Australia: Common Sense Approach to Construction of Collective Agreement

Trade and Transport Bulletin
Last Updated: 15 April 2010
Article by Brendan Charles and William Robinson

The Federal Court of Australia's recent decision in Qantas Airways Ltd v Australian and International Pilots Association [2010] FCA 231 illustrates that the courts are likely to take a common sense approach to the interpretation of the provisions of a collective agreement. This case involved a dispute between an airline and an organisation representing its pilots over provisions in a collective agreement for overtime payments.


In Australian International Pilots Association v Qantas Airways Ltd [2008] FMCA 1008, Federal Magistrate Burchardt was faced with an application by the Australian and International Pilots Association (AIPA) for a declaration that Qantas Airways Ltd (Qantas) had breached the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2007 (the Enterprise Agreement).

AIPA, on behalf of Captain Garry Duggan, asserted that Qantas had failed to provide Captain Duggan with additional rates of pay pursuant to clause 25.3 of the Enterprise Agreement. AIPA argued that clause 25.3 provides for a higher than normal rate of pay in circumstances where a 'downline disruption' occurs, which has the effect of extending the hours that would otherwise have been worked in a particular period.

Federal Magistrate Burchardt, based on his construction of the relevant provisions of the Enterprise Agreement, concluded that Qantas had breached its obligation to pay Captain Duggan additional rates of pay for the extra duty he had performed owing to downline disruptions.

Qantas launched an appeal.

The Appeal

The primary issues considered in the appeal before the Federal Court were:

  • Whether clause 25.3 of the Enterprise Agreement applied to downline disruptions.
  • Whether, where a downline disruption required further or different work, such work was to be regarded as an allocation of duty for the purposes of clause 25.3 of the Enterprise Agreement.
  • Whether Federal Magistrate Burchardt erred in his definition and interpretation of the word 'assigned'.
  • Whether work caused by a downline disruption was work that ought to be credited and paid in the ordinary way.

The Enterprise Agreement

Clause 25.3 of the Enterprise Agreement, which in a more conventional agreement might have been described as overtime or penalty payments, reads as follows:

25.3 Additional payment when assigned over divisor +5 Where a flight crew member is assigned a duty that takes his or her projected credited hours over the bid period divisor (or, where applicable, his or her personal divisor) +5, the flight crew member will receive an additional payment of 1 hour for each credited hour (prorated for time less than 1 hour) that remains over the bid period divisor (or, where applicable, his or her personal divisor) +5 at the end of the bid period. The Company will not exercise the right to remove overprojection where the hours are caused by these circumstances. (emphasis added)

Clause 7 of the Enterprise Agreement contains a number of definitions. The following were considered by Justice Gray, on appeal, as relevant to the interpretation of clause 25.3:

assigned means an allocation to a flight crew member for which the flight crew member has not bid.

awarded means an allocation to a flight crew member as a result of the flight crew member's bid.

credited hours means hours accrued in accordance with clause 27.15 but excludes additional flight duty payments (clause 25.1)

Clause 27.15.1(b) of the Enterprise Agreement is headed: 'flight crew members may be required to exceed bid period divisor plus 5 where disruptions occur'. It reads:

A flight crew member may be required to exceed bid period divisor (or, if applicable, personal divisor) plus five in a bid period if, after departing the base station on the last pattern in the bid period, the flight crew member is rescheduled or delayed on the line due to an unexpected disruption to the pattern.

Proper Construction of the Enterprise Agreement

Justice Gray offered the following construction of clause 25.3:

'The key to the proper construction of cl 25.3 of the Enterprise Agreement is the phrase "assigned a duty". Coupled with the definition of "assigned" in cl 7, this phrase makes it clear that cl 25.3 is dealing with a situation in which Qantas requires a flight crew member to accept a roster pattern for flying duties different from any roster pattern for which that member has bid.'

His Honour noted that while there is an 'allocation' in both the definition of 'assigned' and 'awarded', the word 'allocation' is not defined by the Enterprise Agreement. Justice Gray found that the allocation in clause 25.3 of the Enterprise Agreement involved a conscious decision to set apart a particular duty roster for a particular flight crew member who had not bid for it. His Honour then sought guidance on the meaning of 'allocation' from the Macquarie Dictionary:

'In its ordinary meaning, according to the Macquarie Dictionary, "allocation" is the act of allocating. To "allocate" is "to set apart for a particular purpose". Thus, in its ordinary sense, "allocation involves the making of a conscious decision to set apart something for a particular purpose".'

In light of this definition, Justice Gray concluded that Federal Magistrate Burchardt was in error in determining that clause 25.3 of the Enterprise Agreement required Qantas to make additional payments to Captain Duggan. His Honour reasoned that any additional workload from the downline disruption is not the result of any 'allocation', but, rather, the number of flying hours involved in a roster is extended, by necessity, due to the disruption.

Accordingly, the Federal Court allowed the appeal and set aside the orders made by Federal Magistrate Burchardt, which required Qantas to pay Captain Duggan an additional payment for the extra duty he had performed due to downline disruptions.

Implications for employers

Given this decision relates to the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2007 its application to all collective agreements is limited. The decision does, however, signal a willingness by the courts to adopt a common sense approach to the construction of various provisions of collective agreements. For employers, it also serves as a timely reminder that they ensure the terms of their collective agreements accurately reflect the parties' intentions and are drafted in clear, concise and unambiguous language.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

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