Jetstar has been fined $90,000 for breaching the terms of the Air Pilots Award 2010 by unlawfully deducting
training costs from the wages of six cadet pilots. The Fair Work
Ombudsman brought proceedings in the Federal Court at Sydney under
the Fair Work Act.
The training costs were incurred at a time when the cadet pilots
were formally employees of a New Zealand Jetstar entity and
travelled frequently to New Zealand. The cadet pilots'
employment was subsequently transferred to two Australian Jetstar
entities, after which point their employers deducted a total of
$17,500 from their salaries. The deductions have already been
repaid to the cadets as the employees' union, the Australian
Federation of Air Pilots, successfully brought action on their
behalf in 2011. In setting the fine at 68 percent of the maximum
penalty available, Justice Buchanan criticised Jetstar's
decision to continue making deductions even after receiving legal
advice that they breached the Award.
Jetstar's decision to domicile its pilot training scheme
outside Australia and make the assertion that trainees were not
subject to Australian awards was contentious, particularly when
many of the trainees were Australian residents who had been
recruited in Australia and spent time in Australia during their
traineeship. We note that the Fair Work Ombudsman has parallel
proceedings ongoing against Jetstar over the use of cabin crew
engaged by Thailand and Singapore entities on certain domestic
Australian sectors where Jetstar claims the employees are not
subject to Australian awards.
Employers need to be cautious when asserting that employees who
live in Australia, are sent to Australia for work or who travel
extensively to Australia for work are not subject to Australian
awards. Detailed legal advice should be obtained on the issue, and
employers should be aware that the regulators are taking a keen
interest these arrangements.
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