C2015/1204, Transcript of Proceedings [2015] FWCTrans 238 (22 April 2015)

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Australian Federation of Air Pilots v HNZ Global [Helicopters (Australia)] Pty Ltd
(C2015/1204)

PN1

VICE PRESIDENT HATCHER: Yes, can I take appearances? Mr Reitano, you appear for the appellant?

PN2

MR REITANO: Correct, your Honour.

PN3

VICE PRESIDENT HATCHER: And, Mr Felman, you appear for the respondent?

PN4

MR FELMAN: Yes, I do, your Honour.

PN5

VICE PRESIDENT HATCHER: We note that permission has previously been granted to the parties to be represented by lawyers. Mr Reitano?

PN6

MR REITANO: I understand Mr Felman has something to say before --

PN7

VICE PRESIDENT HATCHER: Okay.

PN8

MR FELMAN: Yes. Your Honour, there’s an issue in relation to - as you will have apprehended, this is a dispute in relation to now four employees; Greg Duncan, Avana Gaulin, Nigel Saunders, and Rick Kasparis. I think, as a matter of housekeeping, I wanted to raise, and I’ve raised this with my friend and who will doubt have something to say, in relation to two of those employees. If I take possibly the easiest one first, that is Rick Kasparis. I’ve just been instructed that - and I’ve got the email - Rich Kasparis has emailed, I think both the union and the company, the employer, that he no longer wishes to be part of this dispute.

PN9

Now, there may be argy-bargy about the extent to which this Full Bench can continue to arbitrate in relation to him, but in any event, because of a concession that we have basically made in relation to Mr Kasparis, my friend might ‑ ‑ ‑

PN10

VICE PRESIDENT HATCHER: So we can put the concession, what’s that?

PN11

MR FELMAN: The concession is in relation to ground 5, your Honour, which is that there was a failure to consider clause 8.6, or properly determine the issue of clause 8.6 of the enterprise agreement, which entitles live onsite pilots to overtime in certain circumstances, and there had been some correspondence prior to this dispute, that well no, you’ll only get overtime if you work a certain amount of days, and the union agitated that as being not permitted by clause 8.6, and we are prepared to - I’m instructed to make a concession that it doesn’t really matter how many days they work, if an employee is entitled to - a live onsite or an LOS pilot is entitled to overtime under clause 8.6, then they’ll get it.

PN12

I think it’s a bit unclear as to whether that was made clear earlier, but clause 8.6 provides that a pilot who is called out to work on a rostered day off ‑ ‑ ‑

PN13

VICE PRESIDENT HATCHER: Sorry, I’ll just open my ‑ ‑ ‑

PN14

MR FELMAN: It’s at appeal book 618.

PN15

VICE PRESIDENT HATCHER: Yes.

PN16

MR FELMAN: A pilot who is called out to work on a rostered day off will receive a replacement day in lieu or be paid an amount for each day worked equal to 1.6 times the daily rate. My instructions are that that will apply in relation to LOS pilots, irrespective of the number of days they’ve worked. I think there was some suggestion in correspondence between the employer and the employees that you had to work a certain amount of days before your overtime kicked in, and that was part of the dispute notified to the Commission, and we’re basically consenting that there’s no requirement to work a particular amount of days if the - clause 8.6, if you’re entitled to overtime pursuant to clause 8.6, which appears to be quite uncontroversial, then you’ll get it.

PN17

VICE PRESIDENT HATCHER: Was that the only issue of relevance ‑ ‑ ‑

PN18

MR FELMAN: That seems to me to be the only issue with - well, I think with Kasparis, who is, of the four, the only currently - he’s the only one who’s a live onsite pilot. The others are touring pilots. Perhaps my friend can, aside from correcting the ‑ ‑ ‑

PN19

VICE PRESIDENT HATCHER: So you said there was an issue about a second employee?

PN20

MR FELMAN: Do you want me to continue with the next employee?

PN21

VICE PRESIDENT HATCHER: Well, just tell us what these issues are.

PN22

MR FELMAN: Yes. The next issue is in relation to Ms Gaulin. Ms Gaulin’s employment has been terminated. Now, she has lodged an unfair dismissal application. In my submission, there is now a real issue as to whether there’s jurisdiction, whether she’s no longer covered by the EBA. Now, that may change depending on the outcome of the unfair dismissal application. I note that I’ve got the form, and this is not in any evidence, I accept that, but she’s not currently seeking reinstatement.

PN23

“What outcome are you seeking by lodging this application?” The applicant seeks compensation in accordance with section 392 of the Fair Work Act. So a couple of issues arise in relation to that factual matrix. The first is, does this Full Bench have jurisdiction to determine a dispute in relation to a person who’s not covered by this enterprise agreement anymore. She may, again, become covered by the enterprise agreement if she’s reinstated, for example, amends the application, but that is an issue.

PN24

The second is that should leave be given in relation to a dispute where the person is not - it’s futile. Ms Gaulin is not currently employed, not seeking reinstatement, it doesn’t matter anymore in relation to her.

PN25

COMMISSIONER ROE: Does it affect entitlements?

PN26

MR FELMAN: I don’t think so. I don’t think so. I haven’t turned my mind to that, Commissioner, it’s a good question, but that might go to futility, but that doesn’t necessarily go to jurisdiction. Either there’s jurisdiction or there isn’t. But in any event, that there’s a breach of entitlements, that’s not something, I think - that there has been a breach of past entitlements at this Commission under this dispute resolution procedure could necessarily determine anyway, and that’s not currently the subject of the dispute, whether there’s a contravention of entitlements.

PN27

The dispute is, can something be done from now on? Can employees be directed to work on a particular roster without their consent, and acquit annual leave in a certain way.

PN28

VICE PRESIDENT HATCHER: So that leaves two employees whose issue is alive?

PN29

MR FELMAN: Correct. Greg Duncan and Nigel Saunders, and I suspect no concession is being made in relation to those two employees and that’s what this appeal will be about. Really, most of the grounds of the appeal are still alive. Ground 5 falls away because ground 5 relates to clause 8.6, and I’ve just made that concession, and ground 6 falls away, if indeed, Gaulin’s dispute is not determined, because that ground 6 is in relation to Gaulin’s individual flexibility agreement.

PN30

VICE PRESIDENT HATCHER: One thing I was going to raise and this might be convenient, is that clause 21.3 of the agreement, appeal book page 638, refers to parties having a right of appeal.

PN31

MR FELMAN: Yes.

PN32

VICE PRESIDENT HATCHER: Does the appellant need permission to appeal in those circumstances where the agreement confers a right? I only raise this because it relates to your proposition that some of these matters might go to permission to appeal.

PN33

MR FELMAN: I haven’t, your Honour, addressed that question.

PN34

VICE PRESIDENT HATCHER: Well, you might want to just take that on notice.

PN35

MR FELMAN: Notice. My instinct is that I’m not sure that that clause could displace the operation of section 604 which requires ‑ ‑ ‑

PN36

VICE PRESIDENT HATCHER: Well, there’s authority that says a clause of that nature might have that very effect.

PN37

MR FELMAN: Might have. Again, your Honour, I haven’t turned my mind to that and I’m not familiar with the authorities. If leave is not required, then leave is not required. I think, ultimately, the issues need to be agitated in this dispute anyway, but whether leave is required or not, Ms Gaulin has been terminated and the agreement doesn’t apply to her, there’s an issue about whether this tribunal has jurisdiction to determine a dispute about rights going forward for an employee that’s not covered by the enterprise agreement.

PN38

VICE PRESIDENT HATCHER: Let’s be clear; this affects grounds 5 and 6, does it?

PN39

MR FELMAN: Correct. And of course, to the extent the decision is expressed to cover the employment of certain employees. Then there’s the general discretion, I suspect, that your Honours have about the futility of determining an issue where the employee is no longer employed. It doesn’t mean this is all a waste of time. The vast bulk of the appeal continues in relation to two of the touring pilots.

PN40

VICE PRESIDENT HATCHER: Right. Thank you. Mr Reitano?

PN41

MR REITANO: Can I deal with matters backwards. I think your Honour is right, we don’t need leave to appeal. It certainly something that had escaped me, and 21.3, basically that - so permission to appeal is probably not relied. To the extent it is, I rely on grounds that I’ve outlined. The second matter is in relation to Ms Gaulin, and I think Commissioner Roe’s question, I don’t think I can contend that it does affect entitlements in the circumstances.

PN42

The reason I say that is because Commissioner Cribb, in effect, stayed the decision to implement any of these changes some time ago, and that was continued. That continued, in effect, I should say, until Hamilton DP discharged the stay order by his decision, but fairly shortly after that, we filed an appeal and there was accommodation reached between the parties that again, in effect, stayed the company’s hand in implementing any changes.

PN43

So I couldn’t stand here and tell the Commission there was any practical effect in relation to Mr Gaulin. It would be entirely misleading to say that. Nonetheless, Ms Gaulin has a right of appeal from the decision of - or had a right of appeal, and pursued that right while she was employed, from the decision of Hamilton DP. Again, I would have to concede, in a practical sense, even if the Commission were to hear her appeal, there would be no practical significance to it. It simply can’t affect anything because she doesn’t seek reinstatement. I can’t see how it could affect a compensation order.

PN44

VICE PRESIDENT HATCHER: So is ground 6 pressed in those circumstances?

PN45

MR REITANO: There’s one nagging matter and it relates to the last thing that I said, and that is whether it could affect a compensation order. Ms Gaulin’s circumstances were curious, and I’m sure that the Commission is appraised of those in the court. I wonder if I could, as it were, take that issue about Ms Gaulin and obtain some instructions about it, and inform the Bench perhaps later in the morning, rather than doing it on the run.

PN46

My current position is I can’t see how it would affect any compensation order. I don’t agree with my learned friend that the Commission has its jurisdiction removed simply because someone has been dismissed. My learned friend was, I think, wrong in respect of - he said it twice, he may have said it three times. The Full Bench is not dealing with a dispute, the Full Bench is dealing with an appeal from a decision of Hamilton DP who was dealing with the dispute, and the point is the distinction is important.

PN47

The circumstances that prevailed when we say Hamilton DP erroneously decided the matter is what the Full Bench is dealing with, it’s not dealing with the circumstances as they exist today, and I know that is probably contrary to some authority about administrative decision-making, but I think in context, and having regard to the Act and the disputes procedure, the presumption would be that hearing an appeal relates to the circumstances that prevailed up until the time of the decision of Hamilton DP.

PN48

In relation to Mr Kasparis, so long as it is understood that the company no longer intends to rely upon its assertion that Mr Kasparis, or as we understand it, any employee, needs to work 220, or in the company’s revised formulation, 230 days before they will be entitled to payments under clause 8.6, then we don’t press the matter in respect of Mr Kasparis, and we don’t press that ground of appeal.

PN49

DEPUTY PRESIDENT GOSTENCNIK: Mr Reitano, isn’t the right of appeal which is conferred in clause 21.3 simply part of the scheme of dispute resolution, private arbitration power that’s conferred on the Bench, so is it correct to differentiate the two? What we’re in effect doing is still exercising dispute settlement power by way of an appeal.

PN50

MR REITANO: That’s the argument against what I said, I understand that, but the right that is - the question is in dealing with a dispute, CF dealing with an appeal, is the Commission dealing with the circumstances as they exist today, or as at the time of the original decision. It harps back to, I think, some of the older cases about reinstatement, for example, and I think there are some old cases under disputes procedures, too, where it’s been said that the employee is no longer employed and therefore couldn’t agitate a dispute, but at the time that the matter was determined by Hamilton DP, there was no issue about that.

PN51

There was always jurisdiction. The employee was always employed. The employee had a right to pursue the matter through the disputes procedure, and that’s the issue.

PN52

DEPUTY PRESIDENT GOSTENCNIK: But in any event, you’ll come back to the utility of ‑ ‑ ‑

PN53

MR REITANO: I’ll see some instructions about Ms Gaulin and return to it. I should add that, as we understand my learned friend’s position in relation to Mr Kasparis, the other issues, if I can put it that, that relate to Mr Kasparis, will be adequately ventilated in respect of the two remaining employees, and presumably when determined, that determination will be binding in respect of Mr Kasparis as well. That is, issues about whether there is an entitlement to direct employees when to take annual leave, or whether there’s an entitlement to direct what rosters employees work and so forth.

PN54

VICE PRESIDENT HATCHER: All right. So, Mr Felman, do you confirm that understanding with respect to Mr Kasparis?

PN55

MR FELMAN: Yes, I do.

PN56

VICE PRESIDENT HATCHER: Yes. All right. Does that mean we can - Mr Reitano, can we therefore treat ground 5 as not pressed?

PN57

MR REITANO: Yes.

PN58

VICE PRESIDENT HATCHER: Right. Thank you. All right. Let’s proceed with the rest of it, then. Mr Reitano?

PN59

MR REITANO: If it please the Commission. I should make the apology right at the beginning. If I slip in to talking about Mr Kasparis and Ms Gaulin, it probably is unintentional, but I will try and deal with the issues in the dispute so far as they can be dealt with as generically as possible. Could I, before I commence my submissions, hand up to the Full Bench a copy of the notification or the form F10 that doesn’t form part of the appeal book that initiated the matter before - or, the matter that ultimately was decided by Hamilton DP.

PN60

VICE PRESIDENT HATCHER: Does Mr Felman have a copy of that?

PN61

MR FELMAN: I do. I’ve got my own copy.

PN62

VICE PRESIDENT HATCHER: Yes. So there’s no objection to us receiving this?

PN63

MR FELMAN: No.

PN64

MR REITANO: You will see that at item 4 of the dispute notification on page 2, the heading is, “What is the dispute about?” Then there continues over a large number of pages, I think about eight, in I think 37 or so numbered paragraphs, the details about what the dispute concerns. You will see, in the paragraph commencing on the top of page 3 that it affected, at the time, five employees. The Commission would be aware that Mr Quayle dropped out of that because he, at the time, was employed under the terms of an unexpired AWA and the Commission has heard about Mr Kasparis and Ms Gaulin’s positions this morning.

PN65

Under (a) you will see that Mr Duncan and Mr Saunders are specifically named as touring pilots, and that each of them were said to have been directed to acquit their annual leave entitlement of 42 days per year at the rate of or in blocks of 2.7 days per roster period, that they have been, in effect, directed to submit leave applications to take leave at that rate and work a 21-day and on an 18.3 days off roster. I need to ‑ ‑ ‑

PN66

VICE PRESIDENT HATCHER: Had the consultation been undertaken with respect to that direction prior to the direction being issued, or subsequently?

PN67

MR REITANO: Our case was, no, and the company turned up before Hamilton DP and I think - I think - conceded that there had been no consultation and that consultation would occur before any of the changes were implemented. In any event, our case was that consultation hadn’t occurred by the time that the matter had come before Hamilton DP. It is important to identify that there were, at the time at least, three issues; one was the reduction in - sorry, the direction to acquit annual leave. The second was overtime which has gone by the wayside, and the third was the reduction in rostered days off.

PN68

Could I then, having identified those from the dispute notification, take the Commission to what remains of the relevant terms of the enterprise agreement which are found in the appeal book at tab 12. I don’t want to read every one of the provisions to the Commission, but I need to read the ones that are relevant. If the Commission goes to appeal book 624, there is the provision of the agreement that relates to annual leave. In particular, in clause 13.1, you will see it opens with the words, “Annual leave is provided for in the National Employment Standard. This clause provides occupational-specific data.”

PN69

You will then see in clause 13.1.1 the entitlement of a live onsite pilot to annual leave, which is to 42 days’ annual leave inclusive of Saturdays, Sundays and public holidays, through each 12 months of continuous service. It goes on to say it accrues on an hourly basis. In 13.1.2, which relates to Mr Duncan and Mr Saunders, the entitlement for a touring pilot is found, and the entitlement is the same, namely, 42 days, but the clause says more than that.

PN70

In (a), it says 28 days’ annual leave inclusive of Saturdays, Sundays and public holidays on full salary for each completed 12 months of continuous service, and then an important sentence in the dispute was, “A touring pilot will take annual leave in one 28-day block immediately after one block of 13 touring days off, being a total of 41 continuous days off duty.” Then, (b) one additional day ‑ ‑ ‑

PN71

VICE PRESIDENT HATCHER: Does the reference to 13 touring days off there suggest that the paragraph only contemplates the 15/13 roster situation?

PN72

MR REITANO: The reference to - yes.

PN73

VICE PRESIDENT HATCHER: That is, it doesn’t explain in the context of the equal time roster how this would work?

PN74

MR REITANO: The clause doesn’t contain any other prescription as to when annual leave will be taken. The prescription that it does contain, that is, the entitlement or the right that it creates, is to 28 days after the block of 13 touring days.

PN75

DEPUTY PRESIDENT GOSTENCNIK: So in respect of persons who are not caught by that pattern, then one goes to the NES, presumably, to determine the taking of leave?

PN76

MR REITANO: Subject to something that I’ll say when I come to the equal time roster provision, yes. I think that’s right. There is a construction available, and I don’t know that it matters for present purposes, but there is a construction available that the equal time roster, which we contend for, is introduced by agreement. In effect, it allows an employee to give up the right that they would otherwise have under 13.1.2, to 28 days in one block. It’s either that or you go to the NES. They’re the two routes that get you there.

PN77

The clause goes on to provide for one other additional day of annual leave which accrues for each completed year of service, et cetera, and I don’t need to say anything more about the actual entitlement to leave. It’s for 42 days, 28 days in one block. Could I then just go ‑ ‑ ‑

PN78

VICE PRESIDENT HATCHER: Just so that I understand this, how is the rest of the leave taken? So (a) deals with 28 days, you’ve got 42 days, where does the rest of it fall?

PN79

MR REITANO: It’s the 13 days off, the 13 tour days. If you’re on a 15/13 roster, it’s the 13 days off that gives you 41, and the next paragraph gives you the 46.

PN80

VICE PRESIDENT HATCHER: Okay.

PN81

MR REITANO: Yes, right.

PN82

COMMISSIONER ROE: It’s not 13 taken off before that you have already accumulated that you work for, it’s the 13 days - I just don’t quite follow that because you work for 15 days ‑ ‑ ‑

PN83

MR REITANO: Yes.

PN84

COMMISSIONER ROE: ‑ ‑ ‑ then you will accumulate a certain entitlement to rostered days off?

PN85

MR REITANO: 13.

PN86

COMMISSIONER ROE: Yes, exactly, so how are they annual leave?

PN87

MR REITANO: Because if you look at - sorry, it’s my fault, Commissioner. If you look at clause 13.1.2, you’re entitled to 42 days off per annum. That’s the starting point.

PN88

COMMISSIONER ROE: Yes.

PN89

MR REITANO: Then (a) says 28 days’ annual leave, and add the 13, which is 41, and add the 1, is 42. I hope that’s clear.

PN90

COMMISSIONER ROE: That is clear.

PN91

MR REITANO: So you get ‑ ‑ ‑

PN92

VICE PRESIDENT HATCHER: So, sorry, 42 days is all - when it says “days off”, is that equating with annual leave, or is it saying ‑ ‑ ‑

PN93

MR REITANO: The 42 days is made up of two components; 28 days’ annual leave in (a), plus 13 touring days off, which is 41, and one day in paragraph (b), which is 42.

PN94

VICE PRESIDENT HATCHER: So the actual annual leave ‑ ‑ ‑

PN95

MR REITANO: Component.

PN96

VICE PRESIDENT HATCHER: Is only 28 plus the one additional day?

PN97

MR REITANO: Yes. That’s how I read the clause.

PN98

DEPUTY PRESIDENT GOSTENCNIK: So what the clause is really saying is that annual leave shall be taken as a block of 42 days off?

PN99

MR REITANO: Yes. Yes, that’s right, which I think has some consistency with the NES in terms of annual leave being taken, but I’ll come to that. In 13.1.4, and these are important, they might be seen as machinery provisions, but they are important in terms of the way in which the annual leave entitlement operates. 13.1.4 provides:

PN100

Touring pilots may apply and leave may be granted at the company’s discretion provided the leave is accrued at any time within the year. However, a leave embargo may be held over the months of June/July and over the Christmas holiday period for the purpose of rostering alternate Christmas tour breaks.

PN101

And it goes on, and then picking it up again:

PN102

Applications for leave over the summer holiday period must be submitted in April or earlier and the successful applicants -

PN103

And so on. It provides a prescription about the company having some facility to exercise a discretion against the taking of leave at particular times. 13.1.5 requires that:

PN104

Leave applications should be made using the appropriate form. Once the pilot has submitted their leave application, the company will respond to their request within five working days.

PN105

And so on. So an employee who wants to take leave, who determines that they will take leave, is required by the agreement to make an application for leave. Again, this will be important when I come to clause 14 which deals with the two roster alternatives, but the annual leave clause makes it clear that an employee must apply for leave and the company has a discretion within certain limits, in 13.1.4, to refuse that. In 13.1.6, simply to complete the picture:

PN106

Once granted, annual leave shall not be altered except by mutual agreement, or in the case of a pilot change of status, equipment or base, the company is unable to accrue existing -

PN107

Et cetera, et cetera. The company can’t recall someone from annual leave. So the scheme of annual leave is for an entitlement that’s created by 13.1.2 to take it one block. There are machinery provisions in 13.1.4, 13.1.5, 13.1.6, that make it clear that an employee applies for leave before they take the leave. As I say, dependent on the discretion of the company. Finally, I think in ‑ ‑ ‑

PN108

DEPUTY PRESIDENT GOSTENCNIK: But the applications that are referred to in 13.1.4 are different from those applications in 13.1.5. 13.1.4 is confined to applications relating to summer holiday periods.

PN109

MR REITANO: I’m sorry, your Honour?

PN110

DEPUTY PRESIDENT GOSTENCNIK: 13.1.4, the applications referred to there for leave, are applications for leave during a particular period, that is, over the summer holidays, and they’re to be submitted by a particular time and advice will be at a later time, in September. The 13.1.5 reference to leave applications, seems to me, to be a reference for applications for leave outside of the summer period.

PN111

MR REITANO: With respect, the summer entitlement is part of what’s included in 13.1.4, but 13.1.4 is informed by the first sentence:

PN112

Touring pilots may apply and leave may be granted at the company’s discretion, provided the leave is accrued at any time within the year.

PN113

The rest of it is prescriptive.

PN114

DEPUTY PRESIDENT GOSTENCNIK: Yes. I with you. Yes, I understand.

PN115

MR REITANO: But in order to apply for leave, it needs to be done, under 13.1.5, in writing, et cetera. 13.1.10, 11 and 12 also provide additional prescription in relation to various matters that regulate annual leave. One relates to sickness, one relates to taking annual leave in advance, one relates to the requirement to use annual leave to ensure that they don’t have more than 28 days accrued at any time, and cashing out as well.

PN116

So clause 13, and I haven’t gone through each and every part of it, I’ve taken the Commission to what we consider to be important, creates a regime for the taking of leave of 28 days annual leave, that’s to be taken in one block. It creates the requirement that pilots apply for leave, that the company has a discretion about that. It provides for the use of an appropriate form. The taking of leave, is effectively, the discretion to take it resides in the employee. That is, to apply for it and take it within the limits of clause 13.

PN117

VICE PRESIDENT HATCHER: So 13.1.4 applies to touring pilots only. Is there some mission after that?

PN118

MR REITANO: I don’t see within the clause anything relating to live onsite pilots in respect of applications for leave. I don’t know whether that’s an oversight or deliberate, but I don’t see anywhere in the clause that deals with it.

PN119

VICE PRESIDENT HATCHER: Well, 13.1.5 is not confined, is it, or is it to be read with ‑ ‑ ‑

PN120

MR REITANO: Well, it certainly doesn’t say it is, except for, if your Honour - no, it certainly doesn’t say that. Could I then go to the next clause that’s relevant, and that’s clause 14, which I think plays part of the company’s case. The point we make about this clause, before I come to it, it’s particular terms, it was Hamilton DP’s view, and central to his finding, that clause 14, or parts of it at least, gave the company the right to direct employees as to what roster they would work, and - that’s bold and uppercase with stars all around it - and gave the company the right to direct employees as to when they take annual leave.

PN121

For the moment, we don’t need to worry about - I will come to why it’s important, but we don’t need to worry about, for the moment, as to whether that entitlement was to direct employees to take annual leave at the rate of 2.7 days per roster cycle, 2.7 days annual leave per roster cycle, or 21 days in one block. Hamilton DP’s analysis applied to the right under part of this clause to direct employees to take annual leave. It was irrespective of the amount, it didn’t need to rely on 2.7 days.

PN122

The reason I say this is that there’s some formal issue that the company takes in its written submissions about this, and as I say, I’ll deal with it in due course, but for present purposes, I want to concentrate on clause 14 insofar as the Deputy President found that there was an entitlement in the company to direct employees as to which roster they would work, and an entitlement to direct employees as to when they take annual leave.

PN123

We contend, and we do so, we say, for good reason, that there is no right to direct employees given to the company under the agreement as to what rosters they work, and we contend that even if we’re wrong about that - and we’re not - but even if we are wrong about it, if for one moment we contemplated that, there was certainly no right under the clause to direct employees to take annual leave, if for no other reason because it stands in stark - it’s up against the hurdle that has been created in clause 13.1.4 and 13.1.5; that for an employee to take annual leave, there must be an application by the employee and there must be an exercise of the company’s discretion against or in favour of that.

PN124

Clause 14 starts with the words, and I don’t think it’s as important as it is to the annual leave issue, but it starts with the words, “Hours of work is provided for in the NES. This clause provides occupational-specific data.” Clause 14.1 which relates to live onsite pilots, provides:

PN125

Rosters will be compiled to cover a period of 14 days, and whenever possible, will be promulgated in writing seven days prior to the commencement of the roster period. Where practical, rosters will be complied to cover longer periods of time. Rosters will nominate duty periods on each day, reserve or standby time, duty days, known flying leave and days off.

PN126

Clause 14.1.3, which the company relies on, notwithstanding clause 14.1.1:

PN127

Rosters may be altered by the company to meet the operational requirements of the business.

PN128

Now, before I go on, there was no evidence, even if this be important, and we say for something that I’ll say in a moment that it’s not important, but even if this was important, there was no evidence before Hamilton DP of any operational requirement. To the extent that there was some hint of it, it was debunked, but the company brought no evidence, put no one near a witness box.

PN129

I’m not for one moment suggesting that the company loses the case because it didn’t put a witness in the witness box. I am suggesting that the company did not put anyone in the witness box to justify the suggestion that somehow rosters were being altered to meet operational requirements of the business. There just was not a scintilla of evidence about that. In any event, this relates to alteration to the roster under 14.1 which is the one compiled to cover 14 days. It doesn’t relate to the issue that we agitate here.

PN130

It is important, though, because the clause nominates a circumstance in which the company does have a right to do something in respect of rosters. This appears to be lost in the company’s submissions. Our case about this clause is that where it gave either the employee or the employer a right to do something, it said so. So it said the company, in 14.1.3, can in certain circumstances have the power to alter rosters, and later on, I’ll come to two other examples where the clause says that a party has a certain right to do something.

PN131

VICE PRESIDENT HATCHER: So 14.1.3, that doesn’t apply to touring pilots, does it?

PN132

MR REITANO: No. No, but it’s in context of the agreement, the point I make. I think the company’s submissions about this were drafted, I think with a view to Mr Kasparis being involved.

PN133

VICE PRESIDENT HATCHER: All right.

PN134

MR REITANO: I think. My friend says yes, and I thank him for that. But my point on 14.1.3 is that as a matter of context and construction of the agreement, it creates rights in a party to do something about rosters, it says so. Whether it be live onsite pilots or touring pilots or any other person, and I’ll come to the other examples in a moment. 14.2 relates to touring pilots and 14.2.1 says:

PN135

A tour will be on the basis of 13, 28-day cycles per year, each cycle consisting of 15 days or part thereof on duty, and 13 days off duty with the 13th cycle being annual leave.

PN136

Again, I think referring to Roe C’s question earlier about the 13th cycle. So that’s the first alternative. You will note, so far, nothing has been said about who decides. Nothing is said that the company or the employee has the right to insist on that roster, or an equal time roster in which annual leave is taken and these words are important, “during the year as part of the touring days off.” The reason these words are important, as I say, ultimately it perhaps doesn’t matter too much to the case we press, but the reason why the words are important is the way we read them is, an equal time roster involves equal time at work and equal time not at work.

PN137

So you could have a 1/1 roster, a 2/2 roster, a 21/21 roster at issue here, or a 6 month/6 month roster, I think. I think you could have any permutation so long as it involved - and no one contested otherwise before Hamilton DP that equal time meant anything different from what I’m saying.

PN138

VICE PRESIDENT HATCHER: Is this right, an equal time roster doesn’t work unless you have annual leave being taken during the year as part of the touring days off?

PN139

MR REITANO: And that’s the point that I - that’s exactly - well, the clause says that that has to be so.

PN140

VICE PRESIDENT HATCHER: And that’s right, as a matter of mathematics, isn’t it?

PN141

MR REITANO: Well, the reason why I hesitate to simply say yes to your Honour’s question is because I understand some different proposition is put by the other side. We say that if you work a 21/21, you can just work back the maths and work it out that it’s got to be 2.7 days. That’s as close as you can get. It leaves a couple of days over that you have to work out, but 21/21 means 2.7 days annual leave, 18.3 rostered days off. It just works that way.

PN142

What is suggested, and I don’t want to make my friend’s submissions or case for him, and as I said, I don’t understand it, what is suggested, that within that clause, you could direct an employee to take a block of annual leave in one go, as it were. So you could say, “Well, you’re going to have 21 days off as touring days here, but in the next block, you’ll have six days annual leave.” So your touring rostered days would be, in that example, 15, rather than - or you could have 21 days block as annual leave.

PN143

Now, we say that properly understood, both in the industry and certainly understood in Mr Saunders’ affidavit, to which I’ll provide a reference, an equal time roster in which annual leave is taken during the year as part of the touring days off is what we say. But where you say it’s 21/21, then the way you work it back is by doing the maths and say, well, over the period of the year where you’re doing 21/21, we have to have this many annual leave days, dividing it by whatever the appropriate figure is, you come back to a figure of 2.7 days, so in each period, there’s 2.7 days annual leave, there’s 18.3 rostered days off.

PN144

VICE PRESIDENT HATCHER: So you never accrue any annual leave because you use up your entitlement in every roster cycle?

PN145

MR REITANO: Indeed, contrary to - I’ll say it because I’m going to say it eventually - the whole notion that is enshrined in the available rights created by the National Employment Standard. I don’t need to go to it, I’m not going to take the Commission to the transcript, it’s something I think was fairly clear, that was disturbing to Hamilton DP in the argument before him, that the National Employment Standard set up, as it were, a charter of rights.

PN146

So an equal time roster in which annual leave is taken during the year as part of the touring days off, additional days annual leave will be provided so that pilots on an equal time roster are on par with 15/13 pilots. If the pilot is not fully utilised during the duty period, this will not have any impact on the pilot’s future days or roster cycles.

PN147

COMMISSIONER ROE: Can you just explain what you say the sentence, “Additional days annual leave will be provided so that pilots on an equal time roster are on par with 15/13 pilots” means?

PN148

MR REITANO: Yes. If you do the maths, if I can go back to what I was saying earlier, and I was not good at maths, so I hope I’m - I’m outlining it as I understand it, I’m not outline the details of the calculation. If you work out on a 21/21 days basis the number of days annual leave you have to have, it comes down to, as I said, as close as you can get, it comes to 2.7 days and 18.3. Once you convert that out, you get a number which I think is 38, or roughly 38. A person on a 15/13 roster would be entitled to 42 days annual leave, as we found when we were in the annual leave clause, 13.1.

PN149

There are four days over, so on the example of 2.7 days that I’ve given, in order to be on par with a 15/13 pilot, you need to give people another four days annual leave, and that calculation could be done on any other of the permutations, if we said 28/28. We see, for example ‑ ‑ ‑

PN150

DEPUTY PRESIDENT GOSTENCNIK: And what happens to that four days? Does it ‑ ‑ ‑

PN151

MR REITANO: You get it as annual leave.

PN152

DEPUTY PRESIDENT GOSTENCNIK: Yes, but during the tour, or does it accrue for ‑ ‑ ‑

PN153

MR REITANO: As I understand it, on Hamilton DP’s analysis, when the employer directs you to take it, as with all of your other annual leave entitlement under this arrangement.

PN154

DEPUTY PRESIDENT GOSTENCNIK: But putting aside the direction, if no direction is given, then that four days accrues, is that ‑ ‑ ‑

PN155

MR REITANO: Yes, because you’re to be on par.

PN156

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN157

MR REITANO: Could I just give a practical example which is found in Ms Gaulin’s - I know she’s not relevant, but it helps illustrate the point, I think. It’s in her individual flexibility agreement. If you go to appeal book 160, and at 3.3, I don’t need to go to the rest of it because the provides the practical example of what I’m talking about. At 3.3, “Because pilots on a 28/28 roster”, and that’s what Ms Gaulin was working under, individual flexibility agreement:

PN158

- work on average more days than pilots on a 15/13 roster, ie 182 days, an additional two days annual leave is allocated to these pilots. These additional annual leave days are to be taken at the beginning or end of a tour at a time agreed between the pilot and the company.

PN159

So when you do the maths and work out the 28/28 pilot, they’re two days short of annual leave as against - or they’re working two days more, if you like, you can do it the other way, as against 15/13 pilots so you make it up by giving them some additional leave. I think it’s because the world doesn’t equally divide by 42, but I might be wrong. I don’t want to press that as the basis for it. To save me dealing with it later, Mr Saunders deals with the issue of the 2.7 days in his statement at - just pardon me a moment. I think it’s appeal book 290, paragraph 23.

PN160

Going back through the clause, clause 14.2.2, which I don’t read for present purposes, relates to what the duty period is. I don’t need to say anything more. 14.2.3 deals with rosters for touring pilots:

PN161

Rosters will be compiled to cover a period of 14 days and whenever possible will be promulgated in writing seven days prior to the commencement of the roster period. Rosters will nominate travel days and duty periods. The normal roster cycle may be altered by mutual consent. The chief pilot may alter the roster over the Christmas/New Year break to ensure duties over the festive are shared.

PN162

So the chief pilot is given a right to do something under 14.2.3. In 14.2.4, it’s headed, “Rostered irregular touring cycles”:

PN163

In unusual circumstances such as the start-up of an operation where tours of 28 days may be varied to meet operational necessity and where pilots work less than 15 days in a 28-day cycle where no leave has been taken, the situation will be treated as follows -

PN164

So there’s a prescription about how that’s to be treated, and then the important clause in our case which I think didn’t receive the attention it deserved, is 14.3. The scheme, we say, that is created by this clause is that - this whole clause, but in particular 14.2.1, is there’s two ways you can work. You can work a 15/13 roster or you can work an equal time roster. They’re the two ways that the agreement contemplates that a person can be rostered. We said before Hamilton DP, we say on appeal, that there is no right created either in the employer or the employee to nominate either of those ways, but they’re the two ways; one or the other is the way it has to be resolved.

PN165

You have to work in one of those two ways. It is to be agreed, it is a matter that, in Mr Quayle’s statement, that he refers to. I’ll provide some references to the evidence which receives no coverage in the decision below. It is in the context of an industry where hours and rosters are agreed - in the context of an employer, I’m sorry, where hours and rosters have always been agreed between the parties. Indeed, in this case, the hours of Gaulin were subject to agreement, her special individual flexibility agreement which I took the Commission to, and it’s found at about AB160, were subject to agreement.

PN166

The hours that were worked by Kasparis, and I again note that he in particular is not part of the case, but it illustrates the point; the hours negotiated by Kasparis and Quayle were the subject of an agreement, and the references to that are at appeal book 305 at paragraph 15, and appeal book 323, annexure RC-2. It was put to Kasparis and Quayle, “We want you to work particular hours. Tell us what they are?” Kasparis and Quayle responded and that was what the agreement was as to the hours they would work. But there’s also specific reference in Mr Quayle’s affidavit to the way in which hours were worked, being the subject of agreement.

PN167

You will see in the contracts of employment reference to your - I think it’s either “nominal” or “notional”, I think it’s nominal, rostered hours will be 15/13. Consistent with, of course, one of the two ways that is found in the agreement as to how hours are to be rostered. So again, the contracts of employment evidence the practice that grew up in the employer about things being agreed. This is not, with respect to Hamilton DP, a situation where the clause says that HNZ may direct employees to work one or other of these two ways.

PN168

There is a context to it that Hamilton DP thought that there was little of, and that is that everything in the case pointed to people agreeing to the rosters they worked on, and there was a very important out to those two forms of clauses. So they were, if you like, for want of a better term, the safety net rosters. You agreed to one or other of those, but 14.3 entitled the parties to agree to some other form of roster if they wanted to. 14.3.1:

PN169

Nothing in this agreement shall preclude the parties agreeing to alternate arrangements for hours of work or rosters to meet the operational requirements of the company provided the company’s approved flight and duty system is adhered to.

PN170

And then there’s a reference in 14.3.2 to part-time work.

PN171

VICE PRESIDENT HATCHER: So who are the “parties”?

PN172

MR REITANO: The parties are defined, as I recall it, as HNZ and the employees employed. It’s in appeal book 615 at 4.3, you’ll see “All herein referred to as the parties”, 4.1 is the company, 4.2 is all MPT pilots employed in a full-time or permanent or casual position, et cetera.

PN173

VICE PRESIDENT HATCHER: So is 14.3.1 referring to a collective alternative arrangement or individual arrangements?

PN174

MR REITANO: Our reading is individual arrangements, that the parties may agree as in an individual employee and the employer.

PN175

VICE PRESIDENT HATCHER: There’s nothing to be read in the fact that “parties” is not capitalised there?

PN176

MR REITANO: I think it’s just clumsy. I don’t think really anything turns on it, with respect.

PN177

VICE PRESIDENT HATCHER: So if you go back to 14.2.3(c), it uses the phrase, “the normal roster cycle”. Is that the same as the roster referred to in (a) and (b) or is it referring to something different?

PN178

MR REITANO: I would suggest it is, but only because I don’t think it can refer to anything else.

PN179

VICE PRESIDENT HATCHER: Or (a) in term refers to “cycles”, 13/28 day cycles.

PN180

MR REITANO: Yes. If it is, I can’t honestly answer, but I think it refers to the cycle that employees work 15/13.

PN181

DEPUTY PRESIDENT GOSTENCNIK: Mr Reitano, just so that I clearly under the point, in very simple terms, you say 14.2.1 creates no right to change, it simply specifies one of the two mechanisms by which work can be organised?

PN182

MR REITANO: Yes.

PN183

DEPUTY PRESIDENT GOSTENCNIK: However one got there, once one got to one or the other, any departure from that has to be by agreement other than in the circumstances expressly provided for in the remainder of that clause. For example, the chief pilot offering his particular circumstances.

PN184

MR REITANO: That’s a circumstance, yes.

PN185

DEPUTY PRESIDENT GOSTENCNIK: Yes. So other than those, any other change, changing from (a) to (b) or (b) to (a) must be by agreement?

PN186

MR REITANO: Yes, and there are two reasons for that, or two important reasons for that. The first is that - well, sorry, can I just go back one step because your Honour’s question was predicated on the basis that once you are there, as it were, that itself is the subject of agreement. When you are employed, I took - I gave your Honour the references to the various employees, all of them, all agreed on a particular roster cycle that they’d work under when they commenced employment.

PN187

It was subject of agreement, it wasn’t the subject of direction, but the two reasons why you end up in the situation that followed from your Honour said are the clause does not give anyone, employee or employer, or Santa Claus, the right to direct employees as to what roster they’ll work. The clause simply doesn’t say it. As a matter of ordinary English words, it simply does not say that.

PN188

VICE PRESIDENT HATCHER: So just to be clear on - does 14.2.3(c), you’re not contending that gives express - is an express provision to the effect of what you’re contending for, are you? Or are you?

PN189

MR REITANO: 14.2.3(c)?

PN190

VICE PRESIDENT HATCHER: (c), when it refers to normal roster cycle may be altered by mutual consent, you are or you are not contending that that supports you, your case?

PN191

MR REITANO: To the extent that it reflects what I’ve said generally about this clause and the history of the parties and so on, that a lot is left to them by way of agreement, yes, but I think what 14.2.3(c) is directed towards is that on any given occasion, the parties can depart from whether it be 15/13 or ‑ ‑ ‑

PN192

VICE PRESIDENT HATCHER: (a) or (b)?

PN193

MR REITANO: Yes, (a) or (b), or an equal time roster. They can depart from by agreement.

PN194

DEPUTY PRESIDENT GOSTENCNIK: But it’s not a reference to departing from (a) and going to (b) as such?

PN195

MR REITANO: No, because ‑ ‑ ‑

PN196

DEPUTY PRESIDENT GOSTENCNIK: But either of those are the normal roster cycle?

PN197

MR REITANO: Yes, that’s right. Yes. Or it may be that the normal roster cycle is (a), but could you, just for the next month - that doesn’t work - for the next six weeks, go on (b), can we agree to that? The whole notion, the foundation for this clause is, as I say, for two reasons. One is there is nothing in the clause that gives to anyone the power to direct when an employee - what type of roster an employee will work, but even if I’m wrong, even if I’m completely and utterly wrong about that, you can’t work 14.2.1(b) without any employee agreeing to that being the time at which they will take their annual - that being the time or times at which they will take their annual leave.

PN198

It contravenes the NES, it’s dead and buried, and there is nothing, you won’t find anything in clause 14.2.1(b) that would permit the employer to direct an employee or require an employee to take their annual leave in that way. Try as you may, the words just don’t allow you to get there. Now, Hamilton DP’s finding was against us on both grounds; 14.2.1 gave a power to direct which of those two rosters are worked, and clause 14.2.1(b) gave a power to direct that annual leave be taken at particular times.

PN199

He predicated his analysis on an acceptance of our position that that was 2.7 days per roster cycle. It doesn’t matter, for present purposes, as I said.

PN200

VICE PRESIDENT HATCHER: So did that conclusion involve a finding by the Deputy President that the requirement was reasonable pursuant to 93(3)?

PN201

MR REITANO: The answer is yes. The reason I’m careful about this, that I was criticised for not giving yes and no answers before his Honour, so the answer is yes, but ‑ ‑ ‑

PN202

VICE PRESIDENT HATCHER: I thought his Honour always wanted yes or no answers.

PN203

MR REITANO: If I could just - if your Honour would just pardon me a moment I’ll find the actual part of the decision that deals with it.

PN204

VICE PRESIDENT HATCHER: It appears to be 38 and 39, is it?

PN205

MR REITANO: I think it’s - the reason I was hesitating is it’s the bottom of AB9. The agreement requires consultation with employees ‑ ‑ ‑

PN206

VICE PRESIDENT HATCHER: Sorry, which one?

PN207

MR REITANO: At the bottom of AB9. It’s paragraph 38 of the decision.

PN208

COMMISSIONER ROE: Paragraph 38, yes.

PN209

MR REITANO: Yes. There’s a paragraph earlier where his Honour says I need to direct myself to provisions of the Act, and I haven’t read that and I don’t need to, and he says:

PN210

The agreement requires consultation with employees about the equal time rosters, including details such as days off, the employees receive the essential rest and recreation contemplated by annual leave.

PN211

I don’t know what that means.

PN212

DEPUTY PRESIDENT GOSTENCNIK: Presumably that first requires a conclusion that 14.2.1(b) is a term of the kind contemplated by 93(3).

PN213

MR REITANO: Yes, and I think his Honour says that, because of his Honour’s finding that the clause allowed the employer to direct when annual leave would be taken. He then cites a number of cases:

PN214

It would clearly be the case that equal time rosters which confine the taking of annual leave to one or more of the 42-day blocks would meet the requirements of the Act simply by prescribing a period of absence as annual leave rather than rostered days off. It would be odd if the Act required a change in terminology and no change at all in the substance of the roster. This would be a distinction made on the basis of language rather than any issues which affected the employee’s rest and recreation.

PN215

DEPUTY PRESIDENT GOSTENCNIK: Well, what does that mean?

PN216

MR REITANO: I don’t know, your Honour. I was about to say I think what his Honour is trying to say, and I don’t want to verbal his Honour but I think what he is trying to say is simply because you get a lot of days off at a time, that’s pretty close to annual leave, so that’s good enough.

PN217

VICE PRESIDENT HATCHER: The same thing is you could just call a particular 21-day block of annual leave and then that is the required rest and recreation contemplated annual leave.

PN218

MR REITANO: He is simply saying because you call it rostered days off, or annual leave, you’re still getting time off and whatever you label it doesn’t make any difference, you’re still getting the time off.

PN219

DEPUTY PRESIDENT GOSTENCNIK: Or perhaps to put it another way, because it’s attached to a period of rostered days off, then in those circumstances, assuming the requirement, it’s a term as contemplated by 93(3), if the requirement is reasonable in the circumstances.

PN220

MR REITANO: Well, with respect to that, these people don’t get weekends. There’s a whole ‑ ‑ ‑

PN221

DEPUTY PRESIDENT GOSTENCNIK: I’m merely trying to understand ‑ ‑ ‑

PN222

MR REITANO: No, if his Honour was saying that, he’s missed a whole Pandora’s Box worth of stuff, including the fact that it ignores the fact that these people don’t get weekends, that they’re working 21 days in a row before they see a day off, and his Honour wants to tack onto the rostered days off that they get, 2.3 days or 2.7 days, I keep getting it wrong, 2.7 days, to say that that’s their annual leave. There’s not many people in the workforce who get their annual leave in 2.7 day blocks.

PN223

DEPUTY PRESIDENT GOSTENCNIK: Your principal position is that 14.2.1(b) is not a term as contemplated by 93(3)?

PN224

MR REITANO: Hard and fast, that’s our principal position.

PN225

DEPUTY PRESIDENT GOSTENCNIK: But if you’re wrong about that, then you say it’s unreasonable in any event?

PN226

MR REITANO: Yes. I want to give your Honour a reference to something about why it’s unreasonable in a moment, but I just want to go to paragraph 39 because it wouldn’t be fair of me to ignore it. His Honour goes on and says:

PN227

Having regard to the needs of both the employee and the employer’s business -

PN228

MR REITANO: I don’t know what the needs of the employer’s business were, I don’t recall any evidence being led about what those needs were:

PN229

- and the other factors raised by the applicant -

PN230

That’s the AFAP:

PN231

- in my view, clause 14.2.1 meets the requirements of the Act, including section 93, as does any employer direction under it.

PN232

Now, they’re all the reasons we get, that his Honour thinks that it meets the requirements:

PN233

There’s no detriment to employees within section 55(4), and no undue influence or pressure under 34(4). The arrangement is consistent with the Act and other legislation, agreements and contracts of employment and is not otherwise harsh.

PN234

VICE PRESIDENT HATCHER: So his footnote 36, what’s that referring to?

PN235

MR REITANO: That refers to the AFAP’s submissions, which I’m going to come to in just a moment. I just want to finish off his Honour’s section on this:

PN236

In the alternative, the employer was willing to allow employees to nominate which 21-day blocks would be annual leave -

PN237

Well, it’s by the by. It has nothing to do with it:

PN238

- and to have them choose another seven days in another duty cycle for the taking of annual leave. It would consult with employees about such issues. This arrangement is, in my view, consistent with the Act, agreement and contracts of employment is not otherwise harsh -

PN239

Firstly, there was evidence that the employer was willing to do that. Secondly, it doesn’t fall within the definition of an equal time roster, so it’s not permitted under the agreement anyway, and ‑ ‑ ‑

PN240

DEPUTY PRESIDENT GOSTENCNIK: It would need to be a change to a normal roster cycle ‑ ‑ ‑

PN241

MR REITANO: Yes, correct.

PN242

DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ within 14.2.3, yes.

PN243

MR REITANO: Correct. And thirdly, employees are entitled to the rights they have under the NES and the rights they have under clause 13 of the agreement in respect of annual leave and it’s not for the employer to substitute some alternative arrangement about nominating the block when they’ll take annual leave. Could I go to the submissions; your Honour asked me about the reference in 36. If your Honour goes to the appeal book at AB93, it’s tab 3, and there were lengthy submissions put to his Honour about the issues in relation to annual leave and the reasonableness or otherwise of the provision.

PN244

The reference at the footnote is paragraph 70 to paragraph 103. I don’t want to take the Commission to all of that. I rely on it, but what I do want to take the Commission to is what was said about section 93. It starts at paragraph 98:

PN245

The National Employment Standard at section 93(3) provides for an agreement to include a term permitting an employee to be directed to take annual leave, but only in particular circumstances and only if reasonable.

PN246

Then the provision is quoted. It was anticipated that the employer would rely on 93(3) and it was said it doesn’t provide for such a term and there is a reference to the provisions of the Acts Interpretation Act and then at 101:

PN247

In considering what was intended by Parliament as what they constitute particular circumstances, the explanatory memorandum to the Fair Work Bill at 381 to 383 said subclause 93(3) permits terms to be included in an award or agreement that require an employee or that enable an employer to require or direct an employee to take paid annual leave in particular circumstances, but only if the requirement is reasonable. This may include the employer requiring an employee to take a period of annual leave to reduce the employee’s excessive level of accrual or if the employer decides to shut down the workplace over the Christmas/New Year period.

PN248

It was then said that that was well beyond the ambit of what was contemplated. The very notion that someone would be required to take their annual leave at 2.7 days per roster period is, in my respectful submission, and it was below, unreasonable. There is then a paragraph:

PN249

It is further noted that having regard to 382 of the explanatory memorandum as to relevant considerations of reasonableness, the desire of the respondent to acquit annual leave at the rate of 2.7 days each rostered period, the benefit to the employer being to avoid an annual leave liability, your Honour, the presiding member’s question about it being emptied out as soon as it’s accrued, or to provide annual leave cover and thus deny rights to employees is not reasonable and not a reasonable ground.

PN250

And then there’s a reference to the matters that are relevant to considering whether the provision was reasonable or not. But as I say, and as I’ve said, foremost, our position is that this is not a provision that allows an employer to direct or require an employee to take annual leave. If there’s any doubt, then it should be decided against the proposition. I don’t think there is any doubt, the provision doesn’t say it, read as a matter of ordinary English words. If there’s any doubt, it should be led against the proposition that it creates that. It would need to be crystal clear, in my respectful submission, in order to defeat a provision of the National Employment Standard, and you would need to see the sentence appear in clause 14.2.1(b), “For the purpose of this clause, the employer may require an employee to take annual leave.”

PN251

Or in accordance with this clause, HNZ might direct, may direct an employee to take annual leave as part of the roster. It simply doesn’t say it.

PN252

VICE PRESIDENT HATCHER: So just to be clear, if it’s not a section 93(3) provision, you say it contravenes the NES because it’s contrary to section 88?

PN253

MR REITANO: Yes.

PN254

VICE PRESIDENT HATCHER: All right.

PN255

DEPUTY PRESIDENT GOSTENCNIK: And presumably you say it’s also not a term otherwise dealing with the taking of paid annual leave, as set out in 93(4)?

PN256

MR REITANO: I don’t think it was ever argued, but yes. I don’t think it was ever suggested by anyone. Now, before I leave this part of my submissions, could I just reiterate that the way in which to sensibly read 14.2.1(b), that is, the equal time roster provision, is that if an employee agrees to work that roster, then it follows that the employee would, under 13.1.4, apply for annual leave which they are given the right or power to do under 13.1.4 and 13.1.5. The company may refuse or accept that.

PN257

That is the way that we say it works. His Honour dismissed - perhaps I should be careful about how I characterise exactly what his Honour said about that. His Honour, at 33, dismissed the suggestion that clause 13, insofar as it provided for annual leave to be taken in one 28-day block, relevantly curtailed the power to introduce an equal time roster. His Honour said, at 33 at page 9, appeal book 9:

PN258

When annual leave clauses of the agreement are examined, clause 13.1.2(a) provides for leave to be taken in one 28-day block immediately after one block of 13 touring days off, which is referred to one type of roster only. Clause 14.2.1(a), Work Cycles. These are the work cycles which provide for 13 days off duty. Equal time rosters in 14.2.1(b) do not provide for 13 days off duty and are not affected by the requirement. In any event, clause 14.2.1(b) expressly provides for leave to be taken during the year as part of the touring days off, not as a block.

PN259

MR REITANO: In making the finding, his Honour ignored the other parts of clause 13, in particular the power to apply and to be granted annual leave, and in our submission, the contrary interpretation that his Honour wanted, in paragraph 34, arose from the provisions of the agreement itself. Clause 14.2.3, which his Honour noted related to the normal roster cycle and allows such a roster cycle to be altered by mutual consent, referred to the temporary aberration that I referred to.

PN260

In the context of this clause, this refers to the details of the cycle promulgated in writing seven days prior to the commencement of the roster period. In effect, the roster on the noticeboard, not different work cycles under clause 14.2.1. His Honour then referred to the express right, in 14.1.3, to change roster cycles in respect of live onsite pilots and the express right under clause 14.2.3(c), but thought that those clauses related only to the general roster structure - sorry, related not to the general roster structure, but to particular rosters set for each employee seven days in writing beforehand.

PN261

What his Honour ignored is the submission we made that where the agreement gave people rights to do things, it said so. Where it required agreement, it said so. In respect of 14.2.1, it left the position open against a context of the fact that rostered hours were a matter of agreement between the parties. Could I then briefly say something about - I don’t intend to address all of the written submissions.

PN262

Could I then briefly turn to say something about - but I rely on them - the contract case.

PN263

DEPUTY PRESIDENT GOSTENCNIK: Sorry, Mr Reitano, just going back to that. So if an employee works on an equal time roster, and assuming for a moment your submission about the clause not being - that is, 14.2.1(b) not being a section 93(3) clause, the “unless otherwise agreed”, the manner in which annual leave is to be taken, in respect of that person, is derived from the NES?

PN264

MR REITANO: I’m sorry, your Honour?

PN265

DEPUTY PRESIDENT GOSTENCNIK: Sorry, I’ll start again. If an employee is working an equal time roster, and accepting for present purposes, your argument that 14.2.1(b) is not a term within the meaning of 93(3), 13.1.2 deals with the taking of leave in respect of the 28-day cycle. How does one identify the taking of leave provisions in relation to the equal time roster? Does one go to the NES or do you say one goes to 13.1.4 and 5?

PN266

MR REITANO: There are two matters that arise from your Honour’s question. First, there is what is the entitlement, that is, how much annual leave do you get.

PN267

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN268

MR REITANO: The answer to that is readily picked up in the part of clause 14.2.1 that Roe C asked me about. That is, additional days annual leave will be provided so that you’re on par with a 15/13 roster. So we know that a 15/13 person gets 28 days annual leave, plus the 13th block.

PN269

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN270

MR REITANO: So that’s the entitlement. The way in which an employee comes to take leave is governed by the NES. Now, that is, in a sense here, regulated by clause 13.1.4 and 5 and other provisions of 13, but in particular we know an employee, consistent with the NES, must apply for leave.

PN271

DEPUTY PRESIDENT GOSTENCNIK: Yes, and leave is to be taken at a time mutually agreed, subject to unreasonable refusal.

PN272

MR REITANO: Yes.

PN273

DEPUTY PRESIDENT GOSTENCNIK: Yes. Yes, I understand.

PN274

VICE PRESIDENT HATCHER: So 13.1.4 and 5 are section 93(3) provisions in effect, aren’t they? Or perhaps they’re simply facility provisions.

PN275

MR REITANO: Well, they’re not 93(3) provisions. 93(3) provisions are provisions ‑ ‑ ‑

PN276

DEPUTY PRESIDENT GOSTENCNIK: I think they might be 55 - where are we?

PN277

VICE PRESIDENT HATCHER: I meant 93(4) provisions.

PN278

MR REITANO: Yes, and 88 is the provision that relates to when an employee can take annual leave, and one of them - I don’t need to say it - is not when an employer decides they’ll take them, and nor can you find anything in the agreement about that.

PN279

DEPUTY PRESIDENT GOSTENCNIK: Or the provision that I had in mind was 55(4):

PN280

An enterprise agreement may include terms of the following kind, that is, terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES.

PN281

MR REITANO: Yes. And they would fall within that description, yes.

PN282

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN283

MR REITANO: I don’t want to - I might return to that in a moment. You’ll also note, although it’s probably by way of footnote, that under the NES, annual leave accrues as the year goes by, and that’s a requirement.

PN284

VICE PRESIDENT HATCHER: 13.1.2(a) may not be consistent with that requirement because it refers to annual leave accruing for each completed 12 months of continuous service. On one view, that doesn’t allow for progressive accrual.

PN285

MR REITANO: Well, yes. That may be right, but it can’t oust the NES. Your Honour, DP Gostencnik asked some questions about section 55. I simply note that these were dealt with in our written submissions at paragraphs 119 to 126 of the written submissions before Hamilton DP, at AB114 and 115. We dealt with sections 55, 56 and 334.

PN286

DEPUTY PRESIDENT GOSTENCNIK: Thank you.

PN287

MR REITANO: Could I finally just say something very briefly about, before I deal with some matters of footnoting that I want to deal with from the respondent’s submissions, just say something very briefly in addition to what’s been said in the written submissions about the contract argument. In each case, there was identified in the written submissions and in the evidence before Hamilton DP, written contracts of employment as they related to each employee.

PN288

No jurisdictional challenge was, or nor could be, ever made to dealing with that under the disputes provision. I don’t need to go into that because I don’t think there’s any challenge to that here either. The provisions of the contracts in each case, other than in the case of Kasparis, which I don’t need to deal with because we’ve dispense with the ground that specifically relates to him, all contained a provision. You’ll see it in AB127, for Duncan; AB155 for Gaulin; AB293 for Saunders, Duncan and Saunders being the important ones here.

PN289

All provided for a term that said you will nominally work a 15-days on and 13-days off roster. Travel will be on your own time. As this is a 24-hour operation, your actual hours will vary depending upon the roster and client requirements with due consideration for fatigue management guidelines. In each case, the contracts said that they could only be the subject of variation in writing, and I think the change was - or the change clause in the contracts dealt with significant change to the contract, and we said that where you are taking people away - whether you want to put the word “nominally” before it or not, I don’t care.

PN290

Where you’re taking people away from an arrangement where they have 15 days on and 13 days off and have 42 days annual leave once a year - or sorry, 28 days plus the 13th cycle to give them 42 days off once a year, to putting them on an arrangement where they have 21 days off, 21 days on, with 2.7 days treated as their annual leave, that was a significant variation to what had gone before. Now, the employer’s case focused on the word “nominal”, and said, well, they’re only nominal days.

PN291

Whatever work the word “nominal” had to do, there was a significant variation from moving to 15 on, 13 off, 21 on, 21 off, together with loading it up with what I’ve said about annual leave, and that required to be evidenced in writing. The Deputy President dealt with this at paragraphs 41 through 46. He noted the reference to significant variation in 53, and he said that there’s nothing in the contracts of employment that prevented an employer directing a roster different to the nominally provided roster and which was provided for in the enterprise agreement.

PN292

The roster in each case is not affixed as a central term of the contract, but it is a nominal roster. With respect to Mr Kasparis, the contract does not refer to, I don’t need to deal with that, and then he said, “in the alternative, the terms of each contract do not override clause 14.2.1.” No one ever suggested they did, of course. The terms of the contract were separate and apart. His Honour then went on to say that the terms of the contract evinced an intention that the agreement and the contract be read and operate together, in stating, “This contract and the agreement forms the entire agreement between you and the company which would mean that the agreement prevailed.” I don’t know why his Honour came to that view either, with respect.

PN293

The contracts were made at a time, in each case, where the provisions of the agreement were known. It was stipulated in each of the contracts that a 15/13 roster would be worked. It was stipulated in the agreement at clause 14 point - I keep forgetting the number - that a 15/13 roster was one of the alternatives, and that was the roster that the parties agreed to. Any change from those rosters to an equal time roster of any kind was, with respect, significant. His Honour gives no reasons for why he doesn’t consider that to be a significant change.

PN294

I did say before I came to the question of something by way of reply to some of the footnotes in relation to the respondent’s outline of submissions. That was the last matter. I should indicate, in the written submissions, I have dealt with - and I don’t want to labour it here - the irrelevancy that is the consultation provision in the agreement. The consultation provision in the agreement contemplates the existence of a right. Before the employer can direct change, you have to find a right in the employer to do so.

PN295

His Honour seemed to think that the existence of the consultation provision created a right in the employer to direct change. I think his Honour said that there was nothing remarkable about that interpretation. With respect, it’s completely bizarre. The consultation provision presumes at all points that there is a right to effect some sort of change consistent with it. The most logical explanation, if one needs one as to what operation the clause has in circumstances where such a right may not exist - and I’ve pointed to some of the examples in my submissions as to where it does exist.

PN296

I think there were three that I gave, one in relation to alteration of the normal roster cycle, I think; one in relation to the chief pilot, and I think there was one other. If I need to find rights that gave the employer the right, I could find them there, but even if there weren’t any, the most logical explanation for the existence of the consultation provision is of course that the Act requires it to be found in an enterprise agreement.

PN297

It doesn’t require people to put in rights - in inverted commas - to do with the work that a consultation provision might have. You need to find those rights elsewhere. It is not as his Honour labelled it or styled it, a change provision. It is a provision about consultation that is predicated on the basis of an extant or an existing either agreement or right elsewhere in the employer to direct changes occur.

PN298

COMMISSIONER ROE: Mr Reitano, just before you move to the respondent’s points, this agreement says that effectively you can work 24 hours a day, seven days per week, the rosters can be dealt with in that way. Why is it 28 days annual leave rather than 35 days annual leave? In other words, why isn’t there an additional week for shift workers, as provided for in the NES?

PN299

MR REITANO: We’ll take it, if you’re offering it.

PN300

COMMISSIONER ROE: I’m just trying to understand ‑ ‑ ‑

PN301

MR REITANO: It’s an industry - yes.

PN302

COMMISSIONER ROE: ‑ ‑ ‑ how the annual leave sits with the NES.

PN303

MR REITANO: It’s a curiosity, your Honour, that is the industry. It is the standard that is set in the industry, as I understand it. That’s what I’m instructed. There was no evidence before his Honour about that.

PN304

COMMISSIONER ROE: No, I understand.

PN305

MR REITANO: But my understanding about the history of the provision is that it’s just the industry standard. Oh, I’m told it’s also in the award. It’s the award entitlement as well.

PN306

COMMISSIONER ROE: Okay.

PN307

MR REITANO: but I can’t help your Honour as to any ‑ ‑ ‑

PN308

COMMISSIONER ROE: No, no, if it’s in the award, that’s how it perhaps makes ‑ ‑ ‑

PN309

MR REITANO: I think most of the matters that I wanted to deal with in reply I’ve dealt with on the way through, but could I perhaps just provide some references to some of the evidence that I may not have given. At paragraph 19 of the respondent’s submissions, it deals with the suggestion that there was no finding by the Deputy President that clause 14.2.1 granted HNZ the right to direct employees to take annual leave, and it’s very careful in the way in which the sentence is phrased. I’m not being critical about it, but you have to pay attention to the words:

PN310

- at particular times were not agreed by those employees or to take annual leave in blocks of 2.7 days per roster cycle.

PN311

The whole decision of Hamilton DP proceeded on an acceptance of the proposition that we were advancing, that it was 2.7 days that we were being directed to take. It doesn’t matter because we say that there is no power to direct us to take any annual leave, but can I just give the references. They’re at 19, 21, 22 and 39 of the decision.

PN312

VICE PRESIDENT HATCHER: What were they again?

PN313

MR REITANO: I’ve only given them in order, rather than best to worst. I think the best references are probably the later ones, but 19, 21, 22 and 39. I gave, I think earlier, the reference to Saunders who gave evidence that was, again, I don’t say you win cases just because witnesses aren’t cross-examined, I’m not making that trifling submission. More importantly, the uncontroversial evidence, because he wasn’t cross-examined, that Mr Saunders gave as the basis that the case proceeded on, which is found at AB290, paragraph 23, that a 21/21 roster would require him to take annual leave at the rate of 2.7 days per cycle.

PN314

He’s the only one who directly gave that evidence, but everything else proceeded largely, I don’t say exclusively, but largely on the basis that there was an acceptance that an equal time roster of 21/21 required annual leave to be taken at that rate.

PN315

VICE PRESIDENT HATCHER: So when you started, you took us to the F10 notification which refers to a direction to that effect, so that was never in dispute that that direction had been issued?

PN316

MR REITANO: Well, that’s what I understand is in dispute, either now or tangentially before Hamilton DP. The direction was that you work an equal time roster, 21/21. That wasn’t in dispute. I don’t anyone suggests that that’s in dispute and I give you the references to the correspondence in relation to that, if it is. But what appears to be agitated is that that would require you to take 2.7 days annual leave per roster cycle, and it’s suggested - I think I gave the example earlier - what seems to be suggested is you could get a direction to take 15 days annual leave in that roster cycle and six touring days off, and in the next roster cycle, you could be given a direction to take this many annual leave days.

PN317

As long as equal time on and off, it doesn’t matter how they’re configured. Our understanding of equal time roster, and as I say, accepted by Hamilton DP, is that when it says, as part of the touring cycle, you pro rata it as between the touring cycle over the year. To an extent that was accepted, I accept that in oral submissions, some different things were said, but to an extent the proposition was accepted by the respondent in its written submissions, at AB599, paragraph 78 in the second sentence, there are also some references in the transcript which contradict that.

PN318

The only other matter that I wanted to deal with that arises from the respondent’s submissions relates to Ms Gaulin, and I don’t want to labour the Commission with that if I’m not going to pursue it, so I might just park that. If I need to give the references, I will give them. They relate to questions about whether the Deputy President was in error in not dealing with her case, and that fundamentally is the ground of appeal that we run.

PN319

They concern questions about whether the individual flexibility agreement that Ms Gaulin was on had been terminated, whether it was validly terminated, whether the provision concerning her not being worse off, in effect, if it was terminated was operative or not and so on. I don’t want to develop the submissions unless I need to, and I wonder if I could just have leave to perhaps address for five minutes if I need to at the conclusion, if that’s suitable to my learned friend.

PN320

MR FELMAN: Well, I was going to ask what is happening with Ms Gaulin, so ‑ ‑ ‑

PN321

VICE PRESIDENT HATCHER: We might take a 10-minute adjournment before we start with you, Mr Felman, and Mr Reitano can get instructions on that point and advise us when we resume. We’ll now adjourn.

SHORT ADJOURNMENT [11.45 AM]

RESUMED [11.58 AM]

PN322

VICE PRESIDENT HATCHER: Mr Reitano.

PN323

MR REITANO: I’ve spoken to my learned friend about this: we have some difficulty getting instructions at the moment. I don’t know if the full bench has read any of Ms Gaulin’s evidence or anything like that but she lives a substantial period of the year overseas. I don’t know if that’s got something to do with the difficulty of contacting her. But I’m told that we will be able to contact her at least within 24 hours. What I was going to propose - and my learned friend I think is agreeable to this - is that if we wish to pursue that part of the appeal that concerns Ms Gaulin, we have leave to put something in writing by, say, next Monday afternoon.

PN324

The reason I ask for that is because - and my friend concedes, I hope he doesn’t mind me telling the bench that - there’s something of a new argument run on appeal that wasn’t run below in respect of Ms Gaulin. So the first time we saw it was when we saw the written submissions. I’m happy to meet it orally now but I just don’t want to waste the full bench’s time and I think the likelihood of Ms Gaulin wanting to pursue the case is - well, I can’t comment but I don’t think it’s likely that she would pursue it. But I’m happy to deal with it now ‑ ‑ ‑

PN325

VICE PRESIDENT HATCHER: So what was the proposal then; by when?

PN326

MR REITANO: By next Monday afternoon and then my learned friend would have a week to respond to anything I say.

PN327

VICE PRESIDENT HATCHER: That sounds fair.

PN328

MR REITANO: Other than relying on my written submissions, those are the submissions that I wish to make.

PN329

VICE PRESIDENT HATCHER: Thank you. Mr Felman.

PN330

MR FELMAN: Thank you, your Honour. I might just point out at that outset that there was an issue raised about consultation. We did give an undertaking below that we’d consult with the union about the direction to work the 21-day equal-time roster. That can be found at paragraph 812 to 814 at appeal book 31. So I don’t think that’s contentious and of course the union have pushed - that’s in response to the union pushing that there’s an obligation to consult in relation to this direction and I’ll come to the significance of that shortly. But the nub of this appeal is in relation to whether HNZ Australia - I’ll just call it HNZ - can direct its employees to shift to an equal-time duty cycle. The way the case is put is is it permitted by the terms of the EBA itself, in particular clauses 13 and 14 ‑ ‑ ‑

PN331

VICE PRESIDENT HATCHER: Sorry, before you move on, just so we can clarify the nature of the direction; so there’s no dispute that it was a direction to go on a 21 days on, 21 days off roster?

PN332

MR FELMAN: Correct.

PN333

VICE PRESIDENT HATCHER: Is there dispute that that roster would require 2.7 days annual leave to be taken?

PN334

MR FELMAN: Yes, there is a dispute about that.

PN335

VICE PRESIDENT HATCHER: There is a dispute?

PN336

MR FELMAN: Yes, and I’m going to come to this: there is nowhere anywhere in the EBA or in the direction on the evidence that there was going to be - you have to take 2.7 days of annual leave in each off-duty cycle. Now, Mr Saunders has some sort of reference to it at paragraph 19 of his statement but it’s not to the effect that there’s a direction. There may have been some discussions about it but at the end of the day, that is actually not what the clause says. The clause says it’s an equal-time roster in which annual leave is taken during the year as part of the touring days off.

PN337

VICE PRESIDENT HATCHER: If an equal time - an 21-day on-off roster can’t work unless there is some amount of annual leave being taken to make up the off days in the cycle. Is that right or not right?

PN338

MR FELMAN: No, not necessarily, your Honour.

PN339

VICE PRESIDENT HATCHER: Can you explain how it can work without doing that?

PN340

MR FELMAN: Well, the annual leave can be taken at any time provided it’s during the off period. They’re my instructions. That is the way that the system is able to be worked. For example ‑ ‑ ‑

PN341

VICE PRESIDENT HATCHER: If you implemented it tomorrow, the pilot would work 21 days and then has not worked enough hours to acquit the 21 days off without annual leave. Is that right or not right?

PN342

MR FELMAN: Has not worked enough ‑ ‑ ‑

PN343

VICE PRESIDENT HATCHER: If the roster starts today, in accordance with the direction, the pilot works the first 21 days.

PN344

MR FELMAN: Yes.

PN345

VICE PRESIDENT HATCHER: That’s not sufficient time worked to allow 21 days then being taken off without some of that being annual leave, is that right?

PN346

MR FELMAN: Well, my instructions are that they’re not required to nominate that period during that first 21-day off period as annual leave.

PN347

VICE PRESIDENT HATCHER: So what do they get paid? If you’re going to get paid for the 21 days you’ve either got to have accumulated enough time to have those 21 days off and be paid ‑ ‑ ‑

PN348

MR FELMAN: Yes.

PN349

VICE PRESIDENT HATCHER: - - or you’ve got to take some form of leave.

PN350

MR FELMAN: Well, I can only go on my instructions. I can get some further instructions about how mechanically that would work.

PN351

VICE PRESIDENT HATCHER: Does it mean that some of the period - if annual leave is not required to be taken as 2.7 days some of the period is unpaid. Is that the nub of it?

PN352

MR FELMAN: No, that’s not what I understand to be the case. It won’t be unpaid. They’re being paid a - the salary is an annual one and I think maybe there’s a bit of confusion. It’s an annual salary wherein the employees are required to work a certain amount of time on and a certain amount of time off and the salary just compensates the employee for that. It’s not a weekly wage depending on how many days you work.

PN353

VICE PRESIDENT HATCHER: Is it paid monthly, is it? Now is it paid?

PN354

MR FELMAN: It’s paid monthly.

PN355

VICE PRESIDENT HATCHER: Okay, so it’s divided by 12 and they get X.

PN356

MR FELMAN: Correct.

PN357

COMMISSIONER ROE: Yes, but under the NES you have to work - you can only work 38 hours a week ‑ ‑ ‑

PN358

MR FELMAN: Yes.

PN359

COMMISSIONER ROE: - - and it provides - it can be averaged over a period.

PN360

MR FELMAN: Yes.

PN361

COMMISSIONER ROE: Well, what’s the period? I mean, the period is the roster, isn’t it? Isn’t that how - so therefore, how can you have a 38-hour average if you can change that at random?

PN362

MR FELMAN: 38-hour average per week?

PN363

COMMISSIONER ROE: No, 38 hours average over the roster cycle. So it’s either 38 hours per week under the NES or 38 hours averaged over the roster cycle. So if the roster cycle is 21 days on, 21 days off, then the 38 hours is averaged over 42 days. That’s the way it works, so it’s averaged over 42 days. So how can that be achieved if you don’t know what is the annual - how those days are made up?

PN364

MR FELMAN: Well, you’ll know at some stage during the year, Commissioner, that you’ve taken annual leave at a certain time and then those other days - until then, you’re working 21 days on, 21 days off.

PN365

VICE PRESIDENT HATCHER: So is this what you’re putting; that notwithstanding it’s an equal-time roster, employees can accrue annual leave throughout the roster ‑ ‑ ‑

PN366

MR FELMAN: Yes.

PN367

VICE PRESIDENT HATCHER: - - and can apply for leave whenever the employee wants?

PN368

MR FELMAN: Yes.

PN369

VICE PRESIDENT HATCHER: Then the employee will make a decision about that.

PN370

MR FELMAN: Yes.

PN371

VICE PRESIDENT HATCHER: There’s no requirement under the direction to take any annual leave at any particular time during the cycle; is that the position you’re putting?

PN372

MR FELMAN: Provided the annual leave is taken during the off-duty part of that cycle, that’s correct.

PN373

DEPUTY PRESIDENT GOSTENCNIK: Mr Felman, can you point me to the provision in the agreement that is the provision that is a term providing for the averaging of hours over a specified period? I took it from your submission that you say the period is 12 months and you work 21 on, 21 off and you take annual leave and over that period, then you get your average.

PN374

MR FELMAN: Yes.

PN375

DEPUTY PRESIDENT GOSTENCNIK: Well, in order for that to be correct it seems to me that under section 63 you require such a term in the enterprise agreement.

PN376

MR FELMAN: Well, that’s a permissive section, your Honour. It doesn’t mean that - there’s no evidence, unfortunately, below about what the actual rosters and how many hours - the way in which the hours are going to be worked. There was no evidence about that. But section 63 is a permissive clause that permits that, your Honour. I don’t understand that there is a clause in the EBA that provides for the averaging of hours.

PN377

COMMISSIONER ROE: If you don’t have that clause then doesn’t the primary provision apply, which is that it’s 38 hours? 62 says that it’s 38 hours and then 63 is the permissive provision which allows for an averaging and generally speaking I would have thought averaging means the roster, unless as has been said there is some specific provision that says you can average it over one month or two months or perhaps even up to 12 months.

PN378

MR FELMAN: But section 62 provides that you can’t work more than the following hours unless the additional hours are reasonable for a full-time employee, 38 hours. There’s no suggestion at 21 days on that they’re working more than 38 hours a week.

PN379

COMMISSIONER ROE: But that’s not the - you see, it’s the additional hours issue that’s fundamentally about overtime.

PN380

MR FELMAN: Yes.

PN381

VICE PRESIDENT HATCHER: So they work seven days continuously, don’t they, in a week?

PN382

MR FELMAN: I have to confess I don’t have the answers that you’re seeking. This wasn’t an issue below. I can see that it’s important to the bench. I’m happy to get some instructions on that. It wasn’t the subject of evidence and my friend - and this is not a criticism of him - hasn’t said anything about these particular provisions.

PN383

COMMISSIONER ROE: It’s only relevant because of your response about the annual leave.

PN384

MR FELMAN: Yes. At the end of the day, whenever annual leave is taken the employees are not working for 21 days. Now, in a sense it doesn’t matter whether one is having acquitted 2.7 days in any cycle or in a 21-day block, the fact is they’re not - the employees are not working over each of those 21-day cycles. When it is that they’re notionally taking annual leave ‑ ‑ ‑

PN385

COMMISSIONER ROE: Annual leave isn’t a notional question. That’s the issue. It’s not a notional question.

PN386

MR FELMAN: Yes, but that is the clause.

PN387

COMMISSIONER ROE: Annual leave is distinguishable, surely, from the issue of rostered days off. The two things are completely different matters.

PN388

MR FELMAN: Well, with respect, Commissioner, what the EBA provides is that annual leave is worked during the rostered days off - annual leave is taken during rostered days off, during which, for example, you will get your annual leave loading over that period. It is still a period of - and this is the finding of the Deputy President ‑ ‑ ‑

PN389

VICE PRESIDENT HATCHER: Where does it provide that?

PN390

MR FELMAN: Sorry, your Honour?

PN391

VICE PRESIDENT HATCHER: Where does the agreement provide that, that annual leave has to be taken during the off-duty period?

PN392

MR FELMAN: Clause 14.2.1(b):

PN393

An equal-time roster in which annual leave is taken during the year as part of the touring days off.

PN394

VICE PRESIDENT HATCHER: So, if I wanted to accumulate four weeks’ leave at the end of the year and then go overseas, I can’t do that?

PN395

MR FELMAN: For four weeks?

PN396

VICE PRESIDENT HATCHER: Yes.

PN397

MR FELMAN: That’s right. This isn’t a discussion about the validity of this particular clause. This issue is whether the employer can direct the employee to work a roster - a tour-cycle in accordance with this provision that the agreement has been approved. I don’t understand that there’s been - perhaps is why I’m not able to answer these questions - a challenge to the validity of the agreement, as to whether it itself inherently in its terms, as distinct from the way it might be applied, is contrary to the NES.

PN398

COMMISSIONER ROE: No, the employee - Mr Reitano’s case is that an employee might agree to an equal-time roster ‑ ‑ ‑

PN399

MR FELMAN: Yes.

PN400

COMMISSIONER ROE: - - where they don’t ever have four weeks’ annual leave as a block. An employee can agree to that. That’s not contrary to the NES.

PN401

MR FELMAN: I accept that. But that’s in any arrangement; there is not right in the NES to take a 28-day block of annual leave.

PN402

COMMISSIONER ROE: I think there is.

PN403

MR FELMAN: But yes, the critical difference between the equal-time roster is that your maximum annual leave you can get is 21 days, whereas under the 15/13 roster you get tacked on at the end of your 13-day off-duty cycle, a 28-day block.

PN404

VICE PRESIDENT HATCHER: That difference is not of any significance, in your submission?

PN405

MR FELMAN: No, it is. I’m not suggesting that it’s not a matter of significance. They are quite different.

PN406

VICE PRESIDENT HATCHER: All right.

PN407

MR FELMAN: The question though is ultimately on the terms of the enterprise agreement, can HNZ direct its employees to work under this duty cycle? I apologise, your Honour. I had my phone on because I needed that email sent in relation to Ms Gaulin and I’ll turn it off now. I apologise - sorry, in relation to Mr Kasparis, his email, so I apologise for that. The issue is whether the employee can be directed to work this duty cycle without their consent. The issue is not whether this is a permissive duty cycle under the enterprise agreement. It has clearly been agreed - I understand the union supported the approval by the Commission and it was approved and I don’t understand there had been any discussion during that approval process about that particular ‑ ‑ ‑

PN408

COMMISSIONER ROE: If you accept Mr Reitano’s interpretation of the clause there would not be ‑ ‑ ‑

PN409

MR FELMAN: No, there wouldn’t be; I accept that.

PN410

COMMISSIONER ROE: There wouldn’t be any ‑ ‑ ‑

PN411

MR FELMAN: Yes, but that was unsaid. I mean, obviously the employer has a very different view about whether this can be done without consent. But the submission we make is that clearly, on its terms, clause 14.2.1 sets out two touring cycles and does not provide any fetter on its terms on whether the employer can require it; require the employee to work either of the two cycles. Absent a requirement to obtain consent, one oughtn’t be implied into the agreement. There are clauses that expressly say where certain conduct needs consent and there’s - with respect - there’s a consultation clause but there is nothing in the agreement that says, “You’re going to need their consent to change the employee to a cycle.”

PN412

With respect, my friend has it the wrong way around. He says there needs to be something in there that says you can do this without consent. It’s not the way that it works.

PN413

COMMISSIONER ROE: This isn’t a black-and-white question.

PN414

MR FELMAN: I accept that.

PN415

COMMISSIONER ROE: It depends on the context. There are some awards and some agreements where if it’s silent it means there’s discretion to do it, where there are others which when you look at the context it’s only able to happen if they’re - if certain circumstances are met. It depends on the context.

PN416

MR FELMAN: I accept that, Commissioner, but there’s ‑ ‑ ‑

PN417

DEPUTY PRESIDENT GOSTENCNIK: One of the contextual considerations that in relation to LOS pilots is an express provision allowing for alteration of rosters and there is no corresponding express provision to that effect in relation to touring pilots.

PN418

MR FELMAN: That is correct. That is part of the context of the enterprise agreement but we respect, your Honour, that deals with LOS pilots who have unique considerations and there’s no suggestion that because there’s a certain schema associated with LOS - who have completely different work patterns; they work on the site, they have different rosters over a period of 14 days where there’s a minimum of four days - it’s a 10-day on, four-day off. There is no duty cycle. So it’s a completely different point - in fact, with respect, your Honour, my submission is that that clause 14.1.3 does not provide support for the proposition that because there’s a discretion for the employer to change the roster for LOS pilots suddenly you need to cede in the agreement a similar clause to enable tour-duty cycles to be only changed by consent.

PN419

It’s a completely different clause. 14.2 actually sets out what the two tours are and then there’s a separate clause, your Honour - 14.2.3 - about rosters, which is a separate issue because it’s one thing to have a duty cycle but you need a roster as well. When in the roster, when during the week, are you going to be working? Obviously it’s a 24/7 operation. There’s a limitation obviously on when the employees will work. SO there needs to be a roster set up and clause 14.2.3 sets out the promulgation of that roster and with respect, clause 14.2.3(c), that’s what that consent requires; a change to that roster is our primary submission.

PN420

I think my friend - and he will correct me if I’m wrong - didn’t seem to suggest that clause 14.2.3(c) was a requirement that changing 14.2.1, the cycle under there, required consent. I don’t understand that that was the argument. My friend was not able to point to anything in the enterprise agreement that set out a fetter - sorry, that’s within clause 14; I’ll come to clause 13 in a moment - that set out a fetter in clause 14.2 itself as to how an employer can direct an employee to take ‑ ‑ ‑

PN421

VICE PRESIDENT HATCHER: So if you have an equal-time roster under 14.2.3 for each 14-day period within the cycle the employer can direct which days to be working and which days you’re having off?

PN422

MR FELMAN: Yes.

PN423

VICE PRESIDENT HATCHER: Doesn’t that operate as a further, effective limitation upon the taking of annual leave, even if we ignore the 2.7 days? I mean, if the leave has got to be taken up at some stage during the cycle and the employee is entitled to promulgate a roster every 14 days which says, “You shall work these days and you shall have days off these days,” that’s a further complete control over when annual leave can be taken, isn’t it?

PN424

MR FELMAN: Well, that would be - that would have to be subject to the annual leave that the employee has asked for and received. You couldn’t roster someone during a period - that roster period is when they’re working. They can’t be asked to work during a period within which either they’re off or they’re taking annual leave. It sort of conflates together because they can only take their annual leave during a duty period off. So that roster couldn’t affect that, your Honour.

PN425

VICE PRESIDENT HATCHER: I thought you said annual leave could only be taken when you’re rostered off?

PN426

MR FELMAN: Sorry, annual leave can only be taken - on the equal-time roster annual leave can only be taken during the touring days off, so the 21 days off.

PN427

VICE PRESIDENT HATCHER: But you only know the touring days off when you get a roster that tells you what days you have off. IS that right?

PN428

MR FELMAN: The way I understand it works is that the roster only applies - it covers employees in relation to their touring days on.

PN429

VICE PRESIDENT HATCHER: Yes, but you have to take your leave while you’re on a touring day off.

PN430

MR FELMAN: Yes.

PN431

VICE PRESIDENT HATCHER: How do you know it’s a touring day off without having a roster?

PN432

MR FELMAN: Well, when you start your cycle you know, your Honour, that you’re on the 21 - the answer is this: you know where you are because you’re on the 21 days on and then you know the next 21 days are off.

PN433

VICE PRESIDENT HATCHER: You do the 21 days on continuously, do you; 21 days in a row?

PN434

MR FELMAN: Yes, 21 days on and then 21 days off.

PN435

VICE PRESIDENT HATCHER: So what do you need the roster for? The roster tells you what hours you’re on?

PN436

MR FELMAN: Yes, correct - like for example, day shift or night shift. So for example, they might be 21 days on but let’s just take the Monday: they’re told, “You’re doing the 8 am till 4 pm shift.”

PN437

VICE PRESIDENT HATCHER: Right. So when 14.2.3(c) refers to the normal roster cycle being altered, what’s that referring to?

PN438

MR FELMAN: We say that that refers to the roster that’s promulgated in relation to the touring days on of that employee. So the employee is given a roster. This is - during your 21 days on you’re going to be working from 8 am to 4 pm say, for example, Monday, Tuesday, Wednesday, Thursday, Friday. If that’s going to be changed, “We’ve changed our mind, we want you to work the night shift on those days on,” we say that 14.2.3(c) says, “No, you need that with consent.”

PN439

VICE PRESIDENT HATCHER: Why is it we use a different phrase from (a) and (b)?

PN440

MR FELMAN: Well, I think that is part of the problem with this enterprise agreement. The phraseology throughout is not consistent. It is the word, “roster.” 14.2.3 uses the word, “rosters,” in subparagraph (a) and (b) whereas 14.2.1 is a tour cycle, although I accept, your Honour, it does use the word in (b), “An equal-time roster.” So clearly, there’s a confusion of language and I don’t know that it helps necessarily because none of these terms are defined. They’re used in different ways in different parts of the agreement but having regard to the context of 14.2.3 and where subparagraphs (a), (b) and (c), 14.2.3(c) refers to the roster promulgated for that 14-day period.

PN441

To support that, your Honour, one looks at the previous enterprise agreement, the previous version of the enterprise agreement 2010, which is exhibit - I can dig up the reference - had that particular clause in there; that is, that the normal roster cycle may be altered by mutual consent but in 2010 agreement there was no alternative tours. There was only one. So that clause couldn’t have been directed to requiring consent to change between two different tours.

PN442

VICE PRESIDENT HATCHER: So just to be clear, the equivalent of 14.2.1(b) was not in the preceding agreement?

PN443

MR FELMAN: Correct.

PN444

VICE PRESIDENT HATCHER: But 14.2.3(c) was?

PN445

MR FELMAN: Yes. So my submission is that can’t be intended to require consent between the two tours because when it was in the 2010 agreement when it was there, there was only one tour.

PN446

DEPUTY PRESIDENT GOSTENCNIK: Mr Felman, can I just this to you: it seems to me that 14.2.1(a) and (b), those are different roster cycles.

PN447

MR FELMAN: Yes.

PN448

DEPUTY PRESIDENT GOSTENCNIK: The reference in 14.2.3(a) is that the roster that sets out the hours of duty within that cycle for a period of 14 days.

PN449

MR FELMAN: Yes.

PN450

DEPUTY PRESIDENT GOSTENCNIK: So then when I get to (c) where there’s a reference to the normal roster cycle, it seems to me to be a reference to the cycle, the normal cycle in (a); that is either the 28-day cycle or the time roster cycle so that what is required if I’m going to alter that cycle is consent but the roster is a different creature. It’s an instrument within the cycle setting out the hours of work.

PN451

MR FELMAN: Yes.

PN452

DEPUTY PRESIDENT GOSTENCNIK: I see a lot of nodding so that seems to be consent.

PN453

MR FELMAN: Yes, well, the way it was put below and the way I understand it is that it’s in relation to the roster but there’s going to be a change and this might be what was intended in the 2010 agreement. Look, here’s the tour, it’s 13/15. If there’s going to be change - for example, 10/15 or 21/21 - in circumstances where that was not in contemplation it may have been that 14.2.3(c) was the mechanism by which the employer and the employee could agree to a change, although ‑ ‑ ‑

PN454

DEPUTY PRESIDENT GOSTENCNIK: I might be wrong but I understood Mr Reitano agreed to that, that the cycle refers to a change to - not between those two cycles but in those cycles.

PN455

MR FELMAN: Yes, and that’s another way of reading that agreement but it is unclear.

PN456

COMMISSIONER ROE: Just before you move off this general point, clause 14 begins with, “hours of work is provided for in the NES.” So that’s clearly a reference to section 62 and following.

PN457

MR FELMAN: Yes.

PN458

COMMISSIONER ROE: Then 14.2.1(a) and (b), they are provisions consistent with section 63 of the Act; that is, they’re provisions that provide for the averaging of hours of work over a specified period. Is that your understanding?

PN459

MR FELMAN: Yes, yes.

PN460

COMMISSIONER ROE: So the 38 hours work - 38-hour week, 38 weekly, ordinary hours - are either in the form of 13 28-day cycles, so the 38 hours is averaged over that 28 days, or ‑ ‑ ‑

PN461

MR FELMAN: Yes, during which you’re working 15 of those days.

PN462

COMMISSIONER ROE: During which you’re working 15 - or in an equal-time roster and if you’re looking at the 21-day that’s a 42-day averaging.

PN463

MR FELMAN: Yes, so you’re averaging - in relation to the first tour you’re averaging it over a 28-day period and in relation to the second tour - remembering (b) doesn’t say 21.

PN464

COMMISSIONER ROE: No, no, but I’m using that example.

PN465

MR FELMAN: Yes, but in these circumstances - correct, it’s averaged over a 42-day period.

PN466

COMMISSIONER ROE: Yes.

PN467

MR FELMAN: Correct - I think I misunderstood the inquiry earlier about sections 62 and 63 and I turned my mind to it.

PN468

DEPUTY PRESIDENT GOSTENCNIK: And then if that’s right those hours that are in excess of the average of 38 can be refused, if they are not reasonable?

PN469

MR FELMAN: Correct. You’ve always got to comply with the NES. There’s no way of ousting the NES and we aren’t for a second saying - we accept that this agreement, if the NES prevents its operation there’s a problem.

PN470

VICE PRESIDENT HATCHER: So under this roster the provisions for applying to take annual leave under 13.1.4 and 13.1.5 still apply?

PN471

MR FELMAN: Yes - sorry, your Honour.

PN472

VICE PRESIDENT HATCHER: If I’m working this roster and I’m just simply happy to let my leave accumulate and don’t apply that’s fine, is it?

PN473

MR FELMAN: Yes.

PN474

VICE PRESIDENT HATCHER: No need to ever acquit for the hours? You just get it paid on termination 10 years later?

PN475

MR FELMAN: I’m just checking whether there’s a requirement that it needs to be taken within the year but subject to a reasonable direction that - it would be taken at a particular time, that’s right. I know that point was treated with a bit of hostility but that’s the point I make, that 2.7 is - when I say, “notional,” I don’t mean annual leave is notional. What I meant was that when it’s said that you take it is notional because the reality is - and we accept this. This is a feature of the equal-time roster: it’s 21 days on, 21 days off, infinitum. So the annual leave - and we accept that you’re directed to take annual leave during the cycle off.

PN476

We accept that. That’s what the clause says. So whether it’s just part of your cycle off - you’re not working because you’re in your off cycle or you’re not working because you have annual leave, that is an inherent feature of that particular duty cycle. Now, where you are on annual leave you’ll be paid the loading. If you’re not on annual leave, as your Honour correctly points out, it accumulates and accrues. But that doesn’t mean that it can accrue for ever. There is always that option, your Honour, to lawfully direct someone to take annual leave.

PN477

VICE PRESIDENT HATCHER: Is 14.2.1(b) a provision authorised by section 93(3)?

PN478

MR FELMAN: Yes, and that is one of the grounds of appeal that I’m happy to go to now, your Honour, is that’s - sorry, can I just - sorry. I’ve just had it confirmed that if an employee wants to leave - just before I go to that point - wants to say, “I don’t want any annual leave,” and then on the last cycle, the last 21-day-off cycle, says, “I want it all now,” they wouldn’t be working anyway. They’d get their leave loading for that, say, three-week period. But that doesn’t mean, your Honour, that they cannot ever acquit it throughout their entire employment and therefore have it accrued - paid out on accrual. There is always that ability to direct.

PN479

DEPUTY PRESIDENT GOSTENCNIK: Mr Felman, I did I hear you correctly to say that salary is paid monthly? Is that what you said?

PN480

MR FELMAN: They’re my instructions.

PN481

DEPUTY PRESIDENT GOSTENCNIK: Because clause 8.1.1 says, “Pilots’ salary shall be paid fortnightly.”

PN482

MR FELMAN: My instructions are that it is fortnightly. So, your Honour, to address the issue about section 93(3), the first point to make, your Honour, is that - if I just go to section 93 - section 93(3) is premised on there not being an agreement, which section 88 prima facie requires. Section 88 says:

PN483

Paid annual leave may be taken for a period agreed between the employee and his or her employer.

PN484

On its face, clause 14.2.1 does not contravene that, because an employee may agree to it. Even though we say the employer can direct the employee to do it, the employee may agree. The employee may say, “I’m quite happy to do the 21 day on, 21 day off, and I’m quite happy to take my annual leave ‑ ‑ ‑“

PN485

VICE PRESIDENT HATCHER: I think the appellants conceded that an employee can agree to do it.

PN486

MR FELMAN: That’s right.

PN487

VICE PRESIDENT HATCHER: This has arisen because there’s two employees who have not agreed to do it.

PN488

MR FELMAN: So it’s in the particular circumstances that one needs to look at ‑ ‑ ‑

PN489

DEPUTY PRESIDENT GOSTENCNIK: But if your submission, Mr Felman, is that under the arrangement in 14.2.1(b) leave can be taken at any time throughout the year provided it’s attached to the touring days off, then subject to appropriate applications being made for that leave under 13.1.4 and 1.5 it will always be agreed.

PN490

MR FELMAN: Well, except we’ve got two employees who don’t agree to taking that type of annual leave. But you’re right, there will always be agreement if the employee agrees to this duty cycle.

PN491

DEPUTY PRESIDENT GOSTENCNIK: Is that because of the understanding that seems to have been central to this case, that leave is to be taken at 2.7-day intervals, because the view might be different if that is now not the understanding and you say it’s not the understanding.

PN492

MR FELMAN: That I don’t know, your Honour. As to why they - I think the evidence was a bit beyond that, to be fair to my friend. I think Ms Gaulin, for example, gave evidence that she likes the 42 days off because she can go back to London. The reason why different employees don’t agree might depend on their own personal circumstances. It may not have anything to do with the 2.7 days. They must may not like the fact that they don’t get a 28-day block any more.

PN493

DEPUTY PRESIDENT GOSTENCNIK: Or that they can only take it during the off cycle.

PN494

MR FELMAN: Yes, I think there was - and this isn’t in the evidence but I don’t want to mislead the Commission so I’ll say it on my feet and I don’t think my friend will object - there was some discussion with employees that they would be acquitting annual leave at 2.7 days.

PN495

DEPUTY PRESIDENT GOSTENCNIK: There is some discussion with employees.

PN496

MR FELMAN: There wasn’t evidence before that but I’m instructed that there was some discussion about it and I’m now admitting that to the bench. But that doesn’t mean that they’re entitled to do that and that doesn’t mean that that’s what the clause allows them to do and when I’m now saying on my feet that that is not the position of the company. To what extent that affects the union, I don’t know.

PN497

DEPUTY PRESIDENT GOSTENCNIK: So, Mr Felman, if an employee is entitled to take 28 days off per year at any time he or she wishes, provided it’s attached to an off-duty period - that’s a period of 21 days - 28 and 21 days is more than 42 days. So I don’t understand where the objection is that in relation to the evidence someone likes taking 42 days off because that will give them ‑ ‑ ‑

PN498

MR FELMAN: In one block.

PN499

DEPUTY PRESIDENT GOSTENCNIK: Yes, but that will give them - 28 plus 21, if it’s attached to a period of off-duty, which is what this says, leave should be taken as part of the touring days off and the touring days off are 21 days ‑ ‑ ‑

PN500

MR FELMAN: So that’s the most you can take in one block.

PN501

DEPUTY PRESIDENT GOSTENCNIK: Then you take the 28 days, that will give you 49 days.

PN502

MR FELMAN: No, I don’t - there may be a misunderstanding. I don’t think you can take - you can’t take your whole 28 days in one off-duty cycle because that’s only 21 days.

PN503

VICE PRESIDENT HATCHER: You can only ever take it during the 21-day off-cycle period.

PN504

MR FELMAN: Correct, so the most you can get in one hit is 21 days.

PN505

VICE PRESIDENT HATCHER: I see, so you’ve got to take it as part of the touring days off is as part of the 21 days.

PN506

MR FELMAN: Yes, you can’t tack it on to the end of the 21.

PN507

VICE PRESIDENT HATCHER: Isn’t that analogous to telling a Monday to Friday worker that they can only take annual leave on weekends?

PN508

MR FELMAN: Well ‑ ‑ ‑

PN509

VICE PRESIDENT HATCHER: Weekends and rostered days off?

PN510

MR FELMAN: - - a Monday and Tuesday worker?

PN511

VICE PRESIDENT HATCHER: A Monday to Friday worker.

PN512

MR FELMAN: A Monday to Friday worker.

PN513

VICE PRESIDENT HATCHER: Maybe works Monday to Friday, accumulates a day off every month ‑ ‑ ‑

PN514

MR FELMAN: But it is different, your Honour, because they’re not being paid for the weekend, normally. They’re not working the weekend, they’re not being paid. These employees are being paid during their - it’s not analogous because this is a roster or a cycle where they’re working 21 days on and getting paid for working the 21 days off.

PN515

VICE PRESIDENT HATCHER: I’ll change analogy then: it’s like telling a person who works 40 hours a week and accumulates a rostered day off every month that at least part of their annual leave has to be taken on a rostered day off. That’s the analogy, isn’t it?

PN516

MR FELMAN: Where they’re paid for that rostered day off?

PN517

VICE PRESIDENT HATCHER: Yes.

PN518

MR FELMAN: Yes. But that is what the EBA provides, your Honour; that is what it provides. You’ve got to remember these are particularly unique circumstances of the employer as well. I mean, this is an enterprise agreement that has been agreed to by the union and the employer. I know there is an issue about whether there needs to be consent but clearly contemplated was that this was an appropriate duty cycle because of the needs of the employer. The employer is a 24/7 operation which flies pilots to - and I don’t think there’s a lot of evidence about this but I don’t think it’s particularly controversial ‑ ‑ ‑

PN519

MR REITANO: I object to the evidence being led from the bar table.

PN520

MR FELMAN: An employer and employee and a union are entitled to negotiate terms that are suitable to that particular enterprise and it’s been approved. The issue here is the interpretation of that enterprise agreement: can the employees be directed to work that cycle without their consent?

PN521

DEPUTY PRESIDENT GOSTENCNIK: And can they as a consequence be told how much annual leave they can take at any one time?

PN522

MR FELMAN: Correct, but they’re told that in relation to the other duty cycle as well, your Honour. It just happens to be a direction that these employees are happy with. This is the point that I want to make: they’re both prescriptive.

PN523

COMMISSIONER ROE: It’s much less prescriptive, surely? In the other rosters - in the other tour cycle, the direction in terms of the taking of annual leave is much less restrictive and it’s actually set out in the annual leave clause and the annual leave clause specifically tells you how you will take your annual leave and that is clause 13.1.2.

PN524

MR FELMAN: Yes.

PN525

COMMISSIONER ROE: That actually insures that people get a continuous period of 42 days off on annual leave when in their normal work cycle they only - in their normal work cycle they only get 13 days off so normal pattern of work they get 13 days off.

PN526

MR FELMAN: Yes, I accept that.

PN527

COMMISSIONER ROE: Annual leave, they get a block of 42 days off whereas under this alternative option normal cycle of work you get 21 days off, annual leave, no difference.

PN528

VICE PRESIDENT HATCHER: The only difference being the payment of ‑ ‑ ‑

PN529

COMMISSIONER ROE: The only difference being the annual loading.

PN530

MR FELMAN: I accept that. I accept that clause 13.1.2 is a different - it is restrictive in the sense that you’ve got to take your 28 days in one block.

PN531

COMMISSIONER ROE: Some people mightn’t like that.

PN532

MR FELMAN: Correct.

PN533

COMMISSIONER ROE: That’s understandable.

PN534

MR FELMAN: Some people might.

PN535

COMMISSIONER ROE: It’s a lot less restrictive though, isn’t it?

PN536

MR FELMAN: Correct, it is less restrictive but the issue is what turns on that, Commissioner. Yes, it may be less restrictive and yes, that - but at the end of the day this issue is whether consent is required and it can’t turn on which of the duty cycles is better or more restrictive or more beneficial to employees. It turns on the language of the enterprise agreement.

PN537

VICE PRESIDENT HATCHER: This issue turns on whether or not that provision is reasonable if you say it’s a provision within the meaning of 93(3).

PN538

MR FELMAN: Yes, I accept that. Now, if we’re in the territory of 93(3), there’s an issue of reasonableness and we address that. I accept that. But again, the mere fact that one cycle is less beneficial or a bit more restrictive than another doesn’t itself mean that therefore it’s unreasonable. It just means that one is a bit less restrictive. Again, as the Commissioner correctly pointed out, that may not suit everyone. I’m being hypothetical but you could have someone here who says - who has been shifted to the 28 days, saying, “No, no, I’ve got childcare responsibilities and my kids are on school holidays; I like to take a week off every school holidays, I don’t like taking one 28-day block,” and then they’re complaining that you’re trying to shift them from an equal-time roster to a 28-day block where suddenly they’re forced to take all their annual leave in one particular cycle.

PN539

COMMISSIONER ROE: But the general scheme of the NES is people take annual leave by agreement, right?

PN540

MR FELMAN: Yes.

PN541

COMMISSIONER ROE: That’s the general scheme so that’s the way you overcome that. Then under certain circumstances you can have restrictions imposed in awards and agreements ‑ ‑ ‑

PN542

MR FELMAN: I accept that.

PN543

COMMISSIONER ROE: - - provided they’re reasonable.

PN544

MR FELMAN: Yes, and that’s the terms of section 93(3), which I’ll go to. I think I should address it now.

PN545

DEPUTY PRESIDENT GOSTENCNIK: That brings us to paragraphs 37 to 40 of the judgement.

PN546

MR FELMAN: Correct - yes, that’s right, your Honour. Now, section 93, my friend actually said - I think I need to address this first - that clause 14.1.2.1(b) isn’t even a clause that is captured by section 93(3). Then the subsidiary argument is that even if it is it’s not reasonable. If I address the first point, that the section provides that an enterprise agreement may include terms requiring an employee or allowing for an employee to be required to take paid annual leave in particular circumstances.

PN547

Well, clearly that’s what clause 14.2.1(b) is. It’s requiring or allowing an employee to be required to take annual leave in particular circumstances, those being during the touring days off. Subject to the issue of reasonableness, that clause is squarely caught by section 93(3). The issue is whether it’s reasonable.

PN548

VICE PRESIDENT HATCHER: I hate to jump back to this but is this right: if you work under the equal-time roster for a year, you don’t take any annual leave during that year, there’s no direction at that point to take the annual leave and then you terminate your employment, you’re simply paid out the accrued annual leave, are you?

PN549

MR FELMAN: Yes.

PN550

VICE PRESIDENT HATCHER: There’s no cross-acquittal about days off or anything like that?

PN551

MR FELMAN: No.

PN552

VICE PRESIDENT HATCHER: Right.

PN553

COMMISSIONER ROE: But you won’t have worked enough hours to justify your rostered days off.

PN554

MR FELMAN: But you don’t have to - the rostered days off are just provided for in the agreement. You don’t have to work enough hours to justify the rostered days off. You work 21 days and then you get 21 days off and you’re paid for both.

PN555

VICE PRESIDENT HATCHER: Effectively makes it something less than a 38-hour week.

PN556

MR FELMAN: Well, that would depend, your Honour, on how many hours had been worked during the 21 days on, doesn’t it?

PN557

COMMISSIONER ROE: Isn’t that a real stretch of the interpretation of the words, “an equal-time roster in which annual leave is taken?” It doesn’t say, “May be taken.” It says, “is taken during the year as part of the touring days off.” Isn’t the ordinary meaning of that that you will actually take your annual leave entitlement as part of your touring days off except for the additional days, that is, if there aren’t enough in your cycle?

PN558

MR FELMAN: Yes.

PN559

COMMISSIONER ROE: Isn’t that a proper, ordinary reading of it?

PN560

MR FELMAN: Yes, and that may allow, Commissioner, HNZ to say, “Look, it’s been 10 months. You haven’t taken any annual leave and the clause says you’re meant to take it during the year as part of the touring days off and we’re directing you to do it.” But if they don’t do that then they haven’t taken their annual leave.

PN561

COMMISSIONER ROE: But then it’s not consistent with the wording, which is saying, “is taken.”

PN562

MR FELMAN: Then it isn’t - then they haven’t taken their annual leave consistent with 14.2 and the employer wears the consequences, that they have accrued untaken annual leave on termination of employment.

PN563

COMMISSIONER ROE: But isn’t a more natural reading of it that it will be a cycle where 2.7 days off annual leave is being taken out each cycle? Isn’t that a more natural reading?

PN564

MR FELMAN: In my submission that is not required by (b.) “Is taken during the year as part of the touring days off,” could easily also be read in one whole block ‑ ‑ ‑

PN565

COMMISSIONER ROE: Well, it can’t be in one whole block if it’s ‑ ‑ ‑

PN566

MR FELMAN: Sorry, one block and then seven days later - yes, it does have to be during the year, looking at that clause. But it doesn’t say anything there about it’s got to be the same amount of annual leave in each cycle or that it has to be in each off-duty cycle at all. It just says, “During the year.”

PN567

COMMISSIONER ROE: The reason I’m asking the question is really - it relates to Vice President Hatcher’s question. It struck me - and I was asking you to respond - as an unnatural reading of the clause to allow for the possibility that none of the annual leave is actually taken during the year.

PN568

MR FELMAN: IF that was the case, if that had happened, then it would not appear to be consistent with what 14.2.1(b) requires. But that doesn’t mean that - again, that doesn’t mean that if it happens - for example that they’re not required to do but there’s no obligation to pay it out.

PN569

COMMISSIONER ROE: I understand that point but the mutual intention of the parties in reaching the clause 14.2.1(b) was that annual leave would normally be taken during the year as part of the touring days off.

PN570

MR FELMAN: Yes, I accept that. I accept that, Commissioner, but the Vice President’s question was that if it’s not and they’re terminated and there’s no direction to take it then what happens? I don’t think an employer could say, “Well, we’re not paying you because under 14.2.1(b) annual leave is ‑ ‑ ‑

PN571

VICE PRESIDENT HATCHER: Except there’s no set-off, there’s no notion of days owing or anything of that nature.

PN572

MR FELMAN: No.

PN573

VICE PRESIDENT HATCHER: Right. So you were going to address paragraphs 37 to 40 of the judgement?

PN574

MR FELMAN: Yes. This is dealt with in our submissions at paragraphs 24 to 29.

PN575

VICE PRESIDENT HATCHER: So in paragraph 38 of the judgement the Deputy President says:

PN576

The employee received the essential rest and recreation contemplated by annual leave.

PN577

MR FELMAN: Yes.

PN578

VICE PRESIDENT HATCHER: Is that finding justified in circumstances where there is an effective prohibition on taking four continuous weeks off?

PN579

MR FELMAN: Sorry, if your Honour could repeat that question?

PN580

VICE PRESIDENT HATCHER: Yes: is that finding justified in circumstances where there is an effective prohibition on taking four weeks annual leave off in one continuous period?

PN581

MR FELMAN: Yes, with respect, it is. I mean, there is no requirement that all annual leave be taken in one 28-day block.

PN582

VICE PRESIDENT HATCHER: There’s no requirement but it’s effectively prohibited.

PN583

MR FELMAN: It is, but that might be the same where an employer says to an employee, “Either taken annual leave during the Christmas period” - that then means if you want 28 days a year that you won’t be able to take annual leave in a 28-day block at some other time.

PN584

COMMISSIONER ROE: Different issue.

PN585

MR FELMAN: Sorry, Commissioner?

PN586

COMMISSIONER ROE: The expression that Deputy President Hamilton is referring to about essential rest and recreation is a reference I think to a number of cases which are about the fact that annual leave is about the right to have that period of time off. I understand under some circumstances an employee might choose to have something different or there might be regulations about when you take leave and so on but the essential right being the rest of recreation of having the continuous period off.

PN587

MR FELMAN: Yes. But you have to remember, Commissioner, that these employees are getting, effectively, a rest and recreation - that is, a time off not having to attend for work and perform duties - every 21 days.

PN588

COMMISSIONER ROE: They work 21 days straight.

PN589

MR FELMAN: Exactly. I accept that.

PN590

VICE PRESIDENT HATCHER: They’re clean different things, aren’t they, as Charles I would have said?

PN591

MR FELMAN: Sorry, your Honour?

PN592

VICE PRESIDENT HATCHER: They’re clean different things: a rostered day off and annual leave are two completely different things.

PN593

MR FELMAN: Yes.

PN594

VICE PRESIDENT HATCHER: In paragraph 38 they seem to be equated as if they’re the same thing, it’s just a different name you give it depending upon what entitlement you access. Is that not what paragraph 38 says?

PN595

MR FELMAN: Are you asking about what Deputy President Hamilton is referring to?

PN596

VICE PRESIDENT HATCHER: Yes, it’s an appeal from his decision. This is the base upon which he found it was reasonable. I’m suggesting to you that - putting an alternate proposition that a rostered day off in a roster cycle and annual leave are two different things and they’re not the same thing under different names, as appears to be suggested in paragraph 38.

PN597

MR FELMAN: Yes, I accept that they are different but the reality is that this enterprise agreement - this is a roster that is inherent in the agreement itself and it’s been approved by the Commission. It was accepted by the union and it’s now, in my respectful submission - they can’t come along and argue that a clause that on its face says, “Equal-time roster in which annual leave is taken during the year as part of the touring days off,” is now not reasonable.

PN598

DEPUTY PRESIDENT GOSTENCNIK: I’m not sure how you get to that proposition. Inherent in the provisions dealing with the NES and their relationship with the enterprise agreements is that from time to time there will be provisions in enterprise agreements which have no force and that’s why they make - the Act makes provision for that effect. So I don’t think it’s an answer to say, “Well, nobody argued that this clause was unreasonable at the time the agreement was approved so they can’t now argue that it’s unreasonable.” I don’t think it works that way.

PN599

MR FELMAN: Yes, well ‑ ‑ ‑

PN600

DEPUTY PRESIDENT GOSTENCNIK: Unreasonableness can be arrived at from two different perspectives: (1) that it’s unreasonable on its face or alternatively it’s unreasonable having regard to the particular circumstances of an employee.

PN601

MR FELMAN: Yes.

PN602

DEPUTY PRESIDENT GOSTENCNIK: So that a clause which on its face might be reasonable might nevertheless be unreasonable when one takes into account the various factors, including the particular circumstances of an employee.

PN603

MR FELMAN: Yes, well, Deputy President had regard - as he expressly said - to those needs of the employees. He had regard to their circumstances and he had regard to the needs of the employers. There was evidence that this was driven by the need to - the decision to move to an equal-time roster was driven by the need to find greater efficiencies in HNZ’s contract with Rio Tinto. So there was evidence that there was a business need. There was evidence before the Deputy President about the employees’ particular circumstances and why they didn’t like it.

PN604

His Honour weighed that up and came to the view that it was reasonable.

PN605

VICE PRESIDENT HATCHER: Where is the evidence about the business needs of the employer?

PN606

MR FELMAN: So there is for example exhibit GD2 to the Duncan witness statement at AB136. You see there in the first sentence of that email:

PN607

HNZ needs to find greater efficiencies in our contract with Rio Tinto and as such it has become necessary for us to review our work rosters and in particular the 15 days on, 13 days off roster pattern.

PN608

MR FELMAN: I accept that that’s not voluminous evidence and we didn’t call evidence below but ‑ ‑ ‑

PN609

VICE PRESIDENT HATCHER: I think, “slender,” would be the appropriate word, wouldn’t it?

PN610

MR FELMAN: I accept that. The point is there was evidence before the Deputy President about why and on its face there’s nothing to suggest that that email is not correct or not the truth and there was no suggestion that that was not what they were doing. But there is evidence about that there was a business decision. It wasn’t an arbitrary or capricious decision designed to make life harder for employees. It was driven by the need to find efficiencies in the contract with Rio Tinto. The weight we put on that evidence ‑ ‑ ‑

PN611

VICE PRESIDENT HATCHER: That’s the best evidence, is it?

PN612

MR FELMAN: I think that - yes. The weight to be put on that evidence was a matter for the Deputy President. He had before him the witnesses and the evidence and his Honour formed a view that having regard to the needs of the employer and the employees, there was a reasonable requirement. The other issue of course is that we’re required to consult, your Honour, with these employees under clause 21 - sorry, clause 22 of the agreement. So the decision to go to a 21-day roster in a sense has not been finalised because there needs to be consultation with the employee.

PN613

With respect, at the moment, to say - to go beyond the clause itself and look at the particular circumstances of the employees is premature because a final decision has not yet been made. The appropriate time to review that would be after there has been consultation and a decision has been made in relation to particular employees about how they’re directed. So for example it may be - and I don’t know that it’s going to happen - that for a particular employee, yes, “You’re directed to an equal-time roster but we’re going to make an exception and in relation to annual leave over a particular time, you can do your annual leave a little bit differently.” That may not happen, but it may.

PN614

The point I’m making is that it’s premature at this stage because we still have to consult and we’re committed to do so to say that clause 14 - the relevant clause, beyond its terms itself, is unreasonable. It would depend on how it’s applied to a particular employee and that hasn’t happened yet.

PN615

VICE PRESIDENT HATCHER: No, no. But it’s the clause itself which is unreasonable, not in its application, so the question has to be assessed by reference to what 14.2.1(b) requires, doesn’t it? That is, you characterise it as containing a requirement that annual leave be taken during the touring days off. That’s the relevant requirement for the purpose of 93.3.

PN616

MR FELMAN: Yes, yes.

PN617

VICE PRESIDENT HATCHER: And the assessment is whether that requirement is reasonable.

PN618

MR FELMAN: Yes.

PN619

VICE PRESIDENT HATCHER: We can do that by reference to the text of the clause can’t we?

PN620

MR FELMAN: I accept that.

PN621

VICE PRESIDENT HATCHER: That’s what the Deputy President did.

PN622

DEPUTY PRESIDENT GOSTENCNIK: Mr Felman, do you accept that the matters that are set out in paragraph 382 of the explanatory memorandum going to reasonableness are relevant considerations?

PN623

MR FELMAN: Yes, they would be but they would depend ‑ ‑ ‑

PN624

DEPUTY PRESIDENT GOSTENCNIK: Not the only ones but they are - yes.

PN625

MR FELMAN: Yes, but they really depend on the circumstances of the particular case, a lot of those issues. Some of them are generic, most of them seem to be particular to the circumstances and that’s the point that I want to make, that hasn’t happened yet because there’s still that obligation to consult. I accept what your Honour says that yes, you can assess clause 14.2.1(b) by reference to 93.3 but only on the terms of the clause itself.

PN626

VICE PRESIDENT HATCHER: You’re not suggesting that consultation will lead to a result that’s inconsistent with the requirement in 14.2.1(b) are you?

PN627

MR FELMAN: I don’t know what the consultation will be, your Honour.

PN628

DEPUTY PRESIDENT GOSTENCNIK: Presumably, that would be an agreement of the kind that was contemplated by 14.2.3(c). Is that what the - “Normal roster cycle may be altered by mutual consent”.

PN629

MR FELMAN: Not necessarily, your Honour. It might be an agreement under 14.3.1.

PN630

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN631

VICE PRESIDENT HATCHER: That, in fact, gives you a third option, that is to do something completely different from the other two options.

PN632

MR FELMAN: Yes.

PN633

VICE PRESIDENT HATCHER: But we’re not here assessing ‑ ‑ ‑

PN634

MR FELMAN: No.

PN635

VICE PRESIDENT HATCHER: You can do that if you want but we’re here assessing the fact that employees have been directed to work a roster under 14.2.1(b). That’s what we’re talking about, isn’t it?

PN636

MR FELMAN: Yes.

PN637

VICE PRESIDENT HATCHER: Not talking about something else?

PN638

MR FELMAN: No, I accept that.

PN639

VICE PRESIDENT HATCHER: Therefore we can assess the purpose of 93.3 reasonableness in the context of what that requirement is. Which is, taking annual leave during the year as part of the touring days off.

PN640

MR FELMAN: Yes.

PN641

COMMISSIONER ROE: Isn’t it correct that the consultation provision is a consultation provision, it’s a very important provision, obviously, but it’s a consultation provision. Ultimately, you say, the employer can make a direction.

PN642

MR FELMAN: Yes.

PN643

COMMISSIONER ROE: So following consultation, the employer can make a direction?

PN644

MR FELMAN: Yes, yes.

PN645

COMMISSIONER ROE: And Deputy President Hamilton, in paragraph 39, found:

PN646

Having regard to the needs of both the employee and the employer’s business and the other factors raised by the applicant, in my view, 14.2.1 meets the requirements of the Act including section 93 as does any employer direction under it.

PN647

MR FELMAN: Yes.

PN648

COMMISSIONER ROE: You don’t disagree with that?

PN649

MR FELMAN: That’s right.

PN650

VICE PRESIDENT HATCHER: How much longer do you think we’ll be, Mr Felman?

PN651

MR FELMAN: I think ‑ ‑ ‑

PN652

VICE PRESIDENT HATCHER: I’m not hurrying you or anything, but.

PN653

MR FELMAN: I think that depends a bit on the interaction with the ‑ ‑ ‑

PN654

VICE PRESIDENT HATCHER: Uninterrupted.

PN655

MR FELMAN: ‑ ‑ ‑ bench which I think has been reasonably ‑ ‑ ‑

PN656

VICE PRESIDENT HATCHER: Uninterrupted.

PN657

MR FELMAN: ‑ ‑ ‑ substantial, I must say. Which I don’t complain about. It’s ‑ ‑ ‑

PN658

VICE PRESIDENT HATCHER: If we didn’t interrupt you, how much longer would you be?

PN659

MR FELMAN: I guess it depends a bit on - I mean, there’s not a lot to go beyond a lot of the written submissions.

PN660

MR REITANO: I got into trouble for not saying yes or no.

PN661

VICE PRESIDENT HATCHER: Shall we bat on or shall we take the lunch ‑ ‑ ‑

PN662

MR FELMAN: I’m happy to bat on if the bench is. I don’t know that I’d be much longer than half an hour.

PN663

VICE PRESIDENT HATCHER: Half an hour.

PN664

MR REITANO: Half an hour.

PN665

MR FELMAN: It may not even be that.

PN666

VICE PRESIDENT HATCHER: How long do you think you’ll be in reply, Mr Reitano?

PN667

MR REITANO: At the moment, 10 minutes.

PN668

VICE PRESIDENT HATCHER: All right, we’ll bat on then.

PN669

MR FELMAN: I apprehend, your Honour, that the quibble that you have with clause 14.2.1, or that the bench might have, is that it is requiring employees to take annual leave during a period of rostered touring ‑ ‑ ‑

PN670

VICE PRESIDENT HATCHER: I’m simply putting to you that that’s the requirement, that’s the section 93.3 requirement it imposes and therefore the reasonableness is to be assessed by reference to that requirement.

PN671

MR FELMAN: Yes, that’s right and we would say that that is a reasonable requirement having regards to the needs of the employer to run this particular operation. Yes and, of course, having also regard to the fact that there is that provision to take that annual leave at any particular time, provided it is within the touring days off. It doesn’t have to be, and I think that’s important, doesn’t have to be 2.7 days per cycle. The next ‑ ‑ ‑

PN672

DEPUTY PRESIDENT GOSTENCNIK: I still don’t quite understand how it is that that clause can be said to discharge the inherent principle behind annual leave and that is to provide for rest and leisure but give them annual leave on days they would already have had off.

PN673

MR FELMAN: I don’t think ‑ ‑ ‑

PN674

DEPUTY PRESIDENT GOSTENCNIK: And could rest and be leisurely during that period anyway.

PN675

MR FELMAN: Yes. Other than the fact that those employees would get, under clause 14.2 ‑ ‑ ‑

PN676

DEPUTY PRESIDENT GOSTENCNIK: A bit more purchasing power because they’ll get the loading.

PN677

MR FELMAN: Yes, there’s the loading and the additional days of annual leave that you get under clause 14.2.1(b) that you can take during an on period ‑ ‑ ‑

PN678

COMMISSIONER ROE: And a 21 day roster is how many? Because I think my rough calculation was that if you have nine of these - a 21 day roster is about nine cycles in a year so nine times 2.7 doesn’t leave you many days left.

PN679

MR FELMAN: No, it’s not a lot.

PN680

COMMISSIONER ROE: It’s only a few days.

PN681

MR FELMAN: It’s about four.

PN682

DEPUTY PRESIDENT GOSTENCNIK: You say that the additional days don’t have to be taken as part of the touring days off?

PN683

MR FELMAN: Yes, they’re my instructions, yes.

PN684

DEPUTY PRESIDENT GOSTENCNIK: But that’s about four days in a 21 day cycle.

PN685

MR FELMAN: Correct. Yes. What it is, your Honour, is that you are, for a certain identified period, correct, it is during the rostered period off where you would otherwise not be working but you are on annual leave, you’re paying the loading, you’re being paid the loading. The next point, and I don’t know that much, with respect, really turns ‑ ‑ ‑

PN686

VICE PRESIDENT HATCHER: A lot of what you’ve said about the way in which annual leave can be taken, how are we to read paragraphs 18 and 19 of the judgment?

PN687

MR FELMAN: That is the AFAP question. I think his Honour was there just ‑ ‑ ‑

PN688

VICE PRESIDENT HATCHER: I’m not sure what he means but his Honour then go on to say that’s the wrong question or was that the question he answered?

PN689

MR FELMAN: No. His Honour is there, in 18 and 19, merely re-phrasing, with respect, the AFAP’s point and then ‑ ‑ ‑

PN690

VICE PRESIDENT HATCHER: Yes but does he go on to re‑characterise that?

PN691

MR FELMAN: Yes, I’m just going to find that reference. At paragraph 21.

PN692

VICE PRESIDENT HATCHER: I see. All right, thank you.

PN693

MR FELMAN: Which is at AB7. The next issue with ground three was the issue of clause 13.1.2 and whether the requirement to an equal time roster was inconsistent with that particular clause, and all we really say there is that clearly clause 13.1.2(a) deals with the cycle of the 15 days on/13 days off. It doesn’t contemplate an equal time cycle and you have to go elsewhere in the agreement which, in this case, is 14.2.1(b) or, as your Honours have pointed out, the NES. Clause 13.1.2(a), we say, has no work to do where there’s an equal time roster and that’s quite clear on the face. Reading this clause sensibly, it’s clear that it doesn’t ‑ ‑ ‑

PN694

VICE PRESIDENT HATCHER: That is a provision of a section 93.3 nature applicable to the 15/13 roster?

PN695

MR FELMAN: Correct.

PN696

COMMISSIONER ROE: What about the preamble?

PN697

MR FELMAN: Sorry, your Honour? Sorry, can you ‑ ‑ ‑

PN698

COMMISSIONER ROE: “(a) Touring pilots entitled to 42 days off per annum”. Are you saying that doesn’t apply to touring pilots under 14.2.1(b)?

PN699

MR FELMAN: Yes, that’s right. Clearly that applies, on its face, to the 15/13 roster.

PN700

COMMISSIONER ROE: The preamble does?

PN701

MR FELMAN: The whole of clause 13.1.2. When read together, clearly ‑ ‑ ‑

PN702

VICE PRESIDENT HATCHER: You don’t get (b) if you’re on the 21 day on/off roster?

PN703

MR FELMAN: You get the additional leave under clause 14.2.1(a). It says “additional annual leave days”.

PN704

VICE PRESIDENT HATCHER: As part of the four days.

PN705

MR FELMAN: Sorry?

PN706

VICE PRESIDENT HATCHER: As part of the four days?

PN707

MR FELMAN: Yes, that’s right.

PN708

VICE PRESIDENT HATCHER: I see. These applied by another provision of the agreement to these people?

PN709

MR FELMAN: Correct.

PN710

VICE PRESIDENT HATCHER: All right.

PN711

MR FELMAN: I don’t think I need to refer in relation to ground four, just refer to the submissions in relation to that ground. Grounds five and six at the moment aren’t pressed. In relation to ground seven, again, I just refer to the written submissions. I note that in relation to ground eight there’s an issue about whether the clause complies with section 55.4. I think really that’s been subsumed by whether it complies with section 93.3 because if it does, then it’s not detrimental relative to the NES because clause 14.1 is under the NES.

PN712

VICE PRESIDENT HATCHER: Anything you want to say about clauses 13.1.4 and 5?

PN713

MR FELMAN: I think they would apply, that they still apply to touring pilots on an equal time roster. Although there’s obviously a large part of 13.1.4 that seems to be predicated on a 15 day/13 day ‑ ‑ ‑

PN714

VICE PRESIDENT HATCHER: The first sentence, second line refers to “at any time within the year” so presumably you’d say that that doesn’t apply to an equal time roster?

PN715

MR FELMAN: No, that’s to be read subject to the - that’s right. Wouldn’t apply to the equal time roster cycle. Tour, sorry.

PN716

VICE PRESIDENT HATCHER: Is this a fair comment that compared to the previous agreement, we had agreement which is largely constructed on the basis of a 15 on/13 off roster ‑ ‑ ‑

PN717

MR FELMAN: Correct.

PN718

VICE PRESIDENT HATCHER: ‑ ‑ ‑ and then this new roster has been tacked on to the new agreement with perhaps insufficient care being given as to how it’s to work out within the framework of the whole agreement.

PN719

MR FELMAN: Yes. Not being made with sufficient care may have been an inability to reach agreement but the fact is there are gaps. In relation to ground eight, I don’t really propose to go much beyond the submissions, the written submissions. In relation to grounds nine and 10, this is the contract point, and again the nub of the argument really is subsumed by whether there’s an entitlement under the enterprise agreement to direct employees to work the equal time roster because if there is, and this is a decision your Honour, Vice President, that you were on in a DL employment where:

PN720

The contract contained provisions inconsistent with those in the instrument, the provisions in the instrument will apply by virtue of the statute which gives it effect and inconsistent provisions of the contract will be displaced in their operation and rendered operative.

PN721

To the extent that the contract doesn’t allow, without a variation of that contract, a direction to work an equal time roster but the enterprise agreement does, and of course that’s been the nub of the early part of this argument, then the contract will be displaced in its operation. But, of course, that argument is being predicated on us being successful in the first instance and if we’re not, then probably the rest of the case largely falls away if the Commission forms a view that it can’t be done without consent.

PN722

But in any event, and this is in the written submissions, if one looks at the words of the contract it’s not a variation of the contract, a significant variation of the contract. It’s a variation of the hours that are permitted by the terms of the contract and that’s having regard to the words themselves which is “You will nominally work a 15 days on/13 days off roster. As this is a 24 hour operation, your actual hours will vary depending upon the roster and client requirements” and read together, that clause, we say, clearly gives the right of the employer, under the contract, to alter the hours of employee.

PN723

DEPUTY PRESIDENT GOSTENCNIK: Mr Felman, let’s assume for a moment that Mr Reitano’s construction of the contract is correct, doesn’t clause 14.3.1, in effect, displace the argument which you put earlier, that is earlier under this head, advanced that is where there’s an inconsistency then if there’s a capacity to direct, the employer can direct, notwithstanding the contract, doesn’t the 14.3 effectively oust that because the parties can agree to vary those things?

PN724

MR FELMAN: No, your Honour, with ‑ ‑ ‑

PN725

DEPUTY PRESIDENT GOSTENCNIK: Nothing in the agreement prevents them from doing that?

PN726

MR FELMAN: No but merely because parties can agree under the agreement doesn’t mean that absent that agreement the employer can’t direct without consent and that’s what we say is the situation in relation to clause 14.2.1.

PN727

DEPUTY PRESIDENT GOSTENCNIK: Understand.

PN728

MR FELMAN: The last point I want to make which goes back to the first ground is the point about consultation. We say that clearly the consultation provisions in clause 22.7 to 22.11, which weren’t there, by the way, in the 2010 agreement where there wasn’t this alternative duty cycles, they require ‑ ‑ ‑

PN729

COMMISSIONER ROE: I think the reason they weren’t there is because the legislation didn’t require it and between the old agreement and the new agreement the legislation changed to require the inclusion of the consultation about rosters.

PN730

MR FELMAN: Yes, that may well be why but it’s just in terms of the history of the agreement.

PN731

VICE PRESIDENT HATCHER: Is the 2010 agreement in the appeal book?

PN732

MR FELMAN: Yes. Do you want me to see where it is?

PN733

VICE PRESIDENT HATCHER: No, it’s all right, we’ll find it.

PN734

MR FELMAN: It’s AB231.

PN735

VICE PRESIDENT HATCHER: Thank you.

PN736

MR FELMAN: But the fact that - there’s no need for consultation at all if you need consent.

PN737

COMMISSIONER ROE: No, because the Act requires that clause to be included and it’s commonplace in section 205(1)(a) ‑ ‑ ‑ -

PN738

MR FELMAN: I understand that.

PN739

COMMISSIONER ROE: It is commonplace in agreements and awards to have provisions about a notice period, a provision which says an employer can, if they give X amount of notice, make changes to the roster.

PN740

MR FELMAN: Yes, I accept that.

PN741

COMMISSIONER ROE: But that doesn’t oust the consultation requirement and the requirement under the consultation clause to consult in the period in that seven day notice period.

PN742

MR FELMAN: No, I accept that.

PN743

COMMISSIONER ROE: The two things operate independently.

PN744

MR FELMAN: Independently. I don’t take that submission any further. Those are my submissions.

PN745

VICE PRESIDENT HATCHER: Thank you.

PN746

MR FELMAN: We obviously rely on the written submissions.

PN747

VICE PRESIDENT HATCHER: Mr Reitano.

PN748

MR REITANO: I will be brief. Could I just pick up the matter that I think Commissioner Roe and I think your Honour, the presiding member, raised. Sight should not be lost of what the definition of an equal - sorry, what the type of roster that is provided for in 14.2.1(b) actually is. It’s not just, as my learned friend has put to your Honours and Commissioner, an equal time roster. It doesn’t say that.

PN749

Your Honour, the presiding member, will remember, I think, you asked the question “Well what if they didn’t take their annual leave by the end of the year?” and my learned friend said “Well so what? They’ve accrued their annual leave”. The problem with that whole argument is that the type of roster contemplated omitted, whether by direction or otherwise, but in our submission permitted by 14.2.1 is an equal time roster in which annual leave is taken during the year as part of the touring days off and our whole case, foundational to our case before the Deputy President and foundational here, you cannot have an equal time roster unless an employee applies and presumably is granted, with the agreement of the employer, for annual leave during the touring days off. It just ‑ ‑ ‑

PN750

VICE PRESIDENT HATCHER: You can if it’s something less than 38 hours a week. That is, you’ve calculated it on the basis that it’s 38 hours a week average but theoretically if it was calculated on some number less than that, you could do it.

PN751

MR REITANO: No because unless, I think we’re at cross‑purposes, unless and until an employee applies for annual leave and it is granted, the clause can’t be engaged in any circumstances.

PN752

VICE PRESIDENT HATCHER: Why is that obvious then?

PN753

MR REITANO: Because the NES provides that annual leave can only be taken by agreement, at times agreed to by the employer and the employee. This agreement provides as well in 13.1.4, I think, or five, for an application process but set that aside for the moment, unless an employee says “I agree to take” - the employer says “Will you take your annual leave now?” and the employee says “Yes, I agree. I’ll take it now”, unless and until there is an agreement as to the taking of annual leave in any 12 month period, this definition, an equal time roster in which annual leave is taken, isn’t engaged. If a person does not take annual leave, there is no equal time roster in which annual leave is taken.

PN754

DEPUTY PRESIDENT GOSTENCNIK: That assumes that it’s not a section 93.3 clause.

PN755

MR REITANO: Well ‑ ‑ ‑

PN756

DEPUTY PRESIDENT GOSTENCNIK: Because if it’s a 93.3 clause, then there’s a direction in it that you’ll take the annual leave ‑ ‑ ‑

PN757

MR REITANO: I suppose that - well, I’m only dealing with the question that was raised from the bench but I did make the note to repeat something I said, and I shouldn’t repeat things in reply, you don’t see the words an equal time roster in which the employer directs or requires that an employee take annual leave. You just don’t see that and why you would read those words in, I do not know. An employee might be perfectly happy, I don’t know why they would be, I don’t understand why a person would be perfectly happy to take their annual leave days as days that they would otherwise have off anyway, I don’t understand that, but an employee might be perfectly happy to do that.

PN758

Usually annual leave days are days that you’re going to work, that you would otherwise work, that you take as days off. They’re not usually associated with days that you would otherwise have off in any event. But the clause does not say that you can have an equal time roster in which you work 21 days, you get 21 days off and you don’t take any annual leave. It doesn’t say that. That’s not something that is permitted.

PN759

What is permitted is an equal time roster in which annual leave is taken during the year as part of the touring days off and until an employee applies and is granted annual leave, the clause isn’t engaged. And thus, you cannot engage the clause at all in circumstances where an employee does not agree to take and we said it loud and clear in each of the statements that were filed “I don’t agree to apply for annual leave in those circumstances”.

PN760

The second matter I want to raise, and perhaps partly because my friend wasn’t involved in the case below but perhaps not, it was never seriously contended - it was put, I conceded so much in my submissions, it was put that you could have an equal time roster that didn’t involve the 2.7 days calculation that I’ve made but it was never seriously contended, in my submission, that we were talking about anything else.

PN761

I need to refer to a couple of things but before I do, to make it very clear, at appeal book page 101, paragraph 54, there is a reference back to the dispute notification that I handed up this morning and the reference is to attachment three of the dispute notification, and these were submissions ‑ ‑ ‑

PN762

DEPUTY PRESIDENT GOSTENCNIK: Page 101 what? What was the reference in that?

PN763

MR REITANO: Appeal book 101, paragraph 54 and I’m, in particular, referring to “On 4 June, the respondent requested that Ms Gaulin enter into a new IFA that provides for 21 days off, 18.3 days off and includes a requirement she submit leave applications for 2.7 days of annual leave for each tour break” and there’s a reference to attachment three of the dispute notification. If you go to attachment three, you will see at paragraph three, there’s a heading Allocation of Leave and you will see in paragraph 3.2 something very different to what my learned friend has been submitting.

PN764

DEPUTY PRESIDENT GOSTENCNIK: I had that in attachment one, Allocation of Leave.

PN765

MR REITANO: Sorry. Does your Honour not have attachment three?

PN766

DEPUTY PRESIDENT GOSTENCNIK: I do. It’s a ‑ ‑ ‑

PN767

VICE PRESIDENT HATCHER: Email.

PN768

DEPUTY PRESIDENT GOSTENCNIK: ‑ ‑ ‑ very short email.

PN769

MR REITANO: You’ve got to turn over the page.

PN770

DEPUTY PRESIDENT GOSTENCNIK: I see.

PN771

MR REITANO: Sorry. The email refers to the document behind it. You’ll see in paragraph 3.2 “Pilots on a 21/21 roster entitled to 28 days annual leave per year and work on average 182.5 days per year after leave entitlements. The 28 days annual leave includes Saturdays, Sundays and public holidays. Pilots on a 21/21 roster do not take their annual leave in one block like the pilots on a 15/13 roster because their touring days off of 21 days incorporates 2.7 days of annual leave. The total 21 days touring off, 18.3 are touring days off and 2.7 are annual leave days. As such, annual leave is taken during the year as part of the touring days off”. That’s where we got it from.

PN772

DEPUTY PRESIDENT GOSTENCNIK: The other employees get one of these?

PN773

MR REITANO: I don’t think it’s in the evidence that each of them got it but this refers to what HNZ says a 21 roster is. You’ll see pilots, not just Gaulin, pilots on 21/21 roster are entitled to.

PN774

VICE PRESIDENT HATCHER: That’s not a direction, that’s a request to sign an IFA.

PN775

MR REITANO: Yes but - I understand that. It is the definition of what a 21/21 roster is in HNZ that I’m concerned with. The direction comes elsewhere, and I’m going to come to that in a minute, but what I’m referring to is the fact that when people are directed to work a 21/21 roster, and there’s plenty of evidence that that was the case, that’s what they’re directing, HNZ understood it to mean what is in paragraph 3.2. HNZ were promulgating that that’s what it meant.

PN776

Can I say that’s of no great surprise to anyone. This whole debate that is being had, before I come to the other references, this whole debate is a massive distraction, it’s a total waste of time, it is a huge victory of form over substance, with respect to my learned friend. If you are taking annual leave as part of your touring days off over a whole year, it doesn’t matter if you take it as 21 days and seven days but the effect is you are taking 2.7 days every six week period or every - sorry, I’ll withdraw that, every 42 day period.

PN777

That is the effect of it. The substance of it is that’s what you’re doing. Whether you take 21 days in one block and seven days somewhere else, over a 12 month period, it is exactly the same as taking 2.7 days in each cycle. It can’t be put any other way. No matter what finesse you put on it, the substance of it will always come back to that. It will always come back to the fact that the effect of what you’re requiring, because you’re requiring people to work 21 days on, have 21 days off, the substance of what you end up with in the calculation is 2.7 days every 21 days to make up the touring days off. It must be so.

PN778

DEPUTY PRESIDENT GOSTENCNIK: But if that’s right, why would there be a need to enter into a flexibility arrangement under the terms of the flexibility clause?

PN779

MR REITANO: Sorry? Sorry ‑ ‑ ‑

PN780

DEPUTY PRESIDENT GOSTENCNIK: If that were right, if that’s the right construction of the provision, why is it necessary to enter into an individual flexibility arrangement which is clearly intended to be a flexibility arrangement under the flexibility clause of the agreement?

PN781

MR REITANO: I think there’s two answers to that. I’m not sure which flexibility arrangement your Honour’s referring to but Ms Gaulin was under ‑ ‑ ‑

PN782

COMMISSIONER ROE: The one you took us to. Yes, Ms Gaulin.

PN783

MR REITANO: Ms Gaulin ‑ ‑ ‑

PN784

DEPUTY PRESIDENT GOSTENCNIK: The one you referred me to which starts off with the words “That this is made in accordance with clause 24” which I take to be a typo because it’s clause 23.

PN785

MR REITANO: Ms Gaulin, I don’t know - would your Honour just pardon me a moment? I just want to make sure that I’m not in error.

PN786

MR FELMAN: Can I just say, I’m not sure where this takes us. I mean, I did concede that there’d been discussions about the 2.7 days and I made it quite clear that we weren’t adhering to that, we were departing from that position, so I don’t know where this is all going.

PN787

DEPUTY PRESIDENT GOSTENCNIK: I think Mr Reitano is saying that whatever way you look at it, the proper construction of the clause is that you have to take 2.7 days leave and this is relied upon as ‑ ‑ ‑

PN788

MR REITANO: In the context of 21/21?

PN789

DEPUTY PRESIDENT GOSTENCNIK: Yes, in the context of the equal time roster, 21/21, and this is supportive of that. My point is, if that’s so, why is it necessary to effectively vary, which is what this would do if it were executed, vary the operation of the agreement in the manner set out if that’s the proper construction of the clause to begin with.

PN790

MR REITANO: Ms Gaulin was previously, prior to I think about 4 June, I think, the email was dated, Ms Gaulin was under another enterprise flexibility agreement. Can I just forget for a moment the whole argument about termination of that that I put to one side this morning, and that individual flexibility agreement provided for 28 days on and 28 days off. On 4 June, a proposal was put to, in effect, vary that and bring it back to 21/21 in accordance with what’s in this agreement. On 9 June, this enterprise agreement was approved by the Commission and came into operation shortly thereafter. That appears to be the sequence of events.

PN791

DEPUTY PRESIDENT GOSTENCNIK: Sorry, the clause 24 is a reference to the 2010 agreement. I see, that, yes. This was purporting to be an individual flexibility arrangement under the 2010 agreement.

PN792

MR REITANO: Yes.

PN793

DEPUTY PRESIDENT GOSTENCNIK: The 2010 agreement didn’t have an equal time roster provision.

PN794

MR REITANO: Yes, correct, correct.

PN795

DEPUTY PRESIDENT GOSTENCNIK: I understand that now, okay.

PN796

COMMISSIONER ROE: You say that this is reflective of how the equal time roster provision in this agreement actually operates?

PN797

MR REITANO: When your Honour says “this”, your Honour’s referring ‑ ‑ ‑

PN798

COMMISSIONER ROE: Sorry, the current agreement.

PN799

MR REITANO: It’s what everyone understood, in my respectful submission. Could I just give your Honours the references without going to them, unless it’s absolutely necessary. And as I say, I concede that some of this was not as definite as I would otherwise like it to be but the argument proceeded below pretty much on the basis that the equal time roster that was being spoken about was 2.7 days off per 42 days being annual leave. The main reference is PN1356 to 1358 of the transcript.

PN800

There is also a reference in Deputy President Hamilton’s decision. I know my friend gave one reference but there is another reference at paragraph 19. I’m not, for one moment, suggesting that this is clear but it points in the same direction where his Honour said:

PN801

The AFAP says that the employer seeks to direct Gaulin, Duncan, Kasparis and Saunders to acquit their annual leave entitlement of 42 days at the rate or in blocks of 2.7 days per rostered period comprising of a 42 day block of 21 on and 21 off days. I am prepared to adopt the AFAP terminology. In each case, the employee is aware that the employer seeks that the employee work such a roster. In each case, the employee refuses to do so.

PN802

His Honour proceeded on that understanding. As I say, at the end of the day, it probably doesn’t matter too much because within the definition it must be that you acquit in substance 2.7 days every 42 days as annual leave.

PN803

VICE PRESIDENT HATCHER: Those paragraphs of the transcript you identified, that is 1356 to 1358, seem to say that the company advanced a primary case that it was 2.7 days per cycle and this notion of having a three week block and one week block at your discretion was an alternative case?

PN804

MR REITANO: Yes, I think that’s fair, your Honour. I didn’t make the point below, it didn’t occur to me until I was sitting here thinking about it, but it doesn’t matter. The substance of it is always going to be 2.7 days per 42 days will be annual leave over a 12 month period. It can’t work otherwise. It doesn’t fall within the definition ‑ ‑ ‑

PN805

COMMISSIONER ROE: The employee doesn’t have the choice about when they take that annual leave because they are required to take 2.7 days on average of the days off as annual leave.

PN806

MR REITANO: Yes. But an employee might come along, on our construction of the clause, an employee might, as I say I can’t understand why anyone would do it, but an employee might come along and say “Yes, I’m prepared to work that type of roster and here are my applications for annual leave and I want to take annual leave at the rate of 2.7 days per 42” or they might say “I want to take them as 21 and seven” or whatever calculation you want. It’s still going to come back to the effect of it is over the year that’s referred to, it’s still going to come back to the fact that they’re taking 2.7 days per 42.

PN807

The other matter that was raised, which is just wrong, in my respectful submission, is that it’s said that the four days, that is the remaining four days when you work out the comparison and so on, aren’t taken as part of the touring days off. The clause says they are. The clause says annual leave is taken over the period as part of the touring days off. They can’t change it because they don’t like it. The clause says that that’s what an equal time roster is. It’s one where annual leave, all annual leave not some of it, all annual leave is taken as part of touring days off.

PN808

COMMISSIONER ROE: It doesn’t have the word “and”, it doesn’t have the word “all” in front of it, does it?

PN809

MR REITANO: It doesn’t say some either. It says “annual leave” and annual leave is a term defined by the agreement. If it intended to say something different to annual leave of 28 days, one would imagine where it would’ve said part of the annual leave or something less than the total of annual leave. It says annual leave.

PN810

The only other matter that I wanted to deal with in reply ‑ sorry there are two other matters. Could I just give the Commission a reference to, I’ve lost it, a question was asked, or my friend made some submissions, about certain things only happen after consultation, could I just, and they’re just by way of example, they’re found, I think, in all of the witness statements, for some reason we keep turning up Ms Gaulin’s because it’s just easier to go to hers for reasons that I don’t understand but I think they’re littered throughout the material, AB139, 166 and 167, in particular, are all about questions of what my learned friend said “Things happen after consultation”.

PN811

This matter started in June last year and there’s still been no consultation at all and that’s because, as we understand it, particularly if one looks at 167, it’s our way or the highway is the employer’s attitude. Ms Gaulin is told if they’ve terminated her individual flexibility agreement and if she wishes to accept future work from the company, she can contact them. That’s the notion of consultation that exists here.

PN812

The final matter I wanted to deal with in relation to matters arising in reply, I’ve alluded to it, I’ll say it clearly, the notion that someone would apply for annual leave on days they would otherwise have off is entirely unreasonable, in my submission, and section 93.3 could not be satisfied in those circumstances apart from anything else, and apart from the errors disclosed in paragraph 38 of the Deputy President’s decision. If it please the Commission.

PN813

VICE PRESIDENT HATCHER: All right, thank you. We thank counsel for their submissions. Upon receiving any further submissions which may be necessary concerning Ms Gaulin’s situation, we will reserve our decision. We’ll now adjourn.

ADJOURNED INDEFINITELY [1.38 PM]

Fair Work Commission Transcripts

C2015/1204, Transcript of Proceedings [2015] FWCTrans 238 (22 April 2015)