[2014] FWCFB 4584 |
FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.
Airline Operations - Flight Attendants’ Long Haul - Qantas Airways Limited - Award 2000
VICE PRESIDENT WATSON |
MELBOURNE, 17 JULY 2014 |
Applications by Flight Attendants Association of Australia and Qantas Airways Limited for a modern enterprise award for Flight Attendants employed in Qantas Long Haul operations . development of enterprise specific terms is consistent with modern enterprise award objective - wages in the enterprise agreement currently in excess of awards - different safety nets for different groups of employees - case for modern enterprise award not established - application dismissed. Fair Work (Transitional Provisions and Consequential Amendments Act 2009 Schedule 6 sub-item 4(5),9(3), Fair Work Act 2009 s.193.
Introduction
[1] The Flight Attendants Association of Australia (FAAA) and Qantas Airways Limited (Qantas) have each made an application under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the Airline Operations - Flight Attendants’ Long Haul - Qantas Airways Limited - Award 2000 (the Qantas Long Haul Award).
[2] At the hearing of this matter Ms T Firth of counsel and Ms J. Oldmeadow appeared for Qantas. Mr J Hart appeared for the Flight Attendants Association of Australia (FAAA).
The Legislative Task
[3] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Transitional Act which provides:
(5) In deciding whether or not to make a modern enterprise award, and in determining the content of that award, the FWC must take into account the following:
(a) the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
(b) whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process;
(c) the content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
(d) the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;
(e) the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
(f) the likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g) the views of the persons covered by the enterprise instrument;
(h) any other matter prescribed by the regulations.
[4] It is also necessary to consider the modern awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. We turn to consider these factors in relation to the circumstances of this case.
The Circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4 (5)(a)
[5] The history of the Qantas Long Haul award can be traced back to 1951 when an award was made binding on the Hotel, Club, Restaurant, Caterers, Tea Rooms and Boarding House Employees Union of New South Wales and Qantas Empire Airways Limited. 1 Awards applying only to Qantas employees were first made in 1974. One award covered Flight Hostesses. The other covered Flight Stewards. The classification titles and award coverage were distinguishable by gender. Much has changed in the airlines industry since that time.
[6] In 1993 the separate awards covering hostesses and stewards were replaced by the 1993 Airline Flight Attendants (Qantas) Award. In 2000 the term Long Haul was added to the title to distinguish the international operations of Qantas from the domestic operations of Australian Airlines that had been acquired by Qantas in 1992.
[7] The origins of the Qantas Long Haul Award as an enterprise instrument lie in the history of Qantas as Australia’s only international airline operator. As is evident, and is dealt with in more detail below, those circumstances have fundamentally changed.
Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4 (5) (b)
[8] The Aircraft Cabin Crew Award 2010 (the modern award) would apply if the Qantas Long Haul Award is not modernised.
The content, or likely content, of the modern award referred to in paragraph (b): Item 4 (5)(c)
[9] The content of the modern award is different from the provisions of the Qantas Long Haul Award. The wage rates are higher in the modern award at the classification levels at or below Level 2 Year 1 and lower for classifications above that level. As some classifications in the different instruments appear to involve the same skill and responsibilities but have different wage rates, a question arises as to whether the rates in one or the other award contain properly fixed minimum rates. Terms and conditions in the Qantas Long Haul Award are more generous to employees with respect to allowances, flight duty period limitations, rest periods, minimum duty hour credits, pay protection, notice of termination of employment and personal leave.
The terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument: Item 4 (5)(d)
[10] The airline industry is comprised of a number of components. Airline passenger and freight operators commonly operate on a fixed schedule. The general aviation sector includes a diverse range of chartered, business and private flying. Third party providers also provide specialist services to the sector. Cabin crew, other than Qantas cabin crew, are generally covered by the modern award. This includes cabin crew directly employed by other airlines, such as Jetstar, Virgin, and contractors. Indeed the modern award applies to another Qantas subsidiary, Qantas Cabin Crew Australia Pty Limited which employs around 600 of the 4000 cabin crew deployed on Qantas International aircraft. Cabin crew on the A380 aircraft are employed by the new employing entity and are covered by the modern award. The actual terms and conditions of employees of both Qantas entities and most other groups are governed by enterprise agreements. A single enterprise agreement applies to employees of both Qantas employing entities.
[11] It is relevant to note that changes in the industry over the past quarter of a century include a number of low cost operators entering into the market, (some of which have since failed), increased international travel into and out of Australia, increased competition from other international airlines on international routes, increased use of third party service providers, increased use of contractors and a higher proportion of employees who are not direct employees of airlines.
The extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment: Item 4 (5)(e)
[12] The more prescriptive and more generous provisions of the Qantas Long Haul Award can be described as enterprise specific in the sense that they were developed to apply specifically to Qantas operations. Most of the terms of the proposed modern enterprise awards are agreed, although the parties are not agreed on a limited number of matters including dispute settlement procedures and redundancies.
The likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons: Item 4 (5)(f)
[13] As Qantas employees are covered by an enterprise agreement, there would be no immediate impact on employees if the Qantas Long Haul Award was terminated. However, when a new agreement is required to be considered against the Better Off Overall Test in the Fair Work Act 2009, the relevant benchmark would be different. We observe that there have been nine over award enterprise agreements negotiated with respect to Qantas Long Haul cabin crew since 1992 and the wages in the enterprise agreement are now well in excess of those in both awards.
The views of the persons covered by the enterprise instrument: Item 4 (5)(g)
[14] There does not appear to be any opposition to the modern enterprise award being made. Qantas has made an application and supports the making of a modern enterprise award. It also said that the application provides an opportunity for the Commission to consider whether it is appropriate in all of the circumstances to retain enterprise award coverage for the employees concerned. The FAAA supports the application and the retention of an enterprise award.
Any other matter prescribed by the regulations: Item 4 (5) (h)
[15] There are no such matters prescribed.
The Modern Enterprise Awards Objective
[16] The history and content of the Qantas Long Haul Award and the terms of the proposed modern enterprise award demonstrate that, consistent with the modern enterprise award objective, terms and conditions tailored to the employment arrangements of an enterprise can be provided.
Should a modern enterprise award be made?
[17] The overall consideration of this question must take into account the factors mentioned above. The Qantas Long Haul Award arose as an enterprise instrument in quite different circumstances than apply today. The industrial relations system at the time was centred on awards. Now it is centred on agreements. Awards provide a safety net and a basis for fair agreement making by application of the better off overall test.
[18] No employee will lose award coverage if the existing enterprise award is terminated as they will become covered by the industry award safety net. The alternative safety net contains inferior entitlements in some respects. While some of the terms could be considered to be enterprise specific, they are also peculiar to cabin crew. Indeed, only some cabin crew engaged on Qantas International flights are covered by the existing enterprise award. Others are covered by the industry award as are all of the cabin crew employed by other Australian based international airlines.
[19] The development of enterprise specific terms to suit employment arrangements in the enterprise is consistent with the modern enterprise awards objective. This is a relevant consideration but must be weighed against all of the circumstances of this matter.
[20] The industry is not characterised by enterprise awards for cabin crew, but is very much characterised by enterprise agreements. Indeed Qantas utilises a different corporate vehicle for the employment of some international cabin crew for which the industry modern award is the safety net. The enterprise agreement covering both groups of employees must satisfy the Better off Overall test with respect to both applicable awards. It appears that the modern award does not present any difficulties in this regard.
[21] In our view a case has not been made out for the creation of a modern enterprise award covering this discrete area of employment within the enterprise. Our reasons include:
● A modern enterprise award would continue the segmentation of the discrete section of the workforce, that does not include all flight attendants employed by Qantas on its aircraft, or any other group of Qantas employees,
● There would be differences in the safety net between people performing similar roles within the enterprise,
There has been a modern industry award which has been established having regard to the industry and its generic features, and in which Qantas made submissions.
Conclusions
[22] For the above reasons, the applications to make a modern enterprise award covering Qantas Long Haul Cabin crew are dismissed. It is unnecessary that we consider the disputed aspects of the proposed awards. Pursuant to Item 9 (3) of schedule 6 to the Transitional Act the Qantas Long Haul Award terminates as at the date of this decision.
VICE PRESIDENT
Appearances:
Ms. T Firth of counsel and Ms J Oldmeadow for Qantas Airways Group
Mr. J Hart for the Flight Attendants Association of Australia
Hearing details:
2014
Melbourne
8 July
1 1951 71 CAR 313.
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