[2014] FWCFB 4657
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.

Australian Municipal, Administrative, Clerical and Services Union
(EM2013/91)
Australian Air Express Pty Limited
(EM2013/127)

AUSTRALIAN AIR EXPRESS AWARD 2004

VICE PRESIDENT WATSON
DEPUTY PRESIDENT SMITH
COMMISSIONER LEE

MELBOURNE, 21 AUGUST 2014

Application by Australian Air Express Pty Ltd and Australian Municipal, Administrative, Clerical and Services Union for a modern enterprise award for Australian Air Express. Fair Work (Transitional Provisions and Consequential Amendments Act 2009 Schedule 6 sub-item 4(5), 9(3), Fair Work Act 2009 s.57.

Introduction

[1] Australian Air Express Pty Limited (AAE) and the Australian Municipal, Administrative, Clerical and Services Union (ASU) 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 Australian Air Express Award 2004 (the AAE Award).

[2] AAE is a logistics company that operates air freight services within Australia. It was established in 1992 as a joint venture between Australian Airlines and Australia Post. Qantas Airways Limited (Qantas) acquired Australian Airlines in 1992. In 2013 Qantas acquired the shares in AAE held by Australia Post and AAE is now a wholly owned subsidiary of Qantas. Its road transport courier division was sold to Star Track Express Pty Ltd prior to the acquisition of the Australia Post shareholding. AAE leases and operates aircraft as part of its freight services.

[3] The AAE Award is an enterprise instrument because it applies only to the operations of a single enterprise. It applies to customer service and administration employees from entry level to Operational Controller.

[4] At the hearing of this matter Ms T Firth of counsel and Ms J. Oldmeadow appeared for Qantas. Mr. E White of counsel and Mr. J. Cooney appeared for the ASU.

The Legislative Task

[5] 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:

[6] It is also necessary to consider the modern enterprise 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 and generally to have regard to other modern awards objectives. 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)

[7] When AAE was created in 1992 a range of awards applied to it. In 1994 a single enterprise award was created to replace the various other instruments. It has been modified and updated in the ensuing period.

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 Airline Operations Ground Staff Award 2010 (the modern award) would apply to customer service and administration employees if the AAE Award is terminated. It is not necessary to consider transport employee classifications as road transport employees are no longer covered by the award following the sale of the transport division to Startrack Express.

The content, or likely content, of the modern award referred to in paragraph (b): Item 4 (5) (c)

[9] The applicants basically seek to replicate the relevant entitlements in the AAE Award in a modern enterprise award. Wage rates in the AAE Award are higher than the rates in the modern award. At the entry level for customer service and administration employees there is a $43 differential. There is a $30 differential at the level 2 customer service and administration level compared to the equivalent in the modern award. At level 7 the differential is approximately $95. These comparisons make it doubtful that the rates in the AAE Award are properly fixed minimum rates and would need to be reviewed prior to any modern enterprise award being made.

[10] Other terms and conditions in the AAE Award are more generous to employees including with respect to notice of redundancy, severance pay, overtime for shiftworkers, allowances, personal leave and public holidays.

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)

[11] The airline operations industry is now highly diverse and includes many service providers and contractors to airlines as well as airlines themselves. Only certain Qantas entities and Airservices Australia are covered by enterprise awards. We have determined not to make a modern enterprise award for customer service and administrative employees directly employed by Qantas.

[12] Enterprise agreements are widespread in the airline operations industry. Employees covered by the AAE Award are employed under an enterprise agreement applying to AAE which is the latest in a succession of agreements applying to AAE employees.

The extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment: Item 4 (5) (e)

[13] The more generous terms and conditions can be described as enterprise specific. They reflect terms that have been applied more generally within the Qantas group. However it should be noted that by their nature they have not been developed for operational reasons, but rather to extend more generous entitlements to Qantas group employees at a time when the enterprise award was the major vehicle for enforceable terms and conditions of employment. Now terms such as these more generous benefits are contained in enterprise agreements.

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)

[14] As the employees of AAE are covered by an enterprise agreement there would be no detriment to them if the AAE Award is terminated. However on renewal of the enterprise agreement a different safety net would apply.

The views of the persons covered by the enterprise instrument: Item 4 (5)( g)

[15] AAE, the ASU and employees covered by the AAE Award consent to the making of a modern enterprise award.

Any other matter prescribed by the regulations: Item 4 (5) (h)

[16] There are no regulations relevant to this criterion.

The Modern Enterprise Awards Objective

[17] The existing AAE Award and a revised modern enterprise award would be consistent with the modern enterprise awards objective because it contains terms and conditions tailored to the enterprise and which have applied for some time. Those terms are reflected in the applicable enterprise agreement.

Should a modern enterprise award be made?

[18] The circumstances of this matter disclose a history of enterprise award coverage in common with many other parts of the Qantas Group operations. This history extends back to a time when awards were the main source of actual terms and conditions of employment. The workplace relations system has undergone extensive changes since that time. Now enterprise agreements are the main source of terms and conditions. While an enterprise award applies a modern award does not apply: s57 of Fair Work Act 2009. For employees covered by enterprise agreements the main significance of the applicable award is the benchmark it represents for the purposes of the Better off Overall Test in the agreement approval process. These considerations are relevant to the operations of AAE because it is covered by an enterprise agreement and it has been renegotiated a number of times over the years.

[19] It is also noteworthy that the operations of the airline industry have undergone fundamental changes during this corresponding period. Qantas and its domestic predecessor, Australian Airlines were the major employers in the industry. Now there are a myriad of employers engaged in airline operations either as operators of aircraft or providing ancillary services. The modern award applies generally to work of a type performed by AAE employees.

[20] Although there is general support for the making of a modern enterprise award in this matter we are not persuaded that a sufficient case has been made out to make such an award. The terms of employment in most other parts of the industry arise from enterprise agreements operating from a single modern award safety net. It has not been demonstrated that there is a substantive detriment to either AAE or its employees if this arrangement is applied to them. In all of the circumstances we have decided not to make a modern enterprise award to replace the AAE Award.

Conclusions

[21] We have decided not to make a modern enterprise award with respect to AAE. The applications by AAE and the ASU are therefore dismissed. Pursuant to Item 9 (3) of Schedule 6 to the Transitional Act the AAE Award terminates as at the date of this decision.

VICE PRESIDENT

Appearances:

Ms. T Firth of counsel and Ms J Oldmeadow with permission for Qantas Airways Group

Mr. E. White of counsel and Mr. J. Cooney with permission for the ASU

Hearing details:

2014

Melbourne

9 July

Final written submissions:

Qantas on 29 July 2014

Printed by authority of the Commonwealth Government Printer

<Price code C, AP834590 PR553037>