Industrial Relations Commission New South Wales Medium Neutral Citation: Newcastle Airport Pty Ltd v Ferguson & Ors [2020] NSWIRComm 1068 Hearing dates: 25 September 2020 Date of orders: 25 September 2020 Decision date: 25 September 2020 Jurisdiction: Industrial Relations Commission Before: Commissioner Webster Decision: Orders granted Catchwords: EMPLOYMENT LAW – stand down – COVID-19 – no useful work for employees – no act or omission of the applicant - seriousness of the orders sought - public interested favours discretion being exercised Legislation Cited: Industrial Relations Act 1996 (NSW) Category: Principal judgment Parties: Newcastle Airport Pty Ltd (applicant) Respondents as contained in Schedule 1 to the decision Representation: Counsel: Mr Boncardo (for the intervener TWU and respondent, Mr Cosgayon) Ms Anthony (for the intervener APESMA and respondents, Mr Eastcott and Mr Lucknow) Solicitors: Sparke Helmore (for the applicant) File Number(s): 2020/00259722 Publication restriction: Nil ex tempore decision 1. This application pursuant to s 126 of the Industrial Relations Act 1996 (NSW) (the Act) arises as a consequence of the COVID-19 pandemic and in particular travel restrictions imposed by the Commonwealth and State Governments of Australia in response to it and the reduction of air travel by consumers. Newcastle Airport Pty Ltd is the applicant (the applicant). The applicant operates Newcastle Airport in regional New South Wales and has experienced an extreme downturn in its operations in recent months. 2. The respondents to these proceedings are 59 employees of the applicant. 3. The matter came before the Commission on 9 September 2020 for mention where directions were made for the filing and service of evidence and submissions. One of the directions made was that the applicant emailed each of the respondents informing them of those directions by close of business, 10 September 2020. 4. The Commission made orders for substituted service with respect to the respondents in chambers on 10 September 2020. 5. In addition, I made a direction on 10 September 2020 that the parties file a short written outline with respect to the Commission's jurisdiction to make the orders sought in the Notice of Motion by close of business, 23 September 2020. 6. Section 126 of the Act is in the following terms: 126 Stand-down orders—suspension of payment of remuneration (1) The Commission may, on the application of an employer or an industrial organisation of employers, order the stand down of employees of that employer or of members of that organisation if there is no useful work for the employees because of— (a) industrial action, or (b) breakdown of machinery, or (c) any other act or omission, for which the employer or employers concerned are not responsible. (2) The Commission is to give high priority to the hearing and determination of any such application. (3) An employee who is stood down by the Commission is not entitled to any remuneration (including allowances) while stood down. However, this subsection does not apply to any allowance that the Commission considers should be paid despite the stand-down order. (4) The period during which an employee is stood down is to be regarded as a period of employment with the employer for all other purposes, including the accrual of leave and the calculation of superannuation and other entitlements. (5) A stand-down order does not apply to an employee who is an apprentice or trainee (other than an existing worker trainee) within the meaning of the Apprenticeship and Traineeship Act 2001. 1. By way of Notice of Motion, the applicant asked the Commission to make a stand down order in respect of the respondents, to operate for a period of 12 months. 2. The matter came before the Commission for hearing today, 25 September 2020. The Commission granted leave to the Transport Workers Union of New South Wales (TWU) and the Association of Professional Engineers Scientists Managers Australia (APESMA) to intervene in the proceedings. Both the TWU and APESMA also sought to represent some of the respondents in the proceedings. 3. With the consent of the applicant and the interveners, the Commission moved into conciliation shortly after the hearing of the matter commenced. Then followed productive discussions that have resulted in the applicant seeking orders from the Commission, which are not opposed by the interveners or any respondent. The applicant's evidence and submissions 1. In support of the Notice of Motion was an affidavit of Mr Peter Cock, Chief Executive Officer of the applicant sworn 3 September 2020. 2. Mr Cock gave the following uncontested evidence with respect to the applicant's operations and the impact of COVID-19. 3. Prior to COVID-19, Newcastle Airport was the second busiest airport in the state with approximately 220 services operated per week to 7 direct destinations, servicing 1.28 million passengers annually. 4. The applicant's main sources of revenue are; 1. 36 % aeronautical revenue, including passenger charges; 2. 38 % car parking revenue; 3. 13% rental car revenue; 4. 5% retail lease revenue; and 5. 8% other property and commercial revenue. 1. As a result of the COVID-19 pandemic and government advice and restriction on travel, from early April, almost all passenger services were suspended. Passenger numbers in April, May and June were 99% below the prior year, meaning Newcastle Airport had less than 1 % of normal passenger traffic. By early April 2020, Newcastle Airport experienced a 99.7% reduction in flight operations. 2. As at the 3 September 2020, the majority of flights by major carriers had been suspended with the only interstate flights operating being a skeleton number of Brisbane flights targeting essential mining workers. On some days of the week, there are no flights at all. 3. The applicant's revenue has declined by almost 90 % since mid-March 2020. The commercial outlook is uncertain and dependant on a range of unknowns including State boarder closures. 4. The applicant has applied for federal government assistance in the form of the Federal Government's JobKeeper wage supplement scheme. That application has been rejected and an objection has been lodged to that decision by the applicant. The Federal Government support package for regional airlines did not include direct support for Newcastle Airport. 5. Deciding to keep Newcastle Airport open to facilitate intrastate flights considered vital for regional communities in NSW, the applicant took a range of measures to reduce its expenditure, including measures resulting in an 18 per cent reduction in labour costs earlier this year. 6. In May 2020, the applicant redeployed 15 operational staff to alternative duties which included repainting terminal interiors, completing landscaping works and other maintenance and improvement works. The applicant says those works have now been completed. 7. Mr Cock gave evidence that there is no useful work available for the workforce. Specifically, he stated: "Having reviewed its operations, NAPL does not have either further alternative duties, to which staff could be redeployed or the resources to undertake these duties if they existed." 1. This evidence is not contested. 2. Mr Cock also gave evidence that there had been consultation with staff with respect to the decision to make the application to the Commission that they be stood down. 3. The applicant also relied upon two affidavits of Ms Melissa Rowe, Executive Manager of Operations and Compliance of the applicant sworn 10 and 23 September 2020. 4. Ms Rowe gave evidence with respect to the information that has been provided to staff in relation to the application before the Commission. 5. On 31 August 2020, the respondents were informed of the decision to make the application that they be stood down in a briefing by Mr Cock followed by an email to staff the same day about the proposed stand down. The respondents then met with their Senior Leadership Team to discuss the proposal and raise any questions. 6. On 4 September 2020, a document answering frequently asked questions was circulated to the respondents about the proposed stand down. 7. On 7 September 2020, Mr Cock conducted a meeting with staff via Zoom to provide an update on the application before the Commission and provide information with respect to timing to the respondents. 8. On 8 September 2020, the applicant held discussions with staff with respect whether it was proposed that their position would be stood down. After these meetings, the respondents received an email confirming those discussions. 9. Attached to the affidavit of Ms Rowe sworn 23 September 2020 is a table setting out information with respect to the business units of the applicant and what work is currently required within each. Along with the evidence of Mr Cock referred to earlier, this demonstrates that there is no useful work for certain of the applicant's employees who it proposes be stood down either completely or partially. The position of the respondents and the interveners 1. During the hearing of the matter, Mr Lucknow, a respondent to the proceedings requested a change to the Order sought to enable employees to take leave at a rate of either full, part or a proportion of their usual pay. That amendment was agreeable to the applicant and was not otherwise opposed by any party or the interveners. 2. Other than this, none of the respondents opposed the orders being sought despite being given an opportunity to do so. Both the TWU and APESMA did not oppose the orders being sought and were involved in negotiations today that have directly led to the amended proposed orders being presented to the Commission. 3. There was no evidence tendered by the respondents or interveners. Nor did they make submissions with respect to the application other than to indicate that they do not oppose it. Consideration 1. The Commission was assisted by the submissions of the applicant with respect to the jurisdiction of the Commission. I am satisfied that the Commission has jurisdiction to consider the application for orders pursuant to s 126 of the Act. 2. In considering the application before the Commission, s 126 is to be considered in the context of the object of the Act at s 3, relevantly: "The objects of this Act are as follows— (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State" 1. From the plain words of s 126, it is clear that the applicant bears the onus to establish three things: 1. Firstly, that an employer has made the application; 2. Secondly, the employer has no useful work for the employees; and 3. Thirdly, that the cause of the absence of useful work be an act or omission (or other prescribed reason) for which the employer is not responsible. 1. Even if each of these preconditions are established by the applicant, the Commission is being asked to exercise a discretion, in that it "may" make the orders. 2. There is very little jurisprudence with respect to applications made to the Commission pursuant to s 126 of the Act. 3. It has been put today that the orders sought are extraordinary and it is a serious matter to stand down an employee from their work. The decision to do so will almost always have significant adverse effects upon the employees both financially and emotionally. The Commission should exercise the discretion contained in s 126 of the Act with caution and diligence. 4. The Commission can only exercise the discretion to stand down an employee if the applicant establishes that the employee has no useful work to do. This is a matter of fact to be established with respect to each of the employee respondents. I find that the applicant has discharged its onus to establish that there is no useful work to do in respect of the employees it intends to stand down. 5. Further, I find that the reason this situation prevails is because of the current circumstances involving COVID-19, and in particular the boarder closures and the decision of passengers not to travel as a consequence of the pandemic. These circumstances do not exist because of an act or omission of the applicant. 6. In determining whether it is appropriate for the Commission to exercise the discretion to make the orders sought, I consider it relevant to take into account the significant impact the decision will have upon the respondent employees. Many, if not all, of the employees stood down will be adversely impacted with a reduction in income and lack of certainty about their future. This will place them and their families under significant stress, particularly because they are ineligible for the support other members of the community have been able to access in analogous circumstances. This is happening to them for reasons that are outside of their control and for which they are not at fault. I acknowledge these impacts in making this decision and take them into account. 7. It is appropriate that the Commission take into account the public interest in making the orders sought as well. The applicant's business serves an important role in the community within which it operates namely the Newcastle and Hunter Regions. Some of the roles occupied by the respondents are specialised and not easy to backfill. By making these orders, they will be in a position to return their operations to normal as and when the demand for the Newcastle Airport returns to normal levels. If the orders are not made, the ongoing viability of the operation is highly precarious and the employees may have no job at all. 8. Having considered these matters, I have decided to exercise the Commission's discretion to make the orders sought by the applicant. In doing so, I note that I am satisfied that the making of the order is consistent with the objective of the Act, namely, that is just and fair and will promote efficiency and productivity in the economy to the State. I note also that these orders contain a number of important protective measures that will benefit the respondents. Orders 1. The Commission orders pursuant to s 126 of the Industrial Relations Act 1996 (NSW) that: 1. Newcastle Airport Pty Limited may stand down an employee with or without pay for any day or part of a day which the employee cannot usefully be employed as a result of "COVID-19 travel restrictions" , as defined herein. 2. Prior to standing an employee down, Newcastle Airport will: 1. give the employee written notice of Newcastle Airport's proposal to stand the employee down at least 14 days before the stand down is proposed to commence; 2. consult with the employee(s) proposed to be stood down and, where an employee is represented by a union or industrial association, that union or industrial association; 3. provide information to employees as to: (i) the reasons for the stand down; (ii) the nature of the stand down (i.e. whether it applies to a day or part of a day etcetera); and (iii) the anticipated duration of the stand down; 4. give prompt and genuine consideration to any matters raised by or on behalf of an employee in relation to the proposed stand down; 5. Newcastle Airport must keep a written record of any such consultation. 1. Any employee who is stood down under this clause will be treated for all purposes (other than payment of wages, if Newcastle Airport determines to stand the employee down without pay) as having not broken continuity of service notwithstanding the standing down. 2. An employee who is stood down under this order is able, during the period of stand down, to engage in reasonable secondary employment. 3. Newcastle Airport will make reasonable efforts to identify opportunities for alternative work for employees who are stood down, including outside the employment of Newcastle Airport and will duly notify employees of those opportunities if they arise. In particular, Newcastle Airport will take steps to ascertain whether opportunities for alternative work are available with the City of Newcastle and Port Stephens Council. 4. An employee who is stood down is able to give Newcastle Airport a request to engage in training or professional development and Newcastle Airport must consider the request and not unreasonably refuse the request. 5. An employee who is stood down under this order is entitled to use accrued annual or long service leave at either half or full pay or other proportion at his or her election. 6. In the event Newcastle Airport determines to stand down one or more employees pursuant to this order, Newcastle Airport must: 1. will ensure as far as reasonably practicable that hours of work available are allocated equitably and fairly between employees; 2. ensure that employees are rostered in an equitable manner, having regard to their duties and qualifications and in light of the needs of Newcastle Airport's business. 1. During the period of operation of this order, Newcastle Airport will not employ or engage additional employees or external labour to perform work which could be safely and competently performed by current employees of Newcastle Airport, including employees who have been or are able under this order to be stood down. 2. "COVID-19 related travel restrictions" means restrictions and/or reductions in air travel caused by the coronavirus pandemic and/or measures taken by governments to stop its spread. 3. This order will apply for a period of 6 months. 4. If a material matter or concern about these orders arises, Newcastle Airport, an employee subject to this order or an industrial association representing the interests of one or more employees subject to the order shall: 1. Try to resolve the material matter or concern at the workplace level by discussions between, Newcastle Airport, the relevant employee(s) and an industrial association representing the interest of the employee(s); 2. If the material matter or concern cannot be resolved under 12 (a), have liberty to apply to the Commission to resolve the matter and/or for variation, termination or extension of this order on 3 days' notice. 1. Nothing in this order prevents an employee raising a grievance or concern about the orders through the Newcastle Airport HR PRO Grievance Resolution Procedure. 2. Notwithstanding order 2, in respect of employees who were notified of a proposed stand down of their position on 8 September 2020, Newcastle Airport will be permitted to stand down those employees pursuant to this order, no earlier than 7 days from the date this order is made. ********** schedule 1 1. Bob Aldred 2. George Allan 3. Jason Bailey 4. Tamara Barge 5. Brad Barham 6. Teegan Bell 7. Kate Bennett 8. Duane Boaler 9. Matthew Borger 10. Kurt Boyes 11. Claire Burne 12. Denise Burne 13. Louise Caruana 14. Peter Cock 15. Angelo Cosgayon 16. Stephen Crowe 17. Cristal Davies 18. Alexander Donato 19. Angela Douglas 20. Alexander Dunn 21. Matthew Eastcott 22. Terry Edman 23. Kristie Ferguson 24. Alan Field 25. John Finn 26. Shane Giggins 27. Andrew Gill 28. Matthew Goldsworthy 29. Adam Gray 30. Suzanne Harasti 31. Khali Hoogwerf 32. Brian Hope 33. Naomi Jarvis 34. Lewin Jones 35. Brett Keily 36. Ben Kochanski 37. Alice Lavender 38. Curtis Lucknow 39. Merran Magill 40. Bede Maguire 41. Brett McCartney 42. Laura McCluskey 43. Alison McMillan 44. Colin Merrick 45. David Redmond 46. Melissa Rowe 47. Leanne Russell 48. Trevor Ryan 49. Bryce Scoular 50. Angela Shields 51. Caitlin Smith 52. Brent Steenbergen 53. Maria Thompson 54. Steven Webb 55. Rick West 56. Stephanie Wilson 57. Darryl Woodeson 58. Peter Wych 59. Tim Zorzi DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 October 2020