Redeployment or redundancy - airline liable for relocation expenses, FWC finds

The Fair Work Commission has clarified an aviation services provider’s financial obligations after a union applied for a resolution under s.739 of the Fair Work Act.

The Australian Federation of Air Pilots (AFAP) notified the Fair Work Commission of a dispute with National Jet Express Pty Ltd (NJE) concerning a clause of its enterprise agreement that covered redeployment and expense obligations.

The dispute emerged during discussions between the airline provider and 19 BAe146 aircraft pilots that were nearing the end of a freight contract with Qantas.

Ahead of the scheduled 1 October conclusion, NJE determined a number of alternative positions would be available to some of these pilots; albeit with different aircraft that would require additional training. While the number was not confirmed at the time, it was later identified that 12 positions were available, some of which were interstate.

Importantly, the agreement also distinguished between employee-initiated transfers and those at the direction of the employer, with relocation expenses only having to be covered for the latter.

While several matters were resolved ahead of time, including that of selection criteria and EOI submissions, both parties agreed that the Commission should determine whether relocation for a redeployed role is at the direction of employer or employee; and by extension, whether NJE is bound by the agreement to cover the cost of redeployed employees relocating or whether the employee bears the cost because of a purported choice to move.

According to the AFAP, the NJE’s position that pilots are obligated to support their relocation are inconsistent with entitlements under the agreement.

In determining the dispute, commissioner Emma Thornton noted the urgency for a resolution due to the contract’s eminent conclusion and potential financial cost incurred by NJE should training courses not be taken up in time.

Also dependent on the decision is the fact that the AFAP and Transport Workers Union (TWU), which is supporting their application and whose members are also covered by the same enterprise agreement, contend that interpretation of the relevant clause could determine whether pilots submit an EOI for redeployment.

In this way, the parties agreed that the EOI process will continue, with commissioner Thornton also noting that a finding that pilots are liable for their relocation costs will mean employees can withdraw their names from consideration within a period of 48 hours following publication of the decision.

In addition to the relevant clauses that note transfers as either initiated by employee or the NJE, with payment liable to the initiating party, the AFAP also submitted that the need to relocate arises because of the respondent's business operations.

The union contended that NJE are obliged to avoid or mitigate redundancies of this nature, and that necessary relocation for the continuation of employment is at the initiative of the respondent. In this way, it was argued that a transfer that acts as an alternative to redundancy is not necessarily at the request of the employee.

It is also relevant to note that, should any employees be offered one of the redeployed roles and not accepted, National Jet Express noted it would request the commission get rid of their redundancy entitlements, and that any employees not offered a redeployment would be made redundant.

Further, it was noted that the decision to retire the BAe146 fleet constituted an operational decision by the respondent that triggered the redundancy discussion.

In separate submissions that aligned with AFAP’s position, the TWU claimed that a transfer resulting from a redundancy is employer initiated, adding that the NJE’s argument “deliberately ignores the context in which they submitted the EOI”.

While NJE accepted that its decision to cease operations with the BAe146 fleet triggered the redundancies, it asserted that this “does not mean NJE directed the subsequent transfer of each Pilot”, further noting that a decision does not require identification of who causes the process but rather “who initiated the specific base transfer”.

The company also claimed that the AFAP’s argument would suggest every transfer arising out of redundancy is “automatically classified as employer-director” which would undo related clauses about employee-directed transfers.

It was further argued that employees demonstrated active and informed consent by way of applying to the roles in alleged knowledge that they would be liable to cover costs.

The cost of re-training redeployed pilots was also submitted in contention that NJE had fulfilled its financial liabilities.

In making a determination, commissioner Thornton said that “the words in the Agreement do not fit neatly with the transfers implemented to avoid redundancies”.

While it was accepted that there was an arguable case that the pilots had a choice to not submit for a redeployment opportunity, commissioner Thornton said: “I do not think it is the correct interpretation and application of the relevant Agreement clauses”.

It was therefore determined that the “subjective” view of each party about the interpretations of the cost category was not relevant, and that the liability for relocation expenses lies with the employer due to the essence of the change as dictated by the employer’s “business circumstances”.

Further, commissioner Thornton said: “it is my view that the substance of the matter, being the surrounding factual circumstances of likely redundancies and the nature of the actual ‘choice’ available to employees must override … the purported choice given to the employees”.

“The entitlement to relocation expenses payable on a transfer occasioned by redeployment to avoid redundancy is based on whether the Agreement provides for such an entitlement, not on the subjective views expressed by the parties.”

In this way, Commissioner Thornton found that the proposed pilot transfers were at the direction of NJE and that the relevant relocation cost clauses are applicable in this case.

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