Working within Australia but not under Fair Work legislation

Cases

Working within Australia but not under Fair Work legislation

The Federal Court has ruled against the Fair Work Ombudsman’s prosecution of Jetstar and two overseas companies for allegedly underpaying overseas based cabin crew working within Australia.

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The Federal Court has ruled against the Fair Work Ombudsman’s prosecution of Jetstar and two overseas companies for allegedly underpaying overseas based cabin crew working within Australia.

[Full text of this case: Fair Work Ombudsman v Valuair Limited (No 2) [2014] FCA 759 (24 July 2014)]

The ombudsman argued that award breaches had occurred because the relevant wages paid were below those provided in the Aircraft Cabin Crew Award.

The flights in issue originated and ended within Australia in the period February to July 2011. The crew worked under a service agreement with Jetstar and were employees of a Singapore carrier and a Thai tour company.

Not national system employers or employees


Justice Buchanan found that the two overseas companies were not national system employers and the employees in issue were not national system employees and so not covered by the award.

The court said that the ombudsman’s case paid insufficient regard to operational realities. The internal flights were part of Jetstar's international network rather than its domestic network, and were crewed by international flight and cabin crew rather than domestic flight or cabin crew.

The court noted that there are explicit provisions in the Fair Work Act 2009 which extend it extra-territorially to Australian ships, Australia’s exclusive economic zone, the waters above the continental shelf and by regulation to Australian employers and Australian-based employees, but none applied here.

Conclusion

The court concluded that it was incorrect to postulate that the contracts of employment, or the employment relationships, were in and of Australia in any respect. It was also incorrect to postulate that the Award operates on those (overseas) contracts of employment:

"Leaving the Award aside altogether, the opposite conclusion would mean that, whatever might be the effect of the Award, many other provisions of the FW Act would also apply to the employment by Valuair and TET of the eight cabin crew in the present case. [And this was not the case] …"

The bottom line: The jurisdictional reach of Fair Work legislation extends to national system employers and employees as defined by legislation. When overseas based companies and employees operate in Australia there has to be a correlation with the express provisions in the legislation applying Australian legislation, as noted in this case.

Fair Work Ombudsman v Valuair Limited (No 2) [2014] FCA 759 (24 July 2014)

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