Chapter 1
Background of the Bills
Introduction
1.1
This inquiry reviewed and reported on two bills before the Senate: the Air
Navigation and Civil Aviation Amendment (Aircraft Crew) Bill 2011 (the Aircraft
Crew Bill) and the Qantas Sale Amendment (Still Call Australia Home) Bill 2011
(the Qantas Sale Amendment Bill).
1.2
The Aircraft Crew bill was introduced to the Senate on 17 August 2011 by
Senator Nick Xenophon. The Aircraft Crew Bill proposes amendments to the Air
Navigation Act 1920 and the Civil Aviation Act 1988. The bill was
referred to the committee for inquiry on 18 August 2011.
1.3
The Qantas Sale Amendment Bill was introduced to the Senate on 25 August
2011 by Senator Nick Xenophon and Senator Bob Brown. The Qantas Sale Amendment
Bill seeks to amend the Qantas Sale Act 1992. On 14 September 2011, the
Senate Selection of Bills Committee referred the Qantas Sale Amendment Bill to
the Rural Affairs and Transport Committee for inquiry and report by 2 November
2011.
1.4
The committee decided to extend the reporting date to 21 November 2011
and inquire into the Qantas Sale Amendment Bill and the Aircraft Crew Bill
concurrently. The reporting date was subsequently extended date to 22 March
2012.
Conduct of the inquiry
1.5
The committee provided information about the inquiry on the committee's
website and advertised the inquiry in The Australian newspaper on 31 August
2011 (following the referral of the Aircraft Crew Bill) and again on 28
September 2011 (following the referral of the Qantas Sale Amendment Bill).
Following the referral of each bill the committee wrote to stakeholders to
invite submissions.
1.6
The committee received 14 submissions (including one in camera
submission) which are listed in Appendix 1. The committee held three public
hearings in Canberra on 4 November 2011, 24 November 2011 and 6 February 2012.
A list of witnesses is included in Appendix 2 and Hansard transcripts are
posted on the committee's website.
1.7
In January 2012, the committee agreed to post draft amendments to both
bills proposed by Senator Xenophon on the committee's website and call for
public comment. It also wrote to relevant stakeholders asking for supplementary
submissions regarding this material. The committee received five supplementary
submissions regarding the draft amendments.
1.8
The draft amendments were introduced into the Senate on 13 March 2012
with an additional clause compared to the amendments posted on the committee
website. The comments made in submissions to the inquiry refer to the draft
amendments as posted on the committee website in January 2012.
Acknowledgements
1.9
The committee is thankful to those organisations and individuals that
made submissions and to witnesses who appeared at the public hearings for the
contribution they have made to the inquiry.
A note on references
1.10
The references in this report are made to individual submissions that
were received by the committee. The references to the Hansard made in this
report are of the proof transcript and page numbers between it and the official
transcript may vary. The Hansard transcripts of the committee's hearings and
all public submissions made to the inquiry can be found on the committee's
website.
Scrutiny of Bills Committee
1.11
The Senate Standing Committee for the Scrutiny of Bills considers whether
bills before the Senate trespass unduly on personal rights and liberties and
related matters. The Senate Standing Committee for the Scrutiny of Bills made
no comment on either bill considered in this inquiry.
Overview of the Aircraft Crew Bill
1.12
The Air Navigation and Civil Aviation Amendment (Aircraft Crew) Bill
2011 will require that Australian airlines and their subsidiaries provide pay
and conditions for overseas-based flight and cabin crew operating on their
flights that are no less favourable than if they were directly employed by the
Australian airline. As outlined in the Explanatory Memorandum to the
bill, the inquiry was to consider issues of safety (including fatigue), pay and
working conditions and the effect on Australian jobs due to the use of
overseas-based crew by Australian airlines and their subsidiaries.[1]
1.13
In order to achieve its objectives, Schedule 1 of the bill amends the Air
Navigation Act 1920 to place a new condition on the international aviation
licences held by Australian airlines or the subsidiaries or associated entities
of Australian airlines. The bill seeks to add two new sections, 16A and 16B, to
the Air Navigation Act 1920 as follows:
Section 16A applies to international licences held by
Australian airlines. It states that a condition of the licence is that the
licence holder must ensure that flight crew and cabin crew who are not directly
employed by the licence holder and who are working in connection with an
international flight operated by the airline, must receive wages and conditions
that are no less favourable than they would have received if they were directly
employed by the airline.
Section 16B applies to international licences held by
subsidiaries or associated entities of an Australian airline, as defined by the
Corporations Act 2001. It states that a condition of the licence is that
the licence holder must ensure that flight crew and cabin crew working in
connection with an international flight operated by the licence holder to
and/or from Australia receive wages and conditions of employment that are no
less favourable than if they had been directly employed by the Australian
airline in control of the subsidiary or associated entity.[2]
1.14
In addition, Schedule 2 of the bill seeks to amend the Civil Aviation
Act 1988 to place a new condition on all new and existing Air Operator’s
Certificates (AOCs). It does this by creating a new section 28BJ for the Act:
...which states that it is a condition of an AOC that the
holder of the AOC must ensure that any flight or cabin crew working in
connection with the regular operations of the airline and who are not directly
employed by the airline receive wages and conditions that are no less favourable
than they would have been if the crew had been directly employed by the
airline.[3]
1.15
Finally, the bill also seeks to amend certain New Zealand AOC holders'
conditions by adding a new section 28CA to the Civil Aviation Act 1988:
...which applies to New Zealand AOCs with ANZA privileges,
where the New Zealand AOC belongs to a subsidiary or associated entity of an
Australian airline (as defined in the Corporations Act 2001). This
section states that ANZA privileges will not be granted by Australia unless the
holder of the AOC ensures that all flight crew and cabin crew working in
connection with the regular operations of the airline receive wages and
conditions that are no less favourable than they would have received if they
were directly employed by the Australian airline controlling the subsidiary or
associated entity.[4]
Overview of the Qantas Sale Amendment Bill
1.16
The Qantas Sale Amendment (Still Call Australia Home) Bill 2011 seeks to
amend the Qantas Sale Act 1992. The bill proposes a number of changes to
Qantas’ articles of association to add a number of new requirements regarding
Qantas’ operations and the make-up of the Qantas board, as discussed below. The
bill also inserts a definition for 'associated entity' into the Act, in line
with section 50AAA of the Corporations Act 2001.
1.17
A main feature of the bill is to change some of the requirements for
Qantas regarding the location of its facilities, training and maintenance
operations. The bill seeks to achieve this by omitting ‘(for example,
facilities for the maintenance and housing of aircraft, catering, flight
operations, training and administration)’ from paragraph 7(1)(h) from the Qantas
Sale Act 1992, and inserting the following provisions after 7(1)(h):
(ha) require
that Qantas ensure that, of the facilities, taken in aggregate, which are used
by Qantas subsidiaries and any associated entities in the provision of
scheduled international air transport services, the facilities located in
Australia, when compared with those located in any other country, must
represent the principal operational centre for the subsidiary or associated
entity; and
(hb) require
that the majority of heavy maintenance of aircraft and the majority of flight
operations and training conducted by, or on behalf of, Qantas is conducted in
Australia; and
(hc) require
that the majority of heavy maintenance of aircraft and the majority of flight
operations and training conducted by, or on behalf of, Qantas subsidiaries and
any associated entities is conducted in Australia.[5]
1.18
The bill also seeks to add certain experience and expertise requirements
to the make-up of the Qantas board of directors. After paragraph 7(1)(i) of the
Qantas Sale Act 1992, the bill adds the conditions for Qantas board
membership:
...that
at least one of the Directors of Qantas has a minimum of 5 years' professional
flight operations experience and that at least one of the Directors has a
minimum of 5 years' aircraft engineering experience.[6]
1.19
Currently the Qantas Sale Act only allows an application to the Court
for injunctions by the Minister. The bill seeks to extend this to allow for
applications to the Court by 100 shareholder members or shareholder members who
hold at least 5 percent of the shares in Qantas. To achieve this, the bill adds
the following amendment to both subsection 10(1) and 10(2) of the Qantas
Sale Act 1992:
After “application of the Minister,”, insert “100 shareholder
members or shareholder members who hold at least 5% of the shares in Qantas,”.[7]
1.20
The above change creates clause 5 and clause 6 of the Qantas Sale
Amendment Bill, respectively. According to the bill’s Explanatory Memorandum
this will have the following implications:
Clause 5 provides that the Court may, on the application of
the Minister, 100 shareholder members or shareholder members who hold at least
5 percent of the shares in Qantas, restrain Qantas from engaging in particular
conduct, such as a contravention of mandatory articles (section 7 of the Act)
or section 9 (which requires Qantas to maintain a register of shares in which
foreign persons have a relevant interest), and require them to do a particular
act or thing.
Clause 6 provides that, if Qantas or any other person has
refused or fail to comply with the mandatory articles under section 7 of the
Act, the Court may, on the application of the Minister, 100 shareholder members
or shareholder members who hold at least 5 percent of the shares in Qantas,
require Qantas or that person to do that particular act or thing.[8]
Draft amendments proposed by Senator Xenophon
1.21
In January 2012, the committee posted draft amendments to the two bills
under inquiry on the committee website and wrote to relevant stakeholders to
call for comment. The due date for the submissions was set at 6 February 2012.
The discussion below is based on the draft amendments as they appear on the
committee's website. Those amendments were the basis for the additional
evidence provided to the inquiry.
1.22
The new amendments to the Aircraft Crew Bill would replace all the bill’s
previously proposed amendments to the Air Navigation Act 1920 and the Civil
Aviation Act 1988 regarding workplace relations issues with proposed
amendments to the Fair Work Act 2009.
1.23
To achieve this the draft amendments would substitute the existing schedule
1 of the Aircraft Crew Bill with a new schedule 1 making the following changes
to the Fair Work Act 2009:
1 Section 12 (after the definition of agreed to)
Insert:
aircraft
operating crew
means
any person who:
(a)
is on board an aircraft with the consent of the operator of the aircraft; and
(b)
has duties in relation to the flying or safety of the aircraft; and
includes
a person:
(c)
who is conducting a flight test; or
(b)
who is conducting surveillance to ensure that the flight is conducted in
accordance with the regulations; or
(c)
who is in the aircraft for the purpose of:
(i) receiving flying training; or
(ii) practising for the issue of a
flight crew licence.
2 Section 12 (after the definition of Australian-based
employee)
Insert:
Australian
domestic aviation means activities conducted in Australia
in the support or conduct of commercial aviation operations that carry
passengers whose flight begins and finishes at an aerodrome located in
Australia.
Note:
In this context, Australia includes the Territory of Christmas
Island and the Territory of Cocos (Keeling) Islands (see paragraph 17(a) of the
Acts Interpretation Act 1901).
3 Section 12 (after the definition of Australian-based
employee)
Insert:
Australian
domestic aviation operator means the person, organisation or
enterprise engaged in, or offering to engage in, Australian domestic aviation.
4 Section 12 (definition of flight crew officer)
Repeal
the definition.
5 After section 13
Insert:
13A
Extended meaning of national system employee in relation to Australian
domestic aviation
For
the purposes of this Act, any non-national system employee performing work in
Australian domestic aviation is taken to be a national system employee.
6 Subparagraph 14(1)(d)(i)
Repeal
the subparagraph, substitute:
(i)
aircraft operating crew; or
7 At the end of subsection 14(1)
Add:
or
(g) an Australian domestic aviation operator who directly benefits from work
performed in Australian domestic aviation by a non-national system employee,
regardless of the absence of a direct employment relationship.[9]
1.24
There is also a new amendment proposed to the Civil Aviation
Act 1988 under the Aircraft Crew Bill requiring Air Operator’s Certificate
(AOC) holders to implement fatigue management systems for cabin and operating
crew by 30 June 2012, for flight crew by 31 December 2012, and various other
staff by 30 June 2013. To achieve this the draft amendment would omit items 1
to 3 of schedule 2 of the Aircraft Crew Bill and substitute a new section 28BJ
into the Civil Aviation Act 1988 as follows:
28BJ Management of fatigue
(1) The holder of an AOC must
at all times monitor and manage fatigue-related safety risks, based on
scientific principles and knowledge as well as operational experience, and take
all reasonable steps to ensure that relevant personnel are performing at adequate
levels of alertness.
(2) The holder must have a
system for management of fatigue-related safety risks for cabin crew and other
operating crew in place by 30 June 2012.
(3) The holder must have a
system for management of fatigue-related safety risks for flight crew in place
by 31 December 2012.
(4) The holder must have a
system for management of fatigue-related safety risks for operational support
staff, including but not limited to schedulers, dispatchers, flight operations
managers and continuing airworthiness managers, in place by 30 June 2013.[10]
1.25
The draft amendments put forward by Senator Xenophon to the Qantas Sale
Amendment Bill focus on definitional changes in order to clarify the intent of
the bill. The two key terms are ‘associated entity’ and ‘exercising Australian
rights’ which would be defined as follows:
associated entity means an entity that
satisfies subsection 50AAA(2) or (3) of the Corporations Act 2001.
1.26
And:
exercising Australian rights means using
capacity allocated under an air services agreement to fly to, from or within
Australia or to fly between two or more foreign countries using Australian
allocated capacity other than code-share capacity.
1.27
As a result, the following changes (labelled (3) and (4)) to the bill
are proposed:
(3) Schedule 1, item 3, page 3 (lines 13 to 19), omit
paragraph 7(1)(ha), substitute:
(ha) require that Qantas ensure that, of the
facilities, taken in aggregate, which are used by Qantas subsidiaries and any associated
entities exercising Australian rights in the provision of scheduled
international air transport services, the facilities located in Australia, when
compared with those located in all other countries, must represent the
principal operational centre for the subsidiary or associated entity; and
(4) Schedule 1, item 3, page 3 (lines 23 to 26), omit
paragraph 7(1)(c), substitute:
(hc) require that the majority of heavy maintenance
of aircraft and the majority of flight operations and training conducted by, or
on behalf of, Qantas subsidiaries and any associated entities exercising
Australian rights are conducted in Australia.[11]
1.28
The new amendments circulated in the Senate on 13 March 2012 largely
reflect the draft amendments above. There was the inclusion of an additional
change to the Qantas Sale Amendment Bill, amendment 4, which according to the
Explanatory Memorandum:
...amends the existing paragraph 7(1)(hb) to clarify that it
applies to flight operations management, rather than to flight operations as a
whole.[12]
1.29
This was also reflected in amendment 5 which proposes to qualify
7(1)(hc) in a similar way.[13]
Structure of the report
1.30
The report consists of three chapters. This first chapter outlines the
conduct of the inquiry and provides an overview of the Aircraft Crew Bill and
the Qantas Sale Amendment Bill. It also outlines the draft proposed amendments
put forward by Senator Xenophon as part of the inquiry. Chapter 2 is the main
body of the report and considers the provisions of each bill and the committee's
view in this regard. In addition, this chapter examines a number of key issues
that were developed in the broader context of the inquiry, including the events
and decisions surrounding Qantas' grounding of its entire fleet of aircraft on
29 October 2011. Chapter 3 of the report provides the committee's conclusions
and the recommendations that neither the Aircraft Crew Bill nor the Qantas Sale
Amendment Bill be passed.
Navigation: Previous Page | Contents | Next Page