at the foot of paragraph 8 on page 239 the Full Bench make the following observation:

Whilst the Senior Deputy President's determination was not expressed to be an order it is clear that it was intended to have binding effect. Furthermore, it constituted a final determination of the matter. For those reasons the determination is an order for the purposes of section 45(1)(b).

Once again whilst the Senior Deputy President in this case hasn't expressed himself as making an order, in my submission he has clearly intended that his determinations as to the construction were to have binding effect and applying the approach set out in those authorities should be seen as an order for the purposes of bringing an appeal under 45(1)(b). The other submission I would put is that it is clear from a reading of his Honour's decision that it was either an express or implicit requirement that the parties confer and apply the determinations that his Honour has made in respect of the construction of the agreement.

One of the points made in the Minister for Employment and Workplace Relations v CPSU, the Community and Public Sector Union v State Library of Victoria case, which my learned friend took you to and which is behind tab 14, is that a direction requiring parties to confer is an order in itself for the purposes of section 45 - well, I should be more accurate - for the purposes of section 114 of the current Act, because there we were dealing with a ministerial review. But as I understand the Full Bench's decision they say that order should be construed as having the same general meaning under section 114 as it has under section 120 and, indeed, under section 45(1)(b).

And you will see at paragraph 30 the Full Bench holds, at the middle of the paragraph, that:

A direction requiring a party to do something is a form of order in that quintessential sense, albeit that it is clearly interlocutory.

So in my submission even on my friend's analysis that all his Honour was doing was setting down guidelines for further discussions, and the parties were then to go away and apply those guidelines, it would appear that there is an order that is at least implicit in his Honour's reasoning. That of course isn't the primary position that we take. The primary position we take is that on its proper construction his Honour has determined the issues of construction. In those circumstances what his Honour has done is rightly viewed as an order.

SENIOR DEPUTY PRESIDENT LACY: Mr O'Grady, what do you say about the point made by Mr Hatcher that the form of the dispute resolution clause only confers jurisdiction on the Commission to deal with disputes in the exercise of its arbitral powers as commonly understood, or those terms commonly understood?

MR O'GRADY: The starting point in my submission is that the words in brackets in clause 12.3 were designed to - weren't designed as a limit on the Commission's jurisdiction, but rather have to be read in context of the second part of the clause, which is all about preventing the parties from taking jurisdictional objections to the private arbitration as conferred in clause 12.3.

So in my submission those words aren't designed to limit the powers of the Commission but rather to ensure that the Commission had the full range of powers that it would have had or would have had traditionally. The second submission I would put, your Honour, is that as my learned friend acknowledged, it is not uncommon for the Commission in discharging its arbitral functions to determine matters of construction and that's what he's done here. The third submission I would put is the one that I raised at the outset which is that if my learned friend's right about that, then it raises a fundamental problem as to the jurisdiction that the Commissioner was discharging when he made the determinations that he made in the decision. If your Honours will bear with me. If the Full Bench pleases.

SENIOR DEPUTY PRESIDENT LACY: Thank you.

MR HATCHER: The problem with the submissions that have just been made is that in effect they equate a decision with an order, that is, they seem to proceed upon the premise that if one decides something one is thereby making an order and we say that's a fallacy. If the legislature had wanted to make any decision appellable it would have said so in terms. But the appeal rights conferred both under the pre reform Act and the current Act are narrower than in fact one finds and those courts and tribunals decisions are appellable, but here the legislature has said well no, we're confining it to orders for relevant purposes.

So if the tribunal decides something, for example makes a finding of fact, that can be characterised as a determination or decision, but the mere fact that a determination has been made about something or a finding has been made about something is not to say that the tribunal has made an order. What is necessary to characterise something as an order is that the Commission has commanded something to be done and in all the submissions Qantas has just made one misses any identification of what it is that Senior Deputy President O'Callaghan commanded the parties to do, which of course he didn't do anything.

There was a resort at the end of the submission to the notion that he'd made a direction to confer. We weren't taken to any part of the decision of where such a direction to confer was made.

SENIOR DEPUTY PRESIDENT LACY: I think Mr O'Grady said it's either express or implicit in the decision.

MR HATCHER: Well, yes. Well, the first point wasn't made good and I can't identify where one finds an expressed term, a direction to confer. There's certainly an expectation that the parties will confer but no direction. Well, let's assume for the moment it's implicit, that doesn't get Qantas home on the appeal it wishes to make before this Commission. That is, Qantas aren't appealing a direction to confer. They're appealing the substance of the whole decision. That is, the mere fact that there might have been a direction to confer allows that to be appealed in terms but that doesn’t get you a right of appeal as against everything else in the decision. So I'm afraid, with respect, that doesn't assist the matter.

My friend made an analogy of processes which occur before courts, that is, between findings as to liability and the quantum. It's a useful analogy and it demonstrates the fallacy in Qantas's reasoning. When courts split cases in that way and make findings as to liability they don't make an order as to liability. The final order can only be made after quantum has been determined, all the matters in dispute have been resolved and a monetary order is made.

SENIOR DEPUTY PRESIDENT LACY: That interlocutory step is appellable subject to the discretion of the court.

MR HATCHER: Well, it's appellable because courts usually are given the power to hear appeals against decisions full stop and that's the distinction I make here, that one doesn't usually find in statutes providing for appeals a restriction to an order that is in the usual case and perhaps I speak for more of a New South Wales perspective.

SENIOR DEPUTY PRESIDENT LACY: I think, with respect, the Federal Court rules actually provide that interlocutory decisions are not appellable save by leave of the court.

MR HATCHER: The interlocutory question is a different point. But the point is the decisions, that is judgments, leading aside riders about interlocutory issues, are usually in express terms appellable. In this statute they're not, only orders are, and one can't really equate a decision about something, a finding about a particular matter, a finding about liability, a determination as to liability as being an order absent any capacity to characterise it as commanding something to be done by the parties or disposing of the proceedings.

SENIOR DEPUTY PRESIDENT LACY: How do you reconcile that with the principle stated in the BWIU case?

MR HATCHER: That case - - -

SENIOR DEPUTY PRESIDENT LACY: That findings made along the way are appellable?

MR HATCHER: But that case, with the greatest respect, merely begs the question because what it says is they have to be binding on the parties, so really it begs the question what type of order or what type of decision made along the way is binding on the parties. So for example, when you grant intervention to somebody that's a binding order which allows somebody to exercise certain rights in a proceeding which they would otherwise not have. If you adjourn a proceeding, that's a binding order which, as it were, puts a halt to a case and moves the case to another day to be heard. If you dismiss a proceeding you are thereby determining all the rights and liabilities which might arise in the case.

SENIOR DEPUTY PRESIDENT LACY: But you concede, don't you, that the determination made by his Honour in relation to the application of the 18.5.2 is binding on the parties?

MR HATCHER: I haven't conceded that at all.

SENIOR DEPUTY PRESIDENT LACY: So in any event, if Qantas so wished, it needn't confer with you on the basis of which his Honour directed?

MR HATCHER: That's right and if they choose not to do that we'll be back before the Senior Deputy President asking him to make an order. I mean that's very point I'm making. His Honour was trying to facilitate a process of agreement but as his Honour's decision amply demonstrates, if agreement does not occur the parties will have to come back before him and subject to further conciliation, there will be further arbitration and we'll be asking for orders.

DEPUTY PRESIDENT MCCARTHY: In this legislation, Mr Hatcher, a comparison might be where there is a determination that a termination of employment was harsh, unjust or unreasonable but no order issued until the remedy was considered and an order issued out of remedy.

MR HATCHER: That's the sort of liability quantum sort of thing, or liability remedy, the sort of distinction which my friend drew which I think assists our point. That is, I haven't heard it happen, but if for example a member of the Commission chose to hear an unfair dismissal case by way of dividing it up between whether the dismissal was in broad terms unfair and then there was a separate hearing perhaps as to whether reinstatement should be granted, the fact that the Commission, for example, found that dismissal was harsh, unfair and unconscionable is not an order. It's a determination along the way to making ultimately an order perhaps that reinstatement occur or that an amount of money be ordered.

SENIOR DEPUTY PRESIDENT LACY: I think the difference is that the Act actually says if the Commission makes a finding that the termination was harsh, unjust or unreasonable it may give one of these remedies.

MR HATCHER: That's right. It's a finding along the way to the order which the Commission makes. Now, of course if the Commission declines to make a finding that the dismissal was harsh, unfair or unreasonable then it dismisses the proceedings and that's an order which is appellable, but that's the classic case of a determination or decision along the way to making orders but which of itself is not an order and there's a rationality behind that. That is, interlocutory appeals are never encouraged and the idea is that when the order is made that's when all the appeal rights are true and you have one single appeal as to the whole proceedings.

One of the points we've raised if this goes to leave if we're wrong about competency is that this is really a preliminary interlocutory type decision and the appeal should not be heard now. We should wait if and when his Honour makes an order. But the same analysis applies to the question of competency. It demonstrates why at this stage no order has been made.

COMMISSIONER EAMES: Hasn't the Senior Deputy President made three conclusions in his decision and then determined what the methodology is that should be used and that if the parties then still have difficulties with all of that they can come back to it, hasn't that been determined?

MR HATCHER: Well, it's been concluded or decided, you can use whatever language you like. But what hasn't happened is that an order has been made, that is, an order commanding the parties to do something or an order that binds them as to their legal rights.

COMMISSIONER EAMES: And the case law indicates that we don't necessarily need such a determination to achieve that end.

MR HATCHER: I'm sorry, I don't understand that question.

COMMISSIONER EAMES: There was a case cited earlier by Mr O'Grady.

MR HATCHER: This is the BWIU case I think.

COMMISSIONER EAMES: Yes.

SENIOR DEPUTY PRESIDENT LACY: There are other cases as well, Wright's case. You don't actually have to use the word order.

MR HATCHER: No, there's no issue about it. This is an issue of substance, not of form. There's no issue about that and as I - - -

COMMISSIONER EAMES: You can only go to the words that are used by his Honour in his conclusion and you say that if you go to paragraph 180 that that isn't a determination which has the characteristic of an order.

MR HATCHER: That's what we say because it's not that his Honour hasn't reached a conclusion about the matter or made a decision about the matter, he has, but that's not enough. If a decision was appellable the statute would have said so. It's not enough to say that he's decided a question that's before him.

SENIOR DEPUTY PRESIDENT LACY: What he goes on to say in 180:

If there is a further dispute about the application of this methodology -

Well, it appears there that the dispute would not thereby arise out of the agreement but the application of what he has determined is the methodology.

MR HATCHER: Well, I take a contrary conclusion on that, that his Honour recognised that what he's done is necessarily far from being determinative of the matter and that it may have to come back before him unless this decision assists the parties to reach an agreement. That's what, with respect, we say that paragraph means, that it's a clear indication that what his Honour was doing was not determinative of the dispute before him. It's a facilitative step. The only thing I want to deal with additionally relies to some degree on this being a jurisdictional appeal. The first point was that one aspect of the argument may raise a jurisdictional ground. It will be difficult for me to deal with that without actually in effect debating the whole point and I'm not sure that's a useful exercise.

Conceivably if Qantas was wholly right on that point and we don't think it is for the reasons we've submitted, if it was wholly right on that point arguably, at best, it might be jurisdictional, but that doesn't get it home for its appeal in whole. The second point really tries to re-characterise the nature of the proceedings, so Qantas says, well, if we've said the appeal is not competent that may raise a jurisdictional question. Well, we only can proceed upon the appeal that Qantas has actually mounted. Qantas has not mounted an appeal that the whole exercise carried out by his Honour was beyond jurisdiction. That's not their appeal and accordingly that's not a matter which the Commission in our respectful submission needs to consider. Thank you.

SENIOR DEPUTY PRESIDENT LACY: I'll stand the matter down for 15 minutes and my associate will advise the parties when we're ready to return.

<SHORT ADJOURNMENT [11.23AM]
<RESUMED [11.47AM]

SENIOR DEPUTY PRESIDENT LACY: Thank you for that. We have reserved our decision on the question of competency and the parties should proceed with the appeal and we will in the course of our reasons for decision deal with the issue of competency. Obviously if that is determined in your favour, Mr Hatcher, then we won't proceed with the rest of the matter, but the parties should proceed as though the matter is going to be dealt with.

MR O'GRADY: Thank you, your Honour. I take it the Full Bench has received a copy of the outlines that we filed pursuant to the directions?

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: Could I ask that that be marked?

SENIOR DEPUTY PRESIDENT LACY: Yes.

EXHIBIT #Q1 QANTAS OUTLINE OF SUBMISSIONS

MR O'GRADY: Thank you, your Honour. As the Full Bench will have seen, that sets out in a fulsome way the submissions that we put in support of the appeal.

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: And if I could ask the Commission to have regard to it. Can I turn to a number of matters that are raised both in that document and also in my learned friend's submissions and can I commence with the question of whether or not leave to appeal should be granted and in so doing can I refer back to and rely upon, if I can use that language, the submissions I put as to the competency of the appeal for the reasons that we say that there was an order made that determined an important issues between the parties. It is also my submission that it would be appropriate to grant leave to appeal. The test for the grant of leave to appeal has been summarised in a number of authorities but for convenience can I simply refer the Full Bench to the GridComm decision which is in the list of authorities and I think I took the Bench to before the break, behind tab 10.

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: And the Bench will see at paragraph 7 the test set out in CFMEU v AIRC is reproduced and relevantly leave should be granted if the Full Bench forms the requisite opinion, namely the opinion set out in section 45(2) -

The conventional considerations for the granting of leave, including whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Bench, or whether substantial injustice would result if leave were refused, supposing the decision to be wrong, are not replaced by a different test: rather, s 45(2) provides a further, and obligatory, basis for the grant of leave.

For the reasons that I have expressed with respect to the competency of the appeal point, in my submission the significance of the Senior Deputy President's determination with respect to the construction of the enterprise agreement is such that if the Bench forms a view that it is attendant with sufficient doubt and should be reconsidered, then in this case leave to appeal should be granted. It is the case that it is an interlocutory determination, but for the reasons that I have already attempted to put to the Full Bench it's an interlocutory determination that determines substantive issues between the parties. It's not merely a procedure determination and the authorities that I took the Bench to on competency draw a distinction between matters that are merely procedural and matters that are of substance.

In my submission notwithstanding the fact that it is interlocutory, the fact that it deals with matters of substance is an additional reason why leave to appeal should be granted here. Can I turn then to the substantive matters and deal first with the issue of the anniversary year which is dealt with in grounds 1 and 2 and to put this in context can I take the Bench to the decision of Deputy President Hampton as referred by the Senior Deputy President which is behind tab 6 of the folder that I have handed up to you. This decision was handed down on 5 July 2006 and concerned an exemplary employee. What the parties had agreed to do was to select an employee for the purposes of illustrating how the interaction between the two relevant instruments would work and in order to resolve the dispute over the application of EBA VI.

The Deputy President sets out the relevant provisions of EBA VI at paragraphs 5 through to 9 and they're the same provisions that are of course considered by his Honour in the decision that's appealed from and he goes on to deal with the provisions in the facilitative agreement which his Honour determined was in force as at the time that EBA VI was made and you will see that there is a considerable commonality between the two instruments insofar as they deal with this issue of conversion of part time to full time work. There is in paragraph 7 you'll see that clause 18.5 is set out and relevantly in 18.5.1 it provides for a minimum engagement of 20 hours per week with a minimum daily engagement of four consecutive hours to apply, that the number of rostered hours will not exceed 30 hours per week. In 18.5.2:

Average hours of over 12 months shall be between 20 and 30 per week. A part time employee shall not exceed an aggregate of ...(reads)... the position converts to full time.

Now, the reason for the differential between part time employees in the first year and part time employees in successive years reflects the fact that in the first year a part time employee does not accrue annual leave and so if one multiplies 52 by 30 one comes to the cap of 1560. Employees engaged in this work accumulate five weeks annual leave, therefore if one multiplies 47 by 30, my recollection is one comes to the cap of 1410 that applied in subsequent years. There were similar arrangements in the pre-existing facilitative agreement and these are set out in paragraph 11.

SENIOR DEPUTY PRESIDENT LACY: Is the facilitative agreement superseded by EBA VI?

MR O'GRADY: Yes.

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: And the issue concerning anniversary dates and the reason why I have taken the Bench to this decision is the issue regarding anniversary dates concerns the interaction between these two instruments because we say that one applies EBA VI to part time employees from the time that it was made but that people who were in Australia here who had already been part time employees when EBA VI was made, their accrual hours is governed by the facilitative agreement. As I understand it, my friend's submissions are that you don't focus on the anniversary date of the employees concerned, rather time starts again at the time that EBA VI is made and then the count is reset and the employees are then assessed to see whether they've reached the caps that are in EBA VI and we say for the reasons that we've attempted to explain in the written submissions that there are a number of problems with that.

What his Honour Senior Deputy President O'Callaghan has done is a hybrid of those two approaches which we say also gives rise to some problems, but I'd like to explain what his Honour's done when I perhaps put it in context by going through what Deputy President Hampton stated. If I could take the Bench to paragraph 11 of Deputy President Hampton's decision you will see under the heading Specific Provisions there are similar caps put in place. The language slightly is different but the substance of the caps are the same -

Where total hours worked by permanent part time employees at Adelaide airport exceed ...(reads)... it will not result in the automatic conversion.

So what you have is the same cap but you have an exception that applies, namely, hours worked as described in paragraph 3 which was relief work for full time employees. The relevant distinction, if I could put it crudely, between the facilitative agreement and EBA VI was that under the facilitative agreement if you were performing relief work as described in paragraph 3 none of those hours counted towards the cap, whereas under the facilitative agreement, and this is dealt with in 18.6 which is set out in paragraph 8 of DP Hampton's decision for convenience - I apologise EBA VI. I mean to say 18.6 of EBA VI, 18.6.2, you will see that the way that relief work is dealt with is that when a person is performing that relief work one finds out what the average permanent part time hours on a roster at the time they were engaged to perform that relief work was and they get hours towards their cap based upon that average.

If I can take the Bench to paragraph 35 of DP Hampton's decision you will see he summarised the effect of EBA VI in paragraph 35 and you will see the last bullet point he refers to 18.9.2 and the averaging provision there and then in paragraph 38 and 39 he summarised the effect of the facilitative agreement. You will see at the foot of paragraph 38 and at the beginning of 39 he notes the difference, namely, under the facilitative agreement if performing the relief work none of those hours count as opposed to the averaging provision of 18.9.2. In paragraph 40 what he says is, dealing with the exemplary employee, Mr Hutcheson, that it is only with inclusion of all the elements of his hours as would be provided by EBA VI that his position would convert.

So Mr Hutcheson was a person who was engaged by prior to EBA VI being made, had accumulated some hours under the facilitative agreement, was continuing to accumulate hours under EBA VI and he says, well, it's only if EBA VI, if you like, applies to all of his hours that he would convert. If the last element, as set out in paragraph 35, is not included he won't convert. In my submission the effect of his Honour's determination is that Mr Hutcheson doesn't convert because what his Honour decides is that the facilitative agreement applies to the calculation of hours up to the time that EBA VI is made and that EBA VI applies from that time forth. That becomes apparent if one looks at - sorry, just bear with me. 49, and at the foot of paragraph 49 he says that he considers that -

the facilitative agreement ceased to be relevant for present purposes upon the making of the present Certified Agreement in October 2005.

And then he flags that he may need to hear further from the parties of the consequence of the approach, but his preliminary view is that the fairest application of the agreement will be to trigger the facilitative agreement as being relevant to service up until that time -

Such an approach would avoid the potential for different outcomes based solely upon an employee's anniversary, however there are no express transitional provisions within the Certified Agreement ...(reads)... it is appropriate to provide an opportunity for the parties to make additional submissions.

Then he states his conclusions -

Subject to further consideration of the issue outlined immediately above, I consider that the correct application of the Certified Agreement in the present circumstance is that the terms of the ...(reads)... I initially leave that to the parties to finalise with liberty to seek a concluded determination by the Commission if required.

Now, in my submission what his Honour has not done there is to say that the hours are reset at the making of the EBA VI. What his Honour is saying, consistent with the terms of both EBA VI and the facilitative agreement, that there is a focus on the anniversary year of the employee's employment, that one deals with the first year of employment and one deals with that because of the fact they haven't accumulated annual leave and counts up hours and then when they move on into their second year of employment when they will have accumulated leave, one applies a lower cap. But that for that part of their first year of employment that is under the facilitative agreement one applies the provisions set out in that agreement.

For that part of their employment that occurred after October 2005 one applies the terms of EBA VI, but there is no re-jigging of the year for the purposes of undertaking these assessments. That in my respectful submission is not the approach that Senior Deputy President O'Callaghan adopted with respect to this issue and if I can take the Bench to that. The issue of the anniversary year is discussed at paragraph 73 and following and this is at AB20. The Bench will see at paragraph 85 his Honour says:

The reference in clause 18.5.2 to "the first year" must necessarily relate to the first year of an employee's service with Qantas. The reference in clause 18.5.2 to "any successive year" must necessarily refer to years after an employee's first year of service.

And then he says:

These references do not establish that employment anniversary years must be applied in every case.

Now, we take issue with that for the reasons that we've set out in our written submissions and in our submission on applying the principles set out in Kucks and the other authorities on construction, when one looks at the way in which the cap is to operate, the references to the first year and the references to any successive year are clearly intended to indicate that the cap operates by reference to the anniversary of the employee's employment. Then his Honour says:

These references do not establish that employment anniversary years must be applied in every case. To do so would create an iniquitous vacuum in terms of hours worked by long term employees from when EBA VI commenced operation to that particular employee's anniversary date.

Well, in our respectful submission that's not right either. There is no reason why the clauses cannot operate in the way that DP Hampton foreshadowed that they might, namely, that over the course of the year one calculates the cap by reference to the facilitative agreement up until October 2005 and then one calculates the cap by reference to EBA VI from that date. The cap itself hasn't changed. All that's changed is the exclusion of a certain group of hours under the facilitative agreement has been removed and replaced by an averaging provision in EBA VI.

SENIOR DEPUTY PRESIDENT LACY: What is meant there by an iniquitous vacuum in terms of hours worked by a long term employee?

MR O'GRADY: To be honest, your Honour, we don't know. We say his Honour is wrong in having - his Honour clearly believed that there would be such a vacuum, but in our submission there is no such vacuum and his Honour was clearly led, we would say, into error in his attempts to avoid a vacuum. His Honour then in 86 flags that there is this hybrid approach that he is going to adopt which has regard to both the anniversary date and the agreement date, in paragraph 86. And he says in paragraph 87:

the first date upon which an assessment can be made about whether an employee has exceeded the cap so as to trigger a full-time position is 19 October 2006, being one year from the commencement of EBA VI. An assessment on this day is limited to employees not in their first year of employment.

Now, once again, by drawing a distinction between the dates of assessment of employees in subsequent years of employment and the first year of employment, we say there's no warrant for that in the provisions and he says in 88:

In the event that an employee was in their first year of service with Qantas when EBA VI came into effect, the aggregate hours over 12 months could only be derived by considering a full-year effect of the cap set out in clause 18.5.2. This means that 1560 could only be logically applied to employees engaged after 19 October 2005 such that it could be first measured on the anniversary date of their employment.

So what his Honour seems to be saying is that existing employees one applies the cap 12 months from the certification of EBA VI. Employees engaged after the certification of EBA VI one applies the cap 12 months from the anniversary of their employment and employees who are in their first year of employment but were engaged prior to the certification of EBA VI his Honour seems to have a third approach which is to apply the cap as at the anniversary of EBA VI by reference to the lower threshold applicable to employees working in subsequent years of employment and this appears in 89 and 90, and in particular 90 where he says after setting out his approach:

Exceptions to this approach exist in the case of employees who were in their first year of service on 19 October 2005, where the first definitive assessment against the cap could be made 12 months after their first anniversary date and the relevant maximum would then be 1410 hours. In the case of employees who commenced after 19 October 2005, the first definitive assessment could be made on the first anniversary of that employee's engagement and the relevant maximum would be 1560 hours.

So it would appear that what his Honour is saying is that if he had two employees, one who was employed on 1 October 2005 and who was employed on 20 October 2005, with respect to the second employee you apply the 1560 cap as at the anniversary date of his employment, 20 October 2006, with respect to the first employee you apply the cap on the anniversary on the certification of the agreement. But you don't apply the first year employee cap, you apply the lower cap of 1410 hours. Now, with respect, we say there's no warrant in the language used in the clauses for such an approach and we submit that the approach that was identified by DP Hampton which is one simply assesses the cap and it's the same cap under both the facilitative agreement and EBA VI, by reference to the criterion in existence at the time that the work is done is a perfectly sensible way of applying this agreement.

Furthermore, one effect of what his Honour has done is it deprives my client of the opportunity to appropriately manage the work undertaken by these employees with a view to applying the case set out in both the facilitative agreement and EBA VI. It's clear that EBA VI is designed to allow my client to engage part time employees but to impose a sanction if you like on my client if the hours worked by those employees exceeds a certain threshold, whether it be the higher cap for their first year or the lower cap for their second year. Given the language in the agreement, that's a threshold that operates by reference to the anniversary of their employment date by imposing a new anniversary period, by saying that, well, the threshold has to be recalculated by reference to the anniversary of the certified agreement.

My client is hindered in its ability to properly manage the issue of the allocation of that work in respect of those employees.

DEPUTY PRESIDENT MCCARTHY: But that doesn't necessarily follow, does it, work the other way counted and if on SDP O'Callaghan's approach you apply that, then there's a certain number of full time employees and obligation to have those full time positions for a certain period, isn't there, 12 months? There's no restriction on the number of part time employees, is there, unless I'm misreading or missed something?

MR O'GRADY: No, your Honour. The difficulty is that we are now in towards the end of 2007. EBA VI came into effect in October 2005. If my client has been managing this issue on the basis of the employee's anniversary date of their employment and we're now told, well no, that's wrong, that has an impact because we would have been allocating work on a basis that would not necessarily accord with the way in which we would have allocated it if we had have known that all hours disappeared if you like in a vacuum prior to - sorry, you reset the counter if you like upon the making of EBA VI and then you use that as your reference for the further calculations down the track.

The primary position is the one I put at the outset which is on the natural reading of the words in my submission our construction is to be preferred. The secondary submission is that they're capricious results that follow from his Honour's approach including the differential between the two employees I put forward as examples, one engaged in 1 October 2005 and one engaged on 20 October 2005. There are other iniquitous examples. For example, an employee who was on the cusp of reaching the cap as at 1 October 2005, according to his Honour's approach the counter would be reset and hours would start again from the time of the certification of EBA 16.

DEPUTY PRESIDENT MCCARTHY: It seems that the clause seems to be addressing its position, it's not employees.

MR O'GRADY: I accept that, your Honour, that is the case and there's a clear distinction drawn between employees and positions. What we would say in respect of that is this is a mechanism designed to manage the use of part time work in my client's business, the fact that we have this resetting of the count upon the certification of a new agreement is not something that emerges from the language used by the parties when they made EBA VI. I don't think I can take it any further than that.

DEPUTY PRESIDENT MCCARTHY: Does it go so far as to restrict the use of part time employees?

MR O'GRADY: Well, sorry, your Honour is correct. It doesn't go so far as to restrict the use of part time employees. What it does is provide that if - - -

DEPUTY PRESIDENT MCCARTHY: It obliges the number of full time employees.

MR O'GRADY: Precisely. That's a better way of putting it, your Honour.

DEPUTY PRESIDENT MCCARTHY: And on your approach that would be that the number of full time employees would be revisited every week.

MR O'GRADY: Well, it would be revisited when the anniversary dates of the employees concerned came to be considered.

DEPUTY PRESIDENT MCCARTHY: Yes, which would have to be revisited every week, assuming there's as reasonable number of employees that started at various times.

MR O'GRADY: Your Honour, I'm not familiar with the spread of when people are engaged. There may well be some - - -

DEPUTY PRESIDENT MCCARTHY: See, the reason I raised that is that there were 10 conversions, were there not, on the one day?

MR O'GRADY: There were.

DEPUTY PRESIDENT MCCARTHY: On your approach does that mean that there were 10 people that started on the one day?

MR O'GRADY: No, your Honour. The evidence in respect of those 10 people was that there was an awareness by my client about this issue and about the potential for caps being exceeded. There were discussions with the union and it was decided that we would convert 10.

DEPUTY PRESIDENT MCCARTHY: Yes, I see.

MR O'GRADY: But we don't say that there was an individual assessment of those 10 employees to say they're over the threshold. Sorry, just bear with me. There is of course a requirement in his Honour's determination to have regard to the anniversary dates of a class of employees, namely, employees engaged after the commencement of EBA VI, so the problems that your Honour has identified would still be there. Can I deal very briefly with some of the points made in the respondent's contentions, in paragraph 9 it seems to be suggested that his Honour simply wasn't construing the agreement but was applying in a practical way that might give rise to some discretion in respect of the obligations that he imposed.

In my submission the passage that's referred to by my learned friend this morning as to looking at - and indeed in the submissions of the practical application of 18.5.2 was a comment made by his Honour in the context of him having before him the potential of a MD(6) application and his Honour was canvassing whether or not he would have to go down that path or whether he could deal with the matter under 170LW.

SENIOR DEPUTY PRESIDENT LACY: It might have been the best way to deal with it.

MR O'GRADY: Well, it might have been, your Honour, but here we are. And his Honour did consider the issue of whether he was exercising some broad discretion subsequently when he rejected a submission that's not subject of appeal but it was put by my client below regarding a general discretionary approach to this issue and that appears at paragraph 146 and following and what his Honour says at paragraph 151 is that he would consider it would be inconsistent with the dispute resolution function of the Commission for the Commission to exercise an untried discretion in the running of an airport facility in a fashion contrary to the provisions of the certified agreement.

So in my submission his Honour was confining himself to the proper construction of these provisions.

COMMISSIONER EAMES: Paragraph 152 was prophetic anyway.

MR O'GRADY: Yes, yes, it was. In paragraph 11 of the respondent's contentions it's said that there's a possibility of a collision with the facilitative agreement and that would give rise to insuperable problems. Can I say at the outset that no insuperable problems are identified in the respondent's contentions and for our part we don't see why any insuperable problems would arise. The evidence below was that there are records kept of the hours worked by these employees. There is a difficulty in respect of some types of relief work that would not strictly fall within 18.6 being worked and being able to determine exactly how much of that work was done, but the calculation that I foreshadowed earlier that one could assess whether the cap has been reached by reference to the facilitative agreement up until 19 October 2005 and apply EBA VI thereafter we would say is one that is perfectly open to the parties to apply in the light of the records that are maintained by them. In paragraph - - -

SENIOR DEPUTY PRESIDENT LACY: Just before you go on, does Qantas actually identify a number of part time positions by some sort of establishment? Does it have an establishment of part time positions that it creates and changes from time to time?

MR O'GRADY: Sorry, your Honour?

SENIOR DEPUTY PRESIDENT LACY: Well, if it's not in the evidence it doesn't matter.

MR O'GRADY: I'm instructed there's a pool of part time employees that we have and as I understand it that does change from time to time.

DEPUTY PRESIDENT MCCARTHY: And the hours they work changes?

MR O'GRADY: Yes, although there is, I think, a degree of consistency with respect to the hours that are worked. In paragraph 12 of my learned friend's outline it's said that our approach would lead to two different and inconsistent methodologies must be applied in the same calculation period. With respect to my friend, whilst that sounds frightening when you say that up front, when you tease it apart and ask exactly what's being done in my submission it does not give rise to any cause for concern. The fact that we have an employee who straddles both the facilitative agreement and EBA VI and that one part of his year is worked out by reference to one formula and another part of his year is worked by reference to another, in my submission does not give rise to any great difficulty. One simply applies the agreement that was in force at the time for the relevant period.

SENIOR DEPUTY PRESIDENT LACY: Is the only difference in the formula the hours that are not counted?

MR O'GRADY: As I understand the situation that's the difference. That was the difference identified by DP Hampton.

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: And the cap of course remains the same. In paragraph 13 of my friend's submission it's said that we had impermissible regard to the pre-existing agreement. If I could simply direct the Bench to Short v Hercus which is included in the bundle of authorities that we've handed up and that's authority for the proposition that one of course reads these instruments in their context including the context of the instruments in existence when they were made. Here in my submission it would take almost a wilful judicial blindness to ignore the terms of the facilitative agreement when construing EBA VI and looking at the way in which that agreement was to apply to employees who were already engaged by my client. Of course there is a history that is outlined in the evidence that takes the matter back prior to the facilitative agreement, which is canvassed by DP Hampton.

SENIOR DEPUTY PRESIDENT LACY: But his Honour actually does take that into account, doesn't he? I mean he looks at the decision of Deputy President Hampton and does actually construe the provision in light of that decision.

MR O'GRADY: Yes, but in my respectful submission he misconstrues what Deputy President Hampton decided in that regard and what he does is, is pick up a part of what Deputy President Hampton said without looking at more fully at the paragraphs that I have taken the Full Bench to already where he talks about one agreement operating to the employees in existence at the time and then ceasing to have effect when EBA VI was made and that agreement applying from that point onwards and what he doesn't do is give due weight to the way in which Deputy President Hampton dealt with Mr Hutcheson, the example, because it's clear by flagging that Mr Hutcheson will only get up if EBA VI applies to the entirety of his employment and foreshadowing that that's not going to happen under the way in which he construes the interrelation between the two agreements, but his Honour saw that for that part of the year of Mr Hutcheson's employment that preceded 19 October the facilitative agreement would apply.

Now, that's not the approach that his Honour applies in the decision that's currently under appeal. Can I move to the second ground of appeal and this is dealt with - sorry, when I say second ground, it's ground 3 and 4 but it's the second limb.

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: This goes to the issue of counting non relief hours and the Qantas written submission is set out in paragraphs 38 through to 51 of the outline that has been filed by Qantas and the evidence that we rely on is set out in paragraphs 40, 42, 45 and 46 of that outline. Can I take the Commission very briefly to a part of the transcript which is AB351 which is in the second volume. I'm sorry, this is not the transcript. This is the witness statement of Mr Jefferis.

In essence, the issue here concerned whether there were spare lines and whether or not some averaging provision should have been provided for in respect of those spare lines for the purposes of calculating whether or not the cap had been exceeded and what Mr Jefferis said and Mr Jefferis was the airport manager at Adelaide Airport was that there were no such spare lines in paragraph 21 and his statement wasn't confined to the situation as at the time that he made his witness statement, but he had also looked at the data that preceded that and he went on to say that this had always been the case.

SENIOR DEPUTY PRESIDENT LACY: What does spare lines mean? Does that mean a position where no person has been appointed to it, something like that?

MR O'GRADY: It means that there's a position that no person has been appointed to that a part-time person is allocated to work, if you like and so what one would do and this is an issue that was also before Deputy President Hampton, what one would do is - - -

SENIOR DEPUTY PRESIDENT LACY: Average the hours of - - -

MR O'GRADY: Provide the hours and there would be a figure of 200 I think it is, sorry 219.5 hours that were then added to each employee for the purposes of assessing them under the cap. The difficulty with respect to this issue is that the position put by Mr Jefferis differed from the position that Qantas put in the proceedings before Deputy President Hampton and in particular a witness statement that had been filed by another employee of Qantas - sorry, the name escapes me, your Honour, Mr Ross. I am indebted to my learned friend. This witness statement is at page 254 of the appeal book and Mr Ross was a ramp service manager and he gave evidence of approximately four spare lines that he believed were in existence and that appears at paragraph 12 and following of his witness statement.

Now, Mr Jefferis was asked about the difference between his evidence and the evidence given by Mr Ross in the proceedings before Deputy President Hampton and he in effect said, well, if Mr Ross had come and asked me about it, I would have told him there are no spare lines and he didn't come and ask me and he said I've gone through all of the documents and on the assessment I've undertaken of those documents, there are no spare lines and that was in effect the evidence that was before his Honour in this proceeding.

Now, notwithstanding that evidence, his Honour did not act on Mr Jefferis' evidence. He didn't find Mr Jefferis was lying, he didn't find that Mr Ross's evidence should be preferred to the evidence of Mr Jefferis'. Mr Ross of course didn't give evidence in the proceeding before his Honour. What his Honour held in effect was that it would be contrary to the principles set out in section 110 of the Act to allow Qantas to depart from the position that was stated by Mr Ross in his witness statement and subsequently endorsed by those appearing for Qantas in the Hampton proceedings, in the proceedings before him and so he didn't in my respectful submission engage with the evidence of Mr Jefferis and in our submission, in adopting that approach his Honour fell into error.

Can I take the Commission to where this is dealt with in his Honour's decision and it's at paragraph 107 and following and at paragraph 110 you see he summarised the evidence of Mr Ross and the reference to 219.5 hours and the approach that his Honour adopted is dealt with at paragraph 60 and following and you see that his Honour rejects the submission put to him that some form of estoppel that operated on Qantas and we say his Honour was clearly correct in doing that and that appears at paragraph 66, but what his Honour then does is pick up an approach adopted by Senior Deputy President Kaufman in a case of Thomas v Logica Pty Ltd.

That is included in our authorities at tab 11 and the bench will see that that is a case concerning the settlement of an Mr Jefferis proceeding where notwithstanding having entered into a deed of release, the applicant wanted to pursue the unfair dismissal proceeding in the Commission and his Honour felt that having satisfied himself that the applicant in that case had not entered into the deed of release under any form of duress, it would be contrary to section 110 of the Ac to enable him to continue to ventilate his unfair dismissal proceeding.

In my submission, it's clearly a very different scenario to the one confronting his Honour in this case where there had not been a settlement of the cause of action that a party was attempting to depart from, but, rather, a party sought to adduce evidence that contradicted evidence that it had given in a different albeit related proceeding. Now, in my submission, my client having taken that course, it was incumbent upon his Honour to engage with that evidence and to base his determination upon it and it wasn't open to his Honour to simply ignore that evidence because he felt that that would be contrary to section 110 of the Act.

Clearly that evidence could be tested and, indeed, Mr Jefferis was cross-examined about that evidence and the difference between his approach and Mr Ross's approach was raised with him and if his Honour had, having heard that, concluded that Mr Jefferis was incorrect or didn't understand or any of those things, he might have been able to come to the determination that he came to about the existence of these vacant lines, but his Honour didn't take that course and in my submission he fell into error in not doing so.

Can I take the Commission briefly to the Tramways Employees Melbourne Award decision which is [1951] CthArbRp 528; (1951) 72 CAR 26? It's behind tab 17 of the material that we've filed. I should say, of course, that his Honour did rely on Mr Jefferis' evidence as a basis for moving forward, but his Honour felt that as at the time Mr Ross had described the situation, it should be governed by what Mr Ross had said in his evidence. Your Honours and Commissioner will be familiar with this authority. It's oft cited for the very simple provision that the Commission must act on evidence and this appears at the bottom of 27 and on to 28:

Although the court is not bound by the rules of evidence, this has never been held to mean the court would act without evidence. If a tribunal were to so act, obvious injustice and insecurities could result.

The authorities that have been referred to in our outline, namely the Australian Broadcasting Tribunal v Bond and Ex Parte Citicorp Australia are, of course, also authorities for the proposition that a tribunal is bound to act on evidence and that the determination must be supported by evidence and your Honours and Commissioner, you'll see in Bond at page 367 in the decision of Deane J, those matters are at point 5 of the page through to the top of page 368 and, of course, Citicorp is authority for the proposition that the Commission is bound to act judicially and a failure to do so would give rise to jurisdictional error.

SENIOR DEPUTY PRESIDENT LACY: Was Mr Ross not working for Qantas at the time of the - - -

MR O'GRADY: No, he wasn't, your Honour, and there was evidence about that. That's right, he wasn't working for Qantas. He was working for Jetstar. Can I take a point as an aside, your Honour, that when one has regard to the respondent's outline at paragraph 16, it seems to be suggested that we were bound by the - there's a different construction of what Deputy President Hampton is said to have decided in the preceding subparagraph, but in subparagraph (f) it's said:

We were bound by the outcome of that decision.

Now, if that be right and if what Deputy President Hampton decided or concluded amounted to an order for the purposes of section 45, then one would have thought that what Senior Deputy President O'Callaghan decided would also be an order and would also be binding. Can I simply refer to them without taking the Commission to them in detail some of the parts of Mr Jefferis' evidence that's set out in the appeal book where the basis for him saying that there were no lines appears and this is at paragraph number 631 which is AB86, paragraph number 638, AB87, paragraph number 662, AB89, paragraph number 704, AB93.

It is said in paragraph 18 of the respondent's submissions that there were various concessions made by Mr Jefferis. In my submission, that part of the respondent's outline does not reflect a fair reading of the transcript and if I could once again direct the bench to what we say are the relevant parts of the transcript. It's paragraph number 746, AB98, 794 at AB102, 821 at AB104 and in particular 823 to 824 at AB105 and in re-examination it's paragraph number 1000 at AB120 and 1004 at AB121.

It's clear that whilst there was some discussion between my learned friend and Mr Jefferis about how one would calculate vacant lines and what was meant by the term vacant lines, Mr Jefferis adhered to his view that there was not now and had not been at any relevant time vacant lines of the type described by Mr Ross in his statement. In any event, in my submission a fair reading of Senior Deputy President O'Callaghan's decision is that he didn't determine this issue of any concession made by Mr Jefferis. Rather, he determined it on the basis that he would not have regard to that evidence because of the previous stance that had been adopted by Qantas in the Deputy President Hampton proceedings.

Can I turn to the last issue which is the set off issue or the May 2006 conversions? This position can I suppose be simply summarised on the basis that if the union's case was that there were some 24 employees who had reached the cap giving rise to an obligation upon Qantas to convert 24 positions into full-time, we say that the fact that we did in May 2006 convert 10 positions should have been taken into account in assessing whether or not we remained under an obligation to convert a further 24 positions, that given that as has been pointed out in the course of the proceeding the positions aren't personal to the employee, one after having arisen at a figure of what the obligation was to convert the positions, one would have to necessarily take into account the number of conversions that had occurred to work out what obligation, if any, remained.

The basis of that submission is set out in paragraphs 21 through - sorry, in paragraph 52 and following of the submissions that were filed and I won't go through those matters. However, can I direct the Commission to the evidence that appears at paragraph number 883 to 887 which is AB110 to 111 and paragraph number 931 to 933 which is AB115? As was put to his Honour in the proceedings below, it would be open under the application of these provisions for my client to say, well, it looks like there are a number of employees who are going to meet or exceed the cap in this year. Rather than waiting until that happens, we are going to at a convenient time convert a number of positions, as satisfaction if you like of the obligation that has either arisen or will in due course arise and that's what we say took place.

His Honour doesn't appear to have been attracted to that proposition because his Honour appears to have felt that given the way in which he saw the cap operating and the anniversary date operating, there was not a sufficient nexus between the trigger date, ie. 19 October 2006 and the date when these conversions had taken place in mid-2006, some five months earlier I think was his Honour's language. Now, for the reasons that I've already tried to explain, in my submission his Honour was wrong about the anniversary date, but even if his Honour was right, there is no reason why my client isn't entitled to rely upon these conversions which were not contested as part of the satisfaction of any obligation to undertake further conversion under these provisions.

DEPUTY PRESIDENT MCCARTHY: Let me understand, those conversions were for two reasons, one where the cap, whatever it was, had been exceeded thereby requiring a requirement for more full-time positions and secondly in anticipation of that cap being exceeded, is that what you're saying?

MR O'GRADY: I don't think the evidence was put in precisely those terms. The evidence as I recall it, your Honour, was that there was an awareness of this issue and there was a dispute with the union about conversions and there were discussions and then there was a decision by my client to make the 10 conversions. Now, it is clear that the evidence of Mr Jefferis wasn't that he had gone through and done an individual assessment on the individual positions that were converted to see whether they had reached the cap, but in the light of the fact that these conversations aren't made by reference to the person who is the incumbent in the position, but, rather, the position - we say nothing flows from that. What we say occurred in effect was that there was an awareness that there would have been an obligation to make conversions down the track. We made these conversions at a convenient time with a view to at least in part meeting our obligations under the enterprise agreement.

SENIOR DEPUTY PRESIDENT LACY: If the accumulated part-time hours at that time warranted the establishment of 10 full-time positions, why would you set them off against something in the future?

MR O'GRADY: We're dealing with the same relevant period, as I understand the situation, your Honour. It's not said that the 24 conversions that are the subject of the union's application all arose after the conversions that we made in mid-2006. As I understand it, there's an overlap in the timing, so we say the union's gone to the Commission on the basis that on their figures there's an obligation to make 24 conversions. Now, of course, we don't accept that for a number of reasons. Even if we lose this appeal, we don't accept that for a number of reasons, including some elements of his Honour's decision below that we are happy to adopt and apply, but we say that if 24 or 10 or 15 was the right number, you still have regard to the conversions that took place in mid-2006. The union's 24 numbers as I understand it were all individuals who were said to have reached the cap during the currency of EBA6, so there is that if you like common temporal period. If your Honours please.

SENIOR DEPUTY PRESIDENT LACY: Mr Hatcher, would it be a convenient time to have the luncheon adjournment now?

MR HATCHER: Yes, your Honour.

SENIOR DEPUTY PRESIDENT LACY: Very well, we will adjourn until 2 pm.

<LUNCHEON ADJOURNMENT [12.52PM]
<RESUMED [2.09PM]

SENIOR DEPUTY PRESIDENT LACY: Yes, Mr Hatcher.

MR HATCHER: If it please the Commission, can I firstly address very briefly the question of leave to appeal? I already made some remarks about that earlier this morning and the Commission already has the benefit of our written submissions which deal with that subject. Can I just add two points? Firstly, the general principle is that appeals from interlocutory decisions are not encouraged. The fact that a decision is interlocutory is usually a strong discretionary reason why leave to appeal would not be granted.

I will just give a reference for that proposition. It's Comsec Trading Ltd v FSU (2004) 131 IR 237 at paragraphs 11 and 12. Can I perhaps qualify that immediately by saying that that principle is more usually applied to procedural type rulings, rather than a decision of this nature. However, my second point is that the way the principle applies itself here goes to more in the nature of a balance of convenience type consideration. That is to the extent leave to appeal arises, the Commission should consider, given this interlocutory decision, whether it's more convenient to deal with these matters now or whether it would be more appropriate to wait until the end of the entire process having regard to these two matters, firstly the possibility that the parties might reach agreement either between themselves or by conciliation or secondly that any final arbitrated decision will deal with all the matters in dispute, will involve a definitive outcome by reference to numbers and the like and will allow the Full Bench more comprehensively to deal with any issues which arise.

We say stated that way, the balance of convenience would suggest that this leave to appeal should not be granted now, but any appeal issue shouldn't be left until the completion of the entire process and, of course, in that situation, any issue of competency would presumably be beyond doubt. Now, can I just turn now to the appeal itself and I will deal with it in the three areas that my learned friend did.

SENIOR DEPUTY PRESIDENT LACY: Just before you do that, Mr Hatcher, you might come to this in due course, but on the point you've just raised about balance of convenience, what would be the practical difference in the calculations, do you know, if we were to decide that there was a determination or a decision that can be appealed and then to find and this is jumping a long way ahead, to find that his Honour had erred in the way in which he had construed the provision, what would be the practical difference in the numbers?

MR HATCHER: I can't be definitive about it. The difference will be substantial. That is, I suspect that if Qantas is right on all its points, the number of 24 goes down very low indeed, if not to zero. In the proceedings before the Senior Deputy President, my client had prepared some calculations based upon different permutations of what the outcome might be, but we haven't done one for each of the arguments now advanced by Qantas. In particular, and I am going to come to this shortly, the way Qantas advances its arguments now about the annual calculation period raises very real and we say insuperable problems as to how on earth you would calculate the numbers on that method.

We did an alternative calculation below based on anniversary dates, but assuming against our primary submission that EBA6 was followed retrospectively and that produced a somewhat lower number, but that number is known, but that's not what Qantas submits. It submits that you'd have an annual calculation date which might go back before the commencement of EBA6 and then you'd have these two different methods of applying within the same period for the reasons which I will come to in due course. That creates a nightmare if not impossibility as to how to actually work out the result.

I hope I've answered your Honour's question. The other variability is this, that at the time of the hearing below, as I understand the position and I make this submission on instructions, we had actually identified I think 24 positions which we thought were over the cap, had done numbers to show that those 24 had gone over the cap. I am instructed that some other positions have been analysed since that time and the 24 might be going up as a starting point, so there's a huge range of variability and it might be more useful and this goes back to my balance of convenience argument that if this thing is the subject of an order at the end of the day and the appeal is heard then, the Full Bench would be in a better position to know firstly what impacts these arguments do have on numbers, whether they're significant or whether they're insignificant and that will guide the approach which a Full Bench might wish to take about the matter.

As of now, the Full Bench is relatively uninformed as to the numerical consequences of these arguments as to whether they're individually significant or insignificant, although there's no doubt cumulatively that they are significant.

COMMISSIONER EAMES: I just knew you would give an answer like that. God knows where we end up with that.

MR HATCHER: Yes, perhaps the sheer complexity of this matter is relevant to leave to appeal or perhaps even competency. I say that facetiously. Turning to the annual calculation period issue, we say the essential question here is whether under the terms of EBA6 clause 18.5.2, that is the conversion provision, is to be applied by reference to the calculation period or periods which commence on and from the commencement date of the agreement itself, that's our position and the Senior Deputy President's position, or whether 18.5.2 is to be applied to calculation periods which may commence before EBA6 actually started, requiring some sort of straddling of the two agreements.

The Senior Deputy President rejected the proposition that annual calculation periods operating under EBA6 could start before the commencement date of the agreement itself and we say his Honour was correct in doing so. Before I turn to the reasons why we say his Honour was correct, can I just touch upon something which I raised in the context of competency earlier this morning, that is analysing what it was that the Senior Deputy President was doing? As I said this morning, although undoubtedly he was involved in issues of interpretation of the instrument, he was doing more than that and, in fact, to a certain extent trying to identify a practical way to facilitate agreement between the parties, a practical way in which the terms of this agreement could be applied. To illustrate that, can I just take the Commission to the judgment? This is at appeal book page 16 at paragraph 46 and in paragraph 46 his Honour said this and I don't think - I haven't heard Qantas take issue with this, he says:

I have formed a preliminary opinion that the provisions of clauses 18.5.2, 18.6.2 and 18.9.2 are worded so as to create ambiguity and uncertainty and in effect invite disagreement.

And then in the next paragraph his Honour said this:

An objective consideration of these agreement provisions, so is likely uncertainty about the extent to which clause 18.9.2 permits an averaging approach in the event that relief hours cannot be precisely determined.

And if I can stop there, his Honour made that observation because there was evidence which I will come to in a little while which showed that the records that would allow a precise calculation of hours with respect to each individual position under consideration just didn't exist and that to a certain extent, some sort of averaging approach which wasn't even contemplated in the wording of the clause itself needed to be adopted and then his Honour went on to say:

I consider that there is likely uncertainty or ambiguity about the definition of relief work contemplated by clause 18.9.2 with respect to employees on worker's compensation over long periods and there appears to be uncertainty and ambiguity with respect to the calculation of average permanent part-time hours on the roster for the purposes of clause 18.6.2.

And that was another issue going to the way in which as a practical measure the hours could be calculated, so although undoubtedly his Honour was partly engaged in interpreting or construing the relevant provisions, his Honour was also going beyond that for the reasons I've identified in trying to identify a practical methodology by which this thing could be made to work and that raises some issues about what the proper appeal principles are and it's in that context we say he was, although consistent with the terms of the agreement, exercising - undertaking a decision-making process in which he had a degree of latitude as to the result.

That is it's not simply a question of right construction or wrong construction. Because he was trying to work out what was practicable as well as what was consistent with the agreement, there was in the Coal and Allied terminology some degree of latitude and that requires in that context the appellant to demonstrate that the course taken by his Honour was not open to him on the materials before him and we say that's the proper approach as to how this matter should be resolved.

SENIOR DEPUTY PRESIDENT LACY: His Honour there was dealing with the TWU proposal foreshadowed application, wasn't he, under section 170MD(6)?

MR HATCHER: His Honour was, but the analysis and I've already referred the Commission to other provisions this morning which I don't want to repeat, that in the context of the decision as a whole and the other paragraphs I've taken the Commission to indicates that he was doing a bit more than just construing the agreement and when we refer to averaging, the averaging was going to an issue as to how the clause might be made to work, notwithstanding that the language of the clause made no reference to averaging occurring at all because that was a recognition of the fact that certain records simply did not exist.

Our summary of that proposition is that the Full Bench would not interfere with the decision unless it comes to the conclusion that the outcome reached by his Honour was not reasonably open to him. Now, turning to Qantas's submissions and I will start off with some of the things that were said in their written submissions. They criticise the Senior Deputy President for taking what they say is an overly technical approach and not giving effect to the parties' intentions and in that context they refer to the well known passage in the decision of Kucks v CSR and that decision is contained at tab 4 of Qantas's bundle of decisions and the relevant passage is at page 184 IR.

I won't read it, but in summary in that passage there was an enjoinder to try to give effect to the intention of the parties in construing an industrial instrument in context where the parties might not have been overly concerned about the legal niceties of the drafting of the document, but at the same time Madgwick J in that case said this:

The task remains of one interpreting a document produced by another or others. The court is not free to give effect to some anteriorly derived notion of what would be fair or just regardless of what has been written into the award ...(reads)... an arbitral body does what might fairly be put into an award.

In short, that means that although one tries to give effect to intention of whatever that is in this case, one can't do so independently of the language of the relevant provision of the instrument construed in the context of the instrument as a whole. In particular, these two rules of construction apply firstly intention itself is to be determined primarily from the text of the instrument itself, not from some assertion made in a submission and secondly, whatever you seek to characterise intention as, you can't take an approach which is simply inconsistent or unavailable in the words of the text.

Now, it would be a trite proposition, but we've given authorities in our written submissions to support both those propositions. Here we say what Qantas really does is to make a series of assertions about the parties presumed intentions, but, with respect, we must say that firstly those assertions are made without proper reference to the text of the provision which I will come to in a short while and secondly we note that there's been no reference to any admissible extrinsic materials which would support those submissions except perhaps the predecessor industrial instruments and we say that's not a permissible approach, that is to assert intention without proper regard to the text of the provision itself.

The essential problem with Qantas's approach on this issue of the annual calculation period as was recognised by his Honour below was that it sets up a collision between the quite different provisions of EBA6 and the facilitative agreement which followed. Although on their face the provisions have some similarities, for example the amount of the cap is the same for the first year employee and the subsequent year employee. As a matter of substance, they operate quite differently because the hours to be counted in order to reach those caps are calculated in a different way and in particular on the figures, a very large quantum of the hours which under EBA6 would count towards the cap under the facilitative agreement do not count towards the cap, so there's a collision between those provisions and those concepts if you proceed on the basis that you can have an annual calculation period which somehow requires both those concepts to be applied within the same period and that's the essential point which his Honour pointed out.

Can I just note that reference was made to paragraph 85 of the judgment in the oral submissions? This is at appeal book page 23 where his Honour made reference to this expression, iniquitous vacuum and can I just explain what we say his Honour meant by that? His Honour said in effect this, that if you have an annual calculation period which straddles the end of the facilitative agreement and the beginning of EBA6, you have a collision of the provisions which doesn't work and his Honour rejected that and I will come back to why we say his Honour was right to reject that and he says:

Otherwise, unless you have it starting at the commencement date of EBA6, if you base it on anniversary dates entirely, you then have to wait until each employee starts his or her anniversary date under EBA6 before you start counting.

And in effect his Honour said, well, that doesn't work either because then you end up with this big gap in the operation of the conversion provisions which clearly was not intended by the framers of the agreement and his Honour says, well, on another approach it just doesn't work.

SENIOR DEPUTY PRESIDENT LACY: Sorry, just explain that again?

MR HATCHER: Let me give an example. EBA6 commenced in October 2005. Let's say you have an employee with an anniversary date of 1 June of each year. Now, on an approach which doesn't have the whole thing starting in October 2005, you have some sort of annual calculation period entirely based on anniversary dates, you can do two things. You can try and do a calculation that's from June 2005 to June 2006, that is one that straddles the commencement date of EBA6.

For reasons which I will demonstrate, that brings the respective provisions of the agreements into collision and can't work and we say his Honour rejected that. The alternative is, again if you entirely base it on anniversary dates is to say, well, EBA6 started in October 2005, but because the straddle period doesn't work, we then have to wait until 1 Jun 2006 before we can start calculating again and that's where his Honour says, well, that doesn't work either because it leaves this vacuum from October 2005 to 1 June 2006 where the provision doesn't operate and clearly that's not what the parties intended. It's clear that the parties intended the agreement to operate from the date it commenced its operation, including 18.5.2, so, really, his Honour - - -

SENIOR DEPUTY PRESIDENT LACY: Could I just take that another step? If you had an employee who was wrongly classified under the agreement that preceded the 2005 agreement - - -

MR HATCHER: Wrongly classified?

SENIOR DEPUTY PRESIDENT LACY: Wrongly classified as an employee, not part-time, just a classification at a particular level and was being underpaid under that agreement and continued under the new agreement with the wrong classification and again being underpaid, that person would be entitled to sue for the entitlements under both agreements, wouldn't they?

MR HATCHER: Yes.

SENIOR DEPUTY PRESIDENT LACY: So the entitlement that is created by the preceding agreement continues notwithstanding that it's superseded by that agreement.

MR HATCHER: Well, I can't think of the provision, I think there's a provision under the Act which makes that clear, that is that entitlements under previous instruments are still in force, notwithstanding that they've been replaced by another instrument, but that doesn't with respect resolve the problem we have here because the entitlement - I withdraw that. It's not an entitlement. The provision here operates with respect to an annual calculation period and there's a question that under EBA6, the parties clearly intended that a new system was to apply that was different from the old system, that is there was a departure in the new agreement in terms of the methodology of calculating the hours from the old agreement.

Something new was determined upon and put in place and what Qantas tried to do is to say, well, no, despite what the clear intention was in doing that, we still don't start again from the date EBA6 started. We still have this period which straddles it and we try to mix and marry these two different provisions over a common annual period and we say firstly it doesn't work in terms of practicality, it doesn't work in terms of the text and accordingly it's to be rejected as the correct approach.

Can I deal with those two points we make, first of all the text and I take the Commission to the agreement itself, volume 2 of the appeal book at page 545. Firstly can I draw the Commission's attention to 18.5.1 in passing which provides for a minimum engagement of 20 hours and then it says the number of rostered hours will not exceed 30 hours per week and clearly that's a command by the agreement to the employer. Now, I say this in passing because my learned friend raised a point about how Qantas had to manage this and used that as a point to demonstrate or support his construction.

We make the simple point that if the employer obeys that command, there can never be a question of part-time conversion. That is, it's only if the employer in any week starts breaching the command that you go over 30 in any particular week that this problem could conceivably arise, so the management of the problem is quite simple. All Qantas has to do is obey the command at 18.5.1, that is no more than 30 hours in any week and this issue will never arise, so we think that's got no weight, but then can I turn to 18.5.2?

It refers to average hours over 12 months being between 20 and 30 and then in the following sentence it refers to the annual caps of 15.60 and 14.10 and it's clear that those caps are measured in aggregate by reference to a yearly period, an annual period, so can I ask the Commission to just bear that proposition, it sounds trite, but bear it in mind and if the cap in the annual period is exceeded then the position, though not the employee necessarily, converts to full-time. That has to be read then with clause 18.6 which is on page 547. It's headed:

Transfer of part-time employees to relief employment.

18.6.1 allows a part-time employee to agree to be transferred to full-time relief employment for a maximum period of 52 weeks then they return to the part-time role, then 18.6.2 says this:

The average permanent part-time hours in the roster at the time of the engagement to relief employment will count as the rostered hours when applying the cap on permanent employment.

So the effect of that provision is that it allows that type of relief hours to be counted for the purpose of the cap, but only in a certain way, that is by reference to average permanent part-time hours on the roster at the time of engagement. Now, it's clear that that needs to be read with 18.5.2, so that that methodology is to be applied for the purpose of the cap in the annual calculation period provided by clause 18.5.2 and the proposition is not qualified in any way. It's not suggesting that that proposition could apply only for part of the year or for months of the year.

It's a proposition which is clearly intended to work in conjunction with 18.5.2 in terms of the cap and the annual period. Now, this is where the collision with the facilitative agreement arises if you adopt Qantas's approach. They say that the annual calculation period can straddle the beginning of EBA6. If that's right, there is no qualification in 18.6 or 18.6.2 which could permit that methodology to only apply for part of the cap or for a certain period of the cap. It's clearly intended to apply for all of the cap, for all of the annual calculation period, so unless you read 18.6.2 which nobody asks you to do as retrospective, that is somehow overriding the facilitative agreement within its term as to the methodology, the collision arises.

We have on the one hand the facilitative agreement which Deputy President Hampton said applied right up until the date of the commencement of EBA6. On the other hand you have clause 18.6 which clearly contemplates and expresses the intention of the parties that those hours are to be counted for the whole of the calculation period. Now, of course, under the facilitative agreement, those hours aren't counted at all and that's where you have the clash between the two documents on the Qantas approach.

Now, if there had been some sort of transitional provision here or some sort of qualification which says, look, you don't follow this method if the calculation period pre-dates the agreement, you might find some basis for Qantas's approach, but without any transitional provision or without any qualification, unless you read 18.6.2 as retrospective, it can only refer to something which is happening, that is the whole calculation period happening post the commencement of EBA6, so simply put, the text, the language of the provision which is the primary starting point cannot support the Qantas interpretation and one will note that - I won't ask the Commission to read this, but at paragraph 50 of Deputy President Hampton's decision where his Honour considered but did not conclude as to how this would all work, his Honour expressly noted the absence of transitional provisions which would allow one to carry over from the other, so when one is looking at the intention of the parties, we say two things need to be identified.

First, obviously, the parties intended that a new regime for the measurement of hours would commence upon EBA6 starting and secondly they intended that regime to apply to the whole of an annual calculation period. We say that's what the parties intended and once you accept that, then Qantas's submission that you can have some calculation period extend beforehand with a mix and match of methods we say is not supported by the text of the provision.

COMMISSIONER EAMES: And that clock starts ticking at 1 July.

MR HATCHER: It starts ticking at the beginning of EBA6 which is October. It's accepted that the commencement is in October 2005 and that provides a fairly simple method for existing employees whereby you just calculate it on a single year for the whole lot of them, not this sort of every week having a look at each individual, particular individuals to see whether they've come to a certain number or not, so that's why it doesn't work on the text.

Secondly, it doesn't work in practicality. Can I just give firstly this evidence reference to the appeal book? Mr Bender who had actually been the one to actually try and carry out the task, at appeal book volume 1 page 74, paragraph number 537 expressed the view that this mix and match couldn't as a matter of practicality be done and let me demonstrate two reasons why. If I can ask the Commission to stay with clause 18.6.2, the relief hours are to be calculated by reference to the roster at the time of engagement to relief employment, so if you are engaged for a six-month period of relief work, then the way you measure that is to take the roster at the time you are first engaged to do the relief work and get the average from the roster at that time. That's what 18.6.2 says.

Now, consider this proposition. Go back to my example of someone with a 1 June anniversary date and try to apply Qantas’s mix and match constructions with that concept. Let’s say such a person has their anniversary date of 1 June and on
1 July 2005, that is before EBA VI commences, they move up to do some relief work. Now, under the facilitative agreement that relief work isn’t counted at all. Under EBA VI it’s counted, but EBA VI only counts it as at the commencement of the engagement to relief work which is before EBA VI. Now, they say that EBA VI can’t be retrospective so that provision, 18.6.2, can’t apply to you going up to relief work in a period that’s just before EBA VI commences and you’re left with this conundrum.

That is he’s done hours, or she’s done hours, of work which under EBA VI should be counted. 18.6.2 isn’t retrospective so it can’t apply its provisions to him moving up to relief work before EBA VI starts. And the result is that the hours can’t be counted at all, notwithstanding that EBA VI expressly said they should be counted. Now, it’s just a riddle which can’t be solved on Qantas’s approach. There’s a second problem. This is a practical problem. Under EBA VI relief work is counted, under the facilitative agreement it’s not. Under EBA VI other forms of work in full-time positions, which is not relief work, is counted and it is also counted under the facilitative agreement. So there’s this inconsistency.

A part of the problem is that Qantas apparently doesn’t keep records to distinguish between the two. Can I just take the Commission to volume 1 of the appeal book at page 97. At 742, this is cross-examination of Mr Jefferis, this was put to him:

However, ..... there’s this problem. That from these documents -

These are the records upon which the calculations were based:

- we can not tell when the employees were working under each situation under 18.9.2 is distinct from working up for some other reason. Is that right?

And in effect Mr Jefferis agrees and says not the particular individual. Now it’s put:

That creates a problem in terms of how we quantify hours worked by part-time employees other than is contemplated by 18.9.2 by individuals?---Yes.

Now, if I stop there facilitative agreement in effect those answers mean that you can’t actually identify by reference to the records how to calculate part of the hours, that is hours worked up in a full-time position other than on a relief basis. And as page 98 showed the only way you can resolve that is by reference to an averaging process, that is a bit of a guesstimate based upon averaging, as to how you might calculate that element. And we refer to paragraph number 744. It was put that you need an average and Mr Jefferis says that’s possibly the way of doing it. There’s reference to a Hampton decision in 745. And in 746 Mr Jefferis agrees with the proposition that he doesn’t disagree with the concept of averaging, but simply assert in this case that the average adopted in the Hampton DP’s decision was too high, correct and he said that’s correct.

And so we run into this problem, that under the facilitative agreement where you need to make that distinction the records don’t exist. It’s of less significance under EBA VI because you put it all together and we don’t have to make the distinction. Now, that’s one of the practical reasons why, and I was challenged to come up suitable problems, this is a second one, why this mix and match doesn’t work. Because Qantas hasn’t been keeping the records to allow it to work. It’s not surprising in that context, that is whether records to allow the separate component to be identified weren’t being kept, that EBA VI took a new approach and said we’ll count all of these hours and we’ve got a practical way of doing it and it’s set out in the agreement.

So we say for those two reasons it doesn’t work either as a matter of the text or as a matter of practicality and his Honour was correct in adopting the approach that he did. Can we just note that in their written submission Qantas raises the issue of his Honour’s argument allowing for some concept of lost hours to occur under EBA V. We reject that for the reasons we’ve set out in the written submissions. Can we just emphasise these points. The whole point is misconceived because it tries to interpret EBA VI by something which is said to arise under EBA V. That’s just impermissible as a method of construction.

Secondly as O’Callaghan SDP identified, the conversion is not an entitlement which attaches to individual employees in any event so nobody as an individual loses anything. It’s based upon an identification of when in truth a part-time has had so many hours worked into it that it’s moved into what is effectively a
full-time position. That’s what the provision in effect does. So that notions of people losing hours are not to the point. What is to the point is that there was a new EBA, a new system adopted and we say from the text of the provision it’s clear that that new system was intended to operate by reference to annual calculation periods from the commencement of EBA VI.

We’d also make this observation, that this notion that employees may suffer for lost hours is, we say, a bit misconceived. Of course we know that the effect of the submission is to reduce the number of conversions, not to increase it because we know that if Qantas is successful in pushing the calculation back into EBA V and the facilitative agreement, less hours get counted and less positions get converted. So one has to approach Qantas’s ..... about that issue with some reservation.
Mr Hutcheson is a classic example. As the decision of Hampton DP demonstrated, his position would not convert under the facilitative agreement provisions because not enough hours are earned.

But in the calculation of this case which are contained in the appeal book under EBA VI measured from its commencement date, Mr Hutcheson’s position does convert. So when they talk about lost hours, they talk about lost hours which can’t be recovered. They’re talking about lost hours which in effect benefit Qantas and not the issue of the number of conversations from the employee’s perspective. So for those reasons we say that those appeal grounds 1 and 2 should be rejected. Can I then move to the second area of the appeal. This is the counting of non-relief hours. Now, this point is expressed orally seemingly put in a slightly different way from the way it was put in the written submissions.

In the written submissions it seemed to have been put by Qantas that the Senior Deputy President made a finding of fact or an evidentiary finding which was not founded on the evidence. In the oral submissions that seemed to have shifted so that he simply disregarded evidence or did not make the finding about evidence which was before him. We say with respect that both of those propositions mischaracterise what the Senior Deputy President did. In effect his Honour decided not to revisit a matter that had already been the subject of evidence, submissions and a finding made earlier in the same dispute settling process by Hampton DP.

Now, the first point we want to make here is that as a matter of substance as distinct from form there is no doubt that the process undertaken by Hampton DP was part of the same dispute settling process. That is a matter came before his Honour, it concerned the issue of the number of part-time positions to covert, Hampton DP took that issue of a certain distance and left it to the parties to take further and then when the parties were still unable to resolve it themselves they came back before the Commission, but did so by way of a new dispute notification document.

But it’s absolutely clear in our submission that it was the same substantive matter. And just to confirm that, can I just take the Commission to the history of the matters recounted by O’Callaghan SDP at appeal book pages 6 and 7, paragraphs 16 to 18. So at 16 his Honour identifies the issue of part-time employment position conversion at Adelaide has having been deferred to the Commission for assistance in January 2006. This is paragraph 16 on appeal book page 6. Conciliation fails. Hampton DP then issues the decision, the first decision. Paragraph 17 his Honour summarises the findings in that decision. Then paragraph 18 it says this:

On 25 January 2007 the TWU requested the matter be relisted. On 30 January 2007 the TWU filed a fresh section 170LW application to the Commission on 30 January. This was done at my request given the Commission’s file in the earlier matter had been closed for some time.

So the issue of them being separate proceedings was only a matter of technicality. As a matter of substance it was clear it was the same matter, the same dispute about the same question of part-time conversions. Now, one of the issues that are raised before Hampton DP was the question of which hours counted for the purpose of the respective caps under the facilitative agreement and under clause 18.5.2 of EBA VI. This is discussed by O’Callaghan SDP at appeal book page 18 paragraph 61 through to paragraph 64 on the following page. And the Commission will note that at paragraph 64 there’s a conclusion from Hampton DP’s decision which is set out there, that is:

In terms of the basis to calculate the hours of reference to the last category. Non-specific full-time relief. I would accept that the proposed averaging hours worked the vacant full-time lines as proposed by the TWU is relevant and fair for present purposes.

So a finding or conclusion was made by Hampton DP about the very issue. And as his Honour correctly identified in 64 immediately following, central to Hampton DP’s conclusions about this average is Qantas’s acceptance of four vacant lines. And then there’s a quotation from the evidence of Mr Ross who was a Qantas ramp service manager at Adelaide Airport. That is he was the manager directly responsible for the ground crew including these part-time employees at Adelaide Airport at the time of Hampton DP’s decision. And of court that was Qantas evidence, that is evidence adduced by Qantas before the Deputy President and it was evidence relied upon by Qantas before Hampton DP.

I note that it’s suggested that Mr Ross’s evidence was “off the cuff” in the written submissions. It was not off the cuff. This was from a prepared statement of evidence adduced by him for the purpose of those provisions. Mr Ross was
cross-examined by my client in the proceedings before Hampton DP and can I just give this reference. It’s volume 2 of the appeal book page 287, paragraph number 303.

SENIOR DEPUTY PRESIDENT LACY: Sorry, what was the appeal book page number?

MR HATCHER: I’m sorry, I’ve got that wrong. I'll say it again. It’s volume 2, page 289 paragraph number 303.

SENIOR DEPUTY PRESIDENT LACY: Thank you.

MR HATCHER: In essence it was put to him that he said there was four vacant lines, but it was possible that there was more and then he agreed:

Possibly it could be more than four, yes.

So he’s tested on his own statement and in effect appears to have said it could be more than that. Then as is recorded in paragraph 68 of O’Callaghan SDP’s judgment, this is in appeal book page 20 volume 1, there was a positive submission advanced by the advocate for Qantas on the basis of that evidence which accepted the existence of four vacant lines and propounded an average to be calculated from the four vacant lines consistent with what the Transport Workers Union had done. Now, of course that submission was made by Mr Smith who was and is Qantas’s national industrial relations manager.

And as it’s clear on the basis of not only the TWU submission but the Qantas evidence and the Qantas submission, Hampton DP made a clear finding about the matter, the finding recorded in paragraph 64 of the decision under appeal on appeal book page 19. So this was, in effect, the concluded issue. Now, if this had happened in a court there’d clearly be an argument that res adjudicata or an issue estoppel had arisen, that is once the matter has been the subject of a finding then in the same or related proceeding you can’t just re-open it and have another go at shaping your case.

The Commission was persuaded to make a finding and did make a finding based upon what Qantas had said and what his witnesses had said on oath in that case. Now, when the matter comes before the Senior Deputy President the issue raises well, what do we do with this? Qantas, notwithstanding all of that history, just got up and said well we’re going to run a different case now, we’re going to run a different submission and we’re going to give different evidence. And there was no proper explanation as to why the submission was made the first time, contrary to the position Qantas now advances. There was no explanation as to why
Mr Ross on oath as the relevant manager gave the evidence he did which was now said to be totally wrong.

At the very least on Qantas’s own position they seriously misled the Commission. Now, we raise the position below, which O’Callaghan SDP accepted, that that situation can not be permitted. That is parties can not by their conduct, evidence and submissions induce the Commission to make a finding about the matter and then think about it somewhat later and say we’ll ignore that finding and that case we ran, we’ll now run a different case and ask for a different finding to be made. We say that’s not permissible. Now, of course there’s been debate about it for some years, but there is real doubt at least about whether documents of estoppel and the like apply in a tribunal such as this Commission, but there’s no doubt that there’s a provision in the Act which picks up similar concepts.

That’s the provision in section 110 which requires the Commission to act according to equity, good conscience and substantial merits of the case. And having visited this building for the first time today I’ve noticed that it’s plastered all over the walls of the building, so obviously an important principle.

SENIOR DEPUTY PRESIDENT LACY: We’d say core principle.

MR HATCHER: Core principle, that’s right. Not one that can be departed from at convenience. It was at the very least open to the Senior Deputy President to reach the conclusion that his Honour did that in light of that statutory principle which guides the Commission in all its affairs that Qantas, absent any explanation for its conduct let alone adequate explanation, should be allowed to do that, should be allowed to induce a finding to be made and then just walk away from it later in the proceedings. So we say it certainly can’t be said that his Honour erred. It’s not a case of his Honour ignoring the evidence of Mr Jefferis as can be seen in subsequent decision.

His Honour placed great store upon some of the things Mr Jefferis said. But in the context of that evidence having been given a positive submission was advanced and accepted and in all the circumstances Qantas could not simply change it case in that matter and that was accepted and we say that proposition was open to his Honour at the very least, if not a compellable proposition. His Honour in paragraph 67 refers to the decision of Kaufman SDP in Thomas v Logic Pty Ltd ..... It was submitted this morning by Qantas that that case involved a different factual proposition. It certainly did, but the principle is the same.

That is irrespective of whether estoppel strictly arises equity, good conscience and the substantial merits of the case apply as to whether parties are allowed to depart from positions which they previously entered into or advanced to the Commission. And we say that was of course eminently open to his Honour. In any event can we advance another reason why the Full Bench would not interfere with his Honour’s conclusions about this. And that’s before upon a close analysis of the evidence in any event, it’s a sham issue. It’s an issue which turns upon semantics. Mr Ross in his evidence which was - and by the way, his statement and his transcript were tendered without objection before O’Callaghan SDP, so he then says it came again before the Senior Deputy President adduced by us and wasn’t required for cross-examination, wasn’t objected to - Mr Ross said there were four vacant lines at least.

Mr Jefferis comes along and says well if you ask me there’s no vacant lines. How does one explain the difference between the two? Well, it turns out it’s really a question of semantics. Can I demonstrate why, and this involves going to some of the documents, but the explanation is fairly simple. Can I ask the Commission to turn to appeal book volume 2 at page 391. The document at that page and the following two pages is the list of full-time and part-time employees which were engaged at Adelaide on the ramp in May 2006. This is one of the series of documents on a monthly basis which were annexed to Mr Jefferis’ statement.

And you will see that the full-time positions are listed on all of 391 then going down to about point 5 on 392. So it gives the names of each of the full-time personnel at the time. And then you’ll see there’s a right-hand column call Roster Line, so that matches full-time employees against the roster lines which were established. And Mr Jefferis’ point was simply this, that because there were more full-time employees on that list than there were roster lines once you take out the leave lines, they’re the ones at the end at 7 marked Leave, once you take the leave lines out there’s more full-time employees than full-time lines and therefore there’s no vacant lines.

Now, the problem with that turns upon a peculiarity in the South Australian workers compensation laws. Apparently under South Australia you’re not allowed to dismiss somebody who’s been injured at work, not even if they’re permanently incapable of doing their job. They have to be kept on the books even if they will never return to the job they were doing at all before. And as it turns out a large number of the employees that are identified are injured employees who are totally incapable and will never be capable of doing the roster lines on the right-hand column. That is then what they call non-operational employees.

Now, here in May 2006 they were accounted as employees for the purpose of the list. If one goes back a bit later, for example at appeal book page 1359 - I’m sorry, that’s not right. If one goes back to, yes, appeal book page 359 this is the most recent list for July 2007. The employees had been taken out of the primary list and been segregated into a separate section. So you will see that at 358 there’s a same list of employees, roster lines again, but 10 employees had been pulled out and put in a separate section. That was because they were identified as being totally unable to do their jobs. Some of them were then assigned to do completely different jobs.

In the early one I took the Commission to those 10 were included in the list of employees. Now, it’s that group of people which explain the difference, that is if you assume that they’re non-operational employees that can’t do their jobs and you don’t count those vacant lines, if you somehow assume that because even though they’re injured and can’t do their jobs they’re still in the books and they’re operational, there’s no vacant lines. That’s the only basis of distinction. It’s a semantically debate. Now, in that context can I take then the Commission to some of the cross-examination of Mr Jefferis about this very issue and ask the Commission to turn to volume 1 of the appeal book starting at page 103.

At the top of page 103, this is cross-examination of Mr Jefferis, I took him to the document I just took the Commission to, that is the May 2006 document. And at 798 it was put to him that the list suggests that there’s 73 full-time permanent employees against 68 full-time lines and he agreed with that. I then pointed out the difference which I’ve just pointed out to the Commission, that is later documents had segregated non-operational employees and he agreed with that. And then I put to him that for instance you approach one needed to deduct those employees from the number 73 direct and it was put again in paragraph 801 you need to segregate them.

The non-operational employees, that is those employees who are never going to return and come back on the roster, is that correct?

And he agreed with that. Then I went through the names:

Mr Blackman was one of those that is never going to return from injury?---Yes.

He hadn’t worked a roster line for approximately 10 years.

He says:

That would be before my time.

So it goes back a long way. Mr Brown was one of those, Mr Childsworth was one of those, Mr Donald was in a training position that is not even on the ramp, he agreed with that, not available to perform his duties, Mr Fridum was one of them, and then on the top of page 104 there’s another six names. These are people who are all included in that list of names from May 2006. Then at paragraph number 815 this was put:

Now, can I suggest to you therefore this document shows that the number of operational employees, operational full-time employees, that is employees who are available on operational lines of the sort of leave circumstances talked about in 18.9.2 is not 73, but 62, correct?

And he agreed with that.

And on this document there’s only 62 operational full-time employees that cover 68 operational full-time lines?---Correct.

He agreed with that. It says:

And by the proposition that you agreed with earlier can I suggest to you this is a demonstrative existence of six vacant lines as of May 2006?---Correct.

Then he gives an answer which is unclear. And I put:

You agree with me?

He said yes. And then I ask this question:

So there’s six vacant lines at May 2006?---Correct.

Perhaps that was one question too many because then he said:

Well, I wouldn’t term them as vacant lines because you had those workers comp people currently employed by the company and paid by the company to do that work, they’re just not capable of doing it.

Well, there’s more lines needed than employees that are capable of doing them, correct?---That is correct, yes.

And if one stops there, that’s what this debate was all about. That if you exclude people who simply can’t do their jobs at any time because they’re injured, there’s vacant lines. Mr Jefferis changed the result by including these people as if they were on the roster even though they couldn’t do the job and when he did that there were no vacant lines. That’s all this issue turns about. And when one sees it that way you’ll see that the whole point is without substance. Qantas come to this conclusion and come to this evidentiary position that there’s no vacant lines, only be including people who can’t and never will perform the work in question.

So we say that that’s a reason why the Full Bench would not interfere with the finding made by the Senior Deputy President because even if you did come to re-determine the issue for yourself, you look at this evidence and say look this is a load of - nothing turns on this, the point they’re making is semantical, the simple point was it was at the relevant time that there are more full-time lines than people capable of doing the work in full-time positions. Now, O’Callaghan SDP did recognise that post the decision of Hampton DP position did change and it changed because additional full-time positions were created. And he made a finding to that effect in favour of Qantas based upon evidence post Hampton DP.

So Qantas can’t complain about that. But as to the period from the Deputy President’s decision beforehand we say that he was entitled to follow the conclusion reached by Hampton DP and in any event the evidence would not suggest there’s any reason to interfere with that conclusion. Now can I deal with the final point. This is the set off for the 10 employees. This is a fairly simple point. We say it’s a challenge to an evidentiary finding, an evidentiary founding which was clearly either correct or open for his Honour to make. The relevant part of the decision is at appeal book page 32 and volume 1 at paragraphs 141 to 145.

Paragraph 141 his Honour notes the evidence of Mr Jefferis detailing his understanding of the circumstances surrounding the conversion of 10 part-time positions to full-time positions and that indicates the decision of the 10 positions occurred in the context of disagreement about part-time conversions. And in the following sentence in 142 is the key sentence. His Honour said this:

On the evidence before me I am unable to reach a definite conclusion about the basis for these appointments. It may be that they reflected Qantas’s assessment of the aggregate of clause 18.5.2 was going to be conceded in any event. Alternatively the 10 conversions could have affected an endeavour to resolve the disagreement over part-time conversions. I see little point in further speculating the reasons for this, but I conclude that notwithstanding the reasons for these conversions the subsequently appointed working party was unable to resolve the continuing disagreement.

In effect his Honour said look, on the evidence I can’t find what the reason or basis for these 10 additional appointments was. In our submission Qantas had the onus before his Honour below to satisfy his Honour that those conversions were carried out as a result of or as a result of the application of clause 18.5.2. it can not be the case that the creation of any full-time positions or the conversion of any full-time positions for reasons independent of clause 18.5.2 can automatically be offset against any conversions that may be required. For example, if Qantas can converts 10 positions from part-time to full-time because it simply has more work that needs to be done, or because it’s obtained a new ground ..... contract, that is clearly a reason that is entirely independent of clause 18.5.2 and there is no reason why if subsequently 18.5.2 compels conversions to be made why you’d have a set off in that circumstance.

SENIOR DEPUTY PRESIDENT LACY: But do you agree with what
Mr O’Grady said about the 10 positions being created as a result of the TWU raising the matter?

MR HATCHER: No we don’t, with respect. And this is where his Honour was entitled to conclude that the evidence was such that he couldn’t really make a conclusion about the reason for the conclusion. Can I take the Commission to
Mr Jefferis’ evidence about it. It’s at volume 2 of the appeal book at page 354 paragraph 37. Mr Jefferis said this:

At this time Qantas was using quite a few part-time employees for full-time relief within the scope of clause 18.9.2 of EBA VI due to a number of full-time employees being on workers compensation.

Then there was a bit struck out and then paragraph 38:

Consequently and while the previous dispute proceedings were ongoing before Hampton DP a decision was made in or about April 2006 to convert 10 existing permanent part-time positions to full-time positions. The relevant employees were made aware of this decision by at least 2 May 2006 when they sent a memorandum to ramp services employees and sought expressions of interest given the ongoing dispute.

Now, that was Mr Jefferis’ evidence about the matter. Now one couldn’t - and we say they had the onus to prove that there was some sort of linkage. That’s as good as it gets for them and one can’t derive from that, that it either arose out of calculations under 18.5.2 or involved any concession that any conversions were or would be required, or that it was necessarily connected with the matter before Hampton DP which at that stage had not even been decided. I remind the Commission that the 10 was not a matter which was ever taken into account in that Hampton DP proceedings, even though it had already occurred by the time his Honour dealt with the matter.

There’s a memorandum which is referred to in paragraph 39. Perhaps I should take the Commission to that at page 449 of volume 2 of the appeal book. So it’s headed, if the Commission has that, it’s headed Expression of Interest Ramp Services Working Group. Now, this proposed a working group to try to, as we understand it, to resolve the matters that were before Hampton DP as well as related matters. So in the introduction in the sentence there the reference to a concern by staff about their future and there’s two dot points in relation to that. And then it says this:

As you are all aware there is currently a dispute lodged by the TWU with the Australian Industrial Relations Commission with a hearing date set for 1 and
2 June, a decision ...(reads)... at any time. To this end consistent with our enterprise agreement are we following a working group to review options.

So if I can stop there, the working group is to try and practically resolve the issue which was then going before Hampton DP. And the only reference to the conversions of this document is then told in a dot point. It says:

The following ..... will need to be discussed and resolved.

And then it says:

Even though 10 part-time to full-time conversions have been approved there will still be a need for part-time staff to relieve in full-time positions. It will be necessary to take through on a long term basis over the scheduled six months as against the current six week vocation.

So this is Qantas’s evidentiary case on the point and that’s as good as it gets. And even if one looks at that document there’s no linkage made between the conversion which had already taken place and the issue before Hampton DP for which it was proposed that a working group was to be set up to try and resolve the issue. Against that ..... against that one goes to appeal book page 243. This is
Mr Bender - this is one of the TWU’s witnesses - Mr Bender’s statement of evidence. He says on paragraph 12 on page 243:

I am aware that the company emphasised 10 permanent full-time positions with the intention of replacing the 10 long term workers compensation employees to enable to return to full duties at Adelaide ramp. I know this was the intention because it was stated directly to me by Jefferis when the positions were advertised. He told me this had nothing to do with the matter in the Commission.

That was the evidence on the other hand. Now, the point is that when one looks at that evidence he was clearly open to his Honour, without saying who was right and who was wrong, to say look from this evidence I can’t determine the basis of these 10 appointments and I can’t determine whether it had anything to do with the conversion clause or the dispute and accordingly I’m not satisfied there should be a settlement. And when one looks at the evidence which I’ve taken the Commission to, even looking at the Qantas evidence and even ..... evidence, we see that’s a conclusion which was open to his Honour and ought not be interfered with on appeal.

I should add that there was no suggestion that Qantas had done any calculations to justify the 10 being converted under the clause and that’s at appeal book - I'll just get the reference - page 116 paragraph numbers 950 going over to page 117 paragraph number 951. The other problem with the set off is this, that of course we don’t know whether the 10 positions which were converted at the time were positions, because the numbers have never been done, which would have exceeded the cap or not. See, what’s happened is this. That my client after those 10 converted identified 24 positions which exceeded the cap. They weren’t part of the 10, they were 24 in addition to the 10. They said those 24 need to convert.

We don’t know whether the 10 in addition exceeded the cap as well or not because the calculations have never been done. So the whole basis for the set off has never been calculated. It’s implicit in Qantas’s submissions that the 10 that were converted did not exceed the cap, otherwise that’s the whole basis of the set off. But if, for example, you went back and did the calculation of those 10 and it turned out they were another 10 on top of the 24, so it makes it 34, and then you take the 10 off you’re back to 24 again. So the whole evidentiary basis for a set off was never established.

The starting point, you need to establish the starting point for the 10 to start off with. That is, is it 34, is it 44 or is it 24 before set off even arises? Of course Qantas never established what the starting point was. It’s totally unclear as to whether there’s any set off entitlement at all. Finally can we make this point, that Qantas has not pointed to anything in the text of the provision as distinct from some sort of submission as to merit which would compel the sort of set off it asked for. That is again this appears to be an issue more in the nature of a factual finding or a discretion rather than an argument which arises as a matter of construction on the text of the provision.

So for the reasons I’ve identified, unless there’s any questions, those are my submissions and we say the appeal should be dismissed.

SENIOR DEPUTY PRESIDENT LACY: Just on the relationship provisions in the agreement, do they assist at all in the resolution of whether or not - - -

MR HATCHER: Sorry, which provisions your Honour?

SENIOR DEPUTY PRESIDENT LACY: The relationship provisions in the agreement itself. Clause 6 of the 2005 EBA VI agreement.

MR HATCHER: My recollection is that that was a clause that was taken into account in proceedings before Hampton DP and founded the conclusion that EBA VI replaced everything that went before it and that the facilitative agreement stopped operating when EBA VI came into effect. And again, we say that - I don’t recall that was specifically raised before his Honour below, although we say it’s a clause which supports our approach, that is the parties were in effect wiping what had occurred before and making a comprehensive new agreement with the same provisions to start from its own commencement date.

SENIOR DEPUTY PRESIDENT LACY: Thank you. Mr Hatcher, I'll mark your outline of written submissions.

EXHIBIT #TWU1 TWU’S OUTLINE OF SUBMISSIONS

MR HATCHER: If it please the Commission.

SENIOR DEPUTY PRESIDENT LACY: Thank you. Any time, Mr O’Grady.

MR O'GRADY: Yes. Thank you, your Honour. Your Honour, can I commence with the leave to appeal submissions?

SENIOR DEPUTY PRESIDENT LACY: Yes. How long do you think you might be, Mr O’Grady?

MR O'GRADY: I would have thought half an hour at the outside, your Honour.

SENIOR DEPUTY PRESIDENT LACY: We’ll just take short break,
Mr O’Grady.

MR O'GRADY: Yes, your Honour.

<SHORT ADJOURNMENT [3.26PM]
<RESUMED [3.39PM]

SENIOR DEPUTY PRESIDENT LACY: Yes, Mr O’Grady.

MR O'GRADY: Yes. Thank you, your Honour. Your Honour, can I start with the issues of balance of convenience raised by my learned friend. The first submission I would put to your Honour is that to the extent that the Full Bench takes that into account in deciding whether or not to grant leave, there is a lack of convenience associated with the parties engaging in the process contemplated by the Senior Deputy President when one party clearly has the view that the construction of the enterprise agreement adopted by his Honour is incorrect. Further, these provisions aren’t confined to Adelaide and we have now on the record a determination by a member of the Commission that this agreement which applies Australia wide operates by reference to the anniversary date of the certification of the agreement, save and except for employees who commence subsequent to the certification of that agreement.

In my submission there is an inherent inconvenience in allowing that position to remain the case, particularly where

COMMISSIONER EAMES: I might be mistaken, but I thought the Senior Deputy President was trying to put a fence around his decision in saying that this all applied in relation to Adelaide and not at other ports. I might be wrong about that.

MR O'GRADY: No. Commissioner, you’re not wrong about what he’s attempted to do. The question is whether he’s successfully been able to do that given that what he is doing is expressing a view about the operation of the agreement in terms. And in my submission that’s a matter that should be clarified and that balance of convenience weighs in favour of having that issue clarified, if the Bench were otherwise with us as to what we say are the errors inherent in what the Senior Deputy President determined as to the construction of the agreement. And the construction of the agreement, of course, would remain on foot if the matter didn’t go back to the Senior Deputy President for further clarification which, according to my learned friend, would appear to be an option at least contemplated by the decision below.

With respect to the process that the Senior Deputy President undertook - - -

SENIOR DEPUTY PRESIDENT LACY: Just before you go onto that,
Mr O’Grady. What do you say about Mr Hatcher’s submission that Qantas doesn’t know or doesn’t have any record of the people going back to the previous agreement?

MR O'GRADY: I didn’t understand my learned friend to put it that highly. I think what he was saying, as I understood him, was that there is some difficulty with the records in being able to differentiate between relief work that falls under 18.6 and other work that might be being performed, other relief work that might be being performed. And as I understand it that’s as high as he took it. Now, the evidence - - -

SENIOR DEPUTY PRESIDENT LACY: What do you say about that?

MR O'GRADY: Well, and I was going to come to that in a moment, your Honour, but - - -

SENIOR DEPUTY PRESIDENT LACY: Sorry.

MR O'GRADY: Well, in short compass that was a matter dealt with by
Mr Jefferis in his evidence. What Mr Jefferis said, and I need to go to
Mr Jefferis’ evidence to deal with this vacant line issue, but what Mr Jefferis said is that to the extent that there is relief work that would not fall otherwise within 18.6, that a relatively rare occasion and the submissions that were put below by my client was that it should be dealt with as a deminimous type scenario. It’s not a basis for construing the agreement one way or the other, we would say with respect. And can I say whilst I’m on that topic, that any issues about those hours and the records that relate to those hours are issues that would have to be dealt with in respect of employees who don’t straddle the certification of EBA VI.

And that it’s not being said, as I understand my learned friend, that the facilitative agreement would not apply in its terms to employees whose anniversary would complete the year of service prior to the certification of EBA VI. But can I deal with that in more detail as I get to it?

SENIOR DEPUTY PRESIDENT LACY: Yes.

MR O'GRADY: My learned friend again sought to characterise the task that his Honour was undertaking as something more than construing the agreement and your Honour will recall he took you to paragraph 44 and following of the decision below. As your Honour Lacy SDP pointed out a number of those comments were made in the context of the consideration of the 170MD(6) application that was also being canvassed by the parties. And if I could direct the Bench to paragraph 53 of the decision below because it’s clear that what his Honour decides to do at the end of the process that my learned friend described is:

To resolve the matters in dispute using jurisdiction established by 12.3 on the basis that this jurisdiction should not be used to re-write the agreement or to settle the dispute in such a way that could clearly generate other disputes.

And in my submission what his Honour is there saying is that he is engaged in a process of construction, not a process whereby he is creating rights that don’t fall within the terms of the agreement itself. My learned friend referred to Kucks case and the second paragraph of the principle as to the approach and interpretation. We don’t differ with that approach. However, what we do say is that it is an approach that is impossible to - sorry, I'll withdraw that. We say that it is an approach that does not appear to have been followed by the learned Senior Deputy President in the construction of this agreement and the reason why I say that is that it is impossible, with respect, to reconcile the language used in EBA VI with the way in which the learned Senior Deputy President has fixed anniversary dates for the various classes of employees that he has considered in his decision.

And the Bench will recall the submissions I put earlier about how those will operate. There is nothing in EBA VI that suggests that hours that may have been accumulated up to the eve of the certification of EBA VI will simply be washed away. There is nothing to suggest in the language of EBA VI that there should be a difference drawn between an employee who was engaged the day prior to certification and one who was engaged the day after certification, if that is the effect of what the Senior Deputy President did for the reasons I tried to explain this morning.

It is said by my learned friend that there is an indication in EBA VI that this was to be a new system that was to apply. One would have thought, with respect, that if that his what the parties had intended to achieve in clause 18.5 they would have readily said so. They could easily have said these caps will operate by reference to the anniversary of the certification of this agreement. They haven’t done so. The formula used is consistent with the formula that had been used on previous agreements. It clearly draws attention to the anniversary date of the individual employees concerned. My learned friend took the Bench to 18.5 and sought to draw a distinction - well, raised the issue that as long as my client complied with 18.5.1 the cap would never be reached. Now, with respect to him that submission fails to pay sufficient regard to the change in language between 18.5.1 and 18.5.2.

18.5.1 deals with rostered hours. And clearly if we roster people no more than 30 hours per week and we roster them for 52 weeks in a year, we don’t exceed the cap. 18.5.2 of course deals with average hours. It contemplates things like overtime and the like. It’s because of issues like overtime and the like that the cap is an issue that has to be addressed and that’s the issue that’s before the Commission in this case. My learned friend then sought to come up with insuperable difficulties as to what would flow from the approach that we urge upon the Commission. In my respectful submission none of the issues raised by him give rise to insuperable difficulties.

There is no reason why one can not operate 18.6.2 by reference to the - sorry. There is no reason why one can not operate 18.6.2 in the case of an employee who straddles, or whose anniversary straddles, the certification of the agreement. What one does is one applies the facilitative agreement in respect of that period of service prior to the certification of the agreement and one applies 18.6.2 according to its terms in respect of service that extends beyond the agreement.

SENIOR DEPUTY PRESIDENT LACY: Mr Hatcher’s point is that because of the terms of the specific provisions of 18.6.2 you can’t go back beyond the certification date of the agreement.

MR O'GRADY: Well, in my submission that doesn’t flow from the terms of 18.6.2. You have an employee who was engaged in June or July and has, say, four months service prior to the certification of EBA VI. One applies the facilitative agreement in respect of that four month service. Thereafter one applies 18.6.2. The only transitional issue is the scenario where that employee happens to be undertaking relief work of the type contemplated by 18.6.2 at the date of certification. And then one simply, in my respectful submission, applies 18.6.2 according to its terms. One asks the question well, what was the average amount of part-time relief work being done at the time that engagement commenced?

That gives you a figure, you plug that figure into the other figures that have to be assessed in order to undertake the calculation of the cap. So in my submission there is no insuperable difficulty posed by that whatsoever. All that happens is that in respect of the relief work that occurred prior to the certification of the agreement, none of that relief work is taken into account. In respect of relief work that is undertaken subsequent to the certification, that is accounted for by reference to the average that 18.6.2 speaks of. The other issue that my learned friend raised, namely that there are some figures out there that we don’t have, as I say that was an issue that when one has regard to the evidence of Mr Jefferis is rightly characterise as deminimous.

In any event it was an issue that the parties were able to deal with in the context of the application of the facilitative agreement because it was an issue that always had to be addressed in order to find out whether the relief work was excluded. What of course the agreement doesn’t say is that it should stop and start or that the clock should be rewound every time a successor agreement is negotiated and where they were observed, in my submission, that is something that the parties could easily have put in if they had have intended that to be the outcome. Can I turn to the next issue or limb of the appeal, namely the failure to take into account the evidence of Mr Jefferis.

Can I start by making the observation that section 110 has two limbs. The first limb of course is that the Commission is to act according to equity and good conscience, but the second limb is to deal with the substantial merits of the case. In my submission to ignore the evidence as to the existence of vacant lines is to give insufficient effect to the second limb of that provision. Because the substantial merits of the case are that as a matter of fact there were no such lines on the evidence before the Commission and it is, in my submission, only if it could be said that my client was acting in a way that was clearly inequitable or contrary to or unconscionably that one would ignore that evidence and preclude reliance on it, subject of course to the ability of the union to challenge it or undermine it as it saw fit.

SENIOR DEPUTY PRESIDENT LACY: Do you agree with Mr Hatcher’s characterisation of the facts that if it was a matter in the court that it would be res adjudicata? Would it fulfil the requirements of res adjudicata?

MR O'GRADY: No, your Honour, because Mr Hatcher seems to seek to have it, I suppose, a bit both ways. He seems to say that the two proceedings are related, but that res adjudicata applies. Res adjudicata would not apply if it was the part of the one proceeding, in my submission, because it would always be open for a party to, subject to principles like waiver, to raise these issues again. And in my submission it is open for my client in the context of these proceedings to say look, we got it wrong. The real situation is X. Here is the evidence. Test it, challenge it. And in my submission it wouldn’t be precluded from doing that if we were in a court proceeding given the overlap between the issues and the nature of the orders made by Hampton DP.

It’s not suggested that my clients obtained any untoward advantage from the concession made by Hampton DP and should be precluded from seeking to adduce evidence for those reasons. Rather, if analogies with a court proceeding are to be applied, it’s a case of my client having made a concession which upon due reflection it shouldn’t have made and seeks to withdraw it. And that’s a process that is well acknowledged and accepted in the courts. The other point I would make with respect to that is that to the extent that it’s said by my friend that the evidence means that either this is a distinction without a difference or the evidence favours the construction that his client puts about the existence of vacant lines, that wasn’t the way in which his Honour dealt with the matter below.

He didn’t engage with that evidence and that’s the ground of the appeal that we seek to press. It was a ground raised in our written outline. To the extent my learned friend revisited the submission that he put below, can I simply refer the Bench to the submissions that were put by the representative of my client below rather than going over them. They appear at paragraphs 1392 to 1429 which - I apologise, I should have the appeal book reference. It’s in the first volume and page 171 and following. Can I also direct the Full Bench to the evidence of
Mr Jefferis himself. But before doing that perhaps I'll put this vacant line issue in context.

As apparent from clause 18.9.2 there are certain classes of relief work that are dealt with through 18.6 and that is:

Relief for persons who are absent from work on annual leave, long service leave, periods of workers compensation exceeding six weeks, two or more rostered days off.

And in 18.9.2:

Relief employees are required to work higher duties to cover employees who are absent from work on the grounds set out in 18.9.2(a).

Those employees - sorry. Part-time work or work performed by part-time employees that is done to cover that form of relief is dealt with by the averaging provision in 18.6. Vacant lines are a term that was used by Mr Jefferis to describe relief work that fell outside those forms of relief. So for some reason there might be a vacant position that needs to be filled by a part-time employee undertaking that work and Mr Jefferis’ evidence is that there was, in effect, no such vacant lines. There certainly weren’t four of those vacant lines. And for that reason he resisted the proposition that a person who was on long term work cover leave would give rise to a vacant line because he said in his evidence - and it’s contained in the passages of transcript that I referred the Commission to this morning and it’s also contained in paragraph 819 of the transcript - that work done for that purpose is not a vacant line.

That’s a matter that’s expressly dealt with in the certified agreement. That is calculated by reference to the averaging provision in the certified agreement for that form of relief. And in my submission that’s the same meaning that was adopted before the learned Deputy President in the proceedings before him - Hampton DP. Can I take the Bench to paragraph 819 which is at page 104 of
Mr Jefferis’ evidence where Mr Jefferis is being cross-examined by Mr Hatcher and it was put to him:

There’s six vacant lines at May 2006, correct?

And what Mr Jefferis says is he says:

Well, I wouldn’t term them as vacant lines because we have those workers comp people currently employed by the company and being paid by the company to do that work, they’re just not capable of doing it.

So what he was saying, and this appears at paragraph 823 on the following page, that those people are dealt with under the EBA. But under the EBA that clause allows us to work people up to cover those particular people. So they’re not some additional vacant line that has to be filled for which there has to be an average number of hours allocated to part-time employees to reflect the fact that they do this work from time to time because they are employees who are expressly dealt with by the provisions in 18.9 and 18.6. Could I deal with the 10 positions. In my submission the evidence was not that as stated by my learned friend.

Can I take the Full Bench to paragraph 883 and following where Mr Jefferis was cross-examined by my learned friend about this and he talks about the conversion in 883. And then he talks about the fact that those were 10 part-time positions to full-time that had previously been covered by part-time employees. And then he says at 887:

Employees were working up to the current full-time lines because there was insufficient full-time staff to cover them and by converting those people in the full-time they picked up those full-time lines on a permanent basis.

At 889 he says:

The reason that the 10 were made up was because we had a high number of part-timers working up into full-time. That was the reason for that.

At 894 he says:

There wasn’t a strict analysis done by the hour if that’s what you’re talking about if working out exactly how many people were working up because of the clause.

And then he was asked about the 10 in 895:

10 was the figure that we agreed that we would convert.

And 896:

10 was a figure I thought working with Adrian -

As I understand it Adrian was with the union:

- was a figure that would cover the amount working up that had been happening at the time and that was a figure we put to the corporate office for approval.

In my submission it’s clear from that evidence that there is a nexus between the cap, the fact that there were a number of employees who were approaching a cap and the 10 conversions. And in my submission in those circumstances on the evidence what the learned Senior Deputy President should have done is taken those 10 positions into account, but the reason why he didn’t is apparent from paragraph 145 of his decision where in the second sentence he says:

I am able to discern a basis for discounting full-time conversions established on the basis of aggregate hours over the year up to 19 October by 10 so as to fully reflect conversions made five months earlier.

Now, it’s clear from that sentence that his Honour is having regard to the anniversary period that he has determined is applicable, namely 19 October 2006, and having regard to the fact that there is a temporal gap between that anniversary period and the trigger that it represents and the time when the conversions take place. If his Honour’s approach to the anniversary period is not adopted by the Full Bench then there is ample material, in my submission, why one would find that there is a nexus between those conversions and the fact that employees were reaching the cap. And the next sentence:

Had the parties simply been attempting to negotiate a certain number of full-time conversions the history of the May 2006 arrangements may well have become relevant. However, the provisions of EBA VI do not recognise these earlier conversions.

Well, it’s clear that the provisions of EBA VI do not expressly make reference to those earlier conversions, however what they do is impose an obligation on my client. And we say that these conversions should be taken into account in assessing to what extent we have satisfied that obligation, under what extent that obligation remains unsatisfied. And in that content we say that the union having come to the Commission saying that up to 24 conversions should be made, the fact that 10 conversions have already been made is a matter that should have been given due weight. If the Bench pleases.

SENIOR DEPUTY PRESIDENT LACY: Yes, I thank counsel for their very detailed and comprehensive and helpful submissions. We will reserve our decision. And as indicated earlier, in considering our position on the competency issue, we’ll deal with that in the course of our decision. If that, as I say, is successful, then the other aspects will be dealt with. The matter is adjourned.

<ADJOURNED ACCORDINGLY [4.07PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #Q1 QANTAS OUTLINE OF SUBMISSIONS PN176
EXHIBIT #TWU1 TWU’S OUTLINE OF SUBMISSIONS. PN434